The Aug. 2 deadline to raise the nation’s debt limit is just days away. Without question, Congress must raise the debt limit. Failing to do so will disrupt the markets, raise interest rates for struggling businesses and families and damage our already weak economy. The economic security of thousands of Maine seniors, veterans, children and families is at risk.
Most Americans want policymakers in Washington to put together a balanced approach to deficit reduction that results in shared sacrifice. Unfortunately, that is not where Congress and the administration are headed.
The House and Senate are expected to vote on two very different proposals in Washington.
House Speaker John Boehner’s bill cuts $3 trillion in spending in two steps. About $1.2 trillion in cuts would be locked in over the next decade in exchange for an increase in the debt ceiling until early next year. A yet-to-be-created congressional committee would then have to come up with $1.8 trillion in cuts in order to raise the debt ceiling again. In other words, we will be right back in the same destructive situation in just seven months.
We should be under no illusion that meeting the requirements of the Boehner plan will be any easier in February. His plan is designed to force major cuts in Social Security, Medicare, Medicaid, veterans benefits and critical safety net programs such as the Supplemental Nutrition Assistance Program, or SNAP, which makes sure Maine’s low income children, laid off workers and seniors do not go hungry. Those who struggle to afford basic necessities will bear the burden of deficit reduction.
At the same time, the Boehner plan would exclude closing tax loopholes to reduce the deficit — a strategy both of Maine’s senators have endorsed — is excluded under the Boehner plan. It also extends tax cuts for the wealthiest at a cost of $700 billion. Millionaires and big corporations would get off scot-free — hardly a balanced plan with shared sacrifice.
The Senate will take up a plan offered by Majority Leader Harry Reid, which would cut spending by $2.7 trillion over the next 10 years, primarily by reducing both domestic and defense appropriations. The Reid plan also extends the debt limit into 2013 to end the default anxiety that is troubling markets. Unfortunately, this proposal excludes revenues but unlike Boehner’s plan, it protects Social Security, Medicare, Medicaid and low-income programs that help Americans, including many Maine children and families, when they most need it.
The choices Congress and the administration make about how to tackle deficit reduction in a meaningful way will affect every Mainer and American. Health care, education and retirement security hang in the balance.
The “ Gang of Six,” comprised of three Democrats and three Republicans, proposed a more balanced plan, backed by Sen. Susan Collins, to reduce the deficit. Every part of the budget would contribute to deficit reduction, including revenues. Equally important, this plan adheres to a principle followed under every major deficit reduction proposal since 1985: deficit reduction must not drive families into poverty or further increase the gap between rich and poor.
With approximately 70 percent of Maine’s MaineCare, or Medicaid, funds going to pay for long-term care for the elderly and disabled and with child poverty on the rise for the first time in years, Maine’s federal leaders must hold fast to this key principle.
The Boehner plan is a very sharp departure from the Gang of Six’s balanced proposal.
Unfortunately, extreme members of the House of Representatives are blocking consideration of a more balanced measure. They should not be allowed to continue to hold the debt ceiling, and by extension our seniors, children, and working families, hostage.
In the long run, Congress and the president must adopt a truly balanced plan for deficit reduction that recognizes spending cuts alone cannot solve our long-term fiscal problems and that asking sacrifices of our retirees and children but not our country’s millionaires and big corporations is unjust.
With the clock counting down to default calamity, Congress must raise the debt ceiling now. They must not allow this dangerous game to push our economy back into recession, causing capital businesses need for growth to evaporate, and creating additional hardships for families. Congress should approve Sen. Reid’s proposal to avoid default and move forward with a plan for balanced deficit reduction.
Dean Crocker is president and CEO of the Maine Children’s Alliance. Christopher St. John is executive director of the Maine Center for Economic Policy.