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Hearing of the Joint Select Committee on Deficit Reduction - "The History and Drivers of Our Nation's Debt and Its Threats"

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The purpose of today's hearing is to highlight the unsustainable nature of our nation's debt and I believe the term "unsustainable," frankly, is understated. I certainly want to welcome Dr. Doug Elmendorf, director of the CBO, who when I was a member of the budget committee, I had an opportunity to work with, truly a professional in this town. Sir, I look forward to your testimony.

In the last organization meeting we had, I mentioned the work by Professors Carmen Reinhart and Kenneth Rogoth, This Time is Different. Through their historical study of financial crises, they indicated that letting debt rise above 90% of GDP was frankly a recipe for bad things to happen to a nation. Well, this year our nation has raced past that tipping point. Our gross debt has now surpassed 100% of GDP. And I believe there are two crises facing our nation, not just a debt crisis, but a jobs crisis, and they are clearly connected. The explosive growth in our nation's debt hampers our job creation today.

Last week I quoted a small business person from the 5th District of Texas on the subject; today I want to quote from a few more--names you may be more familiar with.

Bernie Marcus, former chairman and CEO of Home Depot, which employs 255,000: "If we continue this kind of policy we are dead in the water. If we don't lower spending, if we don't deal with paying down the debt, we are going to have to raise taxes. Even brain-dead economists understand that when you raise taxes you cost jobs."

Mike Jackson, CEO AutoNation, 19,000 employees: "The best thing this town could do to help this economic recovery become sustainable is to deal with the deficit and to see tax reform."

Jay Fishman, Chairman and CEO of Traveler's insurance company: "What is really weighing on their minds is not knowing how the coming explosion in federal debt is going to affect their borrowing costs, liquidity, cost of doing business, and prices."

Finally, two or three months ago the U.S. Chamber came out with their small business survey; 83% of their respondents said that America's debt and deficit have a negative impact on their businesses.

So I would make the point, Madam Co-chair, that a path to credible deficit reduction is a jobs program, and we should not be deterred in that mission. We have a spending driven debt crisis. The deficit reduction will be a jobs plan, and I look forward again to hearing the comments of our colleagues as we go about this important work, and of the testimony of Dr. Elmendorf.


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