America’s solvency and even its security depend on paying down its more-that-$14-trillion debt, and that requires replacing partisanship in Washington with a give-and-take attitude. That’s the message Georgia Republican Sen. Saxby Chambliss and Virginia Democratic Sen. Mark Warner delivered Monday to the Atlanta Rotary Club.
“If we don’t address the issue now, for the first time in the history of our country, our generation is going to leave the next generation an America that is not as good and wholesome as the America we inherited,” Chambliss said.
The debt can’t be ignored, he stressed. “Until we do something about it, that debt is increasing by somewhere in the range of $4 billion a day,” Chambliss said.
Within the next month, the so-called “Gang of Six” -- Chambliss, Warner and four other senators who served last year on President Barack Obama’s debt reduction commission -- will present a bill that seeks to cut the deficit by $4 trillion by the year 2020.
Their plan calls for cutting discretionary spending, including the defense budget, trimming Social Security, Medicare and Medicaid, and generating revenue by scaling back some popular tax breaks, including deductions for mortgage interest and charitable giving.
“If we’re not willing to look at both sides of the balance sheet, we’re not going to get this solved” Warner said.
“The commission did make a reasonable proposal for the way forward,” Chambliss said. “What we decided to do is rally around that proposal.”
Earlier Monday, the two met with The Atlanta Journal-Constitution’s editorial board, providing additional details about how their plan would generate more dollars in taxes while lowering both the personal and corporate tax rates.
Citing the debt commission report released in December, Chambliss said that while the U.S. took in more than $2.3 trillion in tax revenues in 2010, more than $1 trillion was lost through tax deductions and tax credits.
“The debt commission said you can eliminate all of that and you can lower rates in a significant way, to the lowest rates we’ve ever seen,” he said, projecting tax rates of between 8 percent and 29 percent. That's without completely eliminating some of the most popular deductions, such as the mortgage interest and child tax deductions, he said.
Chambliss said he is nervous about what kind of debt reduction proposal President Obama himself will release later this week, saying he fears it will be less far-reaching than the debt commission's ideas.
“But he’s the one that put the commission together, so we’re sure he has an understanding of where we’re coming from,” Chambliss said.
Chambliss and Warner also said that the 2012 budget released last week by House Budget Committee Chairman Paul Ryan (R-Wis.) didn’t go far enough in reducing the debt.
“His budget’s a very serious budget,” Chambliss said. “But what he seeks to do is balance the budget over about a 10 year period simply by reducing spending. And you can’t do that.”
The nation’s debt, Warner pointed out in a slideshow, currently is equal to roughly 62 percent of the U.S. Gross Domestic Product, the total amount of goods and services the country produces each year.
“Beyond 90 percent, and we won’t be able to recover,” he said, pointing to countries such as Japan, Greece and Ireland that currently suffer from debt overload. Their troubles have sent shockwaves through global financial markets.
It will be only two to six years before the U.S. reaches that point, Chambliss and Warner warned.
“Are we willing to roll the dice, not only on the American economy, but on the world economy?” Warner asked.
Chambliss also echoed Adm. Mike Mullen, chairman of the Joint Chiefs of Staff, calling the debt dilemma the nation’s “number one national security interest.”
Those in attendance offered a mixed bag of opinions on the senators' proposals.
H.J. Russell CEO Michael Russell said he anticipated costs and benefits for his business, should the plan go through, but he liked what he heard.
“This is what it’s going to take to get us back on a sound footing as a country,” Russell said.
But McKee Nunnally, a retired Atlanta investment banker, said it would be difficult for many people outside of Washington to see deficit busting as a priority.
“This is a very important issue,” Nunnally said. “But it’s obvious what the No. 1 issue is … Jobs. Ask the man without a job what debt reduction will do for him."
Warner and Chambliss admitted that their constituents aren’t completely sold on the bipartisan movement.
“I’m taking arrows from people on the far right who say ‘Saxby Chambliss is raising taxes,’” Chambliss said. “Mark’s getting the same thing on his side of the aisle.”
But Warner said they remain dauntless, particularly armed with a letter signed by 64 senators of all political shades supporting their efforts and encouraging the president to take up their proposal.
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