Bowles pleas for fiscal responsibility

By Owen Covington, The Triad Business Journal, August 15, 2013

Erskine Bowles teed off on the inability of Congress and the Obama administration to make the tough choices the country needs to become fiscally responsible during a talk to more than 400 Triad business and political leaders Thursday.

It was a day set aside to promote regionalism as part of the Wyndham Championship golf tournament, but Bowles zeroed in on problems in Washington, D.C., during the Champions Breakfast at Grandover Resort.

Bowles, a Greensboro native and Democrat who has been White House chief of staff, made a run for the U.S. Senate and headed the UNC system. And now his name is tied to federal fiscal responsibility after heading a federal commission on the topic with former U.S. Sen. Alan Simpson, a Republican.

"I believe if we don't get these elected officials in Washington to wake up and put this ultra-partisanship aside, and I'm talking about people on both sides of the aisle, ... and pull together rather than pull apart, we will face the most predictable economic crisis in history, and the markets will bring it to us," Bowles said. "We are operating the largest economy in the world on a month-to-month basis, and that is crazy."

It was a sobering assessment of the fiscal state of the country, and one that Bowles has offered frequently since the Simpson-Bowles commission offered its first recommendations in December 2010.

In a light-hearted moment, Bowles explained that the commission was called Simpson-Bowles instead of Bowles-Simpson "because everything is known by its initials in Washington."

But beyond a few moments of levity, Bowles remained on target in imploring those gathered to impress upon their elected leaders the need to address the growing debt and the inability to enact solutions.

He laid out five areas the federal government is "avoiding like the plague":

Health care — speaking to the continually rising health care costs, Bowles noted that those costs were 10 percent of the federal government in 1981; by the end of this decade, they will be as much as a third of the budget. At the same time, tens of millions have gone without coverage, even while the country spends twice as much as other developed countries.

Defense — "We spend more today on national defense than the next 17 countries combined," Bowles said.

He said the country can't afford to be the world's policeman, and that the growing debt is a major national security threat. As an example, Bowles noted a treaty with Taiwan to protect that country if it's invaded by China.

"There's only one problem with that," Bowles said. "We'll have to borrow the money from China to do it."

Income tax code — Bowles is an advocate of starting with a clean slate, free of any tax credits or exemptions, and then building a new progressive code from scratch. Credits and exemptions could be added back in, but only if justified, he said.

"We have the most inefficient, ineffective, globally anti-competitive tax code," Bowles said.

Social Security — It's an area that Bowles said he received hate mail and death threats on after the commission recommended raising the age of eligibility by one year to age 66 in 40 years and by another year in 65 years.

"We don't want to throw granny over the cliff," Bowles said. "We are granny."

Interest on the debt — Bowles said the country is now spending $230 billion annually on interest from the federal debt, a number that's relatively low given today's artificially low interest rates. It's not out of the question for that to rise as high as $1 trillion annually if rates start to climb, he said.

At the same time debt payments are taking away from other areas where federal dollars are needed, those payments are going to foreign countries, chiefly China, who can then make the investments the U.S. can't.

"So the next thing is created over there, not here, and the jobs of the future are created over there, not here," Bowles said. "That's crazy. And you ought to be really mad about it. And you should hold these members of Congress and the president accountable."

Bowles said he's been encouraged by the diversity of views of those who support some or all of the recommendations of the Simpson-Bowles commission, and said an online petition by fixthedebt.org, a campaign he co-founded to promote action on the issue, has garnered 600,000 signatures.

"We've got to make the hard decision, the tough decision," Bowles said. "We've got to step up to these big challenges."