Wednesday, July 13, 2011

Debt Debate

We shouldn't raise the debt ceiling without reducing spending.

George Nethercutt

When former Bill Clinton political adviser and Fox News analyst Dick Morris recently appeared before a Freedom Foundation event, he was critical of Republicans who voted for “only” $39 billion in spending cuts late last year in a presidential and congressional compromise to reduce federal spending. He praised the 59 members of Congress who voted to support larger spending reductions and pointedly criticized 5th District Representative Cathy McMorris Rodgers for not bucking her leadership team to support higher spending reductions.

When a member chooses a career path to congressional leadership, a member’s independence is often compromised in favor of the leadership team, and the member’s constituents are sometimes left behind. It happened previously in the 5th District to former Speaker Tom Foley, who was stuck supporting the Clinton agenda in 1994 that led, in part, to his unseating. There’s a fine line between supporting the party’s leadership team and being true to a member’s constituents. These times demand that all members of Congress pay closest attention to doing what’s right for the United States, and not just what’s right for a congressional career.

The United States’ national debt is over $14 trillion. The debt limit is $14.29 trillion. President Obama and his economic advisors have warned of a pending Aug. 2 hard deadline to raise the federal debt limit (the authority necessary for the federal government to keep borrowing to pay government obligations). Congressional failure to raise the debt ceiling threatens to weaken American economic credibility, jeopardizing credit instruments, America’s credit rating, economic well-being and job recovery.

Vice President Joe Biden and congressional leaders have been negotiating a package of reductions in order to offset a $2.5 trillion debt-ceiling increase before Aug. 2. That would make the debt ceiling $16.7 trillion. House Majority Leader Eric Cantor recently withdrew from the negotiations because Democrats wouldn’t abandon their insistence on tax increases as part of the package of debt-ceiling offsets.

The federal debt limit has been increased 10 times since 2001 and 72 times since 1961. Each time the debt limit is raised, Congress and the president spend up to the debt limit, necessitating another increase. Now with the U.S. debt-to-GDP (gross domestic product) ratio nearing 100 percent, many members of the U.S. House and Senate newly elected in 2010 are insisting that greater spending cuts be adopted if the United States is ever to get out from under its staggering debt. President Obama proposed a $3.7 trillion federal budget for 2012, leaving a lingering annual deficit of well over $1 trillion.

When Iceland’s economy collapsed, its debtto-GDP ratio was 310 percent. The Greek ratio is about 125 percent. Any nation with a ratio of 100 percent or more is in fiscal trouble.

America has experienced debt and borrowing since the Revolutionary times, and, until recently, paid it back. Our country borrowed to meet the national demands of war, economic upheavals and panics. It was during the national adoption of President Franklin Roosevelt’s New Deal in the 1930s that the federal government became a major lender by allowing federal agencies to directly help Americans recover from their economic problems.

In 1950, credit cards became an acceptable way for the business community to charge business-related expenses. Credit cards proliferated during the following four decades, leading to a credit-dependent American society. It’s no wonder that the federal government is now saddled with its own “credit-card debt” as the debt ceiling and federal borrowing keep increasing to ever more dangerous levels.


Last week, Congress returned to the nation’s capital for the balance of July to wrestle with the debt ceiling “fix.” It’s a good bet that Congress will not fail to raise the debt limit. To allow default would be irresponsible and foolish. The important action will be what Congress does to reduce spending. If members don’t exact substantial spending reductions to offset debt-limit increases, they should face election consequences at home.

The pressure will be massive to support a deal reached between President Obama, Democrats and the Republicans. Speaker John Boehner, a thoughtful and experienced leader, has set down a marker that expects the debt ceiling increase to be the same as spending reductions — a workable solution but one that will be painful to those dependent on government payments.

There will be others in Congress, possibly some running for president in 2012, who will want more. But the debt-ceiling vote and accompanying spending discipline will be a leadership test for those we entrust with our tax dollars and the fate of the national economy. They should be litmus-test votes for 2012.

