Social Security checks to nearly 80,000 Alaskans could be delayed. Medicare benefits to 65,000 Alaskans may be affected. More than 25,000 active duty Alaskan military personnel might have trouble getting paid on time.
These are the tip of the iceberg of potential problems for Alaskans if Congress fails to approve a new debt limit, and the federal government defaults on its financial obligations.
I can’t think of a more irresponsible predicament. That’s why I’m working every angle possible to pass a responsible federal budget which also sets a new debt limit.
Unless Congress acts before Aug. 2, the ramifications could set back our nation’s recovery from the worst economic disaster since the Great Depression.
It’s easy to point fingers at how we got here. Politicians from both political parties share blame for borrowing to pay for U.S. engagement in Iraq and Afghanistan, and extending tax cuts to the wealthiest Americans. That alone cost the federal treasury $4 trillion.
In early 2009 to stimulate the economy, Congress and the Obama administration further increased the national debt by investing in public infrastructure and providing even more tax breaks.
Today, this nation is more than $14 trillion in the hole. Continued deficit spending slows economic growth and forces future generations to pay the bill.
Some in Washington intentionally mischaracterize the need to increase the federal borrowing limit as incurring new debt. That’s simply not true.
The ceiling on federal debt has been raised 74 times since it was established, including five times under President George W. Bush.
No less a fiscal conservative than President Ronald Reagan warned about serious consequences of failing to raise the federal debt limit in 1983, when he said: “The full consequences of a default or even the serious prospect of default by the United States are impossible to predict and awesome to contemplate. Denigration of the full faith and credit of the United States would have substantial effects on the domestic financial markets and on the value of the dollar in exchange markets.”
Now’s the time to make the politically painful but necessary choices to tackle the debt and put the nation on firmer financial footing. I favor an approach that achieves three simple goals: cut federal spending, grow jobs and the economy, and is fair and balanced for all Americans.
Cut spending: The Senate Budget Committee, of which I’m a member, just produced a plan to reduce the deficit by $4 trillion over 10 years. Its foundation is $1.2 trillion in cuts to virtually all federal agencies, plus savings in defense which now represents nearly a fifth of all federal spending.
Our plan also protects Medicare, Social Security and veterans benefits while imposing a three-year freeze on congressional pay and cutting federal travel.
Create jobs: With the national jobless rate still above 9 percent, any deficit solution must continue the economic recovery. Our plan protects key investments in education, energy and infrastructure which are vital to help grow the economy. Overall spending would be reduced to the same level as during the Reagan administration.
Treat all Americans fairly: I favor a solution that’s balanced between cuts and new revenues so no group of Americans is singled out. A plan just passed by House Republicans is dubbed “cut, cap and balance.” In truth, that plan cuts Medicare and Social Security benefits for seniors while capping taxes for millionaires and billionaires, which isn’t balanced at all.
I’m working to repeal the tax give-away to the richest 1 percent while eliminating tax shelters and loopholes. I support simplifying the tax code for working Americans, reducing tax brackets from six to three and encouraging small business expansion.
With much of Washington mired in partisan inaction, financial agencies already are looking to downgrade federal bonds. This means increased interest rates, raising the cost of mortgages, utility rates, food and gasoline.
Action is needed now to cut federal spending and grow our economy in a way that’s fair and balanced for all Americans and puts us on a course toward economic sustainability.
• Begich is a U.S. Senator.
Comments (98)
Add comment$1billion/week
Congressman, can you remind me why we continue to spend $1 billion/week in Afghanistan and Iraq? I forget who we are fighting over in Iraq, but I understand we are fighting the goat-herding Taliban in Afghanistan. I feel safer already.
George W. Bush got us into this mess. His tax-cuts-for-the-rich, coupled with his two wars we can't get out of are the REAL reasons we are broke.
Eliminate the tax cuts, end the wars. That's my answer.
How about downgrading to only
How about downgrading to only 100 military bases on foreign soil. That should save a little...
The title of the article also
The title of the article also appears to be missing a "t"
If social security checks are
If social security checks are delayed, it is BO's fault.
There is more than enough money going into the Federal treasury every month to cover interest on the debt, SS payments, & military pay, with money left over.
We do not have a revenue problem Mark. We have a SPENDING problem. And come 2014 you will have a employment problem.
Responsibility ya:
Those wars were started under Bush’s administration. However BO has had how much time to shut those wars down? I also wonder how much that war in Libya is costing the US tax payer. A war the US should have never got involved with. I believe that was started under BO’s watch. When is this man going to take responsibility for what is going on. I guess it’s always a lot easier to point fingers.
The Libya thing is a NATO-led
The Libya thing is a NATO-led intervention. To compare it to Afghanistan (in which we took the lead with a coalition) or Iraq (in which we pretended to have a coalition) is disingenuous at best. And while I'm not super happy that Obama hasn't ended the other wars, I don't think it's super easy to do so without another Vietnam-like situation. That wasn't a very nice withdrawal.
