Support effort to trim debt, Bredesen says

11:54 AM, Dec 4, 2012   |    comments
Gov. Phil Bredesen/The Tennessean
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By Chas Sisk | The Tennessean

Former Gov. Phil Bredesen urged Tennesseans to get behind a campaign to reduce the federal deficit, saying Monday that the issue threatens to undermine the United States economy.

Bredesen told a meeting of Tennessean reporters and editors Monday that Americans should not be lulled into complacency about the nation's fiscal problems. The $16 trillion debt may seem manageable now, Bredesen said, but the United States runs the risk of a sudden shock such as upheaval in China or a change in investor sentiment that would throw its finances into chaos.

"We live in a little bit of a bubble right now," Bredesen said. "It's not going to last forever, and when that happens, then you don't have time to deal with these things in an intelligent way. A lot of people will get hurt."

Bredesen spoke to The Tennessean in support of Fix the Debt, a national campaign to cut $4 trillion from the debt over 10 years through a mixture of higher taxes and changes to entitlement programs.

The campaign grew out of the National Commission on Fiscal Responsibility and Reform, the bipartisan commission lead by former White House chief of staff Erskine Bowles and former Republican Sen. Alan Simpson. Bredesen was named to the group's steering committee last fall.

Leaders of the effort say their goal is a compromise that will cut the debt, and they say they have avoided taking any side in the debate.

But some economists have criticized the campaign for ruling out one solution -- higher tax rates on the wealthy -- and fostering a false sense of alarm about the scale of the debt. They also say major cuts to the debt will curb growth in a slow economy, and they argue that Fix the Debt has ignored the two biggest factors behind the debt's rapid growth: the tax cuts passed under then President George W. Bush and the wars in Afghanistan and Iraq.

Bredesen conceded that the nation had faced larger debts in relation to the size of the United States economy, but those debts had been tied to events such as the Great Depression and World War II. The nation's current financial problems can be solved only by combining higher taxes with reforms to entitlement programs such as Medicaid and Medicare, he said.

The group proposes addressing the debt issue with a solution that involves three dollars in budget cuts for every dollar in new revenue.

Bredesen, a health care executive before he went into politics, added that he would be willing to pay more in personal income taxes if it were part of a broader solution.

"I am very happy to pay more in taxes to solve a problem. I'm not particularly interested in paying more to be the loser in a class war this spring," he said. "If you've got a solution to the problem, I'm there."

Bredesen described the current debates in Washington over raising the U.S. government's borrowing limit and avoiding the so-called "fiscal cliff" of spending cuts and tax increases as bargaining chips in the larger political dispute over debt reduction.

He predicted that serious debate over how to cut the debt would take place in the spring.

"I wouldn't take anything that anybody is saying very seriously right now," he said. "Everybody's posturing, positioning and setting up their stuff. ... The whole issue has yet to play out."

Contact Chas Sisk at 615-259-8283 or csisk@tennessean.com.

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