President here with the bypass and policy center. There are those who work in government and then there are those who make government work. And i James Lockard is is the latter. He has made government just listen to this list of positions. Director of the federal Housing Financing agency its predecessor, the office of federal housing enterprise as oversight chairman of welfare. Also member of the financial oversight board, deputy and principal commissioner and chief operating officer. The Social Security administration. Executive director of the pension benefit guaranty corporation. Out of government and investment banker. Cofounder, a Risk Management company. And he just was talking about it. Chairman recently of the new art museum and Greenwich Bruce Museum just opened up place he says where art meets so i thought im going to go see but most importantly to bpc he was the cochair with former senator kent conrad on one of our in fact one of our best sellers. The report on the commission on Retirement Security and Pension Savings 2016. I can tell you it still being used on capitol hill today by the recommendations in here related to Social Security and thank you to the staff for continuing that work on there. Finally and appropriate think for this and the title of his book jim served his country as a veteran lieutenant j. G. In the navy in the underwater on nuclear submarines. As i recall. And how could i forget . Hes a senior here at bpc. So welcome and our informal steve scully Senior Vice President communications to discuss america underwater sinking. Time to with Lessons Learned so take it away, jim. Steve thank you. And you have teed up. By the welcome. Youre among friends. We appreciate your time up. Bubble down bubble and crush, which is kind of the centerpiece this book. Lets begin with some definitions and then well talk substance. Okay. Yeah, well, my submarine days are a little time a little time ago, but bubbles mean when youre starting surface down, bubbles when youre going down and crush depth is when should not go any farther because youre going to implode. And i would tell a little story in the book about going to test step two, which is the as far as youre supposed to go and i was at the diving officer at the time and relatively junior and somehow i didnt quite stop at that level. And a few feet below, which was a little scary, but at any rate, submarine was really good Training Ground for just really out of college. The you know, you had people working for you were ten years older and much more experienced and but you learned all of things about nuclear power, nuclear weapons. So it was a great. So is america sinking. If you read the latest cbo report, theres no way out to say that it is. It is. I mean, were going to double our debt in the next ten years. If look at the total debt of the u. S. , were like 121 of gdp and well go up to 130 some of gdp in that ten year period. And, you know, the big problem, our entitlement programs, the i think the same cbo report said Something Like 81 of the increase in federal expenditures over the next ten years are Social Security, health care and now interest because interest is going to skyrocket with all the debt. And you on to that defense spending. And then what does that leave us . Well, if you wanted to read those separate and not touch them, you have to cut the rest the budget by like 70 to have a balanced. And i dont think thats going to happen. So you got to touch entitlements. One of the i think in my first chapter of the book, i have a quote from ben and what says is some people call the u. S. Government an Insurance Company with an army and many ways thats what we are. Gao did a report most recently had 150 to Insurance Companies, the u. S. Government, and they Something Like two thirds of all our expenditure. And so if you dont try to fix those, youre in trouble. And unfortunately, many of them were created with unsound insurance principles. I work for several Insurance Companies in the private sector and. They had contradictory missions. You know, you say for bbc example, you want to promote the find benefit plans, but on the same time, you want to make sure that theres enough money there. And the only way to make money there is to charge more for. And so the contradiction in all these programs. Congress, unfortunately ends up setting up programs which were really good intentions, but then never tries to fix them when they need to be fixed. We presented George W Bush with the Patriot Award and he talked Social Security and after he was reelected 2004, he had indicated that he wanted to use his Political Capital to fix Social Security. That was nearly 20 years ago. And what said was startling. He said, we couldnt it done then. And we definitely get it done now. Why . Well, its amazing when we to do it and i was the point person. Social security spent a year on the road doing it. I actually tell a story. About 911 in 2004, i guess was when we went up to camp david. We one 2000. No 2004, it was 911 date in 2004 and he wasnt campaigning because that wasnt a good week. So we were actually cricket over there. My wife and i were invited to camp david for that weekend and his social committee is on his mind. He really wanted to. He it was we needed to fix it. And he was right. And at that point, it was 30 some years away from insolvency today, its ten years away from insolvency. And the insolvency date think then was 2042 and now its 2033. So we, you know, its its a mess. And i