MY VIEW: Kent Conrad

Yesterday, CRFB board member and former Senate Budget Committee argued in the Washington Post that ultimately, additional revenue through comprehensive tax reform will be needed along with entitlement reforms to put the budget on a sustainable path. Responding to a Washington Post editorial, Conrad stated that no part of the budget can be excluded in these upcoming fiscal negotiations:

The Post’s Oct. 20 editorial on the budget challenge [“A fiscal quid pro quo”] made important points but was way off-base on the issue of revenue. It suggested that a fair trade would be reductions to the “sequester” budget cuts in exchange for reforms to Medicare and Social Security and said that Democrats should not insist on additional revenue because that’s a non-starter with many Republicans. Democrats would make a serious mistake by following that advice.

As Conrad explains, the country needs more revenue given our fiscal path, along with entitlement and tax reform. But it's worth noting that new revenues have often been included in comprehensive tax reform. Not only could tax reform help get our fiscal house in order, but it could also help economic growth. Writes Conrad:

Tax reform should be part of any budget deal. Tax reform is necessary to unlock the full potential of our economy. The current tax system is not fair and damages U.S. competitiveness. A five-story building in the Cayman Islands claims to be home to more than 18,000 companies. Is it the most efficient building in the world? No! That and other tax scams cost our country more than $100 billion each year, the Senate Permanent Subcommittee on Investigations has found.

If we don’t fix the revenue side of the equation at the same time as we repair Social Security and Medicare, it will never happen. To suggest, as The Post does, that Democrats should trade adjustments to the sequester for reforms to these programs assumes that the sequester affects only Democratic priorities. More than half of the $1.2 trillion in sequester cuts are to defense, long a Republican priority.

We've known for a while now that solving our debt problem would require tough choices and sacrifices from both parties. Lawmakers have taken advantage of most of the easy policies, so even more modest plans will need to look at all parts of the budget. Concludes Conrad:

A mini-“grand bargain” would require all of these elements: changes to Social Security and Medicare to ensure their solvency for future generations; a modest increase in revenue so all parts of society participate in getting our country back on track; and changes to the sequester cuts that force nearly all of the deficit savings on less than 30 percent of the budget.

We can do this, but everyone must be prepared to give a little so that our nation can gain a lot.

Click here to read the full op-ed.

"My Views" are works published by members of the Committee for a Responsible Federal Budget, but they do not necessarily reflect the views of all members of the committee.