10 Voices Weigh In on Handling Long-Term Debt
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The Fiscal Times
February 28, 2011

The White House and Congress are scrambling this week to reach agreement on a stop-gap deal that would avert a government shutdown for two weeks while Republicans and Democrats try to agree on spending for the remainder of the fiscal year. The GOP is pressing for deep spending cuts this year – as much as $61 billion – and President Obama and congressional Democrats have signaled a willingness to go along with some of those cuts.

But with the deficit likely to hit $1.5 trillion or more this year and the overall debt projected to increase by $7 trillion over the coming decade, many lawmakers, governors, business leaders and economists  are clamoring for a comprehensive plan of entitlement and tax reform, defense savings and other measures to control the long-term debt. 

A small bipartisan group of prominent senators known as “The Gang of Six” are quietly working on a long-range plan to reduce the nation’s massive deficits largely by embracing the key recommendations of President Obama’s National Commission on Fiscal Responsibility. While we await that group’s pronouncements, here is advice from ten politicians and economic experts – relative newcomers as well as veterans of budget warfare – on what do about the long-term debt:

Rep. Mike Kelly, R-PA, freshman House member, former auto dealer:

Raising [the debt ceiling] is irresponsible unless there’s real reform. We’ve gone beyond our credit limit and told our lender, ‘I can’t pay you back, but I still want to spend a lot of money.’ If we keep doing that, we’ll never attack the real problem.

Rep. Dave Cicilline, D-R.I., freshman House member, former mayor of Providence:

It’s a huge challenge to assure that our government is responsible, effective, and affordable. We need to reduce spending but invest in infrastructure to improve the economy. We should look at our spending in Afghanistan. We’ve spent over $400 billion. Two recent reports said that 40 percent to 70 percent of the money was stolen by corrupt government officials. We need the right priorities and need to spend money in the right places and in the right way.

Rep. Colleen Hanabusa, D-Hawaii, freshman House member, former state legislator:

Eventually what we will be working toward in Congress is some form of gradual recognition of how to reduce the deficit. But government needs to protect Social Security as well as Medicare, as well as help those who are unemployed by no fault of their own because the economy tanked.  To me, to cut willy nilly is not an answer. It’s almost like saying all of the spending is unnecessary and you’re just cutting fluff.  That would be great if you could just cut fluff – but I’m not sure how much of this is fluff. 

Gov. Andrew Cuomo, Democrat, of New York: 

The old way of solving the problem was continuing to raise taxes on people. [But] working families cannot afford tax increases. We’re going to have to reduce government spending.

Bill Gates, CEO and Founder, Microsoft, on Charlie Rose:

Look, you have to cut spending. We spend 17.8 percent on our GDP on health care … that is just mind blowing. We’re up to a deficit of $1.5 trillion a year. These numbers are truly upsetting.

George Allen, former Virginia governor (Republican) and U.S. Senator:

We need to stop tax increases, get spending under control, and repeal Obamacare. It will be easier to defund it. My idea is to use individually-owned health savings accounts, which are empowering. My whole family uses them.  And anything not obligated under this ‘stimulus’ and TARP needs to be defunded to help get this deficit under control.

Joe Scarborough, host of MSNBC’s Morning Joe, on his show:

These programs will cripple us. By the beginning of next century you’re going to have Medicare, Medicaid, Social Security interest on the debt sucking up our entire tax revenue.

Glenn Hubbard, Dean, Columbia Business School:

We need entitlement reform, starting with Social Security. Slow the rate of benefit growth for upper-income households. It can reduce future deficits and preserve fairness. Policymakers need to articulate a path of fiscal sustainability, clarify the financial regulatory process, and undo the onerous regulation in Obamacare. 

Joe Stiglitz, former Chief Economist at The World Bank, on CNBC:

What we really need to do is actually increase our spending on investments … and cut back our spending on weapons that don’t work against enemies that don’t exist.

Andrew Ross Sorkin, columnist, The New York Times, on Morning Joe: 

[The Obama administration] has to get a big package that’s too big to fail, that reduces deficits and reforms the tax code, [and] that everybody decides they have to be for it. 

Related Links:
Deficit is Economists’ Biggest Worry (CNN Money)
Deal on Spending Cuts Would Defer Tougher Decisions (Wall Street Journal)
Can a Bipartisan Deal on Deficit Reduction Work? (TIME)