Bowles calls for cutting deficit before stimulus spending
Posted November 3, 2011
Chapel Hill, N.C. — Former University of North Carolina President Erskine Bowles said Thursday that the U.S. cannot afford much more stimulus spending and must drastically cut the federal deficit to improve the economy.
Two days after Bowles told Congress' so-called super-committee, which is tasked with trying to cut $1.2 trillion from the deficit over the next 10 years, that he feared they would "fail the country," he was in Chapel Hill to speak at the UNC School of Government.
A former co-chairman of President Obama's deficit panel, he said he needed to be blunt since the super-committee needs to strike its debt-reduction deal by Nov. 23. If it fails to meet that deadline or if Congress doesn't enact a package by Dec. 23, $1.2 trillion in automatic cuts to defense and many domestic programs would begin in 2013.
"This is the most predictable economic crisis in history," he told WRAL News in an exclusive interview. "The fiscal path we're on is simply not sustainable."
Still, he knows the path is difficult. The deficit isn't simply a federal issue, he said, because government spending also affects state and local economies.
It's also very personal. Bowles recounted a conversation with his mother in which she expressed pride in the work he was doing to reduce the deficit, only to add, "Don't cut my Medicare."
Cuts to Medicare and defense spending will be needed, he said, as will an overhaul of the U.S. tax system.
Neal Wolin, deputy U.S. Treasury secretary, agrees.
"We're going to have to address deficit issues with a combination of spending cuts and revenue increases," said Wolin, who was in Raleigh Thursday for a meeting of groups working to reduce the number of home foreclosures.
Deficit reduction is a long-term process, he said, but the economy needs Obama's American Jobs Act now to boost the economy.
The Senate has balked at the $447 billion legislation and also has defeated portions of the bill that have been presented piecemeal in recent weeks.
"I'm not talking about another stimulus per se. I'm talking about real, concrete ideas (to put people to work)," Wolin said.
Bowles said attacking the deficit needs to be the first priority for Congress.
"These deficits are like a cancer. They're literally going to destroy this country from within," he said. "I want these guys (in Congress) to do what we sent them up there to do."