Simpson and Bowles: Obamacare, Defense Spending Must Be Cut

Friday, 16 Nov 2012 02:05 PM

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The government must rein in defense spending as well as spending outlined in the president's Affordable Care Act if the country is to see marked debt and deficit reduction, according to fiscal watchdogs Alan Simpson and Erskine Bowles.

The United States is staring at $16 trillion in national debt and is running $1 trillion budget deficits and to lighten that burden, popular programs such as those in defense or Obamacare must go under the knife.

"Who the hell is kidding who on what this is going to cost?" said Simpson, the former Republican senator from Wyoming, said of the Affordable Care Act, according to CNBC.

Editor's Note: You Deserve to Know What Obama and Bernanke Are Hiding From Americans

"We haven't found any constituency yet who wants to cut anything back anywhere."

The Supreme Court earlier this year upheld Obamacare, which extends healthcare coverage to more than 30 million uninsured Americans by 2014.

"This baby is on automatic pilot," Simpson said.

"It can't possibly succeed. There is no cost containment in this baby until down the road, and we know what will happen down the road — nothing."

Meanwhile, Americans must accept that heady defense budgets must be trimmed as well.

"I think we've been disproportionately responsible for world peace and I don't think America can afford to be the world's policeman," said Erskine Bowles, former chief of staff to President Bill Clinton.

Simpson and Bowles both head up the National Commission on Fiscal Responsibility and Reform, which outlined ways to narrow deficits and pay down debts, though their recommendations were put on hold by President Barack Obama.

Turning to the fiscal cliff, a combination of tax hikes and spending cuts due to strike the economy at the end of this year, a compromise must come now.

The nonpartisan Congressional Budget Office has said that the economy could contract by 0.5 percent next year if Congress fails to prevent the Bush-era tax cuts and other benefits from expiring at the same time automatic cuts to public spending kick in this January.

"Today, because we have done nothing — nothing — we have this fiscal cliff," Bowles said.

"We've got to get these people to put partisanship aside. We've got to get them to pull together instead of pull apart," Bowles added.

"While the rest of the nation has been having a fragile recovery, they've been having an election."

One heavyweight in the defense industry is keeping a close eye on fiscal cliff talks.

Big builders of ships and airplanes will survive cuts to defense spending, but their smaller suppliers might not and have already rolled back on spending today until they know what taxes and spending outlays will look like next year.

“A lot of suppliers and a lot of other companies around the country are talking about how they’re holding up on their investments until they know where we’re going,” Mike Petters, CEO of Huntington Ingalls Industries, the U.S. Navy’s sole builder of aircraft carriers, told Bloomberg.

“Some clarity on where we’re going will unleash that investment.”

Editor's Note: You Deserve to Know What Obama and Bernanke Are Hiding From Americans

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