think why he says is just no political will and you know, solution at this point is you got to do what president reagan did in 1980 to set up a commission. And the greenspan commission, it was called at the time, and tip oneill and reagan and some others just got together and out a deal. And thats what were going to to do. Hopefully, we dont have to wait peoples. Benefits are going to be cut by 20 if nothing happens. You know, thats thats to me, a problem at this point that we end up not facing reality in this country. Its so easy to demagogue Social Security and say youre going to take benefits from the old people. And yet thats exactly what president trump, President Biden are doing by not to do anything about social, because theres going to be benefit cuts in ten years. You begin your book and this is quote from barack obama that there is no problem cannot solve when we together. So on the issue of Social Security, what has to happen and how do you create that Political Capital to solve the problem beyond 2032 . I mean, as bill was saying, thank you, bill, for leading that for the staff because it was a it was a pretty it took two years for it to come through. We had 19 members leading politicians. The two Public Trustees of Social Security. By the way, there hasnt been a Public Trustee of Social Security since 2015, which is one of our problems. Theres just they dont even appoint a trustees at this point. The to do it is you really have to reach a compromise. And i think it will take a commission and we have. And you know, my thought would be maybe out of this debt ceiling fiasco that congress can get together and say were going to create a commission, a members, maybe to come up with a series of compromises. Our proposal out of a report bill referred to the bestseller is it was about 50 on benefits, about 50 on revenue taxes. We actually increased for the lower income, which i think is important, but we down the growth for higher. We had a somewhat benefit formula. We had a better cola cost of living and and higher very slowly the retirement age and the tax side. We raised the tax max. We also raised that figure. But again it was 1 over ten years and half played by the employer. So id be, you know 0. 05 a year for people. So it can be done now, that was, you know, six years ago. Its going to be tougher now and thats the problem. Every year it gets tougher. It really does. And but, you know, if they dont, it its going to be really very hard on lower income people. I mean, something almost 50 of the people rely on Social Security for most of their income. And americans are not saving enough. Theyre not saving enough. That was part of our recommendations. Actually, i have a report is to increase savings and some of those actually did happen. This cure act one and two have been passed by congress. So we had some action out of that report. But unfortunately, as president bush told you, its really hard to do anything in Social Security. You know, in his book, he said he hugged the third rail and he was toast. So you look at the last 20 years and weve gone from about 8 to 10 trillion to now almost 32 trillion in debt. Weve had 11 war in iraq, war in afghanistan, the Great Recession, the bank bailout covered, 19 tax cuts by a Republican Administration and a Democratic Administration and democrats continuing their spending. So safe to say that everyone is responsible. I think its safe. Say that. Yes. And including the american people, they keep electing them. Yeah, but has this been the perfect storm with all that weve with over the last 20 plus years . Yeah, its been tough. But, you know, talk about the Great Recession the tarp Program Actually made money and certainly, as you know and i see some of the fannie and freddie regulators in the room, they actually, i think at the end they had about 190 billion that they got from the government and they were already giving 300 billion back. So you cant really blame them for this problem. I think you can blame certainly income taxes and the American Rescue plan and all these other things that keep adding on and on. And, you know, its when we had very or no Interest Rates, people thought was really easy to do. And now Interest Rates are going up and its going to be its going to be horrendous because i think, i read a statistic in the next ten years. The interest we pay will be more than we pay for the defense department. So is it a spending problem or revenue problem . Its its both. I mean. Well, its three things. Spending revenue, management and thats what a lot of my book is about, management that we have to manage the government better than we do today. We put people in some of these agencies that have no Management Experience and just want to get in front of television or whatever is really. You wouldnt believe that with you. Shocking and know it ends up that we just keep kicking the can down the road. And so its its all three you know tax cuts for too much theres a quote in this book i get got to read this let me its over here because its my father was a business man wrote a paper 1990, which i gave to president bush 41 policy group and. It was a paper trying to create a successful country. He called it the successful start society. He many people feel the us is downhill. We read or see and hear. Our schools are falling. Our youth is faltering. Our industry is crumbling. Our banking is foundering. Floundering. And our government is fiscally and otherwise. I agree. He wrote that in 1990. And so its