Senators led their colleagues earlier today in proposing a fiscal commission tasked with finding solutions to strengthen America’s fiscal health and stabilize national debt
WASHINGTON—U.S. Senators Mitt Romney (R-UT) and Joe Manchin (D-WV) joined CNBC’s Squawk Box to discuss the Fiscal Stability Act—a bipartisan solution to strengthen America’s fiscal health and stabilize our nation’s finances for future generations—which they led their colleagues in introducing earlier today.
The Fiscal Stability Act would create a bicameral fiscal commission tasked with finding legislative solutions to stabilize and decrease our national debt, which now exceeds $33.6 trillion—more than double what it was just 10 years ago. Cosponsors of the Fiscal Stability Act include Senators Todd Young (R-IN), Kyrsten Sinema (I-AZ), Cynthia Lummis (R-WY), John Hickenlooper (D-CO), John Cornyn (R-TX), Mark Warner (D-VA), Thom Tillis (R-NC), and Jeanne Shaheen (D-NH). The legislation is the companion to the House’s bipartisan Fiscal Commission Act, which was introduced by Representatives Bill Huizenga (R-MI) and Scott Peters (D-CA). A one pager of the legislation is available here, and text of the legislation can be found here.
Excerpts of the interview can be found below and video can be found here.
Joe Kernen: Our next guests are in Washington. They’re unveiling a new bill that looks to rein in the nation’s $33 trillion debt. The Fiscal Stability Act from Republican Senator Mitt Romney and Democratic Senator Joe Manchin would create a commission to come up with potential improvements to the long-term fiscal health of the federal government.
If the commission approves legislative language, it would get faster consideration—it would have privilege, in other words—in the House and the Senate. It wouldn’t need 60 originally, it would need only a majority. Joining us now, Senators Mitt Romney and Joe Manchin…You’re going to have to get some of the other parts of the party probably on board with [the legislation]. Is that possible, Senator Romney?
Senator Romney: Well, actually, there are ten of us that are behind this legislation… A whole group. We’ve got a good group behind it. And you asked the question of how is this different than Simpson-Bowles? The answer is it really patterns itself after Simpson-Bowles. But the debt now is twice the level that it was during Simpson-Bowles. They were at 60% debt to GDP. This is 124% debt to GDP. So, there’s more urgency now. And secondly, Simpson-Bowles did not have a privileged process to get to the floor for a vote, and this legislation does.
So, the process is better, the urgency is greater, and I think as a result, you’re going to see people rally around this. But until the American people begin to think about what would happen if this debt continues to rise, we’re not going to be able to get the job done. But I think in this case, we’ve got a good shot.
Kernen: And Senator Manchin, obviously, I immediately thought, I love the framework. You know, you’ve got leaders from both sides are going to appoint who they think might be able to come to some type of agreement and then some outside experts. But the devil’s always in the details. It’s either got to be less spending or higher taxes, it seems like, or some way to stimulate growth.
Senator Manchin: Everything is on the table, Joe. Basically, we have mandatory spending and discretionary spending…If you look at those categories in the last ten years, they’ve all doubled…[We] put nondiscretionary [spending in the budget] that we can’t even talk about and can’t even debate it. This goes in, it’s automatic. We’re going to pay. It has doubled in ten years from $2.4 [trillion], up to about $4.9 trillion. It’s just out of control. The spending is out of control, but everything’s on the table. We’ll look at nondiscretionary, discretionary, and revenue and make sure we basically have the ability to take care of ourselves.
As former governors, Mitt and I both, and all the people who’ve been former governors, you have a balanced budget amendment. You’ve got to live within your means. And every week we would be consulted with our financial teams and they would tell us if we’re on track to be balanced, if we’re on track to basically have less revenue. We had to make adjustments so at the end of the year, it balanced out. There are no checks and balances here. And what’s happening with Social Security.
If we do nothing and sit back and say, everything will take care of itself. People who, let’s just say get $1,000 check right now from Social Security—my aunts, family members or whatever. Within ten years, that’s going to be cut to $800 and no one will do a thing, and they have no idea and can do nothing about it. We want to prevent that from happening. So we’re putting long-term fiscal stability, 75 years of stability within our trust fund, and in 15 years to have our GDP to the debt under control. We’re at 124%.
