Hoyer Press Staff Blog

Blog posts from the press staff of Democratic Whip Steny Hoyer

July 14, 2011

Do Republicans really want to stop America from paying its bills? Conservative economics writer Megan McArdle explains just how ugly the consequences will get if the debt ceiling isn’t raised:

Are you really going to just stop funding current military operations on August 3rd? You're going to leave a bunch of guys sitting in Iraq and Afghanistan and Libya with tanks and automatic weapons and no way to get them home?

Going to empty the prisons? How many guards do you think turn up for work when you stop paying them?

How about border control? I don't think it's going to be popular with the GOP base when you cease border enforcement and invite anyone who wants to to stroll across our unmanned border checkpoints. However much you hate the ATF and the DEA, they are a small fraction of this sort of spending at the federal level.

If we cut all funding for "general government", who is going to collect the revenues that you need to pay for all the social security checks and Medicare payments you plan to move out?

How long are landlords going to let tenants ride when Section 8 checks don't arrive? Going to let kids sleep on the streets?

Is your kid planning to take out a student loan for college this fall? Not any more, they're not.

With joblessness going up, you're going to get an earful when unemployment checks don't arrive.

. . . and when the mortgage market shuts down because Fannie and Freddie and the FHA stop writing checks….

To the extent that you fix any of these problems, it means cutting into the sacred four: military payrolls, VA benefits, Medicaid/Medicare, and Social Security. Or defaulting on our debt. Also, when you cut spending, GDP is going to fall, which means that tax revenue will also fall, which means that we probably have to cut even deeper into those politically untouchable programs….

[Failing to raise the debt ceiling] would mean an enormous amount of real suffering: homeless families, hungry old people, nursing homes closing their doors to indigent patients. And the fact that we could do it if we had to doesn't mean that we can therefore do it when we don't have to. If you try to artificially create a situation that requires drastic cuts, voters are going to get rid of you, not the spending.

Paying our bills isn’t a favor for President Obama, it’s a responsibility Republicans share to prevent an economic catastrophe that would impact American families—especially because Republican policies helped run up our debt in the first place. It’s time to take action to ensure America pays its bills and we enact a balanced approach to reduce the deficit that protects seniors and the middle class.

July 14, 2011

The American people know we have to pay our bills, that’s why 74% of Republicans and 77% of independents believe that a deficit agreement should include a mix of revenues and spending cuts, according to a recent Gallup Poll.

Business leaders know we have to pay our bills, that’s why a group of leading business organizations are urging lawmakers to agree to a comprehensive deal to ensure that America pays its bills and reduce the deficit.

And the Treasury Secretary Tim Geithner knows we have to pay our bills, saying today: “We’ve looked at all available options and we have no way to give Congress more time to solve this problem. We’re running out of time.”

Democrats remain ready and willing to work with Republicans on a balanced package – that includes both revenues and spending cuts. But it is time for Republican leaders to accept the reality that they are going to have to work with us, not against us.

Time is almost running out.

July 14, 2011

Republicans may want to check out a poll released by Quinnipiac University today showing that Americans trust President Obama more than congressional Republicans on the economy and agree with the President that deficit reduction must be done in a balanced way – not on the backs of seniors and the middle class. The poll makes it clear that Americans support a comprehensive package to reduce the deficit that includes both spending cuts and revenues, which President Obama and Democrats are fighting for as negotiations continue. Will Republicans walk away from this opportunity to seriously address our nation’s fiscal challenges or will they listen to the American people and work with Democrats on a comprehensive agreement to reduce the deficit and pay our bills?

From Politico:

“…45 percent trust the president more than Republicans on the economy, while 38 percent trust the Republicans more.”

“If there’s no deal to raise the debt ceiling, the poll finds, voters would blame congressional Republicans over the president, 48 percent to 34 percent.”

Survey participants also would prefer to see two measures that Obama has pushed: tax hikes for the rich and closing loopholes.”

Sixty-seven percent say an agreement to raise the debt ceiling should include not just spending cuts but tax increases for the rich and corporations, while 25 percent disagree.”

July 14, 2011

Wanted to be sure you saw this editorial in the Washington Post today on debt limit negotiations. It highlights the opportunity that would be lost if we do not work together on a comprehensive package to seriously address America’s fiscal challenges, which is what Democrats continue to fight for as negotiations proceed.

Key excerpts:

“If this moment could not yield a grand bargain or a even modest adjustment to the nation’s fiscal course, it is hard to imagine what will. An election is always around the corner. The political system is increasingly polarized. Meanwhile, the debt is dangerously swollen and still growing.”

