Sen. Warner to industry: Step up and out on budget debate

Democratic Sen. Mark Warner of Virginia has earned a reputation for reaching across the aisle to find solutions. So, the contentious and unproductive fights over sequestration and the budget have been particularly frustrating.

But his frustration isn’t just with other members of Congress; he also has complaints about how the business community has fallen short.

Warner told me in a phone interview this week that his frustration was highest during the debt ceiling debate in the summer of 2011.

“I’m very pro-business, and I have a lot of ties to the business community. I urged them to get involved, but they were silent,” he said.

The economy was in recovery, and the “single biggest thing to hold us back would be this self-inflicted turmoil,” Warner said.

The debt ceiling was raised, but with it came sequestration.

The overall business community increased its involvement as the Super Committee (the group that was to create a framework for getting the debt and deficit spending under control) and the Gang of Six (a group of moderate Republican and Democratic senators, including Warner, that worked on budget issues) failed.

There was the Committee for a Responsible Federal Budget, a non-partisan group advocating for smarter fiscal policies, and the Campaign to Fix the Debt, a group founded by Erskine Bowles and Alan Simpson.

“But, strangely, as the business community stepped up, the defense industry did not,” said Warner, who supports a strong defense and industrial base.

Yes, they testified on Capitol Hill against sequestration and deep defense cuts, but those are narrow topics. “If they make this a balanced approach, then they aren’t just advocating for self-interest, but for the broader interest,” he said.

“But I’m sensitive to those whose success is reliant on the appropriations process and are going to be more cautious,” Warner said.

Everyone has to get out of their “personal political foxhole,” Warner said. “It means looking beyond your industry. It means supporting a Republican who will talk about revenue, or supporting a Democrat willing to take on entitlement reform.”

During our talk, he often referred to sequestration as “stupid”; in fact, he voted both for a Democratic bill and a Republican bill that would mitigate the meat cleaver approach of sequestration. Neither bill was perfect, but they were “less stupid.” Both failed.

The business community’s support for a combination of spending cuts and new revenues is important because that is what is needed to sway Republicans, he said.

“Until we break this gridlock, the host of other issues we face won’t get fixed until we fix our balance sheet,” Warner said. “This gridlock has almost become a metaphor for whether our institutions can function in the 21st century.”

Industry’s relationship with government should focus on collaboration on what Warner calls the three main components of a growth economy: education, infrastructure and research and development, he said.

“We see enormous financial pressures on the business side and the government side on these three main components,” Warner said. “There needs to be more collaboration. Other countries are making those kinds of investments, and that helps their economy writ large and their business environment.”

That’s been a missing component of the political debate, he said.

“The question of how you have a growth economy, and some level of collaboration at least on education, infrastructure and R&D, I don’t think we’ve done enough serious thinking on that,” Warner said.

Even though sequestration has kicked in, Warner said he thinks that the pain won’t be felt for a while, so the political dynamic hasn’t changed yet.

He believes that a budget will be passed before the continuing resolution expires on March 27. Simply extending the continuing resolution isn’t a good idea, particularly on defense.

Life under a continuing resolution doesn’t allow for easy shifting of funds from one account to another. Funding needed in 2012 doesn’t necessarily match the needs of 2013. “You might have the right amount of money, but it’ll be in the wrong account,” he said. “It can be as bad as sequestration.”

While the time frame is tight for passing a budget, most of the work has already been done in the appropriations subcommittees, which is why he said he is mildly hopefully an agreement will be reached.

“I think that the majority of people want to see us get some level of fix,” he said.

And it is important that a long-term solution be found that brings down the debt as a percentage of Gross Domestic Product. While sequestration might be a manufactured crisis because it sets an arbitrary deadline, the growth of the national debt is unsustainable, Warner said.

“Until we fix that, we’re just staggering from crisis to crisis,” he said.

The political environment is harsh, and Warner points to both fellow Democrats and Republicans as culprits.

“There are a lot on both sides who are trying to win the political argument of the day or the week,” he said. “Whoever wins the argument is insignificant. There is no upside. This is just not healthy.”