Parnell warns 'disaster' awaits if changes aren't made

JUNEAU — Alaska Gov. Sean Parnell believes substantial federal spending cuts would have far less impact on his state than the “disaster” that awaits it should the government stay on its current course.


Parnell is one of five Republican governors to have signed a pledge urging Congress to oppose increasing the U.S. debt limit unless certain conditions are met. Those include substantial cuts to reduce the national deficit, a spending cap to pave the way to a balanced budget and congressional passage of a balanced budget amendment to the U.S. Constitution.

Parnell said in an email Thursday that he signed the pledge “to help draw the national conversation and the President and the Congress back to a rational conversation.” He said he’d be open to other options if they involved reduced spending and economic growth that would increase the nation’s revenue base — “not higher tax rates on a shrinking economic pie.”

“We need a serious directional change to recover, and merely raising the debt limit will lead only to disaster,” he wrote.

Patti Higgins, the chairwoman of Alaska’s Democratic party, said the nation can’t cut its way out of its financial difficulties, and the wealthy “need to be paying their share.”

She said tax cuts for the wealthy haven’t worked — they’re “crippling our economy” — and she said Republicans should stop referring to some of the wealthiest Americans as the “job makers.”

“If they’re the job makers,” she said, “where are the jobs?”

Parnell is a fiscal conservative, who’s preached the need for the state, flush with oil revenue now, to use its money wisely and also save for a rainy day. When a federal earmark ban was announced this year, he said Alaska must accept and deal with “the new reality.” Over the years, the still-young state that had grown accustomed to earmarks to help build up its infrastructure.

Parnell said the state must and is taking on more costs that it once relied upon the federal government for. To that end, he has pressed the federal government to limit restrictions on resource development so Alaska — which relies heavily on oil revenues to run — can generate more revenue.

In a statement provided by his office Wednesday, Parnell said that if Congress can’t resolve the debt limit issue, Alaska’s economy will take a hit, and that will mean less investment, fewer jobs and “more dependency on the federal government for our soup and bread.”

“What impact would substantial federal cuts have on us? I say, far less of a hit now then the disaster awaiting us if the federal government continues its current course,” he said.

On Thursday, he said enough cuts should be made “to restore confidence that our nation is on a sustainable economic path, rather than merely putting off default day for the nation by raising the debt limit. How deep the cuts need to be depends upon what other measures are implemented as a total package and across what time span the Congress can negotiate with the president.”

Aug. 2 has been identified as the date by which the government will exhaust its ability to borrow money and pay its bills. Alaska’s two senators have said that failing to raise the debt limit before then would be disastrous for the economy. Parnell said that day will really be a marker for which direction investor and consumer confidence goes. There will be serious consequences, for the state and nation, if nothing is done, he said.

“I believe the President and Congress can still make good choices for the years to come,” he said.


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