This story was updated on Sept. 2 to reflect comments from Fix the Debt concerning their fundraising.
Colorado ought to lead the nation in finding solutions to an overwhelming national debt that left unchecked may force the United States into the same kind of austerity measures that now plague the European economy.
Members of Fix the Debt Colorado, including former Gov. Dick Lamm and U.S. Rep. Mike Coffman, R-Aurora, made that proposal Thursday evening in a conversation with the South Metro Denver Chamber of Commerce. Lamm is a co-chair of Fix the Debt Colorado, part of a national organization that wants to educate members of Congress, “thought leaders and citizens across the country about the need to address the nation’s fiscal challenges.” Its core principles include a balanced budget, reform of Medicare and Medicaid, strengthening Social Security and comprehensive and pro-growth tax reform.
Fix the Debt was launched earlier this year by former Clinton chief of staff Erskine Bowles and former U.S. Sen. Alan Simpson, R-Wyo.; both chaired the National Commission on Fiscal Responsibility and Reform. The organization has chapters in 23 states.
Thursday’s meeting included representatives of U.S. Sens. Mark Udall, D-Eldorado Springs and Michael Bennet, D-Denver; and U.S. Reps. Diana DeGette, D-Denver. and Cory Gardner, R-Yuma.
Lamm said the federal debt is between $80 trillion and $100 trillion, balanced against a $17 trillion national economy. “It’s an incredibly irresponsible amount of money,” Lamm said of the debt. “History will judge us as the most irresponsible” generation, one that leaves its debts to its children and grandchildren.
As to the Social Security trust fund, Lamm said there isn’t a dime in it; the minute it comes into the system from the payers, it’s spent and replaced with federal bonds “that our children and grandchildren will have to pay back. They might as well be Confederate war bonds,” he quipped. Social Security retirement age should be increased, given that people are living longer. He noted his own father, who passed away at the age of 98, got 65 times what he put into Social Security.
Lamm is a long-time proponent of reforms for Social Security, Medicare and Medicaid; he chaired a panel on these reforms with Simpson in Washington in 1996, and it was a core principle in his effort to run for president on the Reform Party ticket that year.
His parents left him with the world’s largest creditor nation, Lamm said, but his generation will leave his children with the world’s largest debtor nation. His parents’ generation left him with little federal debt; but “we are leaving our children with so much debt that it’s almost unimaginable.”
Rick Whipple, chair-elect of the suburban chamber and a member of the Fix the Debt Colorado steering committee, has been to Washington several times to engage members of Congress on the debt issue, which he likened to pushing the biggest rock up the biggest hill. “We’re starting to get momentum in Colorado,” Whipple said. As a group, as citizens, “we need to be engaged, proactive with ideas,” encourage the congressional delegation to work together, and talk to political leaders who can relay the message of fixing the debt to their constituents. “We’ll get the other states to follow us.”
Coffman outlined some of his ideas for resolving national budget issues; he advocated for cuts to the defense budget by pushing capabilities to state guard and reserve units, which he said could be done at a lesser cost, and to “get out of the nation-building business.”
There’s a window of opportunity to address the problems of Social Security, Medicare and Medicaid, Coffman said. “Very modest changes today” will produce big savings down the road. Coffman said he would want to see those programs turned into block grants to the states, to allow them to manage those programs, similar to the welfare reforms in the 1990s.
The wealthy should pay a greater share for Medicare, and the country should phase-in an increase in the age of retirement for Social Security. “The longer we wait, our reforms will be defined by creditors,” and that means austerity measures. “We have to strike a grant bargain and both sides have to give some.”
John Brackney, CEO and president of the chamber, said that as Americans, “we have to be smarter than the TV commercials… someone has to be statesman enough to get something done in Washington.”
In response to audience questions, Coffman said that a plan for fixing the debt could be contained within discussions of the debt limit, which will be up for review again this fall. He also said he did not favor privatizing Social Security. “It is a safety net” and to privatize it would make it subject to the volatility of the financial markets, he said. Other members of the audience suggested raising the wage cap for Social Security, currently at $107,000; Lamm advocated raising it to at least $200,000.
One challenge in fixing the debt is to get the public to become engaged. Coffman told The Colorado Statesman that engagement has to start with Congress. Its members must be willing to live with the same level of benefits as the average American, in pay, pensions and health care. Such reforms, and those of Medicare, Medicaid and Social Security will be tough to do in a divided government, and both sides must be willing to give, he said. It will also take leadership from the President, Coffman said, which he said he hasn’t seen yet on these issues.
Lamm told The Statesman that it is difficult and maybe impossible. “Democracy has to have an educated public that recognizes the stakes of public policy. I get very discouraged.” Lamm noted that Canada was able to fix its national debt, but the American public is “overindulged with little appreciation for the consequences to our children and grandchildren.” It may take a crisis, but no one wishes a crisis on a society. “It’s like Russian roulette… not the kind of thing that a sane society does to itself. But I don’t see a pathway that doesn’t involve a crisis to our economy. The hour is late and the problem is significant.”
“There are a lot of good people on this steering committee, and speaking for myself, we’re frustrated at how we raise this issue. The public has lost faith in government, and who can blame them?”
According to a March 2013 article in the liberal magazine The Nation, Fix the Debt is fronted by prominent Democrats and Republicans in every state. Former state Sen. Norma Anderson, R-Lakewood is the Colorado chapter’s co-chair, along with Lamm. The chapter’s steering committee reads like a “Who’s Who” of Colorado politics, including Gov. John Hickenlooper, Denver Mayor Michael Hancock, former U.S. Sens. Hank Brown and Gary Hart, former Secretary of State Mary Estill Buchanan, former State Treasurer Cary Kennedy, University of Denver Chancellor Emeritus Dan Ritchie, and former Governor Bill Ritter, Jr. The national steering committee includes former U.S. Sen. Tim Wirth.
The Nation reported that the largest funder of Fix the Debt, with a $60 million donation, is Pete Peterson, former U.S. Secretary of Commerce under President Nixon and a Wall Street investment banker. According to The Nation, Petersen advocates for cuts in Medicare, Medicaid and Social Security, and “tax breaks for corporations and the wealthy.” Fix the Debt reportedly received a $1 million contribution from General Electric Wednesday. But Ted Greener, spokesman for Fix the Debt, told The Statesman this week that the $60 million figure is incorrect. “In fact, we do not even have that much money on hand total. Our funding comes overwhelmingly from corporations, foundations and CEOs.” Greener said the correct figure and the campaign’s total aggregate budget is $40 million.
Fix the Debt is a project of the Committee for a Responsible Federal Budget (CRFB), which is also funded largely by Peterson. CRFB has been working on entitlement reform since its founding in 1981.