Former Sen. Alan Simpson had a dire prediction for the U.S. if budget officials continue to focus on short-term issues when it comes to the national debt.
The country will hit the financial skids in the next 10 to 15 years if officials don't find a way to clamp down costs from our rapidly aging populace, the Republican former senator from Wyoming told CNBC on Tuesday.
"Play small-ball and 10 to 15 years from now your country will be sucking canal water and that's the way it is," Simpson said on "Squawk on the Street." "It's called the debt. It's $17.3 trillion, heading for 20, and at some point the people who have loaned us 20 trillion bucks will say you've got a dysfunctional government and you've got a Congress that doesn't work."
Simpson, who along with Democrat Erskine Bowles chaired President Barack Obama's bipartisan commission on fiscal responsibility in 2010, said it takes too long to establish lasting reforms. He pointed to a Social Security system whose future solvency has been neglected for decades.
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"The stuff that is going to eat our lunch is 10,000 people a day turning 65," Simpson said. "Health care is on automatic pilot, forget what you call it. It's time to deal with the long-term stuff before interest goes from what it is now back to historical heights.Then watch people grab their socks and run for blocks."
Simpson expressed skepticism toward any type of meaningful spending reforms, contending that there's an interest group ready to oppose each potential spending cut or tax hike.
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"Whatever you do, whether it's tort reform or real estate, the groups will organize and say, 'These guys are nuts and this is the end of America,'" Simpson said. "You've got to go into the tax code and start ripping those things out of there. Each one of these groups has a constituency that will run a front-page ad and tear your shorts off."
Simpson's comments come as Obama released his 2015 budget on Tuesday, a spending plan that includes new tax credits and job training programs for workers while tightening tax loopholes for the wealthy. The White House also wants to increase spending on road improvements and to expand early childhood education, but Republicans want to reduce the government's role in economic initiatives.
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