Simulated budget battles deal blow to federal debt

by Michael Smith.

On June 26, several thousand Americans in 19 cities participated in a “national town meeting” hosted by AmericaSpeaks, a non-partisan, non-profit organization that seeks to give citizens a voice in national decision-making. Our purpose was to tackle the federal budget. We sat in groups of 8-10 people (each led by a neutral facilitator) and used handout materials to learn about the budget—and then tried our hand at fixing it.

Moderators in Philadelphia conducted the meeting via webcast technology and giant video screens. Participants used electronic polling devices to relay information to Philadelphia and, over the course of the day, build a database.

The polling revealed that in terms of gender, ethnicity, income and political leaning, we looked a lot like the general population. The only underrepresented ethnic group was Hispanics, and we were somewhat light on young adults.

I didn’t know what to expect from the 100 or so people at our meeting in Louisville. I assumed the group was passionate about politics: who else spends the first Saturday of the summer poring over budgets with strangers? Half of us were boomers, whose public discourse over the years has often taken the form of tantrums. Noting the catered box lunches stacked on the tables, I realized the elements were in place for a hell of a food fight.

It didn’t happen. We recited the Pledge of Allegiance together and set to work. We learned that the greatest threats to America’s fiscal future are not corporate bailouts, foreign aid, earmarks, immigration or even the wars in Iraq and Afghanistan. They’re the big entitlements—Medicare, Medicaid and Social Security. Because our population is aging and health care costs are rising, those programs will cause the national debt to exceed our annual economic output (GDP) by 2025—and triple it by 2050.

Needless to say, our economy will collapse long before that point (Greece began to sink as its debt-to-GDP ratio hit 115%). The usual remedies offered are familiar. Idealists on the right want to cut spending and try to outgrow the deficits. Idealists on the left want to protect social programs and raise taxes. Realists—a group that gained new converts on Saturday—understand that neither strategy alone will suffice. The numbers simply don’t add up.

Our job at the town meeting was to make them add up, through spending cuts and tax increases, to $1.2 trillion. That’s what has to come off the projected deficit for 2025 just to bring the growth of our debt in line with the growth of the economy. Not a balanced budget by a long shot—but a big improvement over our present course.

Let it be said that Table #2 in Louisville hit the target, as did many others around the country. We cut Medicare, Medicaid and defense spending, raised the age for receiving full Social Security benefits, eliminated the tax deduction for home mortgage interest, and raised corporate taxes.

AmericaSpeaks will use the data collected at this event to quantify support for specific deficit reduction measures and then present its findings to Congress and President Obama. As this blog has documented, the issue of debt and deficits has gone mainstream. A Gallup poll conducted in late May found that Americans consider the federal debt and terrorism the most serious threats to the country’s future.

Ordinary citizens may be more prepared to deal with the debt than our so-called leaders. I saw a roomful of liberals, conservatives and moderates take pen in hand and slay one sacred cow after another, all without slaying each other. What a concept: grownups demonstrating civility and compromise while going after a common threat. Should we expect less from Washington politicians? Don’t we pay them to make the tough calls?

Nowadays, the call they normally make is to China, buyer of our IOU’s. That’s tough all right—on our grandchildren.

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1 Comment
  1. Hollis says:

    The Concord Coalition used to run exercises like this in the 1990s. Citizens can make the tough choices, but our representatives cannot. Changing the constitution seems like a radical step, but it’s better to make the hard choices ourselves than to have the decisions forced on us by foreign lenders who refuse to extend us any more credit.

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