Debate Over Debt Ceiling Heats Up
Former CBO Director Douglas Holtz-Eakin on the debt ceiling.
- Duration 7:36
- Date Jan 7, 2013
Former CBO Director Douglas Holtz-Eakin on the debt ceiling.
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Well joining me now former director of the Congressional Budget Office the president the American action forum.
Douglas Holtz -- joining us tonight from Washington DC.
-- good to have you with this we've we've hit the debt ceiling.
So says the Treasury Secretary I'm not really sure where we are -- is that right have we actually hit it.
Well what happens is the federal government runs right up very close and -- and the secretary of the treasury begins.
Taking money from different funds inside the government and exchange stabilization fund and treasury.
-- rating the the funds -- for a federal retirement plans.
And uses that money who run the governments that are -- borrowing.
So they're basically doing what.
Millions of Americans accuse -- of doing cooking the books and playing games here and that seems to be pretty standard.
But I've I've got to ask you this.
Why is it just now occurring to both the president and the congress the United States that they should do something about this rather than say oh.
A month before the election where it would have been beneficial.
Perhaps to the Republicans who seek prudent fiscal policy to -- balance.
Certainly ought to get ahead of this problem running up against the London and going to the whole series of special measures that treasury secretary's -- Doesn't make any sense for running a government and certainly running the risk of going over the debt limit and -- international investors makes no sense whatsoever so.
I would you -- getting ahead of this would have been far preferable.
-- but there's no appetite for taking on the real problem which is not the debt ceiling but actually the debt.
And that that's been driven by spending and we've seen no leadership on controlling spending anywhere.
Well you your organization American.
The American action forum.
Putting out very clear statements about what the likelihood would be of the fiscal cliff what would be -- result.
On debt on deficits my god and there are others as well as you know.
I mean there's no mystery here.
To use David -- very senator -- phrase always an idiot.
Would be unaware of the import of actually doing something meaningful substantive and -- when it comes to deficits and debt.
I couldn't agree more I mean you would have to live in a budgetary fantasy -- not to understand.
What Brothers the expiration.
Heck if I -- that that could be hit right in fantasy land.
You know having a trillion dollars in additional.
Spending -- every year as a result of the explosion of the entitlement programs over the next decade.
-- doesn't matter but in the real world it means that.
We can no longer finance.
The regular operations -- government we are blatant -- interest obligations.
And we hand to the next generation an economy that is impaired and a and a huge bills so.
And there is absolutely no justification for not taking this problem on right now.
And quite frankly -- if -- -- person who's gonna retire on social security and in 1015 years.
-- sure like to see that program -- -- it survives in your retirement and it's not going to so we're not doing good service to future seniors.
We're not certainly -- -- -- service in the next generation let me ask you this.
Kicks in and would -- now let's just under sixty days.
-- that's -- smarter just deferred unless they defer again and goodness knows I'm sure they would not even consider such a thing.
Never but the idea of cutting one point two trillion dollars automatic budget cuts when -- just let that happen.
And why don't the Republicans step away quit trying to play big brother and parents of the Democratic Party.
And left the consequences.
Unfold before America's -- Because there was other stuff is a working for the -- there -- three bad ways to do this and then there's a good way to bad ways are you know have a government shut down while.
That's just deprives Americans of services that they actually value in addition to the other stuff they don't want.
You could do sequestration.
But -- take one point two trillion out of the wrong part of the budget you'd never fix the entitlements we would still end up right budget that explodes a long term.
Or you can run up against the debt ceiling impair our credit rating but not actually cut the spending so -- in the end.
You have to pass bills that reform entitlement programs there's no substance.
OK so when I said just let it unfold.
What I meant was not -- frustration -- roll RB I'll I personally think.
The Republican signed up for -- really idiotic sequestration.
They allow them the federal the defense budget to take up 50% of it's due the 20% that it really represents.
In the federal budget so it has a disproportionate burden on it already that that was completely -- arrangements came up about.
The second part of this deal is.
They go around preaching about what we're gonna have to do this we're gonna do back we wanna -- cat just -- -- Just let it go and see what happens what America -- assumes won't happen.
Because Americans don't really get it all that the Republicans look like a bunch of stodgy.
You know members of an orthodoxy who just simply.
It can't resist saying no.
Say you know well that's if that's your idea Mr.
President it's your -- let it rip.
Well I mean if it weren't for the consequences of letting this administration and that the auto pilot -- -- -- for spending -- by -- with him but.
There should be no fight are raising the debt ceiling and there should be -- -- about the reality of having to control spending.
There should be good fight about how we do it what I'd like to see.
That people in congress Republicans and Democrats like do.
Is engaged in that fight there was a time when elected members of senate and house.
Engage in legislative debates about the right way to fix problems and we haven't seen the senate do anything in three years.
And we surely see the house in the senate bill and have them have that debate -- that's what -- happen right now.
You know right now that the Democrats haven't passed allowing my dreams hello I've well I'm going to -- the intruder just deduct.
And and that is to say.
That the democratic.
Controlled senate -- you know has passed a budget of more than three years do well this year right.
Analyst -- -- shocked.
-- so were operating on a different level secondly the president United States is required.
To present a budget.
Between what does -- the first Monday in January and the first Monday in February.
This is a government right now it seems in some ways to be the only one in -- what can we do about that.
I think number one one -- -- said earlier was Americans don't understand what's wrong.
That's true Americans need to understand that they are being endangered.
By the very programs that the president claims he's trying to protect.
That Medicare is not going to protect seniors.
It's going to affect -- -- bad care and bankrupt their children they should understand that and as a result not stand in the way of changes so you know for not -- why little public education.
But for 45 years they've been told Medicare would do just that by both political parties.
And I don't disagree I mean will we need -- honestly.
A serious amount of public education and and that begins in the -- -- -- -- -- the United States to do that have been enormous comp I love the idea of starting at in the White House educating I presume you mean the president -- then we -- -- -- Capitol -- -- senators our congressman.