A group co-founded by Charlottean Erskine Bowles brings its campaign to reduce the federal debt to North Carolina next week, making the state the latest front in the battle to avert the “fiscal cliff.”
Two former governors – Democrat Jim Hunt and Republican Jim Holshouser – will launch Fix the Debt’s N.C. chapter at a news conference Tuesday in Raleigh.
It’s part of a national bipartisan effort to lobby Congress to agree on a bipartisan framework that addresses the nation’s looming fiscal crisis.
“Once in a while something comes along that joins us together – when we all have to band together and set aside differences for the greater good,” Hunt said. “It is the most important domestic issue that we’ve had in generations.”
Fix the Debt was founded by Bowles and Alan Simpson, a former U.S. senator from Wyoming. They chaired the so-called Bowles-Simpson commission that two years ago proposed a package of spending cuts and tax hikes to begin reducing the federal debt, now estimated at over $16 trillion.
The commission’s plan was never adopted. Meanwhile, many say the situation has only grown worse.
Economists say the debt could disrupt a fragile economy, stifle growth and lead to higher interest rates. Bowles has called it “the most predictable economic crisis in history (but) also the most avoidable.”
If the debt is the long-term problem, the fiscal cliff is the short-term crisis.
Should Congress fail to act by year’s end, a series of automatic spending cuts and tax hikes will occur, all stemming from the 2011 fight over the debt ceiling. Gone would be the payroll tax break, the so-called Bush-era tax cuts and more than $100 billion a year in defense spending.
Pressure for action
On Tuesday, Hunt and Holshouser will be joined by business leaders, including former GlaxoSmithKline CEO Bob Ingram. North Carolina will be the 17th state to form an active chapter of Fix the Debt, one of several groups that have formed to pressure Congress to act by raising public awareness of the issue. In North Carolina, the effort will use advertising and events such as round-table discussions.
“We intend to create a ground swell of local, state and national support that persuades Congress to pass, and the President to sign, a comprehensive debt deal,” said spokesman Jon Romano.
In other states, coalitions of business and political leaders have joined to underscore the cost of not acting. In Missouri, for instance, officials warned that falling off the fiscal cliff could cost 40,000 jobs. In Maryland, 300,000 federal workers could find their pay frozen.
Though Democrat Bowles and Republican Simpson come from different parties, both have championed the need for compromise.
As President Bill Clinton’s chief of staff, Bowles helped to engineer the 1997 balanced budget deal with Congressional Republicans. Simpson left the U.S. Senate in 1997 after three terms and has remained active in national affairs, including the bipartisan 2006 Iraq Study Group.
Fix the Debt doesn’t advocate the Bowles-Simpson plan or any other specific formulas for debt reduction. Instead it pushes “core principles,” including reforming entitlements such as Medicare, and increasing government revenues while broadening the tax base and lowering tax rates.
Bipartisan worries, hopes
Some Democrats have balked at changes to Social Security and Medicare. President Barack Obama has called for a “balanced” approach of spending cuts and revenue increases, specifically higher taxes on the wealthy.
But many Republicans have refused to raise taxes.
“We must reduce the excessive spending which has been the culprit in this crisis and restructure entitlement programs,” said U.S. Rep.-elect Robert Pittenger, a Charlotte Republican. “We should eliminate corporate welfare and other loopholes carved out by the thousands of lawyers in Washington in behalf of special interests.”
He said “a fairer and flatter and simpler tax code,” as opposed to tax hikes, would bring in enough revenue if combined with spending cuts.
Pittenger said he hopes “reasonable minds will prevail.” So does Ed Lorenzen, an adviser to the Bowles’ group.
“The Fix the Debt campaign is an effort to bring everybody together,” Lorenzen said. “We’re realistic. They’re not necessarily going to enact the final solution and an entire legislative package by the end of the year.
“But we’re hoping and pushing to adopt at least the framework of a deal that would allow Congress to finish the work.”
Americans, he added, are “frustrated with a political system that can’t solve problems and is stuck with gridlock and the inability to deal with the deficit is at the top of the list.”
Hunt succeeded Holshouser as governor in 1977 and went on to serve four terms as the state’s chief executive. He said Congressional failure to work out a deal would have political as well as economic consequences.
“For either side not to participate and be willing to make some sacrifices would be disastrous for our country,” he said. “The great, great majority of people would not stand for that.”