House Budget Committee Chairman Paul Ryan (R-Wis.) lambasted President Obama on Wednesday for taking the deficit too lightly in his State of the Union address.
Ryan, holding his first hearing of the budget panel since running for vice president last year, said the latest deficit projections from the Congressional Budget Office show Obama is “deluding” himself on the debt.
“It seems as if they think the heavy lifting on debt reduction, deficit reduction is behind us, we have just a little bit left and then we’re done,” Ryan said. “I really worry that our partners in government, here — two-thirds of it, the Senate and the White House — are deluding themselves in thinking this thing is taken care of.”
Obama said during Tuesday's speech that counting 2011 spending agreements and the $600 billion in new tax raises in January, the country is more than halfway to a goal of $4 trillion in debt reduction, enough to “stabilize” the growth of the debt.
Ryan cited CBO’s finding that publicly-held debt had doubled from 36 percent of the economy before Obama took office to 73 percent in 2012. If Congress turns off the automatic cuts from sequestration and a scheduled cut in Medicare payments, Ryan noted, debt would rise to 87 percent of GDP by the next decade.
“We’re in a danger zone,” he said, warning of a possible European-style debt crisis.
“Even if we got every tax increase the president has called for we are not even scratching the surface,” Ryan said. “The other problem is growth. If we keep chasing higher spending with higher taxes we will hurt growth.”
Ryan again criticized the president for missing the Feb. 4 deadline for producing a budget. The White House said Wednesday it hopes to produce a budget in mid-March.
Rep. Chris Van Hollen (D-Md.), the top-ranking Democrat on the budget panel, defended Obama and argued the budget is late because Congress waited too long to deal with the “fiscal cliff.” He said the deficit is a problem, but said trying to balance the budget in 10 years using only spending cuts — as Ryan has pledged to try to do with his next budget — makes no economic sense.
“I would say having a balanced budget is a good economics, I guess we just disagree on that point,” Ryan said to laughs from his GOP colleagues.
Van Hollen used the hearing to highlight the economic damage from allowing $85 billion in sequester cuts to take effect on March 1.
CBO Director Doug Elmendorf, under questioning from Van Hollen, said that 750,000 jobs will be lost in 2013 if the sequester is allowed to take effect.
“We should be working overtime to avoid that,” Van Hollen said.
He said that later in the day on Wednesday he would try to get the House Rules Committee to allow the full House to vote on a House Democratic replacement for the sequester.
Van Hollen has tried several times to get a vote on the package that would cut farm subsides and impose new energy taxes as well as a minimum tax on the wealthy known as the “Buffett rule.”
The Rules Committee is expected to block Van Hollen's amendment as not germane to a federal pay freeze bill under consideration.