• Avoid disrupting a fragile economic recovery. The fiscal commission and gang of six provided for phasing in savings gradually, with significant spending cuts not beginning until 2013. At the same time, by putting in place a credible plan to stabilize the debt, the proposals would strengthen long-term economic growth by eliminating the risk of a fiscal crisis.
• Ensure revenue is part of the solution. Federal revenue is at its lowest percentage of gross domestic product since the Korean War, and going forward, we will need more if we want to reduce the debt as a share of the economy while adequately funding government in an era of increased longevity and rising health care costs. Under the gang of six proposal, revenues would increase from their current level of slightly more than 16 percent of GDP today to 20 percent by the end of the decade.
• Tax reform that eliminates special-interest tax breaks and preserves progressivity. The best way to grow revenue is an approach similar to the fiscal commission’s in which most tax expenditures are eliminated and the savings are used for deficit reduction and to help increase progressivity.
• Require defense savings for deficit reduction. A broad agreement must scrutinize every aspect of the federal budget — including defense spending. All discretionary spending should be on the table for consideration.
• Protect programs that serve low-income families. Any agreement must adhere to the principle that the most vulnerable in society be protected, especially since they have weathered the worst of the economic downturn. The fiscal commission report, as well as the gang of six proposal, upheld this principle, and for that reason, critical safety net programs were preserved and in some ways strengthened as part of the overall fiscal plan.
At the end of World War II, America’s debt exceeded its entire GDP. Yet, rather than throwing up their hands, our parents and grandparents whittled down their deficits. By the Kennedy administration, the ratio of debt to GDP was back down to where it was before the war. What lesson can we learn from the “greatest generation”? Simply this: Opportunity, not debt, is the legacy we owe to future Americans.
Former Rep. Vic Fazio (D-Calif.) served 10 terms in the House. He is now a senior adviser at Akin Gump Strauss Hauer & Feld LLP.
Vice President Joe Biden waits to conduct a mock swearing-in ceremony with Sen. Brian Schatz, D-Hawaii, in the Capitol's Old Senate Chamber, December 2, 2014. Schatz was sworn in to serve the remainder of his term since he was appointed to the seat after Sen. Daniel Inouye, D-Hawaii, passed away.