[Congressional Record Volume 156, Number 83 (Friday, May 28, 2010)]
[Extensions of Remarks]
[Pages E973-E975]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 LETTER TO THE NATIONAL COMMISSION ON FISCAL RESPONSIBILITY AND REFORM

                                 ______
                                 

                           HON. FRANK R. WOLF

                              of virginia

                    in the house of representatives

                         Thursday, May 27, 2010

  Mr. WOLF. Madam Speaker, I have been working for nearly 4 years with 
Representative Jim Cooper to address the country's unsustainable 
financial path. While I believe


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  May 28, 2010 on Page E973 the following appeared: Mr. WOLFE. 
Madam Speaker, I have been
  
  The online version should be corrected to read: Mr. WOLF. Madam 
Speaker, I have been


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[[Page E974]]

our legislation offers a better choice in solving this Nation's 
financial crisis, the President has moved forward with his National 
Commission on Fiscal Responsibility and Reform.
  I have written to that commission's co-chairmen, Erskine Bowles and 
Senator Alan Simpson, to offer suggestions as this process continues, 
and insert my letter for the Record.

                                    Congress of the United States,


                                     House of Representatives,

                                                     May 25, 2010.
     Mr. Erskine Bowles,
     Hon. Alan Simpson,
     Co-Chairmen, National Commission on Fiscal Responsibility and 
         Reform, Washington DC.
       Dear Mr. Bowles and Senator Simpson: As you know from our 
     letter to you of April 17, Jim Cooper and I have been working 
     for nearly four years to establish a bipartisan commission to 
     address our nation's debt crisis by examining all policy 
     options--entitlement spending, other program spending, and 
     tax policy--holding public hearings, and recommending to 
     Congress a plan of action with a mandated vote.
       While I would have preferred passage of H.R. 1557, the 
     Securing America's Future Economy (SAFE) Commission Act, the 
     president has moved forward with an executive commission and 
     named each of you cochairmen of the National Commission on 
     Fiscal Responsibility and Reform. As I write this letter 
     today, the U.S. stock market as well as global markets are 
     continuing a deep and downward slide. Our nation is on an 
     unsustainable fiscal path. You know the staggering and 
     unprecedented debt and deficit statistics. We owe nearly $62 
     trillion in obligations, spend nearly $4 billion each week 
     solely for interest payments to service the debt, and the 
     Congressional Budget Office projects that debt held by the 
     public will encompass 90 percent of the gross domestic 
     product by 2020. Many are concerned that Greece's collapse 
     and the European debt crisis will spread to the United 
     States.
       British historian and Harvard professor Niall Ferguson 
     wrote in the March/April 2010 edition of Foreign Affairs: 
     ``One day, a seemingly random piece of bad news--perhaps a 
     negative report by a rating agency--will make the headlines 
     during an otherwise quiet news cycle. Suddenly, it will be 
     not just a few policy wonks who worry about the 
     sustainability of U.S. fiscal policy but also the public at 
     large, not to mention investors abroad. It is this shift that 
     is crucial: a complex adaptive system is in big trouble when 
     its component parts lose faith in its viability.''
       That ``one day'' is now.
       For the sake of our country, I truly want your efforts to 
     be successful and write today to offer some suggestions. It 
     is impossible to know the outcome of your endeavor but I 
     believe, at the very least, the commission must be a tool to 
     educate the American people on the subject of our nation's 
     dire fiscal situation.
       The American people know that we need to look no further 
     than the situation in Greece to understand what our future 
     may hold if we do not make dramatic changes to control U.S. 
     debt. They need and want to be involved in this process. 
     Public involvement is critical to your success. The reality 
     is that members of Congress will not support any of the 
     commission's proposals without the full support of the 
     American people. This cannot be just an inside-the-Beltway 
     process.
       Therefore, it is critical that the commission, in whole or 
     in part, hold public meetings throughout the nation. The 
     legislation I proposed with Jim Cooper required that at least 
     one town hall style public meeting would be held in each of 
     the nation's federal reserve districts. One meeting that is 
     Webcast from Washington once a month is not adequate. To 
     date, I am unable to locate any information concerning the 
     working groups on your Web site. It is my understanding that 
     the bulk of policy proposals will be developed during these 
     working groups' closed sessions. At the very least, I 
     encourage you to publicize and Webcast all commission 
     activities, and publicly post meeting minutes and documents 
     as soon as possible.
       Secondly, I am very concerned that the commission has been 
     structured in a manner that will make it difficult for you to 
     succeed, and even doom it to failure. I cannot overstate the 
     importance of your work. Your recommendations will define 
     America's very economic future. It is curious, though, when 
     considering the big picture of federal priorities, that you 
     have been allocated $500,000 to perform the singular task 
     before you. Consider that the Obama Administration is 
     currently spending over $8 million on the Financial Crisis 
     Inquiry Commission, even though it will issue its report 
     after both the House and Senate have voted on financial 
     reform legislation. Consider that the District of Columbia 
     was recently reimbursed for $4.4 million for overtime work by 
     first responders at the two-day April Nuclear Security 
     Summit. Consider that more than $2 million in American 
     taxpayer money is being spent to advocate for the adoption of 
     the Kenyan Constitution. Your charter also notes that you 
     have been authorized to hire the equivalent of four full-time 
     staffers. Again, I believe that this is totally insufficient 
     to your task. Just these few examples raise questions for me 
     about the administration's commitment to this commission's 
     work and whether this exercise is just for political cover.
       Given your limited resources, I believe you should take 
     advantage of the incredible talent pool available in the 
     private sector to assist the commission in its work. A number 
     of highly respected organizations have been deeply involved 
     for a number of years in discussions to find solutions to our 
     nation's fiscal crisis, including holding hearings across the 
     country and talking with the America people to explain the 
     unsustainable spending path we are on. I strongly urge you to 
     embrace these groups, which I believe would be willing to be 
     involved at no cost to the taxpayer.
       Robert Samuelson said as much in his May 17 Washington Post 
     column ``Wake Up, America.'' The article is enclosed. I 
     believe the American Enterprise Institute, the Aspen 
     Institute, the Brookings Institution, the Concord Coalition, 
     the Heritage Foundation, and the Urban Institute--
     organizations with years of experience in the very issues 
     before your commission--would be receptive to any overtures. 
     They all have a long track record of working together on 
     fiscal issues.
       I appreciate your consideration of my comments. Please do 
     not hesitate to call if I may be of assistance to you in your 
     endeavor of critical national importance.
           Sincerely,
                                                    Frank R. Wolf,
                                               Member of Congress.
       Enclosure.
                                  ____


