Britannia Radio

Breaking from Moneynews.com Obama Panel Warns Governors: Debt Will Destroy US Like a Cancer The heads of President Barack Obama's national debt commission painted a gloomy picture as the United States struggles to get its spending under control. Republican Alan Simpson and Democrat Erskine Bowles told a meeting of the National Governors Association that everything needs to be considered — including curtailing popular tax breaks, such as the home mortgage deduction, and instituting a financial trigger mechanism for gaining Medicare coverage. The nation's total federal debt next year is expected to exceed $14 trillion — about $47,000 for every U.S. resident. "This debt is like a cancer," Bowles said Sunday in a sober presentation nonetheless lightened by humorous asides between him and Simpson. "It is truly going to destroy the country from within." Simpson said the entirety of the nation's current discretionary spending is consumed by the Medicare, Medicaid and Social Security programs. "The rest of the federal government, including fighting two wars, homeland security, education, art, culture, you name it, veterans, the whole rest of the discretionary budget, is being financed by China and other countries," said Simpson. China alone currently holds $920 billion in U.S. IOUs. Bowles said if the U.S. makes no changes it will be spending $2 trillion by 2020 just for interest on the national debt. "Just think about that: All that money, going somewhere else, to create jobs and opportunity somewhere else," he said. Simpson, the former Republican senator from Wyoming, and Bowles, the former White House chief of staff under Democratic President Bill Clinton, head an 18-member commission. It's charged with coming up with a plan by Dec. 1 to reduce the government's annual deficits to 3 percent of the national economy by 2015. Bowles led successful 1997 talks with Republicans on a balanced budget bill that produced government surpluses the last three years Clinton was in office and the first year of Republican George W. Bush's presidency. Simpson, as the Senate's GOP whip in 1990, helped round up votes for a budget bill in which President George H.W. Bush broke his "read my lips" pledge not to raise taxes. Despite their backgrounds, both Simpson and Bowles said they were not 100 percent confident of success this time around. Simpson labeled the commission members "good people of deep, deep difference, knowing the possibility of the odds of success are rather harrowing to say the least." Bowles also said Congress had to be ready to accept the commission's findings. "What we do is not so hard to figure out; it's the political consequences of doing it that makes it really tough," he said. Arkansas Gov. Mike Beebe was one of those leaders who sat in rapt attention during the presentation, one of the first in public by the commission leaders. "I don't know that I ever heard a gloomier picture painted that created more hope for me," said Beebe, commending its frankness.