Economy & Budget

Senator McConnell providing smart leadership on the debt ceiling

U.S. Senator John McCain (R-Ariz.) today made the following statement regarding Senator Mitch McConnell’s (R-Ky.) efforts to avoid a default on our nation’s debt:

I strongly support Senator McConnell’s efforts to avoid a default on our nation’s debt and the last-case emergency proposal he outlined yesterday to ensure that Republicans aren’t unduly blamed for failure to raise the debt ceiling.

Unfortunately, while Senator McConnell is looking to do the right thing, President Obama has shifted from the ‘blame game’ to the ‘scare game.’

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The path to 218: Finding consensus on the debt limit

House Majority Leader Eric Cantor (R-VA) today called on President Obama to release the details of his “grand plan” that he proposed for a debt limit increase: 

“Today we will continue meetings at the White House to try to find consensus surrounding the debt limit. Though none of the plans being discussed right now could garner the 218 votes needed for House passage, we have found areas of agreement. I am glad the President has finally agreed that Medicare as we know it will be bankrupt within 10 years unless we do something about it, and I am glad he has agreed that we need to address our debt crisis now. As we move forward in this debate, I would ask that we work in earnest on these areas of commonality instead of demanding that areas of agreement are tied to items of fundamental disagreement like raising taxes. The President refuses to compromise on the repeal of ObamaCare, and House Republicans refuse to raise taxes, so both have been ruled out. Further, the simple reality is that tax increases cannot pass the House, and the constant demand for them makes coalescing around any increase in the debt limit less likely. 

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President, Congress must work together for America

In a disturbing sign the economy may be backsliding, the national unemployment rate just rose to 9.2 percent due to anemic job growth. In June, only 18,000 jobs were created, on top of a meager 54,000 new jobs in May. This contrasts sharply with the 178,000 jobs created in April -- evidence the recovery is struggling for traction.

Small businesses have traditionally been responsible for creating the vast majority -- up to 70 percent -- of all new jobs. Yet, in March, the U.S. Census Bureau reported that small business start-ups, a key source of new jobs, declined by 17 percent.

The president and Congress need to re-dedicate themselves to the American people's highest priority: revitalizing our economy.

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The debt ceiling debate: Stupid, but dangerous

As we continue to monitor the hourly reports on whether Congress will grant authority to borrow the money needed to pay the nation’s bills, it worth noting that the United States got along for 128 years without having a formal debt ceiling. So how has this limitation helped us manage our finances?

The first debt limit legislation was attached to the Liberty Bond Act in 1917 (to help finance W.W.I). At that time the public debt that had been accumulated since the birth of the nation totaled less than $6 billion — equal less than 10 percent of the nation’s gross domestic product in that year. But the limit on borrowing seemed to have an inverse impact on deficits. Within only three decades of enactment our public debt was $257 billion, equaling 105 percent of GDP — more than ten times the debt-to-output ratio the country had when the requirement for debt limit legislation was adopted.

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The way forward: Tax reform, not tax increases

The looming political showdown over raising the federal debt ceiling has generated a seemingly endless stream of punditry over winners and losers, key players versus back-benchers, and on-again, off-again “grand compromises.”

But beneath those ever-shifting currents lie bedrock fiscal issues: how to slow the pace of federal expenditures, reestablish long-term budgetary discipline, and reform our uncompetitive tax system without heaping heavier burdens on businesses or individuals. In their quest for a staggering $2.4 trillion debt increase, President Obama and his allies on Capitol Hill have weighed in with many responses to those issues – some good, more than a few bad, and some downright ugly.

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Washington must listen to Americans, face debt crisis

If we divided the debt we accumulate in just one year among everyone in Las Cruces, the largest city in New Mexico's Second Congressional District, every person would owe $13.5 million. The American people deserve better -- it is time for Congress to take responsibility and face our debt crisis. For too long, the federal government has chosen to repeatedly raise the debt limit, sending the bill to our children and grandchildren. Our national debt is crippling our ability to compete internationally, is stifling our job growth, and is pushing us to the brink of economic collapse.

