January 23, 2013
Column #1,639
"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 Security.”

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 years.

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 decade?

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.