House Minority Whip Steny Hoyer (D-MD) offered an unusually blunt assessment of the sources of U.S. debt in a Monday speech before an audience of Republican and Democratic elder-statesmen — calling Republicans on the carpet for creating systemic deficits, then holding U.S. creditworthiness as hostage to a highly contentious right-wing ideological agenda.
In a Monday speech at the Bipartisan Policy Center, Hoyer said both parties are responsible for addressing the country’s unsustainable fiscal trajectory. But he insisted on reminding Republicans that they did far more than Democrats to create the debt, and in so doing, he prompted one famous audience member to attempt to rebut the claims extemporaneously.
“It is not tenable for us to hold ransom the creditworthiness of the United States,” Hoyer said, adding that the GOP’s negotiating posture “ignores that some of their own policies helped get us where we are today.”
From there he recited the three decade history of the current debt most of which is the result of GOP policies.“Republicans made the contradictory promises that cutting taxes would lead to higher revenues and would force lower spending,” Hoyer said. “They did neither.”
Those predictions were clearly, demonstrably wrong. They failed to learn from those facts, however. The next time they were in power, the Republicans were again pushing deep tax cuts as a fiscal and economic cure-all….
President Bush’s policies eliminated the entire Clinton surplus.
Those policies — large tax cuts in 2001 and 2003, unpaid for wars in Afghanistan and Iraq, and an unfunded prescription drug benefit for seniors — explain the source of the country’s structural deficits, which were exacerbated by the 2007-2008 financial crisis.
These policies combined with the economic collapse that took place under President Bush’s watch starting in December ’07 are still the greatest drivers of our deficit.
Why else would some falsely insist that their agenda — cuts to Medicare and other programs for the most vulnerable, and tax cuts for the wealthy — are the only possible answer to our debt?
This prompted former Sen. Pete Domenici (R-NM), who’s co-authored an influential fiscal reform paper, to defend his party.
“I would close it by saying you do a great job of making it appear that it is the Republican Party that is responsible for the debt,” he said. “It’s not correct to say that Democrats are not a big part of the debt problem of the United States.”
Hoyer’s particular prescription for reducing the debt in the long term includes a mix of cuts to defense and non-defense discretionary spending, statutory pay-as-you-go budgeting, entitlement reforms that preserve the basic structure of existing programs like Medicare and Social Security, and higher revenues achieved largely by eliminating tax loopholes. In the speech, Hoyer praised the Simpson/Bowles deficit commission report’s approach to Social Security, which included both benefit cuts and new revenues, and in the past, he has suggested a willingness to accept some further Medicare means-testing.
Based on private conversations he’s had with Republican leaders in the House and Senate, Hoyer says he’s confident a deal can be reached. Complicating matters is the fact that Republicans continue to refuse to raise the debt limit, except on Republican terms — an approach Hoyer criticized as irresponsible. He also noted that the biggest sticking point in the broader deficit debate — health care — is also the single largest driver of projected debt.
The parties, he admitted, have “two dramatically different approaches,” to reducing federal health care spending, and yet, without agreement, “If we do not get a handle on health care costs, we will not handle our deficits.”