Hoyer: Congress must fix ‘gargantuan debt’

In the wake of health care reform's passage, the crushing federal debt is one of the nation's most pressing issues, and five expert panelists at a fiscal responsibility forum yesterday called on the younger generation to take the leading role in the solution.

Although the panelists outlined different measures for tackling the enormous federal deficit — from cutting spending to making 401(k) savings accounts mandatory — they agreed on one important thing: No solution is off the table, and no one is off the hook.

House Majority Leader Steny Hoyer (D-Md.), who graduated from this university, headlined the discussion, called The Fiscal Solutions Tour, before about 85 students, alumni and faculty and staff members gathered in the Riggs Alumni Center's Orem Hall. The forum was sponsored by the public policy school and the Concord Coalition, a nonpartisan, national organization advocating responsible fiscal policy.

Though health care reform has become the law of the land, Hoyer said the work is not over for both policymakers and the public, who must cooperate to find a creative solution to the "gargantuan debt" riding on Uncle Sam's shoulders.

The federal government will run a $1.35 trillion deficit this year, according to a presentation by executive director of the Concord Coalition Robert Bixby, who said the United States' fiscal path is both unsustainable and self-destructive.

The panelists were quick to point out that the problem isn't just rooted on Capitol Hill and the younger generation will have to take responsibility.

Individuals must fundamentally change their habits and closely examine their financial behavior, panelists said, to help turn around the economy. The bailouts of the past two years have contributed to the unstable budget, Bixby said.

Speaking directly to the students in the audience, Hoyer said rising health care costs combined with an aging population are "crushing your generation with debt" and, if faced with another Hurricane Katrina, H1N1 breakout or Iraq war, "you will have no resources with which to respond."

Students in the auditorium nodded as Hoyer continued, calling upon elected officials and citizens to "look reality in the face."

"If either side fails, we will all fail," he said.

As for the question of whether the budget will just balance itself out after the recession subsides, "the answer is no," Bixby said, because the nation faces a structural deficit, not merely a cyclical deficit caused by natural highs and lows in the market.

Baby boomers are retiring, generating an incredibly high demand for Social Security benefits, and people are living longer. Both factors are driving up health care costs at the same time the country can't afford to meet them.

Panelist David Walker, president and CEO of the Peter G. Peterson Foundation — an organization that promotes fiscal sustainability — outlined several possible solutions, with the disclaimer that none would be popular and none would be easy.

To address the primary budget-sabotaging culprits, Walker suggested reforming Social Security to make the program sustainable in the long term. He proposed considering the cost and personal responsibility required for all future health care reform policies and controlling both discretionary and mandatory federal spending.

"Everything has to be on the table, and we have to act sooner rather than later," Walker said.

Georgetown University professor William Novelli said the deficit should be attacked from both revenue and spending. He stressed taking the population's increased longevity into account when making Social Security policy.

Novelli and panelist Andrew Biggs, resident scholar at the American Enterprise Institute for Public Policy Research, both suggested raising the retirement age and scaling back benefits for higher earners. Biggs said people need to "work more, save more and retire later."

After each panelist spoke, Public Policy Dean Don Kettl opened the floor to a Q-and-A session where Eric Miller, a business and public policy graduate student, asked the panel how young people should get involved.

Walker said personal financial responsibility starts early, and young people should continue attending similar events and promote awareness through social media.

Kristin Thompson, a business graduate student, said appealing to students in familiar ways is crucial.

"That's the right way to go about engaging our generation," she said, adding she appreciated that panelists took time to explain why the issue is relevant to people her age. "Now we have to take that message and expand it beyond here."

agulin@umdbk.com