The debt of our nation is the greatest threat we have as a country. The debt. And everybody talks about geopolitical unrest and all the other stuff. Mike Mullen, in 2011, my first Armed Services [Committee] meeting, Mike Mullen was asked the question, “What’s the greatest threat the United States faces?” He didn’t hesitate. He was chairman of the Joint Chiefs of Staff. He said, “The debt of this nation will take us down before any adversary around the world.”
Kernen: Gentlemen, we’re talking entitlement reform again here, which is, you know, it’s the third rail…You know, the President needs to sign this eventually. President Obama didn’t do anything with Simpson-Bowles. You know who the two candidates are. We don’t know, but let’s just for argument’s sake.. if it were as it is right now, Senator Romney, it would take some convincing of President Biden or former President Trump to do anything with entitlements. So, they won’t sign this. I don’t care if you have privilege in the Senate or with the legislation. It would take a lot of cajoling and arm twisting to get either one of these gentlemen to finally touch that third rail, wouldn’t it?
Romney: Well, actually, both President Biden and former President Trump have said they’re not going to touch entitlements. The reality is, not everything is on the table because neither one of us, and nobody else is talking about, changing our entitlements for retirees or people nearing retirement. Those are promises made. Those promises will be kept. There’s going to be no change in the entitlement program for our seniors.
What we’re talking about is what will the program look like for people who are today in their twenties and thirties and forties? And do we need to make some adjustments in that area. For instance, linking the eligibility to the life expectancy of individuals and so forth, and giving people options as to when they opt out of the program and start receiving the benefits.
There are a lot of things we can do. There’s a proposal put out by a couple of senators to invest in the stock market by borrowing some money and using our borrowing to invest in the market and use the returns from the market through arbitrage to help pay for Social Security. Look, there are a lot of ideas out there that don’t require changing our entitlement programs for retirees, and that’s where both candidates for president in 2024, I think we’ll be able to come down.
Kernen: Senator Manchin, it sounds like you’re kind of parsing what President Biden and former President Trump has said. If they said, “We’re just talking about retirees right now.” I don’t think they want to touch it at all, even going into future generations, do they?
Manchin: Joe, the only thing I can tell you, I’ve been here for 13 years. If there is something bipartisan that comes out of the House and the Senate, there’s usually not a problem. There’s usually not a problem. The president, even though they might not like it, they could blame us. The bottom line is getting something out of here in a bipartisan way is a very heavy lift anymore.
This piece of legislation has to have at least three from [each] party…So, it has to be bipartisan, by the way it’s designed…This is a mirror of what the House has done…We put a few things in, guardrails, that we think are right there in line with it. And now it just depends on who they appoint…The House Speaker and the Minority [Leader] and the Majority Leader here in the Senate and the Minority [Leader], they each have four [people] to [appoint]. Let’s see how sincere and how determined they are to get people who really, truly want to get our fiscal house in order.
Kernen: Well, that’s the thing, Senator Romney. I mean, bipartisan…What about the guys in your party, Senator Romney…and you can think of some in Senator Manchin’s party, [who are on the extremes]. It doesn’t matter if you have three guys that agree on something, that doesn’t mean that you’re going to get the caucus on board.
Romney: Now, you’re absolutely right. And let’s not be Pollyannish about this. We’ve got a crisis coming. We recognize that the level of debt in our country cannot continue to go up and up and up because we’re going to hit a wall and you’re going to see interest rates ultimately be affected. There will be a crisis at some point. We’re trying to avert that. As you know, under the law, if we don’t avert this within the next ten years, Social Security gets cut by 24%. So there are some concentrating factors here that are going to come to play. The good news is that if you look at what’s happened in the Senate and the House and the White House over the last few years, we have been able to come together on the infrastructure bill, on the CHIPS Act, on reforming our Electoral Count Act, on marriage and religious liberty, on gun legislation. Even though the extremes were dug in the far ends of each party, we were able to get things done on a bipartisan basis. I can’t tell you that that’s going to get done again. I hope it is. But what I can tell you is if we don’t try, we’re going to be in real trouble down the road. And so Joe and I are working together with ten people that are absolutely committed to getting this done.