The Simpson-Bowles plan is a solution to our fiscal problems. It not only reduces our fiscal deficit to 2.2% of GDP, but also is a bi-partisan program that will work when nothing else has.
President Obama must lead the way on this issue. As I’ve recommended before and will do so again, Simpson-Bowles gives America a chance at recovery before we go over the “fiscal cliff” Erskine Bowles has been warning us about.
We cannot afford to wait until after the election to implement this program. The day we fall over that cliff is rapidly approaching and our politicians are not reacting. Partisanship is destroying our legislative system and rejection of the Simpson-Bowles plan is case in point. Politicians refuse to see the bigger picture: if we don’t act now, we will fail. And fast.
In a rare group appearance, Warren Buffett, Alan Simpson and Erskine Bowles came together in Sun Valley for a CNBC interview. They discussed the Simpson-Bowles plan to reduce the federal deficit and called out Congress for “not doing its job” to help our economic recovery.
The Simpson-Bowles plan does exactly what it was meant to do. The former Senator and former Chief of Staff to President Clinton sat down with Republicans and Democrats and came up with a viable plan to reduce the deficit. They also got a majority of Republicans to vote for it and support in both the House and Senate, but it’s still not enough.
As Bowles was the last man who was actually involved in balancing the budget, it is all the more shocking that they have to fight for their plan. Bowles has real experience in this arena – something our politicians are lacking in.
To be expected, the outlook is bleak. Buffett said that the general economy’s growth has slowed so that it is essentially flat. He does note that the US is still doing better than “virtually any other big economy”, but there is no question that we are in trouble even if there has been a pickup for residential housing.
The task set out for Simpson and Bowles was indeed great. In Bowles’s words, they worked hard to get common sense to overrule politics, a very tough thing in Washington. Even with bi-partisan Senate support and around 150 House members, they are having to look elsewhere for backing.
They have put together a CEO fiscal leadership council of over 100 Fortune 500 CEOs actively trying to influence Congress to do something that will help our recovery. They are also mounting a social media campaign to get 10 million signatures to tell Congress that they must put partisanship aside and address this painful situation.
Indeed, there is no easy way out of our fiscal situation. But just because the process of recovery will be painful, does not give Congress the right to continue to stall on this issue.
Bowles rightly argues that if politicians do not come together the US will be facing the biggest predictable crisis in history. Our fiscal path is not sustainable. He compares deficits to cancer, over time they will destroy America from within.
This morning’s interview affirms what I have been writing about for years. We cannot do politics as usual anymore. It just isn’t working.
The Simpson-Bowles plan represents a legitimate way out of this crisis and a whole new way of looking at these issues. It’s time that Washington got it together and rose above the partisan politics that is destroying our system. We will soon fall over the “fiscal cliff” if they don’t.
