Stating What Our Union Needs | Commentary
On Tuesday, President Obama will take the podium for the State of the Union address and lay out his legislative vision for 2014. An hour or so later, Rep. Cathy McMorris Rodgers of Washington will respond on behalf of the Republican Party. In our previous lives as the Democratic governor of Virginia and the Republican governor of New Jersey, we have had the honor of delivering that response in 1986 and 1995, respectively.
While we don’t know exactly what the president or McMorris Rodgers will say, there are indications that the main themes in both speeches will be jobs, the economy and building a better future for all Americans.
But how we get there? How do we foster a new era of American prosperity? These are the questions that should be addressed Tuesday.
First and foremost, we hope to hear it stated clearly in both speeches that the greatest challenge to our future remains the unsustainable debt we continue to incur. Yes, the deficit has declined from its mid-recession high, but it remains well above historical averages. And our debt as a percentage of the overall economy is at a level not seen since World War II. More to the point, we have done nothing to address the real long-term drivers of that debt: exploding growth in the cost of health care and other entitlement programs operated by the federal government and an outdated tax code that handicaps American corporations and loses billions of dollars in revenue annually to anachronistic tax loopholes.
A bipartisan approach to the latter concern could be built on the groundwork already laid by outgoing Senate Finance Committee Chairman Max Baucus, D-Mont., and House Ways and Means Committee Chairman Dave Camp, R-Mich., who have been working on a proposal that would close certain loopholes and lower rates across the board.
Their plan would make American businesses more competitive globally and more likely to add jobs back home, and generate revenue that could be used, in part, to pay down the deficit. We hope that Camp and Baucus’ likely successor as chairman, Sen. Ron Wyden, will renew this worthy effort in 2014.
But tax reform alone will not protect our future. We must also confront the skyrocketing cost of health care in this country, which threatens to consume the entire federal budget through Medicare and Medicaid. A responsible, bipartisan package of reforms could plausibly begin with proposals that both the president and the Republican House majority, which McMorris Rodgers serves as conference chair, have publicly endorsed.
Each has included the reform of certain Medicare provider payments, and increasing Medicare premiums for wealthy seniors. We’d welcome other specific fixes, but the common goals should be simple — lowering the cost of health care delivery and guaranteeing better health outcomes.
Americans are living longer lives, which is good news. But an aging population means that we have to work harder to guarantee retirees their earned benefits and to protect Social Security for future generations. That won’t be an easy task, and we will have to make some hard decisions along the way. But we can make reforms to Social Security fairly by, for instance, implementing the so-called “chained CPI,” under which the cost-of-living adjustments in Social Security and other programs would be pegged to a more accurate measure of inflation. This provision can be found in the 2014 budgets issued by both the president and the House. Détente on this aspect of entitlement reform could pave the way for other necessary changes, such as increasing the retirement age to reflect the extended longevity we are enjoying as a population.
These and other common-sense solutions can be implemented gradually to protect current beneficiaries and give younger Americans sufficient time to plan for the future, if Democrats and Republicans can finally find a willingness to sit down and find common ground. Sen. Patty Murray and Rep. Paul D. Ryan received praise for the conference committee agreement on the federal budget they recently brokered. The speed with which their colleagues in both parties adopted the agreement and the appropriations bills that implemented it was also encouraging,
Now it’s time for leaders in both parties — including Obama and McMorris Rodgers — to maintain this bipartisan momentum. We have a chance to guarantee America a more prosperous future. It starts with an honest accounting of the problems ahead and a commitment to solving them together.
Charles Robb served Virginia as governor and senator. Christie Todd Whitman was the governor of New Jersey and administrator of the EPA under President George W. Bush. Both are members of Fix the Debt’s Governors Fiscal Leadership Council.