Madam Speaker, I am planning to reintroduced legislation in the House of Representatives aimed at addressing the looming financial crisis facing the Nation, the Securing America's Future Economy,…
Madam Speaker, I am planning to reintroduced legislation in the House of Representatives aimed at addressing the looming financial crisis facing the Nation, the Securing America's Future Economy, SAFE, Commission Act. The bill would establish a national bipartisan commission that will put everything--entitlement spending as well as all other Federal programs and our Nation's tax policies--on the table and require Congress to vote up or down on its recommendations in their entirety, similar to the process set in 1988 to close military bases. Mandating congressional action on the panel's recommendations is what differentiates this commission from previous ones.
Support for the bill is coming from both sides of the aisle. I submit for the record an analysis by the Heritage Foundation and a letter of support from the Concord Coalition.
This legislation will be good for the future of America.
The Heritage Foundation,
Washington, DC, July 14, 2006.
The Wolf SAFE Commission Act: A Chance To Get the Budget Back on Track
(By Stuart Butler)
The recent Mid-Session Review by the Office of Management
and Budget underscores the facts that sensible tax reform
stimulates the economy and that faster growth swells revenue
to the government as a byproduct of new jobs and extra income
for Americans. The review also confirms the overall,
disturbing long-term budget picture indicated in the
Congressional Budget Office's (CBO) long-term forecast. Under
current law, both taxes and spending will rise rapidly during
future decades towards European levels, with an ever-growing
government taking a larger and larger proportion of the
nation's income and threatening America's future economic
growth. Decisive action is needed.
But faced with this threat, Washington is paralyzed. Rather
than seriously tackling the tsunami of entitlement spending
that will hit the budget after the baby boomers begin to
retire, Congress actually made the situation far worse by
enacting the huge Medicare prescription drug benefit. And
while the Bush tax reforms have significantly helped in the
short term, even if made permanent they would shave only
about one percentage point from the future growth in taxes.
Absent any additional reforms, the CBO forecasts that, with
the Bush tax cuts extended, federal taxes will top 20 percent
of GDP by about 2025 and approach 23 percent of GDP by 2045.
The historical average, and today's level, is just over 18
percent of GDP
With Congress polarized and paralyzed, some Members of
Congress, along with President Bush, are exploring the idea
of a bipartisan commission as a way to break away from the
path of rapidly rising spending and taxes. President Bush
pressed for an entitlements commission in his State of the
Union address. Senator Judd Gregg (R-NH) has sponsored
legislation (S. 3521) that includes a commission to review
the long-term solvency of Social Security and Medicare.
Meanwhile, Representative Frank Wolf (R-VA) has crafted a
commission bill (``The SAFE Commission Act,'' H.R. 5552)
specifically intended to win bipartisan support for bold
action to secure the country's fiscal and economic future.
Senator George Voinovich (R-OH) has introduced that bill in
the Senate (S. 3491).
Commissions can help break a political logjam. They can
also become vehicles for action that achieves a short-term
political fix and yet does little in the long term or even
makes things worse. So the political dynamics and mandate of
a commission are critical. Fortunately, the Wolf commission
bill recognizes these facts of political life and offers
real hope for sensible action. A reason for this is that
in its instructions to the commission, the bill wisely
combines reform with fiscal changes in a manner that could
achieve a breakthrough.
The core of the fiscal problem is the sharp projected rise
in future entitlement spending, especially spending on
programs for middle-class retirees. Contrary to many people's
perception, taxes are not falling--as noted, taxes are
projected to rise steadily to record levels under current
law, in real terms and as a percentage of GDP. Still, in
today's political deadlock many lawmakers maintain that tax
revenue must be part of the equation if they are to have the
political ``cover'' to accept curbs on popular entitlements.
But for good reasons, conservatives strongly resist the
idea of raising taxes. For one thing, taxes are not the
problem--spending is. Moreover, raising tax rates or
instituting new taxes would threaten economic growth,
compounding the economic harm associated with government
spending. Further, raising taxes likely would reduce the
pressure on Congress to curb spending or, worse still,
encourage lawmakers to increase their spending promises.
The Wolf bill seeks a solution to this political equation.
It creates a bipartisan commission intended to address the
unsustainable imbalance between federal commitments and
revenues while increasing national savings and making the
budget process give greater emphasis to long-term fiscal
issues. While the commission could consider a range of
approaches, the bill places emphasis on two: reforms that
would limit the growth of entitlements while strengthening
the safety net and tax reforms that would make the tax system
more economically efficient and improve economic growth. The
commission would hold public hearings around the country to
discuss the long-term fiscal problem, and its recommendations
would receive fast-track consideration by Congress.
By combining a slowdown in entitlement spending with
reforms to strengthen assistance to the needy, a commission
proposal could win support of liberals and others who worry
that surging middle-class retiree spending in the future will
crowd out safety net spending. And by placing an emphasis on
pro-growth tax reform, a commission proposal could also lead
to some additional revenues not by raising taxes but thanks
instead to faster economic growth--just as the Bush tax
reforms produced the recent sharp increase in federal
revenues. Combining these features in a commission proposal
could lead to a package that conservatives, liberals, and
moderates all believe would advance their agendas--a
necessary result for an economically sound agreement to
succeed in a polarized Congress.
