At the Securities Industry and Financial Market Association’s (SIFMA) annual meeting in New York on Tuesday, Sens. Saxby Chambliss, R-Ga., and Mark Warner, D-Va., sat down with moderator Cheryl Casone of Fox Business Network to discuss the fiscal cliff and America’s future competitiveness in the global marketplace.
The senators, both members of the recondite “Gang of Eight” are now members of the abbreviated “Gang of Six” whose focus is on dealing with the national debt. They are joined by four members of the National Commission on Fiscal Responsibility and Reform to complete the “Gang of Six.”
With Monday night’s debate and particularly President Obama’s now retracted statement that sequestration was Congress’ idea and his statement that “sequestration will not happen,” the senators dove right into the mire that is our country’s current debt crisis.
Sen. Chambliss was characteristically blunt and told the audience comprised of members of the finance community that “If you like any part of the package that we have proposed to deal with the debt then we have not done our job.” He went on to lament the fact that no work will be done until the election is over and it will turn into a “political slugfest between Thanksgiving and Christmas.”
Sen. Warner thought it important to remind the audience how we got here. He blamed a rise in military spending, two wars that were put on a “credit card” and a much needed but ill-timed Medicare prescription benefit for seniors among others. Sen. Warner then reiterated that the only way the debt can be fixed is through “both spending cuts and new revenues,” a truth that is rarely echoed in Washington.
Both senators implored the business community to get involved and make the necessary sacrifices needed to fix the problem. They reminded the audience that the business community sat on the sidelines during the debt ceiling debate of the summer of 2011 and they needed to mobilize.
Casone then queried the senators as to how to change the anti-Wall Street rhetoric that is prominent in both the media and the consciousness of the general public. Sen. Chambliss responded that “People will always look for someone to blame,” and indicated that the damage done during the financial crisis would not quickly abate. “You can’t change perceptions overnight.”
Sen. Warner in what seemed to be a disclaimer for what he was about to say, told the audience to “match my capitalist credentials with anyone in this room.” Warner is a successful business man in his own right but went on to describe what happened before the 2008 financial crisis as “unprecedented black magic” indicating that it will take time and effort by the business community for its negative image to dissipate.
Warner went on to say that although Dodd-Frank is flawed, we should not “throw the baby out with the bathwater.” Some provisions in the legislation, such as higher capital standards, are necessary, Sen. Warner said. He also indicated that the Financial Stability Oversight Council (FSOC) needed to “step-up.”
Sen. Chambliss in keeping with the discussion’s turn onto the validity of Dodd-Frank said that he was worried about “rules for banks that spill into insurance companies.”
Both senators agreed that not tackling the issue of our debt and “punting” it down the road would be a horrible idea which could potentially lead to a credit downgrade. “What are we trying to do, emulate European Union?” Sen. Warner quipped.