Rivlin warns against federal debt outpacing economy
October 10, 2012 | By Lorna Aldrich | email@example.com
Alice Rivlin, former chief of the Office of Management and Budget, advocated addressing the federal deficit with a "some of each" solution -- less spending and more revenues -- at an October 10 Newsmaker.
"The essence of the problem is that, as we look ahead, our debt is growing faster than our economy can grow, " she said.
She cited as reasons more elderly people and the rising cost of medical care. Social Security, Medicare and Medicaid, under current projections, will drive up spending faster than economic growth, she said.
Revenues to meet these expenditures would require continuous tax increases, she said. She concluded that slower entitlement spending growth and more revenue are both required.
She cautioned against acting so fast that it would derail the current economic recovery. She also favored more economic stimulus now.
Rivlin appeared with David Walker, former head of the Government Accountability Office, and presently CEO of Comeback America. They reported on his organization's initiative that presented potential deficit reduction policies to 30 audiences in 16 states, including nine swing states.
The proposals had to foster economic growth, be socially equitable and culturally and politically acceptable, Walker said. He reported results from voter samples in Ohio and Virginia.
Ninety-seven percent of those respondents found the nation's fiscal and debt challenges serious and said that addressing them should be a top priority. Eighty-five percent agreed that spending cuts and tax increases will be required.
Both speakers addressed the need for immediate action by whoever is elected president. Rivlin said that a president can't do much without Congress; he can lead but he can't force any solution.
"There is very little that can be done by executive order," she said. She urged a declaration that the lame duck Congress must "come to grips" with the problem and avoid the "fiscal cliff" mandatory spending cuts at year-end.
Walker said that the president could creat a strategic framework for evaluating programs. He also advocated political reform. He would like redistricting reform so that more districts would be competitive, term limits of 12 to 18 years, and lobby reforms.