Category Archives: Debt and deficits

Griffin explains debt deal vote, tackles debt problem at Philander Smith

Rep. Tim Griffin is supposed to be embarking on a “Jumpstarting Jobs” tour, but at Philander Smith College Thursday evening, the talk was about the budget deficit.

Two days after President Obama signed the debt ceiling extension, Arkansas’ Republican Second District congressman defended his own vote for the deal. He said that while he wasn’t happy with it and wouldn’t have voted for it had Republicans controlled the White House and Senate, he “wasn’t willing to roll the dice” on the economy had it not passed.

Describing the deal, he said, “It’s like canceling your cable bill when you can’t afford the mortgage.”

Griffin broke with some in his party by saying that he believed the government should increase revenues by reducing the amount of tax deductions. Some Republican leaders have said that rates should be lowered in that case so that there is no net increase.

But he reiterated his opposition to increasing taxes. He said that tax revenues did not decrease as a percentage of the gross domestic product because of the Bush tax cuts. He repeated a favorite GOP line that Washington doesn’t have a revenue problem, it has a spending problem, punctuating it with a Powerpoint slide showing that while revenues have remained consistent since the 1940s, spending is rising dramatically as a percentage of GDP. Even if revenues were to increase somewhat, he said, there’s no way they can keep up with that rate of growth.

Ultimately, he said, the spending explosion will be addressed – if not by the government, then by its creditors.

Griffin said economic growth was the key to reducing the deficit. He called for a flatter tax, regulatory reform, patent reform, free trade, and pro-growth energy policy.

The debt ceiling deal includes automatic spending cuts if a committee of Republicans and Democrats – dubbed the “Super-Congress” by some – and the Congress as a whole cannot agree on reductions. Griffin said he expects Congress to make those cuts without the automatic trigger.

It was a lively discussion. Griffin opened the evening by asking who in the audience was the angriest and then handed the microphone to a man named Patrick, who read a lengthy statement in support of health care reform and against the Bush tax cuts. Despite it being his fifth event of the day, Griffin energetically engaged his audience. He didn’t shy away from any questions and even gave out his cell phone number.

He also didn’t sugarcoat the realities of the country’s budget deficit problem. Saying Medicare needs substantial reforms, for example, he said, “If you love Medicare, then you’d better reform it because it’s going away.”

The audience of about 60 was fully engaged and highly informed on the debt ceiling debate. And it seemed aware of the nation’s fiscal problems. “Everybody’s going to have to take a big bite of this doo-doo sandwich,” said a constituent named “Edmond” who described himself as an independent.

Don’t compromise on ending the debt; compromise on how to do it

What Congress should have done is agreed that ending the debt is nonnegotiable. The it should have compromised on the details.

What it did was decide that the details were nonnegotiable. But it compromised on the principle that we should stop passing on the debt to our children.

That’s a subject I tackle in this week’s column for the Arkansas News Bureau.

No Labels says “Enough”

There’s a bipartisan group called “No Labels” that has been making the argument that it’s time for Republicans and Democrats to stop playing partisan games. Among its leaders is Dave Walker, the former comptroller general under Presidents Clinton and Bush who was featured in the movie “I.O.U.S.A.”

The group is going on the air with the ad, “Enough,” shown above.

Here is the No Labels website.

And if you have never seen the movie, “I.O.U.S.A.,” here is the link. It called attention to the national debt problem way back in 2007, when the debt was $8.7 trillion. It’s now $14.3 trillion.

What if Uncle Sam became a deadbeat dad?

Of course, President Obama, the House and the Senate are going to find some way to merge their competing plans and raise the debt ceiling before August 2.

But what if they don’t?

Two things would happen.

First, the global economy, already shaky, would become even more so. The world’s safest investment, the United States government, would become a lot less safe. Don’t believe it? Consider how the world has reacted to little Greece’s troubles.

Second, the debt would grow, not shrink, despite what some congressmen are telling us. American taxpayers currently pay a very low interest rate on the debt because the government is seen as such a safe investment. What happens if the government is no longer seen as a safe borrower? The same thing that happens if you or I are seen as unsafe borrowers – investors demand higher interest rates in exchange for their capital. Who will pay those higher interest rates? Taxpayers.

Here’s more in this week’s Arkansas News Bureau column.

McConnell, McCain abdicating responsibility, trying to score points


Did you catch the quotes by Senate Majority Leader Mitch McConnell and Sen. John McCain in Thursday’s Arkansas Democrat-Gazette story headlined, “Still no give in debt impasse”?

The quotes are referring to a plan McConnell has offered where President Obama would be responsible for raising the debt ceiling and making spending reductions on his own with Congress able to stop it only with a two-thirds vote.

Those are decisions that Congress should make under the Constitution, but that’s not a concern when there are political points to be won. McConnell wants Obama to be responsible for raising the debt ceiling – which McConnell knows has to be done – so Republicans can run ads against him next year for raising the ceiling. It’s political gamesmanship at its ugliest when our country needs statesmanship and leadership most.

Here are the quotes.

McConnell: “I refuse to help Barack Obama get re-elected by marching Republicans into a position where we have co-ownership of a bad economy.”

McCain, in a statement, which means he had time to think about it, said McConnell’s proposal was “a smart, forward-looking plan to make clear to all Americans that should we get to August 2nd without an agreement, it is President Obama alone – and not Republicans in Congress – who decides whether to raise the debt limit, and owns the economic consequences of any default.”

This is abdication of responsibility at its worst, and it’s particularly shocking coming from an American hero like McCain.

This site is called “Independent Arkansas” for a reason, and when I think Democrats are wrong, I’ll say it. President Obama’s warnings that seniors might not get their Social Security checks was particularly silly and not believable.

But Wednesday, these two Republicans were about as wrong as elected officials can be. Sen. McConnell, you have been in the Senate for 27 years. Sen. McCain, you have been in the Senate for 25 years and in Congress since 1982. You own this economy and this debt just as President Obama does. Time and again, you have voted for tax and spending policies that have weighed this terrible burden on our children and grandchildren’s shoulders.

Fix it.