“Even then, no one who cares about the country’s future should cheer a non-solution solution to lifting the debt ceiling. The need to lift the ceiling was, and perhaps still could be, an opportunity to take at least some steps toward fiscal sanity. Mr. Obama was right to try, however late in the game, for a bargain combining new tax revenue with spending reductions, including to entitlement programs. That may be out of reach, but a down payment on fiscal responsibility — a balanced one, combining both tax increases and spending cuts — should not yet be ruled out.”

It’s not too late for a comprehensive agreement to reduce our deficit and ensure America pays its bills. Democrats stand ready and willing to work with Republicans on a balanced package – that includes both revenues and spending cuts. It’s time for Republicans to take responsibility for the debt they helped create and work on a comprehensive agreement to restore our fiscal health and give businesses and the markets certainty they need.

July 14, 2011

Today, two business leaders, US Chamber of Commerce President and CEO Thomas Donohue and Financial Services Forum President and CEO Robert Nichols, warned of the consequences of a default in a USA Today op-ed, putting pressure on Republicans to avoid the catastrophic consequences that would occur.

According to Donohue and Nicols, failing to ensure we pay America’s bills would mean:

Government operations halted: Failing to increase the debt limit would require the United States to immediately cease honoring 44% of its obligations during the month of August, according to an analysis by the Bipartisan Policy Center. The U.S. Treasury is expected to take in about $170 billion in tax revenue in August, but needs to pay $300 billion in expenses. The resulting $130 billion deficit would require the government to pick which programs — Medicare, Medicaid, food stamps, unemployment insurance — to pay for and which not to fund. And there would be little money left to pay our troops or to run the courts, the prison system, the FBI, or other essential operations.”

Our debt and deficit would get worse: The ‘full faith and credit’ of the U.S. government is regarded as iron-clad and virtually risk-free. As a result, the U.S. government enjoys the lowest borrowing costs in the world… It's been estimated that a one-notch downgrade in the nation's credit rating (the smallest reduction) would raise yields demanded by investors by a full percentage point. Higher borrowing costs mean wider deficits and higher debt levels. Even a one-half percentage point increase in rates would increase our annual deficit by $10 billion in the short run, and by $75 billion per year as outstanding debts roll over.”

Implications for the U.S. dollar: The dollar's role as the world's reserve currency facilitates capital formation, trade, cross-border investment, and economic growth, yielding enormous benefit to U.S. savers, investors, businesses and consumers. In recent years, however, the dollar's status as the reserve currency has been increasingly questioned. Other nations have openly called for an alternative to the dollar. A default and subsequent downgrade of U.S. government debt would likely cause a significant depreciation in the dollar and would accelerate calls for a new non-dollar global reserve currency — to the detriment of every American business, saver, investor and consumer.

Implications for U.S. economic growth and job creation: Higher borrowing costs and a falling dollar mean slower economic growth and job creation. According to an analysis by the Federal Reserve, a one-percentage point rise in Treasury yields would reduce economic growth by 0.8 percentage points. That number sounds small, but it is not. Economists tell us it would translate into hundreds of thousands of lost jobs every year. After last Friday's bleak unemployment report the last thing in the world we should do is needlessly trigger the loss of even more American jobs.”

July 13, 2011

Just who are Republican leaders taking their marching orders from on the debt limit negotiations? It certainly isn’t the American people.

According to a new Gallup Poll, 74 percent of Republicans agree that a responsible deficit reduction plan should include both tax increases and spending cuts, while 77 percent of independents believe the plan should include a mix of revenues and spending cuts.

Sound familiar? It is what Democrats have been arguing all along.

Despite the GOP’s refusal to take yes for an answer, Democrats are still pushing for a big compromise that will reduce the deficit in a balanced way. And the American people agree with us. We certainly know that business leaders agree with us.

If Republicans are as serious about deficit reduction as they claim to be, they’ll stop protecting tax breaks for the wealthiest, listen to the American people and join with us to take action so we keep paying our bills and bring down the deficit.

July 13, 2011

Today, Federal Reserve Chairman warned of the “tremendous” consequences if Congress fails to ensure we pay America’s bills.

Key point: "It is a concern," he said before the House Financial Services Committee on Wednesday. He warned that a default on government bonds would send "shock waves through the entire global financial system.”

