Only a comprehensive plan will fix the debt

The needless government shutdown and the almost-catastrophic default showdown should have taught our elected leaders in Washington some lessons. Among these is that what’s good for the goose isn’t always good for the gander: a handful of anti-government, Tea Party wing Republicans may have scored personal political points in their home districts, but did so at the expense of hundreds of thousands of furloughed federal workers and, very nearly, the full faith and credit of the U.S. government.

But perhaps a lesson that both parties – not just the 50-60 Republicans who drove us all to the brink – need to learn is that we need to do all we can to avoid budget brinksmanship in the future. And to do that, we really must confront our unsustainable national debt.

{mosads}Ostensibly, the shutdown and showdown were about our debt. But in reality, the political theater earlier this month was about anything but; indeed, the shutdown is going to end up costing us tens of billions of dollars. Now, with the immediate fiscal threat behind us, our leaders in Washington can focus their attention where it should have been all along: our long-term fiscal imbalance.

At $17 trillion, our national debt is almost unfathomably large. In fact, relative to the economy, it’s the largest it’s been in more than six decades. And yet, after stabilizing in the near term, it is projected to grow, unchecked, over the years and decades to come. If the debt were just some big number, there would be no need to worry. But it’s more than that. When it’s too big, relative to the economy, it can boost inflation rates, interest rates and unemployment rates. It can curb economic growth. And it can threaten to cause a debt-fueled fiscal crisis. Mounting interest payments can put a budgetary squeeze on the programs and projects – like education, infrastructure and scientific research – that should be our national priorities.

In short, the debt is something we need to worry about. However, there are many folks – some of whom occupy the halls of Congress – who think that we can deal with our debt simply by taking a good, hard look at waste, fraud and abuse. And while trying to eliminate these scourges should always be a priority, our problems are much too large to fix so easily. More worrisome, there’s an even larger group of people who think that we can simply cut our way to prosperity. This ignores the fact that domestic programs have been cut to 60-year lows and that in a society as rich as ours there’s simply no reason to operate with the kind of government that was suitable for a much simpler time.

On the other hand, there are lots of smart people on my side of the aisle who think we can just tax our way out of the hole we’re in. This also ignores the facts. Simply put, relative to the economy, our tax revenue has stagnated, but our spending is on a never-ending upward path. Yes, we do need more revenue – ideally through structural tax reform that will help boost economic growth while making sure the wealthiest among us contribute their fair share. But it’s also true that we need to slow the future growth of federal spending.

Addressing government spending requires us to take a long, hard look at where we spend the most, namely on Social Security and federal health programs. I’m not suggesting we hollow out these programs; instead, I would advise gradual changes, like means-testing Medicare to make sure those who can afford to pay more for their health care do indeed pay more. Similarly, we should index inflation to the “chained CPI,” a more accurate measure of inflation that will cause benefits to grow more slowly over time than they would otherwise. These reforms, mind you, should be coupled with changes that ensure the most vulnerable are not negatively affected.

While politicians (people I understand very well, mind you) are loath to tinker with the tax code or change entitlement programs, the American people are broadly supportive of such efforts, as long as they can be assured the changes are done in a comprehensive manner, reduce the deficit and require both the costs and benefits of the changes to be widely shared.

A comprehensive deficit-reduction plan, phased in gradually as recommended by the Domenici-Rivlin Debt Reduction Task Force of the Bipartisan Policy Center, would be both good politics and good policy. I am also a member of the Campaign to Fix the Debt – a national, non-profit and bipartisan organization – because this is the kind of plan that I believe must be implemented, both to secure our economic future over the long term and to prevent any more shutdowns and showdowns in the short term. I hope you use your voice to echo the call: we need a comprehensive plan to fix the debt.

Villaraigosa is a former Democratic mayor of Los Angeles, and a senior fellow at the Bipartisan Policy Center.