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Phil's column

Phil Power is founder and chairman
of the Center for Michigan.

Michigan citizens can help nation avoid ‘cliff’

Now that the election is finally over, the national news these days is dominated by the specter of the coming fiscal cliff.

So here is a “Michigan Citizens’ Survival Guide to Navigating the Cliff, Understanding it and, Hopefully, Surviving.”

What the fiscal cliff means to Michigan:

Perhaps the biggest event of the decade will start to unfold at the end of this year, when the nation hits the so-called “fiscal cliff.”

The ticking time bomb started last year, with the Budget Control Act of 2011, and was designed to set in place a balance of terror facing both political parties. Unless something changes beforehand, the cliff, which we reach at midnight on Dec. 31, combines draconian spending cuts for both domestic and military programs with the end of the tax cuts enacted during the Bush administration.

According to a Bridge Magazine analysis from Mitch Bean, the highly respected longtime head of the House Fiscal Agency, cuts to defense and non-defense spending in Michigan alone would total $807.1 million in 2013. Repeal of the Bush tax cuts and increased payroll tax rates would reduce total state disposable income by as much as $14 billion and cut state consumption tax collections, as well.

Bean concludes “the state would probably lose all the net jobs we’ve created in the last year to 18 months – and state revenues could easily take a $300 million to $400 million hit in 2013, necessitating budget changes.”

Going over the fiscal cliff would be a big, big time hit to our state, which is still struggling to emerge from the Great Recession.

Can ordinary citizens do anything? From our perspective out here in Michigan, it’s easy to think that ordinary citizens won’t be able to affect one whit all the tugging and hauling that will go on in Washington. But that’s not so.

The Campaign to Fix the Debt – a national nonpartisan coalition of business leaders, elected officials, community leaders, academics and individual citizens – last week announced a Michigan state chapter. The idea is to bring together concerned citizens of all stripes to call on lawmakers to address the ballooning national debt.

Co-chairs are Ken Sikkema, former Michigan Senate majority leader and current senior policy fellow at Public Sector Consultants, and Sandy K. Baruah, president and CEO of the Detroit Regional Chamber of Commerce. “We’re at a point where citizen pressure and involvement can actually make a difference,” Sikkema told me. “It’s not a matter of folks in Washington not knowing what to do. It’s that they’re reluctant to take the hard decisions because they’re afraid of the political consequences of making them. We need to encourage them to step away from knee-jerk partisanship and face difficult facts, and we need to support them when they’ve done so.”

The Campaign to Fix the Debt is designed to focus citizen pressure on elected leaders to put our economy on a sustainable course by reforming the tax code and increasing revenues, while at the same time making smart spending cuts to programs that aren’t working or aren’t necessary. More than 300,000 Americans have already signed a Citizen’s Petition calling on our leaders to do the right thing. For more information, and to sign up:

How to navigate the fiscal cliff:

It won’t be easy, as the problem of what to do about our nation’s out-of-control spending, grotesque tax code and spiraling debt has been around for years. A recently published book – “The Price of Politics,” by Bob Woodward, an author of “All The President’s Men” – describes, in depressing detail, how President Barack Obama and Speaker of the House John Boehner spent months last year trying to agree to a “grand bargain.” I recommend it to anybody interested in our financial future, although you should be warned that neither the president nor the speaker come across as particularly effective.

What the book makes clear, however, is how very complicated these matters are and how complicated it will be to get to agreement, with all the snapping and snarling from both political partisans and the special interests who infest Washington.

It’s very likely that fixing our national debt will be a two-step process, with a down payment to avoid falling off the cliff due by year end and much more detailed and consequential work to be done next year. This won’t be easy, as it will require designing once again a structure (complete with awful penalties) to force reluctant politicians to actually keep their eye on the ball for months at a time and come up with a long term solution to our financial problems.

One of the big opportunities for the Fix The Debt campaign will be to let people know just where negotiations are going and when to weigh in. Two Michigan members of Congress – Dave Camp, the Republican chairman of the House Ways and Means Committee, and Democrat Sander Levin, the ranking minority member – are in key positions on a key committee. And I wouldn’t rule out an important role being played by Congressman John Dingell, the longest-serving member of the House, who has enormous influence in the Capitol.

All in all, the decisions we face as a nation over the next 18 month are crucial to our sustained prosperity.

To fail is to concede that our democratic system simply doesn’t work the way it should. I urge every concerned person to sign the Citizen’s Petition — and make your voice heard.

Editor’s note: Former newspaper publisher and University of Michigan Regent Phil Power is a longtime observer of Michigan politics and economics. He is also the founder and chairman of the Center for Michigan, a nonprofit, bipartisan centrist think–and–do tank, designed to cure Michigan’s dysfunctional political culture; the Center also publishes Bridge Magazine. The opinions expressed here are Power’s own and do not represent the official views of the Center.

