Expert: Defense must be cut to avoid crisis

Posted on March 9, 2011


Expert: Defense must be cut to avoid crisis

By Rick Maze – Staff writer
Posted : Tuesday Mar 8, 2011 11:53:35 EST

The U.S. won’t be able to avoid a crippling debt crisis as long as Congress refuses to include defense spending, Social Security, Medicare and Medicaid in the mix of program cuts to reduce federal spending, the co-chairman of the presidential debt commission said Tuesday.

“We want to keep the country safe and secure, but I don’t think the country can afford to spend more on national defense than the next 14 countries combined,” said Erskine Bowles, White House chief of staff during the Clinton administration and co-chairman of the last year’s presidential Commission on Fiscal Responsibility and Reform.

“I know these cuts are probably difficult, but this is not a decision we can postpone. … We have to act, and have to act now,” Bowles testified before the Senate Budget Committee.

Bowles predicted the U.S. will face a financial crisis in “two years, maybe a little less, maybe a little more,” when it runs out of the ability to borrow money.

“I think it will come before two years,” said former Sen. Alan Simpson, R-Wyo., the commission’s other co-chairman.

The Senate Budget Committee is responsible for coming up with a 2012 budget plan. There is some willingness on the panel to attempt dramatic budget changes, although it is not clear whether they are ready to make large cuts in defense spending.

“I believe we need to seize this opportunity,” said Sen. Kent Conrad, D-N.D., the budget committee chairman. “Make no mistake, we are at a critical juncture.”

The debt commission did not make formal recommendations, but the majority of commissioners — five Democrats, 5 Republicans and one independent — voted for a plan that called for defense spending to be cut through 2015 by the same percentage as any cut in non-defense discretionary spending.

Additionally, commissioners also voted for cuts in federal retirement programs, including military retired pay, by stopping payment of cost-of-living adjustments to retirees until they are age 62.

Bowles acknowledged Congress is talking about budget cuts, but said it is on a scale too small to make a difference. On the pending 2011 budget, House Republicans have proposed a $60 billion reduction while Senate Republicans are talking about $6 billion in cuts. Neither plan amounts to enough to resolve the debt crisis, he said.