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Financial summit confronts debt crisis

The summit focused on student questions about party cooperation and Rhode Island’s economy

Common Sense Action held Rhode Island’s first statewide convention about the national debt and potential solutions in Alumnae Hall Saturday. President Christina Paxson, economist Steven Rattner ’74 P’10 P’13 P’15, Providence Chamber of Commerce President Laurie White, Mayor of Cranston Allan Fung, former member of the U.S. House of Representatives Robert Weygand and local journalist Ted Nesi were all in attendance.

The event centered on two questions, framed by Andrew Kaplan ’15 during his introductory remarks: “How do both parties work together?” and “What lessons can we learn from Rhode Island’s fiscal struggle?” The goals of the student group, which was founded by Kaplan, a Democrat, Sam Gilman ’15, an Independent, and Heath Mayo ’13, a Republican, last semester, are to increase student involvement in politics and “create leaders who can engage in their communities,” Kaplan said. “It’s not about what we think, it’s about what the community thinks,” he said.

Paxson spoke next, introducing the topics to be addressed and identifying her hopes for the summit.

“There are many ways to balance the budget,” Paxson said. “The trick isn’t to balance it — it’s to do it right.” She said she hoped those gathered at the summit would think about “creating policy for growth.”

Students from Brown, the Rhode Island School of Design, University of Rhode Island and Bryant University attended, along with community members and professors from a range of departments, totaling about 120 individuals.

Rattner, the keynote speaker, provided an explanation of how the nation has accumulated debt.

“How we think about debt changed in the Reagan era,” he said, adding that debt was seen as “an anathema” before Reagan held office. More recently, it has been considered a necessary evil, he said.

Tax cuts to the top 1 percent of the income bracket, especially the top 0.1 percent, have had the most significant impact on the size of the debt, Rattner said. He added that military and health care spending also plays a large role in debt accumulation.

The Bowles-Simpson plan — a bipartisan proposal that would increase tax revenues and cut spending through entitlement reform created by President Obama’s National Commission on Fiscal Responsibility and Reform — would have brought the debt level down to 65 percent, Rattner said, cutting $2.4 billion out of the national debt. But the plan has not been put into action, and Rattner said he believes it will not be passed in its current form.

“The only sensible way forward is to both increase taxes and cut spending,” Rattner said, chiding Republican hesitation to change current tax rates. His proposed solution includes rescinding former President George W. Bush’s tax cuts for the wealthy, reforming tax codes to remove loopholes and cutting defense spending.

Rattner also emphasized that Medicare and Medicaid service must be reformed. “Health care rationing will and should occur,” he said. “It’s the big enchilada.”

Nesi moderated a panel featuring White, Fung and Weygand. They discussed a number of issues, ranging from funding public education and research to involving students in political action.

“It’s been tough,” Fung said, referring to issues he’s recently dealt with, which include a flood, a hurricane and millions of dollars of budget cuts.

Weygand said dealing with the budget deficit is an issue of proactive versus reactive policy making. “The government is good at responding,” he said, but it does not use enough foresight when creating new policies.

Polarization came up throughout the panel as an obstacle that must be overcome in order to solve the debt crisis.

Sam Bell GS, an attendee at the summit, said he does not agree with Rattner’s ideas about solutions to the crisis. In order to fix the debt crisis, he said, the private sector debt must be considered. “We need to take action against the whole debt” and not only focus on government spending, Bell said.

Regardless of methodology, the summit’s speakers seemed to agree that “it’s time to organize,” Gilman said. “Now that we have that charge, we need to take it forward.”


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