8 comments from Bridge readers.Add mine!

  1. Richard Cole

    Here’s what George Will predicted 25 years ago — quoting from a Fritz Holling speech.

    “A veteran returning from Korea went to college on the GI Bill; bought his house with an FHA loan; saw his kids born in a VA hospital; started a business with an SBA loan; got electricity from the TVA and later, water from an EPA project. His parents retired to a farm on social security, got electricity from the REA and soil testing from USDA. When the father became ill, Medicare saved his life by paying for a drug developed through the NIH.

    “His kids participated in the school lunch program, learned physics from teachers trained in an NSF program, and went through college with guaranteed student loans. He drove to work on the Interstate and moored his boat in a channel dredged by the Army Corps of Engineers. When the floods hit, he took Amtrak to Washington, DC, to apply for disaster relief, and, while there, spent some time visiting the Smithsonian museums.

    “Then one day, he wrote his congressman an angry letter demanding that the government to get off his back, ad complaining about paying taxes for all those programs created for ungrateful people.”

    That was Will quoting Hollings.

    Here is what George Will said then, in 1984 – something we’d be wise to hear today.

    “This is a decade when Americans must do a lot of growing up, so someone must talk to them just like that. The government we have did not come about overnight, or by accident, or by conspiracy. Middle class Americans who are the articulate complainers about it are the principle benefiters from it. They have no intention of dismantling it, so they had better pipe down and pay up.”

    All the best, Rick

    1. Mike R

      Bravo and congratulations for the right-on-point quote, one that should be required reading for every Tea Bagger who railed against President Obama for saying that no one running a successful business did it alone.

    2. Duane


      Might that be the cause of our declining education system and the jobs going unfilled because so many people don’t have the knowledge and skills to fill them? For all that Mr. Will claims our local high school graduation rate is approaching 50% from the low side.

      It seems the founding fathers and those who built this country didn’t have all that, they only had their ideals and the requirement that they rely on themselves and band togehter when an external threaten existed. It seems the country was formed and grew without all the dependence on the government.

  2. Neil

    The voters have re-elected President Obama and have given him a mandate to continue what he has been doing. The citizens have voted for bigger Federal government, more annual deficits, higher taxes on the rich, more welfare benefits, more layoffs and business not hiring, attacking free market capitalism, the private sector, and fossil fuels. We are about to see the damage caused by the new legislation on Affordable Health Care, Financial Regulation, and Food Safety and Regulation. The Federal departments and agencies are busy generating new rules and regulations at the rate of at least 62 per day.

    How exciting and terrifying the next 4 years will be.

    1. Mike R

      Nice negative and off-topic comment. Sounds like you’re wishing for failure, much like Mitch McConnell four years ago. And, I hope and pray, equally wrong.

  3. Charles Richards

    “To fail is to concede that our democratic system simply doesn’t work the way it should.” Where has Mr. Power been? Our democracy has already failed. In a recent column, George Will advocated sending each household a statement of the benefits they have voted themselves and compare that with how much they paid for those benefits. The voters have been perfectly willing to award themselves rich benefits while shifting the costs to voters not yet born. Politicians would not be so reluctant to “actually keep their eye on the ball for months at a time and come up with a long term solution to our financial problems.” if their constituents had a longer time horizon. We are the “special interests” who are responsible for the $32 trillion bill for future Medicare and Medicaid benefits.

  4. Duane

    “fixing our national debt will be a two-step process”, “it will require designing once again a structure (complete with awful penalties) to force reluctant politicians to “, what is different from what everyone is complaining about now?

    Mr. Power seems to only know what he is complaining about, for he offers nothing new or different.

    There was that old phrase “doing the same thing over and over again and expecting different results.” Wasn’t that used to define insanity?

    Might we start with accountability? Maybe it’s time we start including purpose and performance metrics in the laws and government programs and start ending those that fail to meet their purpose or performance standards.

  5. sam melvin

    Well FIRST we need to get back the SOCIAL SECURITY Money taken out of the LOCKBOX in april 2004 At $ 1,5 TRILLION see CNN Money ……..Dec.17,2007 Jeanne sahadi.
    THE BANK BAILOUT ……also we need to know How much money they are paying back in penalties. The census which pays the STATES back $ 10,000 needs to be payed to the Citzen that signed THE CENSUS.NOT TO THE STATES,wast of taxpayer time and Money.
    This way the local economy will grow and we citizen/Senior will buy the products neede and sold in our loacl ECONOMY.NOT CHINA.

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