Guest opinion: The IOUs are piling up


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“Putting the national debt on a downward path” is not an enticing or appealing phrase, nor is it an appealing task. It is also not a simple undertaking because meaningful economic reform requires leadership and compromise between two parties, something as rare as mountain climbing in Iowa.

Yet, every one of us should seek opportunities to put pressure on our elected leaders to come together to make the hard choices necessary to put our debt’s trajectory on a downward path.
What’s the alternative? If nothing is done now, our leaders will be forced to make painful decisions in the future that could be devastating to us, our families, and our businesses.

House Ways and Means Chairman Dave Camp’s recent tax-reform draft is a good indication that all is not lost. Its effects on the overall economy are generally positive. The Joint Committee on Taxation estimates that the new bill would increase economic activity by up to $3.4 trillion from now until 2023. Because of the lower marginal tax rates, there would be an increased labor supply, a greater likelihood that businesses would invest more in the economy, as well as an increased incentive for people to work.

Camp’s leadership is a bold step in the right direction. My only concern is that the draft does not reduce deficits enough in the long-term to alter the debt’s trajectory. It uses all the revenue generated by broadening the base to decrease rates, instead of using some of it to improve our fiscal situation. It also uses some revenue from temporary revenue provisions and timing shifts to substitute for permanent rate reductions.

Days after Camp released his tax proposal, President Obama delivered his budget for next year.  The issues I have with the budget are similar to my objections to the tax draft. Although the budget puts the debt on a downward path as a share of the economy in this decade, it does not consider debt levels in the next decade, and it makes some overly rosy economic assumptions that make our fiscal situation seem less severe than it actually is.

The budget also lacks the structural entitlement reforms necessary to ensure the solvency of Social Security and other vital health-care programs for future generations. Addressing the solvency of these programs would assist in putting our nation’s debt on a downward trajectory. Along with an aging population, rising health-care costs contribute a massive portion to our national debt. This will only worsen with time, and the longer we wait to make these necessary types of reforms, the changes we will need to make in the future will be more drastic.

We owe it to ourselves and our children to use these recent fiscal developments as a means to keep pressuring elected officials to do what is necessary. We should not sit back and expect elected officials to do what’s in our best long-term interest.

After all, Iowans, more than anyone else, can capitalize on the idea that America is an active democratic society. Every four years, politicians want to know what Iowans think. Let’s not wait a few more years before telling them. That’s why I am a member of the Iowa Chapter of Fix the Debt.

Let’s all get up, get talking and get pushing for the kind of economic safety and prosperity we all deserve.

Mark Hanawait is president of United Equipment Accessories and a steering-committee member of the Iowa Chapter of Fix the Debt.

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