Stop Us Before We Spend Again
President of the Committee for a Responsible Federal Budget, Maya MacGuineas, testified before the Senate Budget Committee on proposals to form a bipartisan commission to deal with the skyrocketing U.S. debt.
This idea is gaining attention now partly because the debt ceiling is reaching its limit and will need to be raised again soon.
Many lawmakers have said they will not support an increase in the debt ceiling unless a commission to reduce the debt is created, Congress Daily reported. A few of the lawmakers present, including Senators Feinstein and Bayh, mentioned that they would not vote in favor of a debt ceiling without some sort of attention paid to a mechanism that would stabilize future debt.
Several Senators, Representatives, and experts testified at the hearing. The consensus was that a commission would be useful given the polarized political climate in Congress. Most agreed that a commission should be bipartisan, consider all budgeting options – both taxes and revenue – and, its final recommendations should receive an up or down vote in Congress.
Announcing a plan to stabilize the debt is about reassuring our creditors that U.S. bonds are a safe investment, MacGuineas wrote in her testimony.
“If large amounts of borrowing will be necessary to keep the economy from falling back into recession, we need to be able to access global funds at low rates; and we need lenders and investors to trust that we are good for the money.”
Doug Holtz-Eakin, former head of the CBO, testified that time is running out to address our budget imbalance. What looked like a problem the U.S. had thirty years to address, he said, now looks like it needs to be solved in the next ten years.
Holtz-Eakin also cautioned that it might be useful to form several smaller commissions that each address separate parts of the budget. He recommended this method because a commission charged with addressing all aspects of the budget might have a harder time reaching consensus, and if it failed it could potentially damage the U.S.’s reputation amongst its creditors.
MacGuineas agreed that comprehensive reforms are difficult to enact, but she said that budgeting is about trade-offs and priorities. When making budget decisions it makes sense to consider all options. She also noted that making hard choices becomes even more politically difficult when Congress gives away its “sweeteners,” such as the Medicare prescription drug benefit, instead of including them in comprehensive reform.
Committee Chair Senator Kent Conrad, who led the hearing along with Senator Judd Gregg, said the current experience of reforming healthcare demonstrates the highly partisan atmosphere and confirms the need for a special legislative process, such as a bipartisan commission. President Obama specifically asked for healthcare legislation that reduces the cost of healthcare, Conrad said. Yet, little in the current healthcare legislation lowers costs because Congress has not been able to make difficult budget decisions in the normal legislative process.
"It is beyond question to me that you have got to have a special process,” Senator Conrad said. “They are the only things that have actually succeeded."
Video and links to all testimony are available at the Committee’s website.