Ex Sen. Simpson pans Obama speech at UVa forum on debt

Alan Simpson, the Republican co-chair of President Barack Obama’s bipartisan debt commission, said Obama’s April 13 speech on fiscal policy was overly partisan and will make it more difficult to achieve bipartisan consensus on the nation’s looming fiscal challenges.

“He said Republicans are [hurting] children and old people,” Simpson said, speaking Wednesday at a forum on the debt sponsored by the Center for Politics at the University of Virginia. “It was a savage attack. And it was done with high partisan glee.”

Following the speech, in which Obama panned the GOP budget plan penned by Rep. Paul Ryan, R-Wis., Ryan told Gene Sperling, director of the National Economic Council, that Obama had “poisoned the well,” Simpson said.

Simpson added that he later told Obama at the White House that he shouldn’t have invited Ryan to the speech. “It was like inviting a guy to his own hanging,” he said.

In Simpson’s view, neither party is taking the nation’s fiscal challenges particularly seriously, as both seem more interested in scoring political points against the other than they are in finding practical solutions.

Simpson believes the national debt will never be solved until the government enacts such painful measures as entitlement reforms of Medicare and Social Security and cuts to defense spending.

“There has to be shared sacrifice,” he said. “There’s been no shared sacrifice in this country since World War II. The only people who’ve sacrificed are the military. Everybody claps when I say it, but they just don’t do it.”

Medicare, for example, needs to be “fixed,” Simpson said, by such changes as reducing payments to doctors and hospitals and requiring patients to pay more via co-payments.

Another example, he said, is TRICARE, the federal health care system for military personnel and veterans. The program, he said, asks veterans to pay an annual premium of only $470, requires no co-pay and extends to the veteran’s dependents. At an annual cost of $53 billion, he said, it seems ripe for reductions, but such an idea is political suicide, as it would outrage veterans’ groups.

David Walker, founder and CEO of the nonpartisan Comeback America Initiative and former comptroller of the United States and chief of the Government Accountability Office, said it is imperative that Congress raises the nation’s debt limit.

“We can’t blow it,” he said. “You can’t play with a tactical nuclear weapon. That’s what the debt ceiling is.”

Walker said he doubts the Democrats and Republicans will pass a clean bill to raise the limit, as the GOP has signaled that it will attempt to use the issue to win concessions, such as deeper budget cuts.

“My fear is that it’s going to be a short-term spending cut that is largely symbolic, which doesn’t really get the heart of our problem, which is more form than substance, which doesn’t have much credibility with the markets and doesn’t have much credibility with the American people,” he said.

Walker, who also criticized Obama’s rhetoric as unhelpful and overly partisan, said Ryan’s budget plan is more of a “political manifesto” than a serious attempt at solving the nation’s fiscal challenges.

“It’s unrealistic, it’s not socially equitable and it’s not politically feasible,” he said.

Dean Baker, co-founder of the Center for Economic and Policy Research, a progressive think tank, said the nation’s deficit is really a health care problem. To get the nation’s fiscal house in order, he said, Congress should enact a public option for Medicare and a mandate to decrease the value of the dollar, which he said is overvalued compared with China’s currency.

The nation’s fiscal problems, he pointed out, did not start with Obama.

“We had a huge housing bubble that collapsed and wrecked the economy. That’s also why we have a really big deficit. We didn’t go on a crazy spending spree. Obama didn’t just go, ‘OK, I’ve got the keys to the White House, I’m going to go out and spend like crazy.’ No. Our economy collapsed.”

Under President George W. Bush, he pointed out, the nation launched wars that were not paid for, enacted tax cuts that were not paid for and rolled out Medicare drug benefit changes that were not paid for.

Baker said it’s “incredible” that cuts to defense spending are not a bigger part of the debate, noting that Ryan’s plan leaves defense cuts off the table.