Editor’s Note: The following comments were made today by Citizens Against Government Waste (CAGW), a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government. These comments came on the heels of Standard & Poor’s (S&P) decision to downgrade its outlook on U.S. government debt from “stable” to “negative.”
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“The announcement from S&P makes plain to lawmakers that there are real consequences to ignoring the government’s ever-expanding deficits and debt,” said CAGW President Tom Schatz. “If elected officials do not change course, the nation will face rising interest rates and higher inflation that will ravage the economy. The S&P decision is the latest of many warnings about the repercussions of ignoring the problem, from financial crises in Greece and Portugal, to the purging of all U.S. debt from Pimco’s flagship hedge fund, to a letter urging deficit reduction from 10 former chairs of the President’s Council of Economic Advisers.
“To date, the only serious answer to these cautionary signals has been House Budget Committee Chairman Paul Ryan’s Path to Prosperity budget plan, which passed the House by a vote of 235-193 on April 15, 2011. Chairman Ryan’s bold plan would cut $6.2 trillion in federal spending over the next decade compared to President Obama’s fiscal year 2012 budget. It would cap non-defense discretionary spending at pre-stimulus levels, repeal the budget-busting elements of ObamaCare, cut corporate taxes, trim the federal workforce, realign farm payments, and eliminate federal funding for unaffordable programs such as high-speed rail. It would not raise taxes, and would cut the deficit to under $1 trillion in FY 2012, eliminating it entirely by 2040.
“In his April 13, 2011 speech, the President failed to produce a well-defined approach to balancing the budget on any time horizon. His most specific recommendation was a ‘debt failsafe trigger’ that would automatically raise taxes or cut spending whenever the federal government spends too far beyond its means. Rather than coming forward with a plan to reduce the debt now, the President promised to produce a plan sometime in the future. It is probably not a coincidence that the S&P decision happened four days after the President’s speech and three days after Senate Majority Leader Harry Reid’s (D-Nev.) announcement that the Ryan plan ‘will never pass the Senate.’
“Saving the nation from bankruptcy should not be a partisan issue; it demands real leadership. As S&P made clear, the time to cut the deficit and pay down our debt is now. Taxpayers deserve action, not rhetoric, before the nation’s economy goes off a cliff,” Schatz concluded.
