Sen. Joe Lieberman, Independent Democrat
With the federal government on the precipice of default if the debt ceiling is not raised and Connecticut laying off thousands of employees, a group of centrists met Friday to discuss solutions for America’s fiscal problems.
No Labels and the Comback America Initiative hosted the luncheon featuring a number of Connecticut political veterans. Independent Democratic Sen. Joe Lieberman gave the keynote address.
No Labels is a national organization with members from both major parties and independents with centrist views. The Comeback America Initiative, located in Bridgeport, is a nonprofit that promotes fiscal responsibility and sustainability.
CAI’s founder, David Walker, former U.S. Comptroller General and CEO of the Government Accountability Office, said the group develops “nonpartisan solutions that can gain bipartisan support.”
Lieberman said historically the two major parties played an important role “bringing together minorities – I don’t mean that in an ethnic sense – to form majorities.”
He said more recently parties have tended to “pull us into conflict and not into unity.”
“The day after an election, the next election begins,” said Lieberman, who is retiring at the end of his term in 2013.
“The ultimate remedy to this is the grassroots,” he said.
Lieberman said the election of President Barack Obama and the rise of the Tea Party in 2010 were both driven by a desire for change. “The people who voted for Tea Party candidates are much broader than that,” he said.
Lieberman quoted President John Adams: “There are two ways to conquer and enslave a nation. One is by the sword, the other is by debt.”
He said the national debt is over $14 trillion and growing by more than $1 trillion a year. He said 10 years ago the federal government collected 19.5 percent of gross domestic product in revenue and spent 18.6 percent of GDP, resulting in a surplus.
Last year, Lieberman said, the federal government spent 23.9 percent of GDP, but only collected 14.9 percent.
“You don’t have to be a Nobel-prize winning economist or David Walker to understand” the need to cut spending and raise revenue, he said.
Lieberman said the challenge is that raising taxes and cutting spending go to “ideological and partisan core” of the major parties.
He said the debt ceiling vote will force a decision, but he doesn’t like the solution of the day in Washington, associated with Sen. Mitch McConnell, the Republican Minority Leader from Kentucky, which he called “Plan Z.”
He said that plan gives the President power to raise the debt ceiling, while creating a bipartisan commission to develop a budget-balancing plan that would get an up or down vote in Congress.
“It’s what you do when everything from A to Y doesn’t work,” Lieberman said. “It’s kicking the can to the next state.”
He also expressed concern whether Republicans in House would support the plan.
Despite disagreeing with him on many issues, Lieberman praised Rep. Paul Ryan, the Wisconsin Republican who chairs the House Budget Committee, for making a detailed budget proposal.
“I give him a lot of credit for having the guts,” he said. Lieberman said some Democrats feel “Ryan gave the gift that keeps on giving,” referring to special election demagoguery on Ryan’s budget.
Lieberman said his dislike for Ryan’s proposed solution for Medicare led him to write a Washington Post op-ed on the subject, which in turn led to a partnership with Sen. Tom Coburn, R-Oklahoma, on the issue.
“If we don’t fix Medicare,” Lieberman said, “it’s not like it’s going to chug along happily.” He said the average Medicare beneficiary gets $3 in benefits for every $1 they paid in, while life expectancy has increased by more than a decade since Medicare was originally passed.
“Our future is on the line,” Lieberman said.
Former U.S. Comptroller General David Walker, founder of the Comeback America Initiative
Walker, former Republican Rep. Nancy Johnson and former Democratic Rep. Barbara Kennelly had a discussion about the federal budget.
Walker said the federal government spends $4 billion a day more than it collects in revenue, and would still be $2 billion short a week if it only made entitlement and interest payments.
Kennelly said fears of a federal default are overblown and pointed to the low interest rate on Treasuries as evidence.
Johnson said Washington has long known that Medicare, Medicaid, Social Security and interest will eventually consume all federal revenue, but those predictions never prompt action.
“If you adjust some of the assumptions behind those numbers you can tame them,” she said.
She pointed to the Patient Protection and Affordable Care Act – also known as Obamacare – and its treatment of reimbursements under which “no hospital can survive.”
“They don’t expect that to really happen,” Johnson said. “It’s just in their to satisfy the numbers game.”
“We really have an obligation to demonstrate that democracy is capable of making hard decisions,” Johnson said.
“We denigrate the Tea Party at our own risk,” she said.
“There’s practically nothing in Congress that has to be done,” Johnson said. “We don’t do budgets anymore.”
Johnson said Congress should raise the debt ceiling and “tie it hard to current action.”
Walker, former Democratic Rep. Barbara Kennelly and former Republican Rep. Nancy Johnson
Johnson suggested eliminating the mortgage interest deduction for second homes and limiting the deduction to the average cost of a home. She also said Congress should consolidate the subsidies for retirement saving to make them easier to understand.
Kennelly, who used to lobby on behalf of the program, said politicians can’t say Social Security isn’t affordable. “We have to afford it,” she said.
Johnson said Congress should “put off some of the spending we’ve planned.”
Kennelly and Johnson agreed Congress should look at cutting the defense budget as well.
“Notice we don’t do battle just the way we used to,” Johnson said. “We do public education just the way we used to.”