In 2014, I was asked by a student at a local university what kept me up at night leading Michelin in North America. After confirming that I slept well, thanks to our global enterprise risk management process, I pointed out two major problems that students should be concerned about as they look to the future.
First was the condition of the road and bridge system throughout South Carolina. Since that talk, the state Legislature addressed this issue by instituting and funding a long-term plan in 2017 to improve the state’s infrastructure. While it still will take years for our road system to reach an acceptable condition, South Carolina is clearly moving in the right direction.
Second was the national fiscal situation, as the federal government’s deficit was again climbing and driving our national debt into the stratosphere. Unless brought under control, this fiscal bubble will burst at some point in the future, as all bubbles do, and the economic damage to our nation would likely ravage their generation. Unfortunately, the situation has only worsened in the intervening years.
What lawmakers should have done prior to 2020 was get the nation's fiscal situation under control. Instead, they continued to pass unpaid-for spending hikes and tax cuts that left the federal government with an annual $1 trillion deficit that would only continue to grow unsustainably in the future.
Today, as we deal with the COVID-19 pandemic, Congress has approved $3.6 trillion in aid to help impacted families and businesses. Our national debt is now well over $20 trillion, and more borrowing will be required. Taking on more debt now for a national emergency is absolutely necessary. But it is truly unfortunate that Congress failed to free up fiscal space before this crisis brought the country to a halt.
With partisanship slowing efforts to provide additional resources to respond to the health care and economic crisis caused by COVID-19 pandemic, there is a glimpse of bipartisan hope for responsible governance coming from the Palmetto State.
Republican U.S. Reps. Tom Rice and Ralph Norman and Democratic U.S. Rep. Joe Cunningham have joined a 60-member bipartisan push in the House of Representatives to plan for the nation's fiscal future. The group's letter to House leadership notes that spending to combat the COVID-19 crisis is the top priority. But they have proposed a set of bipartisan options to bring some sanity back to the budgeting process once this emergency is resolved and the economy is back on stable footing.
The national debt has not been this high since the end of World War II. The United States bounced back then thanks in large part to strong economic growth. But our demographics are far different now, and our population is aging. If we simply rely on growth in the future, the debt will continue to grow faster than we can afford. This will saddle our youngest generation with a bill that would severely hinder its ability to prosper.
That is why this letter signed by Rice, Cunningham and Norman is such an important first step. Responsible budgeting requires tough choices and trade-offs, but it would be disastrous to turn a blind eye to the growing mountain of debt. Today, we are in uncharted and dangerous fiscal territory.
Some in Congress are already showing hesitation about another large round of borrowing to further address COVID-19. What these members of the South Carolina delegation understand is that laying out a plan to tackle the debt in the coming years provides reassurances that we can borrow more now, knowing that Congress will commit to paying for it responsibly when the disease is under control and we are not facing an imminent crisis.
While this is only the beginning of a long road toward fiscal stability, Rice, Cunningham and Norman deserve high praise for coming together to address our nation’s immediate and long-term needs.
Congress must take all necessary steps to combat the current public health and economic crisis. But it also must prepare to map out a path to restore fiscal responsibility so as not to repeat the same mistake made after the last recession, and therefore ensure our children and grandchildren will not face the terrible consequences of fiscal mismanagement.
Pete Selleck is a former chairman and president of Greenville-based Michelin North America. He also has served on the boards of the S.C. Chamber of Commerce, United Way of Greenville County, the Greenville Technical College Foundation and Junior Achievement of Greenville.