Daniel Reilly, 202-225-3130
Wanted to make sure you saw the op-ed by Whip Hoyer in Politico calling for a balanced solution to reducing our deficit which includes action on both spending and revenue. To read the op-ed, click here or see below.
We need balance in tackling deficit
By: Rep. Steny Hoyer
Moody’s and Fitch’s decision to reaffirm America’s AAA credit rating adds to the list of reasons to criticize the downgrade issued by the third rating agency, Standard & Poors.
When we remember that S&P’s decision was originally based on an astonishing $2-trillion math error — and see that investors continue to demonstrate confidence in U.S. Treasury bonds — it might be tempting to dismiss the downgrade entirely.
But that would be a mistake.
Though there are legitimate concerns with S&P’s analysis, its worries about political brinksmanship over U.S. debt are absolutely justified. With U.S. credit up for debate for the first time in memory, it’s past time to give our deficit problem a real solution.
That means a solution based on balance and compromise. And it also means a renewed focus on creating jobs, renewing American industry, and investing in infrastructure and growth. Strong growth, in fact, is a requirement for sustained deficit reduction. But so is a national leadership willing to step back from partisanship.
The full faith and credit of the United States was earned by generations of Americans, who diligently paid our bills and, despite their disagreements, never used the prospect of default to force through a partisan agenda.
That honorable tradition ended this year. A group of conservative lawmakers threatened us all with a disastrous default unless Congress passed their ideological priorities, defying repeated warnings that their course threatened our fiscal credibility.
Democrats in Congress and President Barack Obama offered sweeping compromises — including a “grand bargain” that would reduce our deficit by some $4 trillion. That would have taken a bite out of priorities that Democrats highly value. But we understand that solving hard problems requires hard concessions from both sides.
Republicans, on the other hand, walked away from the table on three separate occasions. It was not until the last moment that Republicans agreed on a smaller plan to pay our bills through 2012.
What’s not over, though, is the prospect of further hostage-taking over our debt. Republicans have promised as much. As Senate Republican Leader Mitch McConnell (R-Ky.) recently said, there is now “an entirely new template for raising the nation’s debt limit….Never again will any president from either party be allowed to raise the debt ceiling…without having to engage in the kind of debate we’ve just come through.”
That’s a dismal and destructive prospect—because in that debate, people around the world were led to wonder, for the first time, whether America would pay its bills. Now that a political party has embraced this as the “new normal,” the world is wondering what will happen to the hostage next time.
As S&P observed, “the political brinksmanship of recent months highlights what we see as America’s governance and policymaking becoming less stable, less effective and less predictable than what we previously believed.”
There’s only one effective way to seriously reduce our deficit: a balanced solution, which includes action on both spending and revenue.
That’s the solution put forward by the president’s bipartisan fiscal commission, led by Erskine Bowles and Alan Simpson. It’s the recommendation of the Pete Domenici-Alice Rivlin commission and the “Gang of Six” bipartisan senators. It’s the solution advocated by Obama and Democrats — and the one the vast majority of Americans stand behind. Even three-quarters of Republican voters support a balanced solution, according to a recent Gallup poll. I believe that a significant number of Republicans in Washington agree with them.
Washington has to reduce spending in the long term. But it’s also clear, from independent analysis, that the Bush tax cuts, which primarily benefited the wealthiest, are one of the largest contributors to our deficit; that tax revenues are at a six-decade low; and that any solution that places the onus of deficit reduction on the middle class alone is both unworkable and deeply unjust.
Yet S&P was only stating the obvious when it listed this important reason behind its downgrade: “the majority of Republicans in Congress continue to resist any measure that would raise revenues.”
We’ll only find a way out when leaders in both parties recognize that “compromise” is not a dirty word. It is what the people expect us to do in the process of solving significant challenges.
Hardliners in Congress can continue to dig in and watch the world lose confidence in the U.S. economy, as our fiscal situation grows ever more dire. In that case, the recent stock market turmoil may be only the beginning of economic woes to come.
Or Americans of all political persuasions can take the debate over our credit as a wake-up call. This month’s agreement to pay our bills created a new bipartisan committee charged with agreeing on $1.5 trillion in further deficit reduction. Its members from both parties have recently been named.
This supercommittee must put all the causes of our deficit on the table and come to an agreement on a balanced, comprehensive solution. Our nation’s future success and economic well-being demands it.
This can be a moment of new recriminations and partisanship in Congress. Or it can be a moment to unite and put our common interest first. Americans expect the latter.
Rep. Steny Hoyer (D-Md.) is the House Democratic Whip.