July 13, 2011

Surely Republicans aren’t actually rooting for the economic catastrophe that would occur if America didn’t pay its bills, but that’s certainly hard to tell from today’s NY Times article:

“Instead, many Congressional Republicans seem to be spoiling for a fight, calculating that some level of turmoil caused by a federal default might be what it takes to give them the chance to right the nation’s fiscal ship.”

So the question is, why do they keep walking away from every opportunity to do something big to reduce the deficit – BEFORE we default on our bills? Democrats are still pushing for a big compromise that will reduce the deficit in a balanced way. If Republicans are as serious about the deficit as they claim to be, they’ll stop protecting tax breaks for the wealthiest and join with us to take action so we keep paying our bills and bring down the deficit.
 

July 13, 2011

Democrats are ready and willing to work with Republicans on a balanced agreement to ensure we pay our nation’s bills and reduce the deficit. But instead of coming to the table to address an issue they say is a top priority and is critical to economic growth, Republicans are walking away and risking our economy security while protecting tax breaks for the wealthy. Today on NPR Morning Edition, Norm Ornstein summed up the Republican strategy well:

“The President stepped in with something that took Republicans aback by pushing for a much more ambitious plan and giving them a lot of things that they asked for but demanding something that they didn’t want to give up. And they now look like the recalcitrants. So, Republicans in both houses are trying desperately to find a way to shift the blame.”

Instead of shifting blame to Democrats, it’s time for Republicans to share responsibility in addressing the debt they helped create and ensure we pay our nation’s bills.

July 13, 2011

Wanted to pass along this article in today’s Washington Post about the letter business leaders sent to Congress and the White House putting pressure on Republicans to agree to a comprehensive deal to ensure that America pays its bills and reduce the deficit. While Democrats are ready and willing to compromise on a large, comprehensive deficit reduction package, Republicans keep walking away and risking our economy security in order to fight for tax breaks for the wealthiest Americans. It’s time for Republicans to heed this call from business leaders and work with us to ensure we pay our nation’s bills and seriously reduce the deficit so we can give businesses and the markets the certainty they need.

July 12, 2011

While Democrats seek compromise on a large, comprehensive deficit reduction package, Republicans keep walking away in order to fight for tax breaks for the wealthiest Americans while advocating the end of Medicare.

If you’re wondering how genuinely concerned Republicans are about deficit reduction, look no further than to Senator McConnell's comments on the Senate Floor:

"I have little question that as long as this president is in the Oval Office, a real solution is unattainable.”

Senator McConnell's comments clearly show he's focused on politics, not on reducing the deficit -- despite Republicans repeatedly stressing that we must take action on this issue. Is Senator McConnell really willing to risk our economic security rather than work with Democrats on a balanced, comprehensive agreement to reduce the deficit?

July 12, 2011

Wanted to make sure you all saw this story in The Hill on how business leaders are urging Congress and the White House to reach a comprehensive deal to ensure that America pays its bills and avoid the catastrophic consequences of default.

We would note that the groups—which include the U.S. Chamber of Commerce, the National Association for Manufacturers, Business Roundtable and Financial Services Forum—are all echoing Democrats’ calls for a long-term deal that will give businesses the certainty they need and the certainty that Republicans have said we need to provide.

Key Point: “Our political leaders must agree to a plan to substantially reduce our long-term budget deficits with a goal of at least stabilizing our nation’s debt as a percentage of GDP — which will entail difficult choices,” they wrote. “The resulting plan must be long-term, predictable and binding.”

July 11, 2011

Wanted to be sure you saw these op-eds and editorials after House Republicans backed away from negotiating a larger, comprehensive agreement to reduce the deficit and ensure America pays its bills. While Republicans have said they agree that we must pay our nation’s bills and argue that deficit reduction is critical to boosting the economy and creating jobs, they continue to fight for tax breaks for the wealthy while ending Medicare, rather than compromising on a balanced agreement.

July 11, 2011

With America just 22 days away from not paying its bills and the need to create more jobs on everyone’s mind, House Republicans had the bright idea of bringing an unnecessary lightbulb bill to the House floor today.

This misguided bill would repeal light bulb efficiency standards set in 2007 that will save consumers billions of dollars every year. The standards are supported by the lightbulb industry and have spurred innovation as companies have already made the investments needed to produce these energy efficient bulbs.

More importantly, this bill has absolutely nothing to do with jobs and everything to do with making a political appeal to the far right wing of the Republican Party.

But even if we did have the luxury of time to focus on lightbulbs instead of jobs programs or deficit reduction, this bill is nothing more than a solution in search of a problem.

