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Former Bain Capital Managing Director Ed Conard and CivicForumPAC Chairman Ford O’Connell on the debt ceiling and the need to rein in spending.
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-- President Obama using the bullet pulpit to demand congress raise the debt ceiling limit.
And making it clear Republicans he's not negotiating with more on this Ford O'Connell chairman of the civic forum pack.
And -- canard.
The former managing director for Bain Capital is the other the book unintended consequences there it is right there.
Our guess I wanna start with the president today talk a little bit about his tone as he's talking about the debt ceiling here's the president.
The debt ceiling is not a question of all arising more spending.
Raising the debt ceiling does not authorize more spending it simply allows the country.
To pay for spending that congress has already committed took.
Ford what do you say that a.
He's gearing up for a partisan brawl unfortunately -- press conference today was a little hypocritical because when he was a senator and 2006.
And George Bush wanted to raise the debt ceiling he said no -- called George Bush a failed leader.
That clearly to -- Clearly you wish they would do it out tonight senate want to repeat what I got up and said eight.
Only a few years ago you were saying that this kind of fight makes no sense we've got to have some kind of fiscal discipline -- what do you say this.
Well I think the president has been the beneficiary of large increases -- mandatory spending because two thirds of the spending is mandatory so he doesn't have to pass bills to increase spending.
The public's not aware of the increases has been -- 30% increase.
Spending is out 24% of GDP historically it's been a 20% -- GDP and -- says as far as the eye can see how one point one trillion dollars a year we only raise one point one trillion dollars a year in income tax.
So I clearly this is situation it cannot continue.
For ever.
Democrats have been saying let's do an end run let's take it to the courts.
-- what do you make of that strategy.
I think it's a losing strategy there's a reason why the debt ceiling raise -- with congress I think what.
John Boehner in the house Republicans and the Republicans in the senate need to say.
And start -- the president why wouldn't say hey.
We eat a balanced approach you're right President Obama if you want this debt ceiling raise -- match -- dollar for dollar spending cuts at some point we're gonna have to address spending cuts.
It is you know this is -- -- -- visiting celebs still it.
But I don't think they should go all in.
Draw the line in the sand and shut the government down because Ed's right the public doesn't know what out of a lot about this and essentially house Republicans could wind -- Intercept of the blame for this.
-- you say though that.
Why the doubt for now won't get you there won't balance the budget it won't stop debt from growing as a percent of a GDP because -- gap is just too too large well.
And I've not saying it's gonna balance the budget why I'm saying is we have to start this conversation this is a good place to start making inroads.
I think that's sequester the better placed to do this and that's when Republicans really have to draw the line -- sorry I -- really just -- percent on that.
But you're saying -- -- that was it interest saying it and someone -- at odds with that some of the cut conservative pundits out there that you know.
There's got to be some negotiations -- take on both sides.
-- -- well I think originally what I had said was that any increase in taxes on income that would otherwise be invested should be linked.
To stopping -- from growing as a percent of GDP.
Because I was afraid in the first round of negotiations.
That Republicans would simply give away tax increases -- -- very little for -- which is basically what has happened.
Now they didn't give a huge amount -- tax increases away -- Still they nevertheless they gave it but they got very little in return for a -- I react well and look at this.
Or do you.
The president's raise the debt limit four times to link.
Five trillion dollars.
I think he likes to say you know this is spending we've already -- it's over it's out the door but at the end of the day.
Every time they raise this debt ceiling federal spending rises that becomes the new norm.
We go to that level and in tax -- have to pay that tab.
All that's absolute right in this cannot -- -- we have to get our spending under control.
And really it's up to Republicans in congress to really educate the public on where we're headed because if the rate we're -- we're gonna be -- twenty trillion.
You know by 2016 in this can't continue because eventually if this continues we're gonna get a credit downgrade -- basically that's gonna hit the average person because they're dollar's gonna buy less.
This is the biggest problem -- the next two decades.
Ed last question to you -- Another debt downgrade what would that mean for the markets what would it mean for the economy and would Republicans again get the blame.
Well I think Republicans.
Unfairly got the blame the last time -- what really causes a credit downgrade.
On controlled spending in Manila inability to bring it back back into bounce that's what really causes of the credit downgrade these little squabbles that we have over -- Debt ceiling in the fiscal -- ultimately they get resolved and they don't change the status -- much so if you go back and look at history realize this is not really what is threatening our.
A credit worthiness it spending.
Spending and we can't get under control nobody will do anything about it right -- Yeah Ed's point if we wanted to do this we're gonna have to modernize entitlements and have structural entitlement reform because with the -- 101000 people -- 65 every -- this is unsustainable.
And and we have to modernize the system or else we're gonna despite a lot of control of the debt.
Now ports from your lips to God's here a long -- -- op Ed thanks for coming on feel that is great to have both be here thanks so much.
Thank you Gerri thank you.
