Deficit commission co-chairs warn of Greece-like debt crisis in US

The US would get in quick financial trouble and military funding could be jeopardized if Congress ignores the recommendations of the deficit commission, its co-chairs say.

Michael Bonfigli/Special to The Christian Science Monitor
Erskine Bowles and Alan Simpson, co-chairmen of President Barack Obama's fiscal commission, predicted the crisis the nation would face if Congress doesn't respond to their plan to reduce the country's budget deficit.

The co-chairs of President Obama’s deficit commission offered a scary forecast of what could happen if Congress ignores their panel’s recommendations and does not act to bring the nation’s deficit and debt under control.

First, financial trouble could come quickly, said former Sen. Alan Simpson, co-chair of the National Commission on Fiscal Responsibility and Reform. “It won’t be the old slippery slope [stuff] that we read about.”

Speaking at a Monitor-sponsored breakfast for reporters on Friday, Mr. Simpson said, “It will be very swift and very dramatic like in Greece or Ireland or Portugal or Spain.” He added, “It won’t take long. It won’t be like a year to prepare – it will be ‘woosh,’ like that.”

The panel’s other co-chair, Erskine Bowles, President of the University of North Carolina, said that the biggest threat to US national security “is the buildup in this debt… because we won’t have the capital to fund our military.”

If foreign lenders cut back on the buying US government debt, it could also put upward pressure on the interest rates companies have to pay to borrow. Mr. Bowles, who has an extensive business background said, “As a business guy, if I can’t get money to grow my business, I am out of business,” he said.

He noted that current interest on the federal debt is around $200 billion and is projected to grow “to a trillion dollars in just ten years.” In terms of government spending, “pretty soon you have no money left for anything else,” Bowles said.

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