Voters should ask, “Did our member of Congress have the courage of fiscal convictions to vote to fully reduce federal spending?” and further, “Was our member of Congress willing to vote for substantial-enough spending reductions, without concern for the next election?” This year, politicians who hide behind “safe” votes disguised as bold action, and offer ambiguous platitudes to America’s economic problems, should be dismissed next year at election time.

When 56 signers of the Declaration of Independence pledged “our lives, our fortunes and our sacred honor,” they acted boldly, with conviction and on principle, believing in a just cause that has survived 235 years of American existence.

All we ask of our current members of Congress is some measure of honest and bold leadership at this momentous time in our nation’s fiscal history.

George Nethercutt is the former congressman representing the 5th District of Washington. His column appears here once a month.

Also in Commentary

The English Way

Justice Scalia finds his rationale for an expansive Second Amendment in Common Law — so why does Great Britain have such strict gun control?

Robert Herold |
Wednesday, May 15,2013

What We Pay For

Publisher's Note

Ted S. McGregor Jr. |
Wednesday, May 15,2013

Keeping America

Announcing a new local effort to inspire today’s students to learn where their country came from

George Nethercutt |
Tuesday, May 7,2013

Cougar by the Tail

Publisher's Note

Ted S. McGregor Jr. |
Tuesday, May 7,2013

Power to the People

Will Spokane step up and grab its own future?

Thomas Alan Linzey |
Tuesday, May 7,2013

Also By George Nethercutt

Sinking Standards

Anthony Weiner — like all cads and cheaters — should resign.

George Nethercutt |
Tuesday, June 7,2011
Commentary

A Plan for Success

How Republicans can win big in 2010.

George Nethercutt |
Wednesday, August 11,2010

Rehab Candidate

America's fallen and it won't get up without enacting five surgical reforms.

George Nethercutt |
Wednesday, May 9,2012

True to Our Roots

Republicans looking to bounce back after the 2012 election should sharpen their message and seek new recruits

George Nethercutt |
Tuesday, December 11,2012
Commentary

In Our Backyards

When debating the new immigration law, think about what Arizonans have to go through.

George Nethercutt |
Wednesday, June 9,2010


I love that Mr. Nethercutt doesn´t actually say where this debt came from: President Bush. Two wars, Medicare part D, and the Bush tax cuts are responsible for our debt. Remember the surplus that we had under President Clinton? Spending cuts during a recession is what Hoover did and why the great depression lasted until WWII which ended up being the public works project that got us to %125 of debt to GDP and out of the great depression. So, what we really need is to back fill state budgets so that we are not laying off teachers and firemen at 50,000 per month. How about we start with taking away tax breaks for corporate jets and Exxon mobile. The fact of the matter is that the bond market is at historic lows, so no amount of "confidence" will improve the economy. The GOP should wake up the reality that they are driving us off the cliff over their idieology. Jul 13, 2011 | Reply to this comment

 

rmaynord:

Your statement that the GOP ideology is driving us off the cliff presupposes that the Democrats have no ideology behind their reasoning and are not driving us ever-deeper into debt. I´m not in the financial position to concern myself with the historic lows of the bond markets (and I seriously doubt that most average American voters are), I do know that every American family must balance its budget and its checkbook at the end of the month. Why shouldn´t the government? Overindebtedness can drive most average American families to ruin quicker than you can document the historic bond market lows. You´re simply playing the blame game. The problem goes back much farther than Bush. And the American public is to blame as well. As to confidence, I always remember my mother´s good friend, Lt.Col. George Washington Hull´s comment to me: "It doesn´t matter whether or not the dollar is sound. What matters is that the public believe the dollar is sound." Jul 20, 2011 | Reply to this comment

 

George Nethercutt, professional politician, turned special interest group advisor and Washington insider, posses a necessary question in his recent commentary “Debt Debate.” He tells us voters should ask “Did our member of Congress have the courage of fiscal convictions to fully reduce federal spending?” and further, “Was our member of Congress willing to vote for substantial-enough spending reductions, without concern for the next election?” Mr. Nethercutt, the former steadfast term limit warrior turned concerned candidate for the next election is partially correct. He fails to mention the most important question regarding deficit and debt reduction. Are we the citizens of the United States willing to do what it takes to pull ourselves out of the financial abyss? Are we willing to learn from our past mistakes and take corrective action?