                [From the Washington Post, May 17, 2010]

                            Wake Up, America

                        (By Robert J. Samuelson)

       You might think that Europe's economic turmoil would inject 
     a note of urgency into America's budget debate. After all, 
     high government deficits and debt are the roots of Europe's 
     problems, and these same problems afflict the United States. 
     But no. Most Americans, starting with the nation's political 
     leaders, dismiss what's happening in Europe as a continental 
     drama with little relevance to them.
       What Americans resolutely avoid is a realistic debate about 
     the desirable role of government. How big should it be? 
     Should it favor the old or the young? Will social spending 
     crowd out defense spending? Will larger government dampen 
     economic growth through higher deficits or taxes? No one 
     engages this debate, because if rigorously conducted, it 
     would disappoint both liberals and conservatives.
       Confronted with huge spending increases--reflecting an 
     aging population and soaring health costs--liberals would 
     have to concede that benefits and spending ought to be 
     reduced. Seeing that total government spending would rise 
     even after these cuts (more people would receive benefits, 
     even if benefit levels fell), conservatives would have to 
     concede the need for higher taxes. On both left and right, 
     true believers would howl.
       The lack of seriousness is defined by three missing words: 
     ``balance the budget.'' These words are taboo. In February, 
     President Obama created a National Commission on Fiscal 
     Responsibility and Reform (call it the Deficit Commission). 
     Its charge is to propose measures that would reduce the 
     deficit to the level of ``interest payments on the debt'' by 
     2015 so as ``to stabilize the debt-to-GDP ratio at an 
     acceptable level.''
       Understand? No? Well, you're not supposed to. All the mumbo 
     jumbo about stabilizing ``debt to GDP'' and according special 
     treatment to interest payments are examples of budget-speak. 
     It's the language of ``experts,'' employed to deaden debate 
     and convince people that ``something is being done'' when 
     little, or nothing, is being done. For example, Obama's 
     target for 2015 would involve a deficit of about $500 
     billion, despite an assumed full economic recovery 
     (unemployment: 5.1 percent). The commission is also supposed 
     to ``propose recommendations that meaningfully improve the 
     long-run fiscal outlook, including changes to address the 
     growth of entitlement spending,'' a mushy mandate. But 
     balance the budget? There's no mention.
       In a classroom, limiting government debt in relation to GDP 
     can be defended. The idea is to reassure investors (a.k.a. 
     ``financial markets'') that the debt burden isn't becoming 
     heavier so they will continue lending at low interest rates. 
     But in real life, the logic doesn't work. Governments 
     inevitably face deep recessions, wars or other emergencies 
     that require heavy borrowing. To stabilize debt to GDP, you 
     have to aim much lower than the target in good times, meaning 
     that you should balance the budget (or run modest surpluses) 
     after the economy has recovered from recessions.
       Interestingly, Europe's experience discredits debt-to-GDP 
     targets. The 16 countries using the euro were supposed to 
     adhere to a debt target of 60 percent of GDP. Before the 
     financial crisis, the target was widely breached. From 2003 
     to 2007, Germany's debt averaged 66 percent of GDP, France's 
     64 percent and Italy's 105 percent of GDP. Once the crisis 
     hit, debt-to-GDP ratios jumped; by 2009, they were 73 percent 
     for Germany, 78 percent for France and 116 percent for Italy.
       The virtue of balancing the budget is that it forces people 
     to weigh the benefits of government against the costs. It's a 
     common-sense standard that people intuitively grasp. If the 
     Deficit Commission is serious, it will set a balanced budget 
     in 2020 as a goal, allowing time to phase in benefit cuts and 
     tax increases. It will then invite think tanks (from the 
     Heritage Foundation on the right to the Center on Budget and 
     Policy Priorities on the left) and interest groups (from the 
     Chamber of Commerce to AARP) to present plans to reach that 
     goal. Their competing visions could jump-start a long-overdue 
     debate on government's role.

[[Page E975]]

       The odds seem against this. The Deficit Commission may 
     embrace debt-to-GDP targets and aim for a ``primary balance'' 
     (excluding interest payments) because it's easier 
     politically. Consider: In 2020 the deficit will be $1.254 
     trillion on spending of $5.67 trillion, projects the 
     Congressional Budget Office. Closing that gap would require 
     steep tax increases or deep spending cuts. But $916 billion 
     of the projected deficit represents interest payments. 
     Ignoring them instantly ``solves'' three-quarters of the 
     problem.
       The message from Europe is that this approach ultimately 
     fails. Intellectually elegant evasions are still evasions. 
     Though financial markets may condone lax government borrowing 
     for years, confidence can shatter unexpectedly. Lenders 
     retreat or insist on punishing interest rates. Market 
     pressures then impel harsh austerity--benefit cuts or tax 
     increases--far more brutal than anything governments would 
     have needed to do on their own. We are, by inaction and self-
     deception, tempting that fate.

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