Time to Dust off “The Moment of Truth”?
On July 17, 2011, I posted an article on my blog entitled “Moment of Truth — A Missed Opportunity?” that strongly supported the recommendations of The National Commission on Fiscal Responsibility and Reform, a bipartisan group co-chaired by then Senators Erskine Bowles and Alan Simpson, which was formed to assess the problems created by the 2008/09 financial crisis. Even though it was hailed as a cooperative breakthrough at the time, this report surprisingly disappeared from the political landscape with no formal action, something which has puzzled and disappointed me ever since. The subtitle of that report dated December 2010 was, in fact, “The Moment of Truth” which had as its mission the daunting challenge to balance the national budget by 2015 and improve our long-term economic outlook to avoid a future financial crisis like the one we had just endured. In so doing that report addressed in a very deliberate and thoughtful way the following six main categories of concern:
- Discretionary Spending Cuts
- Comprehensive Tax Reform
- Heath Care Cost Containment
- Mandatory Savings
- Social Security Reforms to Ensure Long-Term Solvency & Reduce Poverty
- Process Changes
Fast forward to last Friday, April 28, 2017, when that same former Senator Bowles wrote an Op-Ed piece in our local newspaper, the Arkansas Democrat-Gazette, indicating that various trust funds will run out of money between 2021 and 2030 as a result of high levels of mandatory spending. Most notably just Medicare, Medicaid and Social Security alone currently require 81% of every dollar collected and that rate will balloon to 99% in 2027, only a decade away. As a result of this situation, Mr. Bowles allows that we will be confronted with having to borrow much of the money needed to fund other government functions such as our Military, Homeland Security, Education, Infrastructure, Research for Economic Development, etc. from foreign countries which will create an annual deficit of $1.4 trillion. While unsustainable in his opinion, he feels that this financial problem is still solvable but only if both political parties come together and make the hard decisions to avoid such a calamity. If you think the 2008/09 crisis was bad, I can only imagine what the future holds for America if Mr. Bowles predictions are correct.
So, that brings us right back to “The Moment of Truth” which he and Alan Simpson crafted in 2010. Why not just dust that collaborative document off and put it before our congress and president for consideration NOW? With our national debt rapidly closing in on $20 trillion, time is of the essence in my view, so let’s not waste another seven years of inaction, as most of the hard work toward a solution has already been done.