@Madison
The finger pointing is the main problem at this point. As the senator said BOTH sides are responsible.. I supppose you are a great economist and know what is in the US treasury. Both sied are being childish and Not looking out for the the country
@billb: I don't know about
@billb: I don't know about that. The Democrats have proposed several plans, and the Republicans have refused to compromise every time. They're even rejecting plans they themselves have proposed in the past. They're obstructing for political reasons, and that is all they're doing. I don't blame the Democrats for not giving in 100% when the Republicans' ideas are straight out of the 19th century.
FEDERAL SPENDING
7/23/11, 7:45 AM Boehner: Cuts Must Be Greater Than Debt Limit Increase.
**************************************************************************
Social Security, Medicare and Military Personnel are cited by Senator Begich as the victims of a failure to implement the demands of President Obama and his DEM supporters. I'm surprised the good Senator forgot the Police, Firefighters and EMTS, maybe even the August Brown Swimming pool.
I think it self evident that we cannot go on raising the debt limit, borrowing monies from abroad and diluting the value of the dollar by printing more dollar bills. I think Mr. Boehner's statement makes sense and should be the basis for honest negotiation without all the political maneuvering and fear mongering claptrap.
Comparison
http://www.nytimes.com/imagepages/2011/07/24/opinion/sunday/24editorial_...
@PP
Persnick--to date, the ONLY actual Democratic plan is President Obama's budget he presented last February and which the Democratic majority Senate voted against 97-0.
The have been news conferences and speeches in which ideas were presented, but to quote the CBO: "We don't score speeches."
On the other hand, the GOP led House has passed, in this year, a budget, Paul Ryan's plan, Cut Cap and Balance, and the Senate has GOP Senator McConnell's plan.
In other words, the Dems have been masterful at making the GOP jump through hoops, but have yet to put their cards on the table for all to see in the form of actual, concrete plans.
Harry Reid, Democrat Senate Majority leader is preparing a proposal, but that is not yet finalized into an actionable plan.
Budget plan:
PP it doesn’t matter if this is a NATO coalition or not. I was pointing out that we should not be there and that there is no reason to be there, also let’s look at all that wasted money.
It’s interesting that BO has no budget plan, however back in February there was a vote in the senate on a plan BO presented, not one vote 0-97. I’m sure that didn’t go over very well in the mind of a narcissistic. The only grand-standing here is the left, which does not like the fact that someone is standing up against their out of control spending.
Spoken like a true
Spoken like a true progressive, Mark - foment class warfare and blame the war spending. He forgot to mention the MAIN reason - unsustainable spending on entitlements - Medicare, Medicaid and Social Security.
Begich also forgot to write that BO hasn't presented one plan of his own to discuss. What a petulent, angry, cry baby we have for a president.
Democrats have offered
Democrats have offered several solutions:
http://thinkprogress.org/yglesias/2011/07/25/278614/comparative-deficit-...
Again, it would be irresponsible for Democrats to let the Republicans' plans through. They all protect tax cuts for the rich and gut very important social programs.
I'm curious to know why you guys are more concerned with a bill being passed than with what's actually in the bill. It seems to me that's the important part.
I'm also curious to know why it's only been in the past few months that you guys have voiced a concern about the national debt. Last I checked, the debt has been huge since Bush took office.
@PP
I suggest you do an internet search for PorkBusters--this group started in 2005 after seeing the huge increase in federal spending that started under Bush and has more than tripled under Obama
@ggcrackers: PorkBusters is a
@ggcrackers: PorkBusters is a conservative group dedicated to cutting "pork" spending (something that amounts to a rounding error when compared to total federal spending).
I think I'll just go with the numbers, thank you.
PP
Porkbusters was intended to provide the example of concern for spending that you previously asked for. If you wish to move the goalposts once an example is provided, that is up to you.
Many libertarians and conservatives were also up in arms over the Medicare drug law that Bush signed and the start of No Child Left Behind that poured billions in to education with very little to show in the way of positive student results.
Concern with spending did not start with the current President, but keep in mind that this President has spent money with reckless abandon and his stated reasons for the spending binge keep changing as the results keep coming back negative.
Remember, we "needed" the so-called stimulus to keep unemployment below 8% and it has averaged between 9 and 10% pretty much since the stimulus was passed.
p, Obama has NO plan - I'm
p, Obama has NO plan - I'm not talking about his minions' plans. He has nothing and his budget got ZERO votes in the senate when Reid tried to pass it. All he's got is whining and lecturing. We're sick of it.
