Two men who believe they have the solution to the government’s debt and deficit problems will make their case tonight at Miami University.
Alan Simpson and Erskine Bowles are the co-founders of The Campaign to Fix the Debt, a nonpartisan movement focused on the country’s fiscal and economic health, and former co-chairs of the National Commission on Fiscal Responsibility and Reform. The partial government shutdown and their 2010 plan — which was not adopted by the Obama Administration because of a partisan deadlock within the commission — will be discussed at their talk at 7 p.m. at Millet Hall to students, the university and the general public. It’s part of the Farmer School of Business Jack R. Anderson Distinguished Lecture Series.
“They have a real interest to make sure our country is on sound financial footing,” said Steve Wyatt, chair of the Miami University Department of Finance and professor. “We will hear something very different than what is being said in Washington now.”
Simpson is a former Republican senator from Wyoming (1979-1997) and former director of the Institute of Politics at Harvard’s Kennedy School of Government. Bowles is the president emeritus of University of North Carolina, the former White House chief of staff under President Bill Clinton, and former administrator of the Small Business Administration.
When the two — known as the “deficit hawks” — came out with their reduction plan in 2010, Wyatt said it indicates “that we’ve overpromised as a nation too much that we can’t deliver on, and it’s a very cruel thing to do to people.”
Wyatt call the Simpsons-Bowles plan “very sensible” and “would have directed the country “on a path that we were not going to continue to borrow at prodigious rates.”
The plan, however, he said, was not favored by either party.
Because Simpson and Bowles are out of politics, Wyatt said they’re likely to express “some very honest opinions” about the shutdown and the political brinkmanship.
“They’re very plain about the math, they’re very plain about the numbers, they’re very plain about what the situation is,” he said.
The partial government shutdown, which both sides of the aisle are pointing fingers at each other, started at midnight on Oct. 1 when Congress did not approve raising the debt ceiling because defunding the Affordable Care Act was part of that bill. The GOP in the House wouldn’t take it out, and the Democrats wouldn’t support the measure in the Senate. And President Barack Obama said he would veto the bill if defunding the health care act was connected with raising the debt ceiling.
According to the Congressional Budget Office, the U.S. Treasury has been borrowing at the debt ceiling, or debt limit, since May. In a CBO report dated Sept. 25, the Treasury Department estimated that the country’s ability to borrow under those “extraordinary measures” will run out no later than Oct. 17 where the country will have an estimated cash balance of $30 billion.
The CBO, according to the Sept. 25 report, projects the Treasury Department will “exhaust all of the borrowing authority created by those measures, as well as its cash balance, between Oct. 22 and the end of the month.”
Wyatt said if the shutdown ends in a week or two, then “it will be like a blip on the radar screen” and will have no permanent impact on the economy.
However, if it is not settled in a timely manner, then it could be a rocky storm for the country’s economy.
“The problems of what we’re seeing right now with the regard to the debt and the deficit is because in large part as a nation we haven’t sat down and looked seriously at the fiscal path the country’s one,” Wyatt said. “If we don’t do something with the debt and deficit we’re going to find ourselves with far worse problems than we facing today.”