Compromising Debt

By Beacon Staff

As President Barack Obama was sworn into office, America had an annual unbalanced budget deficit of $1.3 trillion. This was the result of previous years when Congress did not pay its way, including a Wall Street bailout. America has never been out of debt, except once.

Former President Andrew Jackson holds the honor for detesting red ink. In 1835 he led the way for America to balance its budget and pay off national debt.

Jackson called debt a “national curse.” The president campaigned to “pay the national debt, to prevent a monied aristocracy from growing up around our administration that must bend to its views, and ultimately destroy the liberty of our country.” The next president, Martin Van Buren, dealt with big banks, as The Panic of 1837 paved the way to permanent national debt.

Former President Ronald Reagan campaigned that “debt was out of control,” but increased it by nearly $2 trillion. Former presidents George H.W. Bush and Bill Clinton each had a debt of $1.5 trillion. Former President George W. Bush had $5 trillion of debt. President Barack Obama will be no exception.

Each president had reasons for deficit spending. George W. Bush’s debt was due to the large tax cuts, unpaid Medicare drug benefits, costly wars and bailing out Wall Street.

Today, the House GOP holds hostage the “full faith and credit” of America with a statutory debt ceiling. National bankruptcy suddenly became a political wager, as Congress, under Bush, increased debt many times.

On debt talks House Republicans are jockeying for political gain, not compromise. House Speaker John Boehner was the fourth-ranking Republican during former House Speaker Newt Gingrich’s “Contract with America” when Congress shut down in the 90s.

The Gingrich-era Congress did nearly pass a balanced budget amendment to the U.S. Constitution. Montana has a balanced budget provision. Given the opportunity, many states would ratify the populist idea.

The Obama budget sent to Congress proposed a five-year freeze on discretionary spending and a two-year freeze on federal workers’ pay. Obama proposed bringing military spending to a zero growth over five years, not renew the Bush era tax cuts, reform Medicare’s growth rate, and tackle Social Security solvency.

Obama’s debt commission proposed $4 trillion in deficit reduction with no support from Congress. The president recently zinged the GOP on how his daughters had a better work ethic toward their homework than the GOP has toward the debt negotiations. “They’re not pulling all-nighters,” he said. “If you know you’ve got to do something, just do it.”

Last week, instead of visiting Whitefish, Obama summoned Congress to the White House. Obama said that debt deserved a long-term fix: “I don’t think the American people sent us here to avoid tough problems. It’s in fact what drives them nuts about Washington, when both parties simply take the path of least resistance.”

Unemployment is at lifetime highs and median American wages are stagnant while top executive pay for corporate America skyrocketed 23 percent. Until the economy improves, middle America can little afford more debt or more taxes.

Sen. Bernie Sanders, I-Vt., called for an end to tax loopholes. “The middle class, the elderly, the sick, the children, and the poor have already sacrificed enough,” he said. “It is time for those people on top, the people who are doing extremely well, to also understand they are Americans, they are part of our country, and they have to contribute to deficit reduction.”

School kids can sometimes get away with doing nothing, but Congress cannot. It is a no-brainer that Congress should open the secret debt negotiations to the American people. Our solutions seem comically simple: We need a bit of old-fashioned compromise.

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