The debt debate has taken front and center now because this nation is going down fast. Under Obama spending has increased over $3T since 2009, unemployment is only going up, BOCare came into being and no budget was passed when the dems controlled all branches of government.
We are on the brink. And your statement about the repubs just wanting to get something passed is flat out wrong. You haven't been paying attention. Have you listened to Boehner on the radio? That's the main sticking point - Obama wants increased taxes and no cuts to entitlements and repubs want atleast a dollar to dollar spending cut to debt increase, with NO tax increases.
Also, BO has said he will not sign a short term deal because he's got that pesky election next year - it's all campaign mode now for him.
Personally, I think BO's up a creek - he will sign most anything that shows up on his desk. He can't not. Have you seen the polls?
@Calypso: you understand the
@Calypso: you understand the national debt has little to do with unemployment, correct? In fact, it has little to do with ANY of the economic problems we're facing right now. This whole debt thing is a ruse concocted by Republicans in congress. It's a problem, yes, but not a pressing one at the moment.
@ggcrackers: for one, you're probably right that many conservatives and libertarians were angry about Bush's economic policies. However, they certainly weren't as loud about it then as they are now that a Democrat is in office.
Second, pretty much every economist agrees that the stimulus mitigated the negative effects of the recession. Obviously it didn't keep unemployment under 8%. But it's not unreasonable to say it kept it under 10%. Same with the bank and auto industry bailouts. If those industries had failed, you can bet unemployment would be WAY up, and that we'd be in a depression right now. So Obama's deficits came from proven Keynesian economic policies. Bush's deficits came from dropping bombs and giving rich people a break. Big, big difference. When government puts a dollar towards domestic policy, there's a return of some sort. When it puts a dollar towards a bomb, the bomb explodes, end story (and sometimes we have to rebuild what we blew up up, costing us more money).
And third, this isn't really a deficit crisis. To get rid of the deficit, taxes just need to return to pre-Bush levels and some modest spending cuts (like military) need to be enacted. That's it. The only "crisis" comes from Tea Party d-bags who would rather froth at the mouth over government being in their Medicare than actually try to craft good policy.
Wrong PP:
Well PP’ most of us here have been around on these comment sections for the last 6 years or more. So yes we have commented on Bush, some good some bad, so you are wrong to think other wise. I am listening to BO right now, what a joke he is; I knew he was a liar, but not a pathological one. I have always been concerned on what the Prez. may or may not do, not just this one. But’ if this man gets what he wants it will affect me in a negative way and there is no doubt about that. I watch that speech of his last night, very hard to do by the way. I really think he has no idea what he is doing.
“I'm curious to know why you guys are more concerned with a bill being passed than with what's actually in the bill. It seems to me that's the important part.”
So were you curious what was in BO’s health bill before it was passed? We still don’t know what’s in there. Things keep coming out a little at a time and what I have read so far isn’t going to do us any good.
p says, "the national debt
p says, "the national debt has little to do with unemployment". How can you say that? Why is BO so persistent to have tax increases - so the government has more revenue, that's why. So if unemployment was, say, 3% rather than 9% (which is low), wouldn't there be increased revenues coming in?
p says, "Second, pretty much every economist agrees that the stimulus mitigated the negative effects of the recession."
Ummm, pretty much every economist that's being honest should agree that the stimulus did nothing except grow government workforces to the tune of hundreds of thousands of dollars/job.
Here's a source that you should like to kind of explain the funny math -
http://www.propublica.org/article/latest-stimulus-job-numbers-are-in-but...
Keynesian economic policies are exactly what is adding to this mess. They don't work but I know the left loves them so let's just keep doing the same. How much has the dollar been devalued because of them? QE-3 anyone?
The reason we can't return to the tax rates during Clinton is because the economy is in the tank. Clinton was riding a wave of prosperous fortunes (think dot com) and money was flowing like mad. Nobody would put up those rates now. Remember 9/11 months after Bush took office and the giant hit the economy took?
"Tea Party d-bags" - Now, now p, you're losing credibility with name calling.
@Milspec.: please don't try
@Milspec.: please don't try the bait and switch. This isn't about the healthcare bill or the misconceptions people have about it ("death panels"). And while a debt reduction agreement may negatively impact you, it's only because you're disproportionately privileged (making more than $250,000 a year--it's hard for me to sympathize).
Otherwise, your argument just seems to name-calling directed at Obama. You sure showed him.
@Calypso: wrongo, once again.
http://www.nytimes.com/2010/07/28/business/economy/28bailout.html
Again, economists agree that the stimulus/bailout measures that Bush and Obama enacted prevented another depression. I suppose you can say all those economists are just liars, but then I suppose you'd have to be pretty stupid to do so.
And FYI, if you're going to say Keynesian economics don't work, you better support that argument considering it's the best tested economic system we have.
