“It was the bipartisanship of the president and the speaker to sit down together and put the country’s interests first … It’s been done in the past; it can be done in the future,” said Governor John E. Baldacci referring to the time he spent in Washington D.C. as a congressman working on the national debt with President Clinton and Speaker of the House Newt Gingrich. “We balanced the budget and for the first time in modern America started to retire our debt, which was about $4.6 trillion. The key then, and it will be now, is to get the parties together to work things out. That’s how we managed it in Maine.”
Baldacci, a democrat, and former State Senate President Rick Bennett, a Republican, addressed the Portland Regional Chamber of Commerce at the Chamber’s “Eggs and Issues” breakfast at the Holiday Inn by the Bay on February 7, 2013. The two former political rivals of an intense Congressional campaign have teamed up, as Maine’s co-chairs of the Fix the Debt campaign, to spread awareness about the national debt. The breakfast was packed with around 350 people who eagerly and with interest listened to the speakers.
Baldacci and Bennett agreed that the inability of Congress to take meaningful action to get the country’s books in order is hurting the economy and would have dire consequences if significant action does not happen soon to right the fiscal course of our democracy.
“The debt is now at $16 trillion,” said Baldacci. “Because of the interest payments we have less to spend on programs that could stimulate the economy and help create jobs — $600 billion less. We’re spending a trillion in health care and education and a trillion in defense, and that’s backing out everything else.”
On a WGAN radio show interview he referred specifically to an item in the news concerning a Department of Defense decision that was made because of fiscal constraints caused by the national debt.
“They aren’t sending a ship to the Middle East because they want to save $700 million. We are going to see it affect our national security, which is tied directly to our economic security,” said Baldacci. “People will begin to connect the dots — it’s all interconnected. It will affect everyone’s quality of life.”
He said that some already have made that connection.
“I believe the slowdown in the economy has been because people don’t have confidence that the decision makers in Washington D.C. can make the right fiscal decisions,” said Baldacci.
The co-chairs stressed the importance of the public becoming engaged in the issue.
“If we can get civic, business leaders and citizens energized about this issue Washington will do something,“ said Bennett. “The leadership needs to come from the citizens, and then the leaders will follow.”
Governor Baldacci served in Congress for eight years and knows that citizen action makes a big difference to the outcomes of decisions in Washington.
“It’s important to representatives when they take on the issues in Washington that they know there are people at home supporting them,” said Baldacci. “With the 2012 there was too much gotcha politics on both sides for anything to happen.”
Baldacci believes now is an opportune time for Congress and the president to act using elements of the National Commission on Fiscal Responsibility and Reform report. The commission was co-chaired by Alan Simpson and Erskine Bowles at the request of President Barack Obama.
“I believe that the president wants to enact some of those recommendations. He’s announced measures that would help stop the sequester, and leadership has shown some willingness to come to the table,” said the governor.
The sequester represents automatic budget cuts that will become law on March 1st in order to bring the deficit down. The measure happened when Congress, during the election year, could not negotiate a deal to manage the debt, mainly because of partisan rancor.
“The sequester will be a lot worse for our country than a deal where both sides compromise. I believe it violates our national security by impacting our military preparedness,” said Baldacci. “I’m hopeful that leadership will be able to negotiate a reasonable deal before the deadline.”
When Baldacci became governor, he inherited a state in recession. His experiences of working in a bipartisan manner gave some hope that if Maine can get through tough times fixing its debt, then so can the nation.
“I not only had the structural gap of $1.3 billion — they had taken out a loan of $250 million for hospital reimbursement issues, and paper mills were closing. It was a very difficult time,” said Baldacci. “At that time we had one the highest tax rates in the country, so we couldn’t raise taxes, and with the recession we couldn’t cut back on programs people depended upon. We had to figure out ways to grow and invigorate our economy and at the same time not cut people who needed assistance off from benefits.”
He turned the situation around, and after two years the state had a surplus with a Rainy Day fund.
“Measures that we underwent in Maine in terms of reorganizations and integrations could be done nationally,” said the former governor. When his eight years ended, the country was in the midst of the worst recession since the Great Depression, but he managed to actually leave a surplus of over $100 million behind for his successor.
The two speakers were asked about raising the debt ceiling.
“The debt-ceiling vote is a side issue to the core problem,” said Bennett. “Some Republicans may not want to hear this, but I agree with President Obama on this. It’s money that has been spent by Congress. You don’t go into a restaurant and have a big meal and not pay for it. We need to focus on fixing the national debt.”
The Republican majority in Congress has been holding the measure to increase the debt ceiling limit hostage, even though the Constitution states clearly that Congress has to pay for services they approve. Nonetheless, for the past decade the issue has been used as a political tool to push political party agendas.
Baldacci and Bennett were also asked in the WGAN radio interview what each would do if he had the power to accomplish something major to help fix the problem.
“We have to change how we deliver health-care funds,” said the governor. “Forty cents of every federal dollar is spent on healthcare — on Medicare/Medicaid. Right now the more services you perform for a patient the more pay you get. I would change that to a captive payment system, so you have a fixed amount to spend. So health-care providers would have to work within a budget. A lot of health-care services providers think the quality of health care and patient satisfaction would be higher because the bottom line in the medical community would be the bottom line of the patient.”
They both agreed any solution has to be a bipartisan, balanced and comprehensive approach. Baldacci said that cutting entitlements, taking another look at the revenue stream, and strategic cuts would all have to be on the table so that funds are there to be reinvested into innovation and needed programs to grow the economy while reducing the deficit.
There is no question that Baldacci and Bennett are deeply concerned about the issue, as they are taking the time and energy to travel around the state getting people involved.
“It’s a test of our democracy,” said Bennett. “The nation’s credit rating has already been downgraded. We need to prove we can manage our debt.”
Fix the Debt is a nationwide, nonpartisan effort to engage legislators, community leaders and businesses across the country who want to see elected officials step up to solve our nation’s fiscal challenges. There is a petition on the website for citizens to sign, which will be sent to Washington, D.C.
The Fix the Debt duo have appearances planned around the state in the coming months.
• Tuesday, Feb. 19, 12:10 p.m., Maine School of Law, Lunchtime Town Hall.
• Wednesday, Feb 27, 12 p.m., Thomas College, Lunchtime Town Hall in conjunction with Mid-Maine Chamber of Commerce.(date changed due to storm)
• Friday, April 5, 7:30 a.m., Husson University Business Breakfast.
For more, please go to fixthedebt.org.