Third, it’s an issue of fairness. There’s no real fiscal solution that doesn’t involve changes to entitlements, and if we are going to adjust vital retirement programs, we must give people time to prepare. For this reason, many proposals exempt those within 10 years of retirement. A delay like this can work, but not if we continually defer action. Procrastinating for 10 years about a 10-year exemption makes it a 20-year exemption.
Simplifying our tax code should be another important part of the solution. Tax “expenditures” now total $1.3 trillion a year (which is almost as much as all of the income taxes we collect), and many are market-distorting, wasteful and unfair. Done right, tax reform would make the entire code simpler and more equitable, while lowering rates for everyone, and reduce the deficit. And when we consider changes to vital entitlement programs, as well as to the tax code, wealthier Americans should of course contribute their fair share.
We all hope that Congress and the president find a way through our immediate fiscal and political bedlam. Once they do, they should recommit themselves to developing a comprehensive, bipartisan plan to finally put the nation on a sustainable fiscal path.
No American wants a future in which our economy is saddled with debt, starved of investment and struggling to grow. By taking action now, our leaders can lay a foundation for more investment, stronger economic growth, a more secure safety net and a brighter future for our children. Rather than continuing to treat the painful recurring short-term symptoms, we would be much better off curing the underlying disease.
Our long-term fiscal challenges are clear, and the solutions are sitting right in front of us. Let’s get at it.
Michael A. Peterson is president and chief operating officer of the Peter G. Peterson Foundation.
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.