Our credit is already faltering. Moody's and Standard & Poor's have said that they could soon consider downgrading the U.S. government's credit rating if our deficits are not addressed. China will not continue to loan us money forever, and we can't afford the bills we've already built up.

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Debt crisis, what is the president's plan?

For months Congress and the administration have debated how to end our debt crisis with long-term spending reforms and avoid defaulting on our country’s obligations.  While some cling to the notion that we can tax, borrow and spend our way to prosperity, this path is unsustainable, and the American people want serious spending cuts and reform. 

The government spends more than it takes in, and this is the reason for our debt crisis.  While we cannot go back and rescind money that has already been spent – like the near trillion-dollar “stimulus” bill – that added to our ever-growing national deficit, we can cap future spending and reform programs on autopilot to achieve savings now that will compound over the next decade.

However, our future prosperity and our national security are threatened if we continue this cycle of taxing, borrowing and spending.  We are not in this crisis because we fail to tax the American people enough – we are in this crisis because we spend too much. 

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It’s time to have a real debate on the debt limit

U.S. Senate Minority Leader Mitch McConnell made the following statement Wednesday regarding the President’s request to increase the debt limit and the importance of passing a Balanced Budget Amendment:

Yesterday morning, I came to the floor to announce my conclusion that, despite his repeated claims to the contrary, the President has no real intention of cutting spending or dealing with our deficits and debt. It had been my fervent hope that the President could be persuaded to view the upcoming debt limit vote as an opportunity to change direction, to cut spending and debt, and to preserve entitlement programs.

But those hopes evaporated when the President began to insist in recent weeks that he would only consider spending cuts later if Republicans agreed now to one of the biggest tax hikes in history. Republicans refused to be drawn into this legislative trap. And when Democrats proposed a smaller plan that they claimed, without any details, amounted to more than a trillion dollars in cuts, well, we refused to go along again -- because we knew that it didn’t.

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We will not pretend that a bad deal is a good one

U.S. Senate Republican Leader Mitch McConnell made the following statement on the Senate floor Tuesday regarding the status of the President’s request to increase the debt limit:

For more than two years now, Republicans in Washington have stood united in the belief that America would never recover from the economic crisis that struck our nation three years ago -- so long as some in Washington persisted in the mistaken belief that government had the cure.

For most clear-eyed observers, that view has found its clearest vindication in the daily drumbeat of news about lost jobs, shuttered businesses and slumping home values; and in the stories that each of us hears from our constituents about the economic hardships that they continue to face. If anyone was still looking for proof that the President’s economic policies have been a failure, they don’t have to look any further than the morning papers or their constituent mail.

Indeed, the more the administration insisted on spending and debt as the solution to our problems, the worse those problems became, and the more Americans demanded that the status quo in Washington had to change. But the administration was slow to get the message. After an election that any honest observer saw as a repudiation of its policies, the White House continued to cling to its playbook. As concerns about our debt and deficits grew, the President presented a budget so unequal to the task that not a single Democrat voted for it, not one. And as the nation inched closer to a potential default, the President focused his attention elsewhere.

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The House cannot pass a bill that raises taxes

At a press conference previewing today’s meeting at the White House regarding the president’s request to raise the debt limit, House Speaker John Boehner (R-Ohio) delivered the following remarks:

I appreciate what the president said today about the need for us to come together and get this done. Our disagreements are not personal. They never have been. The gulf between the two parties right now is about policy. It’s not about process, and it’s not about personalities.

The president and I agree that the current levels of spending, including entitlement spending, are unsustainable. The president and I do not agree on his view that government needs more revenues through higher taxes on job creators. The president and I also disagree on the extent of the entitlement problem, and what is necessary in order to solve it. 

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