There is only one thing worse than Republicans and Democrats failing to agree to lift the debt ceiling, and that is lifting the debt ceiling without a well-thought-out plan and with hasty cuts totaling trillions of dollars over a decade. What business do you know — that is still in business — that would operate this way: making massive long-term cuts, negotiated by exhausted executives, without any strategic plan? It certainly wouldn’t be a business you’d expect to thrive. Maybe you can grow without a plan. But if you cut without a plan, you will almost surely hit an artery or a bone that could really debilitate you. That, I fear, is where we are heading.
Stop for a minute and ask: What would it look like if we were approaching this problem properly?
For starters, two years ago Congress and the Obama administration would have collaborated on a series of hearings under the heading: “What world are we living in?” They would have included a broad range of business, education and technology leaders testifying about what are the major trends and opportunities that are expected to shape the job market for the next decade. Surely, the hyperconnecting of the world, the intensification of globalization and outsourcing, the challenges of energy and climate and the growing automation of the work space that is rapidly increasing productivity with fewer workers all would have figured prominently.
Then we would have put together “The National Commission for 21st Century America,” with this assignment: Given these big trends, what will America need to thrive in this world and how should we adapt our unique formula for success?
Yes, we have developed such a formula over the course of American history, and it is built on five basic pillars: educating the work force up to and beyond whatever technology demands; building the world’s best infrastructure of ports, roads and telecommunications; attracting the world’s most dynamic and high-I.Q. immigrants to enrich our universities and start new businesses; putting together the best regulations to incentivize risk-taking while curbing recklessness (not always perfectly); and funding research to push out the boundaries of science and then let American innovators and venture capitalists pluck off the most promising new ideas for new business.
Only after we had done all that would we then sit down with a blank sheet of paper and say, “O.K., given our current fiscal predicament, where should we cut spending and where must we raise new tax revenues so that we can bring our government back to solvency and, at the same time, reinvigorate our formula for growth and success.”
After all, “we don’t just need a plan for regaining American solvency. We need a plan for maintaining American greatness and sustaining the American dream for another generation,” argues Michael Mandelbaum, the Johns Hopkins University foreign policy expert (and co-author with me of a forthcoming book). “Such a plan requires cutting, taxing and spending. It requires cutting because we have made promises to ourselves on Social Security, Medicare and Medicaid that we cannot keep without reforming each of them.”
But we cannot possibly generate the savings — or the new investments we need in our formula for success — by just taking funds from these social programs and shredding the social safety nets, adds Mandelbaum. “That would trigger a backlash against free-market capitalism. And free-market capitalism is the engine of our growth, and growth is the best way to reduce the deficit.”
That is why we need to raise new tax revenues as well — so we can simultaneously shrink the entitlements programs, but still keep them viable, and generate the funds needed to strengthen all five parts of our growth formula. Anyone who says that either entitlement reform or tax increases are off the table does not have a plan for sustaining American greatness and passing on the American dream to the next generation.
Alas, that is the Tea Party. It is so lacking in any aspiration for American greatness, so dominated by the narrowest visions for our country and so ignorant of the fact that it was not tax cuts that made America great but our unique public-private partnerships across the generations. If sane Republicans do not stand up to this Hezbollah faction in their midst, the Tea Party will take the G.O.P. on a suicide mission. No American politician was more allergic to debt or taxes than Thomas Jefferson, but he also appreciated the need to have the resources to make the Louisiana Purchase and insisted that on his tombstone it be written that he founded the University of Virginia.
Personally, I’ll support anyone with a real plan to cut spending, raise revenues and boost investment in the five pillars of our success — be they Democrats or Republicans. But if neither Republicans nor Democrats can see that we need a hybrid politics today — one that requires cutting, taxing and investing as part of a single nation-building strategy (phased in over time) — then I’ll hope for a third party that does get it and can take us where we need to go.