Federal Deb
Have to agree with Madison on this one folks. The gummint is just trying to scare us. Old folks will get paid, and the military will get their pay. We just need to stop over spending, and get this POTUS out of here!
Next thing they will be coming for our retirement accounts.
Oh and PP; Keynesian economics got us into the financial mess we have been in for years.
@vallbay: are you sure
@vallbay: are you sure supply-side economics didn't get us into this mess? Or perhaps Bush's decidedly un-Keynesian economic policies? I seem to remember the national debt on schedule to be gone within a couple decades before he enacted those and got us into two wars.
Agree Vallbay:
PP, It would be interesting whose teat you live off of. Regardless how you make a living if you do at all, get ready it is only going to get harder for you. Don’t be surprised if you are out of work soon. It is very obvious that you have no idea of simple economics. Sure I do well; I worked hard to get into this position. Maybe I own a business and employ a couple employees’. I can tell you one thing, if my taxes go up because Skippy boy and people like you think I’m rich, guess what? I will be letting one of those employees’ go. And there is no bait-and-switch going on here. I find it funny that when a comparison is made and placed in your lap you can’t handle it. Now there is the bait-and-switch.
Although BO thinks income of
Although BO thinks income of $250,000 is "rich" now, just wait. Soon it will be anyone with a job that's rich. Yikes...
I would be pretty surprised
I would be pretty surprised if I were out of work soon, actually, as I don't buy into the doom-and-gloom predictions your kind have been ignorantly spouting for the last 100 years. You're like the Weekly World News--every year is the end of the world, and when it always fails to happen, you just pretend you never said it and proclaim the next year to be the end of the world/return of Jesus/apocalypse/whatever. It must be tough living in such a paranoid, frightful little world where everything not in lock step with your baseless ideology will lead to ruin.
Here's where your argument really fails, though: if you're going to let an employee go because of higher taxes, you'd let him/her go now, unless you were just employing that person out of the goodness of your heart. If that employee were bringing in more revenue than you were paying in wages, you wouldn't fire that employee even if taxes were higher (because that would lower your total revenue, and thus further impact your bottom line). And if that employee were bringing in less revenue than you pay in wages and associated employment costs, you would already have let him/her go to increase profitability.
That is how economics works. Maybe you don't understand this (though I suspect you do and just don't care about what's good for the country), but you have absolutely NO EVIDENCE that higher taxes would lead to lower employment. Taxes are at an all-time low, and we didn't seem to have any tax-induced employment problems in the past.
Dog eat dog:
Yes it is low at this time and why do you think that is? Also, why do you think the so called rich are setting on there money. You showed a chart a few days ago, I noticed that unemployment started to sky rocket during BO's watch. Just about the time when he promised he was raising taxes on those so called rich. We don’t really know what he is going to do because he can’t tell the truth. Right now I am holding my own; if taxes go up I raise the price on my services and gamble. However, when my widget does not sell because of the economy “no one can afford it” I am not going to cut back on my life style to make up for it, so sorry pink slips for all. Simple as that. As of now due to the increase price of simple living my wife and I have cut way back on spending. Now who do you think that hurts and why. It all trickles down. You stated “I don't buy into the doom-and-gloom predictions your kind have been ignorantly spouting for the last 100 years” Not sure where the 100 years came from. But with a head–in-the-sand attitude like that you won’t get anywhere. Dog eat dog world’ as much as I don’t like that’ that is the way it is.
The rich have always sat on
The rich have always sat on their money. That's what they do. They invest their money to make more money--they don't spend it (at least not in proportions that less well-off people do).
Unemployment began to skyrocket before Obama took office, and continued through 2009. I don't know what you expect the president to do to immediately stop a recession, though. All you've proven here is that it's easier to blame someone for all your problems than actually investigate real solutions for them.
But basically you've proven my point: you don't want taxes to go up because it means you have to contribute more. Not because higher taxes are bad for the country (the contrary, actually). Not because you're concerned it will thrust people into poverty, but because you happen to be particularly affluent and don't want to pay a little more.
PP
You write a good game, but the smoke is pretty apparent--the rich have not "always sat on their money" as you claim, else they would not be rich. Instead they invest when there is the ability to predict the impact of regulation and business. With so many new regulatory rules put into place and so many regulations authorized but not yet written by laws such at ObamaCare and Frank-Dodd, the "rich" and business owners cannot safely predict the business environment.
As to your point about employment, you are forgetting productivity. If a business has two employees and the cost of employment increases (as it has under Obama) the owner will let one go and demand higher production from the remaining.
The economic history on this is pretty clear, pretty much anytime there are mass layoffs, the measure of worker productivity goes up. Incidentally, the rate of unemployment of young (unskilled) workers is near 25% the highest it has been in quite some time and near an all-time high. Blame this on government regulations which has made the cost of employment too high for those with no job skills.