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NAILBA 32: Simpson and Bowles came “to make members mad”

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Alan Simpson and Erskine Bowles came to NAILBA 32 in Dallas on Saturday to make people mad, hoping it will lead to activism on the part of NAILBA members.

Simpson and Bowles, who were appointed by President Obama in 2010 to co-chair the National Commission on Fiscal Responsibility and co-founders of the Campaign to Fix the Debt, receive about a dozen speaking invitations per day, according to Bowles. Because they have to be selective about where they choose to speak, they opt for forums where they think the audience can make a difference. NAILBA made the cut, and it seems fair to say that members were glad they had the opportunity to get mad after hearing the remarks from this famous bipartisan team.

Simpson and Bowles advised the “mad” NAILBA audience to visit their representatives and ask them about their views on deficit reduction. If they don’t have good answers or say they can fix it without making cuts to entitlements, don’t support them (particularly financially) as they look to get re-elected.

Their well-publicized plan, intended to identify policies to improve the fiscal situation in the medium term and to achieve fiscal sustainability over the long run, purported to reduce the federal deficit by nearly $4 trillion and reduce the debt 60 percent by 2023, 40 percent by 2035 and entirely by 2035. It reformed Social Security and the tax code, and included health-care savings and an illustrative savings of $200 billion of discretionary cuts. It called for roughly $2 in spending cuts to $1 in revenue increases.

The final plan, released in December 2010, was able to garner bipartisan support from 11 Democrats and Republicans on the 18-member commission, but fell shy of the 14 needed to guarantee House and Senate floor votes. Bowles said that when they brought the plan back to President Obama and he walked away from it, saying he would use it as “framework” for discussions with House Speaker John Boehner, Bowles and Simpson were surprised and angry.

But they have far from given up, and continue to provide a candid, bipartisan discourse on what the government must do to confront America’s deficit, debt and interest gap. Here are some highlights from their Saturday morning keynote presentation remarks at NAILBA 32 in Dallas:

  • Bowles noted that the federal government hasn’t had a budget in 5 years. “We are operating the largest economy in the world on a monthly basis. That is crazy.”
  • “It doesn’t get any stupider than the sequester. The sequester is really stupid, stupid, stupid,” Bowles said, adding that all of the cuts are across the board, and none of the cuts involve entitlement programs.
  • The United States spends twice as much on health care as any other developed country, but rank between 25th and 50th in critical outcomes such as life expectancy.
  • We spend more on defense than the next 17 countries combined, including China and Russia. “We can’t afford to be the world’s policeman,” Bowles said. The U.S. defense budget is $600 billion now while the next biggest 17 defense-spending countries combined spend $540 billion.
  • Simpson says there are somewhere between 1 million and 10 million different defense contractors. “This defense department is in-auditable, and they’ll tell you that with pride.”
  • Simpson and Bowles said that the most controversial of their plan’s recommendations turned out to be a proposal to raise the Social Security eligibility age by 1 year, 40 years from now, and another year in 65 years. Bowles pointed out that when Social Security was founded in 1935, the eligibility age was 62 and life expectancy was less than 65. Now, life expectancy is 79 but people can still start claiming Social Security at 62. “We have an arithmetic problem,” Bowles said.
  • Bowles: “We can’t grow our way out of this problem… We can’t tax our way out of this problem…  We can’t cut our way out of this problem.”
  • Simpson: “We borrow 40 cents for every dollar we spend.”
  • Simpson recommends interested persons check out the web sites and
  • Simpson: “Where we’re headed is painful, but where our children are headed is just plain cruel.”

For more exclusive coverage from NAILBA 32, see:

NAILBA 32: The valet and JFK

Digging into IUL at NAILBA 32

How to say the right thing at a funeral


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