–Budget Experts Offer Fiscal Entreaties & Scorn For Hill and Admin
–Former Defense Secretary Gates Says ‘Adults’ Must Solve Fiscal Crisis
–‘Fix The Debt’ Campaign Intensifies Effort To Get Big Budget Deal

By John Shaw

WASHINGTON (MNI) – During two days of deliberations in the past
week on the U.S.’s fiscal predicament, leading budget experts lectured,
implored, cajoled and pleaded with policymakers to begin assembling a
comprehensive plan to deal with the nation’s long-term deficit.

A host of U.S.-based think tanks are organizing the “Strengthening
of America” initiative to focus attention on the serious fiscal
problems.

In the first session last week, former Treasury Secretaries James
Baker and Robert Rubin said the U.S. is lurching toward an almost
certain economic crisis unless it adopts a plan to control long-term
budget deficits.

Baker and Rubin argued that the impending fiscal cliff deadlines
provide a huge opportunity for policymakers to craft a comprehensive
deficit reduction agreement.

The fiscal cliff refers to the convergence of several consequential
fiscal policy actions: the expiration of the Bush era tax cuts at the
end of 2012, the implementation of across-the-board spending cuts in
2013, and the need to raise the nation’s statutory debt ceiling some
time in coming months.

Rubin, who served as Treasury secretary for President Bill Clinton,
said the U.S. is on a “deeply dangerous fiscal trajectory” that can only
be reversed with a comprehensive deficit reduction agreement that is
reached soon and implemented in about two years.

Policymakers must tackle long-term deficits on “all
fronts:” non-defense discretionary spending, defense spending,
entitlements, curtailing some tax expenditures, and a “significant
increase in revenues,” he said.

He said he would prefer policymakers extend the fiscal cliff
deadlines for several months and use the extra time to enact a detailed
deficit reduction plan.

But he said he is not confident the deadline extensions will
happen. “I’m not sure we won’t go over the fiscal cliff briefly.”

Baker, who was a Treasury Secretary for President Ronald Reagan,
agreed the fiscal cliff deadlines should concentrate the attention of
policymakers on fiscal policy.

“We’re approaching a time of opportunity,” Baker said. “The time to
act is now.”

They said the polarized U.S. political system makes it extremely
difficult to solve difficult problems.

“I worry about the political dysfunction,” Baker said.

In the second seminar which was held Monday, former secretary of
Defense Robert Gates and the former chairman of the Joint Chiefs of
Staff, Admiral Mike Mullen, said controlling the budget deficit is a
critical national security challenge.

Gates and Mullen were sharply critical of the polarized and
poisonous political climate that has infected American life.

Gates said he hopes that “whatever adults remain in the two
political parties” will work together after the November elections to
craft a deficit reduction agreement that solves “the most difficult and
divisive problems facing this country” and averts scheduled
across-the-board spending cuts.

Both parties must abandon their “ideological zeal and short-term
political calculations” to advance the nation’s long-term interests,
Gates said.

Mullen was not able to offer an optimistic assessment, at least
pertaining to short-term challenges.

“I’m not as hopeful as others that we won’t drive off this cliff.
I’m worried sick about it, frankly,” Mullen said.

Former senator Alan Simpson and former White House Chief of Staff
Erskine Bowles, the co-chairmen of President Barack Obama’s 2010 fiscal
commission, argued that urgent and bold action is needed soon to tackle
the nation’s fiscal challenges.

“I’m really worried,” Bowles said, adding that “ultra partisanship”
in Congress is making progress on fiscal policy extremely difficult.

The United States is facing “the most predictable economic crisis
in history and also the most avoidable,” he said. “These deficits are
like a cancer. They are going to destroy the country from within.”

Simpson and Bowles touted the deficit reduction plan they drafted
in 2010 that achieves more than $4 trillion in deficit reduction over a
decade, with a blend of spending cuts and tax increases.

“$4 trillion is the minimum amount we need to reduce the deficit to
stabilize our debt,” Bowles said.

Former Senate Budget Committee chair Pete Domenici and former White
House budget director Alice Rivlin also addressed the conference and
pleaded for action to tackle the deficit.

“The key is bipartisanship and compromise,” Rivlin said, adding
that both spending cuts and additional revenues must be part of the
plan.

“Politicians are stuck in this groove that it’s either one way or
another,” she said.

Domenici said solving the nation’s fiscal challenges will require
accomplishing two formidable feats: assembling a bold plan that can win
support in Congress and using budget procedures that would allow
policymakers to move it through Congress in a single package that is not
subject to rafts of amendments in the House or a filibuster in the
Senate.

** MNI Washington Bureau: (202) 371-2121 **

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