not its been long term problem. So i did an interview this morning with a conservative republican member of im not going mention his name, but he that his plan would save 1,000,000,000,000 over the next decade, cutting discretionary spending. And he put on the table 500 areas that he would spending. But it seems to me that you talk about where the spending is, medicare, medicaid, Social Security, other entitlement programs and the pentagon budget that hes about. And now interest on the debt. Its about, what, 75 , hopefully. Yeah. You cant do it outside of this. The Social Security, medicare and medicaid. You just cant do it. I mean, that trillion compares to the 20 trillion that will be over the next ten years. So that, you know, thats percent of the problem. And yet you got to tackle entitlements and you know, it can be done. I mean, we actually had 19 members on this commission and 18 of the 19 signed on and there were some pretty big sacrifices in there. Certainly the income benefits were slowed down and they were taxed. Unfortunately, thats going to be part of the part of the issue that Going Forward now. Again, i think we need to manage it government better. I think, you know, taking such clarity today and you know, it needs better management today, better systems. I probably shouldnt be political, but ill do this. They a commissioner there that was working on system reforms and disability forms and he was fired . Mm hmm. And Vice President biden because the unions didnt like him. So, you know, thats it. Managements an issue, too but its got to be smarter about our programs. We shouldnt be creating sorts of new ones. And we seem to love to new programs. And, you know, without sound finances them, you know take the ptc, i think when it originally started in 1974, the premium was 1 per person. Now its 90 per person, 90 some dollars per person. And for an underfunded plan, thats over 300, you know, and thats we just dont think these and it takes so long to fix. I mean Social Security the last fix was 86, 82, 82. Yeah. So, Kelly Darnell knows this. When were in a meeting with our good friend bill hoagland, we always how long it will take before he brings Government Spending. But one of the issues that he has brought up continuously is who the deficit hawks on capitol . Who are the people trying to rein spending today . Who are they . Well, im not an expert. Politics today, even in those days, it was hard to find a deficit hawk. But today it you know its you know you hear some on the right wing the Republican Party but they dont seem to have realistic proposals out there. You know, got to touch both revenues. And taxes. You got to cut spending. Raise taxes. Yeah. And have to. Sounds like a recipe for success in politics. Thats why im not a politician politician. But can we get there . Well, you know, part of my book is of trying to help people think about how we can do better on that. Yes, we we need to look at a lot of these Government Programs. You know, as i said, 150 to Government Insurance programs. Obviously, the biggies, theyre social, medicare, medicaid and all those. But theres a lot of them that we could, you know, when bush was president. Bush 43, he used to every year send up a list of 20, 30 programs that should be just. Mm hmm. But there was always someone in congress that wanted to keep that program alive. I remember in a Social Security, we had an office in. I cant remember south dakota or north dakota, and had one person in it. A person. And so we wanted to the office. It was impossible, you know, you know, and thats, you know just a little thing. But thats the kind of thing that unfortunately goes in washington, d. C. And was a while ago today its even worse as far as i can tell. Its pretty clear, having read the book that youre not real optimistic about how we managed the government, how we operate the government, the waste the abuse in. Yeah. So you saw that firsthand . Yeah. No, i mean, it certainly Social Security is an example of it. You know, its 1. 25 trillion of by far the biggest Government Program by far. I think on the retirement side, its reasonable to run because you know they set dates and its but when you get into disability becomes a very tough program to run because it you know you have to prove to the disability got to go through a state Determination Office then you have to go through this Social Security and then you appeal it and you go through all these things and once you get on people want to get off. Social security has Program People dont know much about called ssi supplemental security income which is separate Social Security and its funded directly from the government. And that program is so complicated that its hard to manage. We actually i was there. We got it off of high risk list, but its because you had to prove your income. You had to prove, yeah, you couldnt work. You had to have no assets. And it just became very complicated. And we put those rules in place for good purposes so people, you know, there isnt waste and abuse but its still is waste and abuse. Your friends here have some tough questions so you have them bring up the index cards and ill read them. Lets talk about the short term because approaching probably mid to late summer, when we reach the date, when it comes to the debt limit, for arguments sake, assume that both sides come together and they the debt ceiling. Republicans say we need to cut spending. Democrats are saying raise the debt limit first. Then well talk about s