The Campaign to Fix the Debt Overview

The Campaign to Fix the Debt

April 2013

An Overview of the National Debt

FixtheDebt.org

How bad is it?

• At $11.8 trillion, the publicly held portion of our national debt is equivalent to over 73% of our entire yearly economic output

• Over the past 4 decades, the debt has averaged only 39% of GDP

• The debt is projected to grow over the next 10 years to 77% of our GPD

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1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050

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Publicly Held Debt as % of GDP

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• Economic Crisis

(Lost revenue and increased spending on safety net programs, like unemployment benefits and food stamps)

• Economic Response

(Stimulus spending/tax breaks and financial sector rescue policies )

• Tax Cuts

(2001, 2003, and 2010)

• War Spending

(Iraq and Afghanistan)

• Spending Increases

(General ramp up in spending)

• Rapid Health Care Cost Growth

(Federal spending on its largest health programs are equal to 5.4% of the

economy; in 25 years, they will be 9.6%)

• Population Aging

(Causing Social Security and Medicare costs to rise, and revenues to fall )

• Growing Interest Costs

(From continued debt accumulation)

• Insufficient Revenue

(To meet the costs of funding government)

Debt Drivers

How We Got Here Why It Will Get So Much Worse

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Consequences of Rising Debt

• “Crowding out” of private investment, leading to slower economic growth

• Higher interest rates for family purchases, such as houses, cars, college tuitions, etc.

• Higher federal interest payments take over an increasing portion of yearly budgets

• Intergenerational inequity – passing the bill onto our kids along with a worse economy

• Uncertain policy and economic environment making it harder for families and businesses to plan for the future

• Risk of eventual fiscal crisis4

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Small Businesses and the Debt

The current climate of fiscal and policy uncertainty is particularly harmful to small businesses

• Small businesses often have smaller profit margins, particularly in their nascent years. Because of this, small policy changes are more likely to make the difference between profit and loss, success and failure.

• In today’s uncertain environment, small businesses have to hedge by holding back on investment in capital and hiring, because these decisions are costly and hard to reverse. This holds back growth in the entire economy.

• The mounting costs of our entitlement programs threatens to crowd-out other spending priorities, including programs that incentivize entrepreneurship, such as SBA loans.

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A Better Path Forward

Targeted

• Spending cuts should be smart to ensure that they only target wasteful spending, rather than gutting vital government functions

Enacted Now but Implemented Gradually

• A big plan would provide the policy certainty necessary for business planning, and gradual implementation would preserve the momentum of the economic recovery

Addressed to the Drivers of the Debt

• Any deal should focus on reining in the out-of-control growth of healthcare costs and entitlement spending, while preserving programs for those who need them most

Our leaders should come together to enact a comprehensive and thoughtful plan which would be:

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What’s Next?

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Background on theCampaign to Fix the Debt

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The Campaign to Fix the Debt – Overview

• The Campaign to Fix the Debt is a national bipartisan effort to encourage our elected leaders to enact a comprehensive debt deal within the next year by creating an environment where voting ‘yes’ reflects both good policy and safe politics.

• The Campaign believes that the national debt is the most serious economic and national security threat facing this country, and we must come together as a nation to fix it.

• To achieve this goal, the Campaign will work at the grassroots and grasstops levels through a combination of state and local coalition building, business leader support, social media efforts, Congressional outreach, and both earned and paid media.

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Unprecedented National Movement• Bipartisan support at the local, state and national levels

• Volunteers across the country mobilized through social media and digital strategies

National Leadership of CEOs and Business Leaders• Unprecedented business community support for a comprehensive

plan that will reduce the debt while strengthening the economy

Bipartisan Leadership in Washington• Collaboration with members from both parties to help create the

environment for bipartisan fiscal reform

What Makes the Campaign Different

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Objectives of the Campaign to Fix the Debt

• Educate Members of Congress about the key elements of a

comprehensive solution, building support for substantial fiscal reform and making clear the consequences of inaction

• Create a political environment in which policymakers and political

candidates become champions of balanced and bipartisan fiscal reform

• Build a national movement to demonstrate to policymakers that

supporting a comprehensive bipartisan debt solution is now the politically safe vote

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Campaign Leadership

Founders

Co-Chairs

Steering Committee

Erskine Bowles, Co-Chair, National Commission on Fiscal Responsibility and Reform

Senator Alan Simpson, Co-Chair, National Commission on Fiscal Responsibility and Reform

Mayor Michael Bloomberg

Senator Judd Gregg

Governor Ed Rendell

Governor Phil Bredesen

Senator Kent Conrad

David Cote, Chairman and CEO, Honeywell

Pete Domenici

Congressman Vic Fazio

James B. Lee Jr., Vice Chairman, JPMorgan Chase & Co.