Mr. Nethercutt mentions that we have experienced debt since the Revolutionary War, and until recently paid it back. What is he cloaking here? Recently must mean the Civil war as we have had debt ever since. Cuts must be made, and revenue must increase to address the amassed debt and present deficit. This mess didn’t start 2 years ago. We are fighting 2 wars. We all love the USA and support our citizen soldiers, until it’s time to pay for it, then it’s don’t tread on me, you socialists. It seems the most vocal supporters of the Red, White and Blue are the ones who pay back the smallest percentage, the uber-rich, the people whose voting record contributed to the deficits, and the biggest Corporations (perhaps they are one in the same). It will take the rich, the poor, the middle class, corporate America, and the government each stepping up to a fair share, rather than simply pointing a finger and forgetting how we put ourselves in this predicament. Mr. Nethercutt during his long tenure as a Politian is as guilty as any current Congress member, through his voting record, amassing huge deficits, adding to the national debt, but he is now a master finger pointer. We danced, now it’s time to pay the band.
Jul 22, 2011 | Reply to this comment

 

Latebloomer:

Yes, I am playing the "blame game" because I live in the reality based world. At the end of Clinton´s Term, we had a SURPLUS. That means, if Bush had not passed the two tax cuts, mostly for the wealthiest Americans, had not lied us into an unwinable war in Iraq, and had increased revenue to pay for Medicare part D, we would have been paying down the debt for a decade rather than running the largest debts. I agree that we need to pay our bills, and it has been the Democrats who have had the balls to actually tell the American people that if we want Social Security, Medicare/Medicaid, and the Dept of Defense unchanged, we need additional revenue. Cathy McMorris continues to live in a world where giving millions of dollars to billionaires trickles down to the middle class. The fact is that wages have been stagnant since Bush was in office, and the House Republicans won´t allow the country to recover because they know that it means re-election for President Obama. Jul 25, 2011 | Reply to this comment

 

I agree that a “member’s independence is often compromised” and that “constituents are sometimes left behind.”

I don’t think politicians should sign anything that closes off discussion before a debate has even begun. That’s what Grover Norquist’s “Taxpayer Protection Pledge” does. Who appointed him the final arbiter of our nation’s business? This is the patriot who said he wanted to drown our government in a bathtub – just the extremist I want to have the ear of my representative.

The problem with his taxpayer protection pledge is that it is false advertising. It does nothing to protect citizens who pay their fair share and blocks any attempt to rid the tax code of loopholes and special interest tax breaks. It seeks to perpetuate a system of inequality where the tax burden is dumped on lower income brackets. It doesn’t protect businesses that pay their taxes, only businesses that have tax breaks, some of which were slipped into bills quickly to avoid scrutiny and due diligence. These corporations and powerful special interests that finagled to get special treatment are, as a skeptic once observed, “the biggest welfare freaks on the planet”. They hide behind the unproven claim that every tax break creates jobs.

Legislators abuse the democratic process when they sign oaths of fealty to a fanatic who is on record ranting against our system of government. It makes me wonder what they don’t like in the Pledge of Allegiance that causes them to seek his approval, maybe the “justice for all” part.

I don’t like taxes. Who does? But it seems unreasonable to me to think a civilized society can function with no taxes at all. I’m all for reducing government spending as long as the tax code is rid of loopholes and questionable tax breaks.

Corporations argue vigorously for their right to personhood in the Supreme Court, but when it comes to paying taxes they want to skip out on that little detail.
Jul 29, 2011 | Reply to this comment

 

 
 
Close
Close
Close