While the Republican field agrees that the debt is hurting economic growth and job creation, very few have offered specific policy initiatives that will bring down the debt in a responsible way and create more jobs with higher wages. It is not enough to simply say we need to cut spending, cut taxes, and add a balanced budget amendment to the Constitution. Without dealing with the long-term drivers of our debt — rising health care costs and entitlement spending — we will not put the country back on a healthy fiscal path.
What America needs is a smart, pragmatic, and bipartisan deficit reduction plan that stabilizes the debt as a share of the economy while also increasing investments in areas that will stimulate economic growth — a two-pronged approach as suggested by leading national voices like the Committee for a Responsible Federal Budget.
The reality is that long-term deficit reduction and economic growth can happen simultaneously. That’s the formula that my administration followed here in Ohio where we balanced the budget and modernized the state’s economy through the Third Frontier Project, which expanded Ohio’s high-tech research capabilities and created thousands of new, high paying jobs. We also increased public investments in schools to give all of our children a chance at a quality education regardless of their zip code or socio-economic status.
But if we don’t take steps to strengthen our retirement programs, including Medicare and Social Security, there won’t be enough room in the federal budget to invest in the next generation.
In 1960, there were approximately five workers for every Social Security beneficiary. But as baby boomers retire, the ratio will shrink to two workers per beneficiary by the end of the next decade — thereby incurring large deficits that will inevitably lead to trust fund depletion. In fact, the Social Security and Medicare Trustees recently released their reports on the long-term finances of each program, which showed both programs on a road toward insolvency. The Disability Insurance (DI) Trust Fund will be exhausted next year, and the combined Social Security trust funds will be exhausted by 2034, leading to an immediate 21 percent benefit cut for all beneficiaries.
Putting the country on a course towards fiscal solvency is the most important challenge that will face the next president. So it is incumbent upon all the 2016 candidates to address this problem and put forward a credible plan to bring down the long-term debt.
Bob Taft is a former governor of Ohio.
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