Congressman Jim McCrery

Senator Sam Nunn

Congressman Jim Nussle

Michael Peterson, President and COO, Peterson Foundation

Steven Rattner, Chairman, Willett Advisors

Alice M. Rivlin, Co-Chair of the Debt Reduction Task Force at the Bipartisan Policy Center

Mayor Scott Smith

Margaret Spellings

Mayor Antonio R. Villaraigosa

Senator Tim Wirth

Ambassador Bob Zoellick, Former President, World Bank12

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Coalition of Voices • Campaign Steering Committee 17

• CEO Steering Committee 31

• Partner Organizations 28

• State Chapters 23

• Former Members of Congress 100+

• Economic policy experts 100+

• CEOs and Business Leaders 170+

• State Civic leaders 601

• Small Business Owners 2,700 +

• Grassroots Activists 345,000 +

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Coalition Support

The Campaign has brought on 28 partner organizations representing a broad and diverse range of perspectives and issue areas including business and trade, multicultural, millennial, economic and budget, environmental, workforce/families, and women’s issues. Partners include:

• Alliance for Business Leadership• American Business Conference• American Homeowners Grassroots Alliance• American Institute of Certified Public

Accountants (AICPA)• Business Industry Political Action Committee

(BIPAC)• Center Forward• Christians for a Sustainable Economy• Comeback America Initiative• Committee for Economic Development• Common Sense Coalition• Concerned Youth of America• Concord 51• Concord Coalition• Corporate Voices for Working Families

• Enact the Plan• Gen Next Foundation• Greater Minnesota Economic Alliance• Minority Business Roundtable• National Gay and Lesbian Chamber of

Commerce• National Parks Conservation Association• National Puerto Rican Coalition• National Small Business Association • North Carolina Association of CPAs• Rebellious Truths• Silicon Valley Leadership Group• Spend Smart America• The Can Kicks Back• Women Impacting Public Policy

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Grassroots Efforts: Overview

• The Campaign’s Citizen’s Petition has received over 350,000signatures to date.

• More than 2,700 small business leaders are members of the Campaign to Fix the Debt.

• There have been over 150,000 letters sent to Congress by our Grassroots network

• FixTheDebt.org has had over 450,000 visitors to the website in 4.5 months

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Grassroots Efforts: States

During the February Congressional Recess, the Campaign hosted events in over 30 congressional districts in 23 states, including:

• Arizona – State steering committee Member and owner of Pivot Manufacturing Rick Murray hosted U.S. Rep. Matt Salmon for a factory tour and roundtable discussion

• Michigan – State steering committee members and small business owners met with Rep. Dan Benishek and Rep. Tim Walberg. Steering committee member and State Senator Roger Kahn spoke at the Marquette Economic Club and met with university and community leaders at an event at Northern Michigan University

• Colorado – in Denver, steering committee members met with Senator Mark Udall for a round-table discussion and organized a town hall meeting with Rep. Mike Coffman and community and business leaders

• South Carolina – Rep. Joe Wilson toured Smitty’s Print Shop and participated in a Q&A session with members of Fix the Debt and the local business community

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State Chapters

The Campaign to Fix the Debt has launched state chapters in 23 states, and there are more than 600 state chapter steering committee members of the Campaign. More state chapters will be announced in the coming weeks. Below is a listing of where we have a presence so far:

• Arizona• Colorado• Florida• Georgia• Iowa• Indiana• Louisiana• Maine

• Maryland• Michigan• Minnesota• Missouri• New Hampshire• North Carolina• Ohio• Pennsylvania

• South Carolina• Tennessee• Texas• Utah• Virginia• Washington• Wisconsin

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Note: Fix the Debt has collected a total of 346,835

signatures for the Citizen’s Petition as of 2/24/13

= Indicates presence of Fix the Debt State Chapter

Citizens’ Petition to Fix the Debt

FixtheDebt.org

How You Can Help:

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• Sign the petition to “Fix the Debt” at FixtheDebt.org or text “sign”

to 877877

• Visit FixtheDebt.org to download the Citizen's Toolkit to learn how

to get involved

• Send a letter to your elected member of Congress or schedule a

meeting with them voicing your concern and desire for a solution

• Spread the word to your friends, family, neighbors, and

colleagues, as well as local clubs and associations