Some might argue that appointing a commission to address
the long-term fiscal situation is an abrogation of
responsibility by Congress. In an obvious sense, it is. But
the Wolf bill also shows that lawmakers recognize that
America's budgeting system is broken and in the current
environment cannot lead to a responsible long-term federal
budget. Representative Wolf's commission proposal seeks to
alter those destructive dynamics in order to secure a sound
economy for future generations.
The Concorde Coalition,
Arlington, VA, June 28, 2006.
Hon. Frank Wolf,
House of Representatives,
Washington, DC.
Dear Mr. Wolf: On behalf of The Concord Coalition, I am
writing to express our deep appreciation for your leadership
in sponsoring the Securing America's Future Economy, SAFE,
Act, which would establish a bipartisan commission to
recommend legislation addressing our Nation's unsustainable
long-term fiscal outlook.
We strongly agree with you that the need for serious action
is not just an economic imperative but a moral one as well.
We also share your view that partisan divisions in Washington
have become so wide that a commission may now be the only way
forward on this issue. By establishing a fiscal policy
commission with a broad mandate, meaningful public
engagement, and the ability to consider all policy options,
your legislation represents a very constructive step toward
bringing about consensus solutions.
The demographic and fiscal challenges facing the budget in
the years ahead are well known. Analysts of diverse
ideological perspectives and nonpartisan officials at the
Congressional Budget Office (CBO) and the Government
Accountability Office (GAO)
have all warned that current fiscal policy is unsustainable
over the long-term.
What is needed now is a clear commitment to address these
issues in a straightforward, generationally equitable and
bipartisan manner. Achieving consensus around the hard
choices that must eventually be made will require open minds
and bipartisan cooperation. Your legislation would establish
a process to do just that.
Recently, The Concord Coalition organized a forum with
experts from across the political spectrum to discuss the
possibility of establishing a bipartisan commission to deal
with our longterm fiscal outlook. Three conclusions from the
forum stand out:
The commission must have meaningful participation and input
from a broad range of views. Bipartisan support is essential
to enacting and maintaining policies that will put the budget
on a fiscally sustainable course.
The commission should have a broad mandate with no
limitations on what policy options the commission can
consider or preconditions on what must be included--or not
included--in a proposal. Everything must be on the table,
including revenues as well as entitlements and other
spending.
The commission should engage the public in a dialogue about
the long-term fiscal challenges and the tradeoffs that will
be necessary to bring about a more secure and sustainable
economic future.
The Concord Coalition commends your proposal because it
recognizes each of these conclusions. The SAFE Act would
establish a bipartisan commission of experts and legislators
appointed by the President and Congressional leaders of both
parties. The Commission would be directed to hold hearings
across the country and incorporate the input from the public
in its report. This is a very welcome provision. The public
should be treated as if it were, in effect, a member of the
commission. Doing so will enhance the commission's
credibility and help build acceptance for its
recommendations. Our experience hosting meetings around the
nation on this issue has demonstrated that when the American
people are armed with the facts and given the opportunity for
honest dialogue, they are willing to set priorities and make
the hard choices that often are not made in Washington.
Most importantly, the Commission would be allowed to
consider all policy options to address the imbalance between
long-term spending commitments and projected revenues,
including reforms of entitlement programs and tax laws. In
our view, this is an essential prerequisite for attracting
well-respected individuals to serve on the commission and for
finding solutions that are both substantive and politically
viable.
We particularly commend you for your willingness to
consider constructive suggestions for changes to achieve
broader bipartisan support and increase the prospect that the
commission will produce a balanced proposal that can be
enacted into law. In that regard, we would suggest a few
changes that we believe would strengthen the bill and help
ensure the commission receives the bipartisan support
essential to its success.
We believe the commission would have greater credibility if
the appointees were more evenly divided between parties,
potentially with some commission members appointed jointly or
as a result of bipartisan consultation. Further, we would
suggest that the commission have bipartisan co-chairs. We
would also encourage you to consider a more expansive
legislative process, which would allow for greater debate of
policy tradeoffs by allowing the consideration of budget
neutral amendments. Those who oppose the priorities and
tradeoffs recommended by the commission should be challenged
to say what they would do instead and given the opportunity
to put forward alternative policies to address the problem.
A commission isn't a silver bullet that will solve our
fiscal problems by itself. It will still take action by
Members of Congress and the administration to adopt the tough
choices. But a commission with credibility and bipartisan
support could provide the leadership necessary to ensure that
these issues receive the attention and serious consideration
they deserve.
You deserve great credit for your willingness to undertake
the difficult but absolutely essential task of focusing
attention on the tough choices our nation faces. The Concord
Coalition stands ready to assist in any way that we can.
Sincerely,
Robert L. Bixby,
Executive Director.
