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Economy
Obama's debt commission warns of fiscal 'cancer'
2010-07-12
The co-chairmen of President Obama's debt and deficit commission offered an ominous assessment of the nation's fiscal future here Sunday, calling current budgetary trends a cancer "that will destroy the country from within" unless checked by tough action in Washington.

Unlike the current economic crisis, which was largely unforeseen before it hit in fall 2008, the coming fiscal calamity is staring the country in the face.
The two leaders -- former Republican senator Alan Simpson of Wyoming and Erskine Bowles, White House chief of staff under President Bill Clinton -- sought to build support for the work of the commission, whose recommendations due later this year are likely to spark a fierce debate in Congress.

Bowles said that unlike the current economic crisis, which was largely unforeseen before it hit in fall 2008, the coming fiscal calamity is staring the country in the face. "This one is as clear as a bell," he said. "This debt is like a cancer."

at present, federal revenue is fully consumed by three programs: Social Security, Medicare and Medicaid. The rest of the federal government, including fighting two wars, homeland security, education, art, culture, you name it, veterans -- is being financed by China and other countries.
The commission leaders said that, at present, federal revenue is fully consumed by three programs: Social Security, Medicare and Medicaid. "The rest of the federal government, including fighting two wars, homeland security, education, art, culture, you name it, veterans -- the whole rest of the discretionary budget is being financed by China and other countries," Simpson said.

"We can't grow our way out of this," Bowles said. "We could have decades of double-digit growth and not grow our way out of this enormous debt problem. We can't tax our way out. . . . The reality is we've got to do exactly what you all do every day as governors. We've got to cut spending or increase revenues or do some combination of that."
But when you issue your report to the Congress you won't be calling for spending cuts say, in Medicaid or Medicare, even though those are consuming the budget. You're politicians first and as pols you know better than to touch those programs. No, you're going to recommend big increases in income taxes and/or a VAT. The Congress will sigh and moan and reluctantly go along. Bambi will do his imitation of Zardari and take his ten percent for various "community organizations", thus ensuring that those particular cancers continue to metastasize. The Dhimmicrats will use the money to increase spending on their friends. The deficit? What about it? And in ten or twenty years time we'll have another commission to address the problem.

I know, I know, I'm an optimist ...
Bowles pointed to steps taken recently by the new coalition government in Britain, which also faces an acute budgetary problem, as a guide to what the commission might use in its recommendations. That would mean about three-quarters of the deficit reduction would be accomplished through spending cuts, and the remainder with additional revenue.

Most Republicans in Congress are opposed to any tax increases, which has made the work of the commission far more difficult. Bowles and Simpson appealed for support to the governors, who have been forced by their states' constitutions to balance their budgets with deep spending cuts and, in many cases, tax increases.
Most of the Dems are opposed to any program cuts, too.
Bowles and Simpson said the commission would have had a stronger hand politically had it been created by Congress, rather than through an executive order. Simpson was pointed in his criticism of seven Republicans who once co-sponsored such a measure but who helped block it in the Senate.

The presentation by Simpson and Bowles, which included repeated statements of determination to produce a bipartisan set of recommendations, drew praise from the governors.

"I don't know that I've every heard a gloomier picture painted that created more hope for me," said Arkansas Gov. Mike Beebe (D).

Washington Gov. Chris Gregoire (D) said that many governors fear that the commission's recommendations will result in more demands on the states.

Bowles, who noted that the 1997 balanced-budget agreement between the Clinton White House and the Republican-controlled Congress included many provisions that put more burdens on the states, said that wasn't likely.

"I don't think you're going to see a lot of devolution coming from us because the states are all broke," he said.

Simpson also warned that the November elections could add another wild card to the work of the commission. "I have no idea what's going to happen on Election Day but it's going to be disruptive . . .," he said. "It's going to be a big wake-up call around the whole United States. I have no idea where it's going, but thank heaven we have a month then to work through the wreckage."
Posted by:

#12  That is a national security problem!
Posted by: JohnQC   2010-07-12 16:20  

#11   The rest of the federal government [in addition to social security, medicare, and medicaid], including fighting two wars, homeland security, education, art, culture, you name it, veterans -- is being financed by China and other countries.

It is SHAMEFUL that China and other countries are financing any part of our federal budget!
Posted by: JohnQC   2010-07-12 16:19  

#10  Massive deficits are teh Democratic Party's own version of "starve the beast": force huge cutbacks in the defense budget by starving the government of access to debt on affordable/sustainable terms.
Posted by: lex   2010-07-12 15:57  

#9  the whole rest of the discretionary budget is being financed by China and other countries," Simpson said.

Shameful!

And who created this fiscal cancer (addiction)?


We need a guy like Gov. Chris Christie in the Presidency and people in Congress of a like mind (and with a spine).
Posted by: JohnQC   2010-07-12 15:45  

#8  HmmmÂ…so the Democrat controlled congress isnÂ’t going to submit, vote, or much lessÂ…you knowÂ…actually vote on a budget this year. After all, why waste all that time debating when you can simply “deem” a budget to have been passed? Not to mention, itÂ’s a good way to add a little slush to your programs in the event that ObamaÂ’s debt commission recommends those pesky spending cuts or freezes. Think about itÂ…you can tell all the rubes you made “painful cuts” when your blowing the same amount of dough as last year. Brilliant!
Posted by: DepotGuy   2010-07-12 11:53  

#7  "Y'll stand back! I'm gonna have to perform an emergency cash-ectomy!"
Posted by: mojo   2010-07-12 11:05  

#6  The reservoir is almost empty, the level being maintained by China, et al. We need to cut, but politicians are unwilling to do the right but unpopular thing.

We have been warned by our bondholders not to go to the trough big time again. Hell, the Chicoms have more fiscal sense than us.

So, since we can't or are unwilling to get our fiscal house in order, economics will do it for us. And most everyone will share the pain. Big time.
Posted by: Alaska Paul   2010-07-12 10:51  

#5  ..a black hole. The way its looking, we might as well allow the whole system to collapse. At least then, all the special interests blocking real reform will be with everyone else, starting at zero. Hard to build a constituency upon promises made upon zero value and worth. It'll be social political deflation with a reshuffling of what is truly critical and new centers of power and influence made by those willing to do and sacrifice versus the parasitic and fluff of modern political patronage.
Posted by: Procopius2k   2010-07-12 10:22  

#4  Cal Thomas said this morning it wasn't so much a cancer as an addiction...
Posted by: IG-88   2010-07-12 08:58  

#3  Not likely that our political weasel-class will cut either S.S. or Medicare.

Which means that, with near-certainty, they will slash defense spending. Ferguson's right: if we don't get the deficit down asap, we will forfeit our military superiority.

Or has that been Barry's game plan all along?
Posted by: lex   2010-07-12 08:30  

#2  I know what to do!

Why not make another massive federal bureaucracy, bankrupt it, and then say we need another massive federal bureaucracy!

And when the unions that work for that massive federal bureaucracy go broke, give them stimulus money!
That'll fix it.
Posted by: newc   2010-07-12 08:23  

#1  Cut spending.
Any Department or Bureau that didn't exist before 1970 are on the chopping block. No civil service cross department transfers.
Posted by: Procopius2k   2010-07-12 08:04  

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