Rising Debt Threatens Long-Term U.S. Competitiveness
Katherine Gehl, President & CEO, Gehl Foods, Inc.
As President and CEO of Gehl Foods, Inc., I am proud to say that my family’s Wisconsin based company has added over ninety jobs and increased revenues by close to 70% since the last recession began in 2008. But I am gravely concerned about the future outlook for US businesses and citizens. The federal government’s rising debt burden threatens the long-term competitiveness and prosperity of the US economy and the very existence of a healthy public sector.
Relative to Gross Domestic Product (GDP), our national debt is already higher than at any point since World War II, and a recent report from the Congressional Budget Office forecasts that debt will exceed 100% of GDP in the early 2030’s. Eventually this must lead to rising interest rates and inflation, making it increasingly difficult and expensive for American businesses to invest and hire. The ability of the US to be competitive in the global market and support high and rising living standards for their US employees will be severely eroded. Furthermore if we don’t change course, we will reach a point—currently estimated by the non-partisan Committee for a Responsible Federal Budget to be in 2031—where the cost of mandatory spending on entitlement programs such as Medicare and Social Security and interest on the national debt will consume all available federal revenue. Under this scenario, there will be no money for critical investments in the future such as education and R&D and no money for other day-to-day functions of government that we take for granted—such as national security. That would be a disaster.
The good news is that this problem can be solved. In recent years, budget experts, business leaders, and former political leaders from both parties have worked together on a series of plans that agree on the outlines of a solution. The Simpson-Bowles and Domenici-Rivlin plans both detail a series of compromises to increase revenue and decrease spending. The compromises are difficult, but doable. Crucially, each plan demonstrates that a so-called “Grand Bargain” can stabilize debt below 70% of GDP by the 2030’s.
Unfortunately, inaction on reform has become the norm in Washington. The suspension of the federal debt limit expired in May, once again placing our nation’s credit rating in peril, and yet these past weeks saw no serious, widespread discussion about reform.
Some leaders have had the courage to rise above party politics to make inroads toward a Grand Bargain. In March, Senator Bob Corker (R-Tennessee) suggested that he and other Republicans would accept increased revenue through tax reforms if Democrats agreed to reform Medicare and Social Security. President Obama proposed changes to these programs in his budget.
Sadly, this opportunity for dialogue has received a cool reception. Many Democrats rule out any discussion about reforming these programs, while many Republicans will not consider any compromise that increases revenues. To achieve comprehensive debt reform, the Administration and Members of Congress must find common ground and enact shared sacrifices for the benefit of the nation, without fearing retribution in the next election.
I invite my fellow Wisconsinites to deliver a powerful message to our elected representatives of both parties: we will return you to office if you set aside party politics for the sake of our fiscal viability. We will not return you to office if you take no action and continue to perpetuate the unsustainable status quo.
There are three concrete things you can do to join me in sending this important message:
First, read a debt reform plan, such as the new one released in April by former Senator Alan Simpson and Erksine Bowles (available at www.momentoftruthproject.org). Building on the plan created when they headed President Obama’s Fiscal Commission, the new plan is another practical, comprehensive approach in which “neither side compromises [its] principles” and all parties seek “principled compromise.”
Second, join the Campaign to Fix the Debt, comprised of respected business leaders, former Members of Congress, and more than 345,000 concerned citizens. Visit FixTheDebt.org to sign the Campaign’s Citizen’s Petition and learn how to contribute to restoring fiscal sustainability.
Finally, call our elected representatives: Senator Baldwin ((202) 224-5653), Senator Johnson ((202) 224-5323), and your Congressperson (numbers available at www.house.gov/representatives/). Tell them we support a Congressional delegation united in leadership on this issue. Tell them we will re-elect those who vote for solutions, even when the solutions are painful and difficult. Tell them we want our state to be the one that leads America away from the cliff of declining competitiveness and an endangered public sector and towards a future we can all look forward to with confidence.
Katherine Gehl is the President & CEO of Gehl Foods in Germantown, WI and is also a member of the CEO Fiscal Leadership Council of Fix the Debt.
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