July 11, 2011

Wanted to be sure you saw this piece in The Economist on the political games Republicans are playing as they refuse to take a balanced approach to deficit reduction. Republicans continue to risk our economic security as they fight for tax breaks for the wealthy while ending Medicare for seniors. It’s time for them to take a serious approach to deficit reduction and work with Democrats to agree to a balanced deal to reduce the deficit and ensure America pays its bills.

July 11, 2011

We were intrigued to hear Republicans say on yesterday’s Sunday shows that there has to be an deficit reduction agreement to ensure America pays its bills – despite the fact that they are walking away from a big, comprehensive compromise that would seriously reduce the deficit:

On Fox News Sunday:

Senate Minority Leader Mitch McConnell: “Nobody is talking about not raising the debt ceiling. I haven't heard that discussed by anybody… the Secretary of Treasury stated we need to do this and we're using this as an opportunity to have a discussion about doing something about spending and debt.”

On Face the Nation:

Senate Budget Committee Ranking Member Jeff Sessions: “There needs to be a deal by August 2nd. I assume [Secretary Geithner] is accurate on that date.”

While Republicans pay lip service to a deal that they keep walking away from so that they can protect tax breaks for the wealthy while they continue to advocate ending Medicare for seniors, other Sunday show guests warned of the catastrophic consequences to our economy if we fail to ensure we pay our nation’s bills.

June 29, 2011

Add the International Monetary Fund to the list of economists, business leaders, and Wall Street executives warning of the damaging consequences of not paying America’s bills:

The U.S. should raise its $14.3 trillion debt ceiling to avoid ‘a severe shock’ to the global economy, the International Monetary Fund has warned.”

“In an annual report card on U.S. economic policy made public on Wednesday, the IMF said the debt ceiling should be raised as soon as possible to avoid damage to the economy and world financial markets.”

Let’s hope Republicans are ready to listen.

June 28, 2011

Yes, we know you’re tired of us quoting him, but Mark Zandi’s comments on the debt limit are definitely worth the read.  Here’s a highlight:

"I think we go into recession and my forecast would be blown out of the water. I think if we get to August 2nd and there is no debt ceiling [increase] and there has to be significant spending cuts, I think even if Congress and the administration reverse themselves days later, I think the damage will have been serious and we'll probably be thrown into a recession."

It’s time for Republicans to take these warnings seriously and stop holding the economy hostage by suggesting we may not pay our nation’s bills. Instead they should work with Democrats to ensure we pay our bills and agree on a balanced approach to reduce the deficit that includes revenues and spending cuts.

June 22, 2011

Today, Federal Reserve Chairman Ben Bernanke warned against undermining our economic recovery by drastically cutting spending too quickly. Democrats agree with Republicans that we must reduce spending but we also have to ensure that spending cuts don’t harm the economy and impede job creation.

Key Point: “In light of the weakness of the recovery, it would be best not to have sudden and sharp fiscal consolidation in the near term,” he said. “I don’t think that sharp, immediate cuts in the deficit would create more jobs.”

June 22, 2011

Wanted to make sure you all saw this editorial in the New York Times this morning.

Key Point:  Leading Republicans — after proposing to gut Medicare — are still trying to pose as the program’s saviors. How cynical can they get?

June 21, 2011

Wanted to be sure you saw this comment from Pacific Investment Management Co. manager Bill Gross, calling on the government to support job creation and shift our focus to manufacturing. While the Republican agenda has been thin on jobs, Democrats hope moving forward they’ll work with us on our Make It In America agenda, particularly bills that passed last Congress with bipartisan support. 

June 20, 2011

Wanted to be sure you saw the Washington Post editorial today about the consequences of failing to ensure America pays its bills. The editorial highlights comments made by CBO Director Elmendorf and Federal Reserve Chairman Bernanke about the negative impact default, or the risk of default, could have on the economy, including significantly adding to the deficit. Democrats stand ready to work with Republicans to ensure we pay our nation’s bills and agree on a path to reduce the deficit.

Key Point: “But no one should inaccurately minimize the risk of tampering with the markets’ faith in U.S. credit and credibility. In the end, the debt ceiling must be raised, and the Bernanke-Elmendorf warnings about the consequences kept in mind. The need to raise the debt ceiling reflects past choices, not future ones. The latter will be difficult enough. They will become even harder if politicians allow the United States to come close to default.”

June 20, 2011

We hope House Republicans were paying attention to the ethanol vote in the Senate today, as 73 Senators—including 33 Republicans—voted to end these tax breaks.

That’s 33 Republican Senators who finally agreed that the tax code is not off limits when looking to restore fiscal discipline.

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