Heartland Institute Experts Respond to July 31 Debt Ceiling Agreement

July 31, 2011

Congressional leaders and the White House on Sunday appeared to come to an agreement to raise the federal debt ceiling. The deal comes with some $2 trillion in promised budget cuts and no tax hikes — but has come under criticism from conservatives in Congress, the Tea Party caucus and liberals. The deal could come up for a vote Monday.

The following statements from fellows of The Heartland Institute may be used for attribution. For further comments, or to book any of these people on your program, contact Director of Communications Jim Lakely at jlakely@heartland.org or 312/377-4000 or 312/731-9364.


“The Boehner-Reid plan, at best, will result in a further increase in the national debt of $7 trillion. It cuts only $6 billion for next year out of a budget that will spend literally over 600 times that, so it’s no wonder it has been widely criticized by fiscal conservatives.

“These budget debates make no sense because of ‘baseline budgeting,’ which builds in trillions in automatic increases in the budget, and then calls any reduction in that runaway increase a draconian cut in spending. The first step on the road to fiscal sanity would involve repealing baseline budgeting so discussions about the federal budget would sound more like discussions about the family budget.”

Peter Ferrara
Senior Fellow for Entitlement and Budget Policy
The Heartland Institute
pferrara@heartland.org
610/438-5721

(Ferrara is the author of America’s Ticking Bankruptcy Bomb, released by HarperCollins in June.)


“The federal government borrows $4 billion a day to cover its $10 billion a day spending habit, and we’re supposed to believe $6 billion of spending cuts for all of 2012 gets us off to a good start toward fiscal sanity?

“We’re supposed to believe in some $2 trillion in spending cuts over the next 10 years when no spending cuts are specifically identified, and when any future Congress could thumb its nose at this agreement and spend whatever it likes?

“We’re supposed to believe in ‘spending cuts’ when the deal really does nothing more than slightly slow projected spending increases, leaving us with higher spending and debts?

“This proposal represents an attempt by leaders in both major political parties to buy votes today with higher debts and taxes tomorrow. It is worse than irresponsible. It is immoral.”

Steve Stanek
Research Fellow, Budget and Tax Policy
The Heartland Institute
Managing Editor
Budget & Tax News
sstanek@heartland.org
815/385-5602


“The Boehner-Reid compromise continues nation's road to fiscal insanity. The only change is the Republican-controlled House has become an accomplice.”

Robert Genetski
Policy Advisor
The Heartland Institute
rgenetski@classicalprinciples.com
312/565-0112


“Two words have been misused by the establishment in this debate — ‘default’ and ‘cut.’ The U.S. was never going to default on its debt if an agreement was not reached. This was a fake crisis designed to encourage compromise. And, there are no actual spending cuts planned at anytime in the next 10 years in the current compromise.

“The Boehner-Reid plan is the result of these two misconceptions. Every year, from now until 2021, government spending and debt levels will rise.

“Conservatives, who stopped tax increases and valiantly attempted to move toward balanced budgets, have had a major impact. They can claim victory even though they didn’t get what the country really needs.

“Voting ‘no’ on the Boehner-Reid plan would be understandable. Let the establishment make incremental moves, while true conservatives refocus their energy to significantly reduce the size and scope of government at the next opportunity.”

Brian Wesbury
Senior Fellow
The Heartland Institute
bwesbury@heartland.org
312-377-4000


“Washington cannot continue to punt the country’s debt problems every time we approach hitting the debt ceiling. While Republicans will try to claim victory, they have not even scratched the surface of reversing the nation’s debt problems caused by over spending.

“The massively underwhelming Boehner-Reid plan is proof that the Tea Party movement is alive and as strong as ever. They have fundamentally shifted the debate from one over tax increases to one over spending cuts. This shift should give us optimism that Washington can eventually get our debt problems under control.”

John Nothdurft
Director of Government Relations
The Heartland Institute
jnothdurft@heartland.org
312/377-4000


“While many on the right are criticizing this deal — and it is hardly perfect — let’s take a broader view. The fact is, the Tea Party caucus has shifted the country’s debt debate well to the right, and set an encouraging precedent for future budget negotiations.

“Just a few weeks ago, President Obama and congressional Democrats insisted that any debt-ceiling package include tax hikes. That feature is absent in this deal — a victory for the Tea Party.

“The most disappointing aspect of this proposal is the fact that some $2.8 trillion in spending cuts will be stretched over 10 years — which totals annually about what the federal government currently spends every month, a mere pittance.

“Americans should also be suspicious of responsibility-dodging gimmicks like the ‘Super Committee’ charged with proposing future spending cuts. The only saving grace is that the Super Committee cannot consider new tax hikes in its deliberations — or, at least, that is what has been promised.

“There’s much work to be done to get the federal government operating within a responsible fiscal framework. It was never going to be done all at once. But this deal represents a small but important first step — and it shifted the terms of public discussion of federal spending toward the principles of smaller government.

“This country has not seen such a shift in decades, and that is reason enough for Tea Party activists and fiscal conservatives to celebrate.”

Jim Lakely
Director of Communications
The Heartland Institute
jlakely@heartland.org
312/731-9364


“Sen. DeMint couldn’t be more wrong in criticizing his leadership. Speaker Boehner has done yeoman’s work leading the party and the country towards a good, fair, tough plan that moves the nation towards balance. The deal isn't a total fix but it’s a good, reasonable start.”

Eli Lehrer
Director, Center on Finance, Insurance, and Real Estate
Vice President, DC Operations
The Heartland Institute
elehrer@heartland.org
202/615-0586


The Heartland Institute is a 27-year-old national nonprofit organization with offices in Chicago, Illinois; Washington, DC; Austin, Texas; Tallahassee, Florida; and Columbus, Ohio. Its mission is to discover, develop, and promote free-market solutions to social and economic problems. For more information, visit our Web site or call 312/377-4000.