January 23, 2013
"American Town Meetings" To Slash Deficit
By Mike McManus
President Obama’s Inaugural Address was very disappointing in
sidestepping America’s biggest problem – our soaring debt. Part
of just one sentence mentioned the issue:
“We must make the hard choices to reduce the cost of health care
and the size of our deficit.” However, the very next sentence
made it clear he had no such intention:
“But we reject the belief that America must choose between
caring for the generation that built this country and investing
in the generation that will build its future.” He explicitly
rejected any reductions of “Medicare and Medicaid and Social
The deal that Congress recently passed to avoid “the fiscal
cliff” actually added $4 trillion to the national debt over the
next decade, even though it raised taxes on the rich.
And that is after America’s debt soared by more than $5 trillion
in Obama’s first term.
As Robert Bixby, President of the Concord Coalition put it,
“There is no entitlement reform, no tax reform and no framework
of process for addressing these critical needs.”
Former Senate Majority Leader William Frist notes: “We have a
doubling of the number of seniors coming in over the next 25
years, so we have more people that we have to take care of. The
per capita cost is going up. And we have fewer people paying in.
So the equation does not work.”
There is a fundamental mismatch between spending promises and
revenues. America currently spends a little over $200 billion a
year on interest. However, Concord projects it will swell to
over $900 billion within 10 years.
There is one bit of good news, however. House Speaker John
Boehner led the House on Wednesday to pass a plan to balance the
federal budget in 10 years – which will require major reforms of
Social Security, Medicare and Medicaid plus tax reform. It is
part of his proposal to allow the debt ceiling to rise from its
current level of $16.4 trillion.
What’s more, the bill included a provision, “no budget, no pay”
if the Senate fails to agree on how to balance the budget by
April 15. Senate pay would be withheld until they reach an
agreement. The Senate hasn’t passed a budget in nearly four
The problem is that the public does not understand the debt
issue. Every middle-aged person has paid Social Security and
Medicare taxes for decades, and wrongly assumes they are simply
getting their money back. No wonder a CBS poll reports that 78%
of Americans oppose cutting spending on Medicare.
What I call for are two “American Town Meetings” with an
unprecedented collaboration of the news media to both inform the
American people and to listen to what an educated public thinks
ought to be done. How?
What if TIME published a cover story with 10 choices on how to
cut federal spending in the same week that NBC and CNN aired
“Specials” on the same choices, and AP wrote stories for
America’s newspaper on the choices? The public could “ballot”
via Facebook on choices like these:
• Should the age of Medicare be raised from 65 to 67, since
people are healthier and live longer, saving $140 billion?
• Should the age at which full Social Security is given be
raised from 66 to 68,saving $160 billion over 10 years?
• Should federal and military employees contribute half the cost
of their retirement, not 1/14th, saving $73 billion over a
The first American Town Meeting would inform the nation about
the scale of the fiscal problem, and consider options for
cutting federal spending. Such an unprecedented collaboration of
the media might attract a million citizens to “ballot” on what
shared sacrifices we are willing to accept.
Two weeks later there could be an “American Town Meeting on Tax
Reform” with choices like these:
• Should mortgage deductions be eliminated for second homes and
limited to $500,000 for primary homes, saving $xxx?
• Should the deduction for state and local income, real estate
and personal property taxes be limited to 2% of adjusted gross
income, raising $96 billion in 2015.
• As an alternative to such options, should such deductions be
eliminated, but lower tax rates as a result, using 10% for
deficit reduction, raising $214 billion in 2015?
These are not just technical issues to be left to experts, but
are value judgments where citizen input would be valuable.
Information must be provided for people to understand what the
tradeoffs are and how much each proposal would cut the deficit.
American Town Meetings would give an informed public a voice on
issues that Washington could no longer ignore.
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