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EDITORIAL: The Democrats’ debt crisis
Despite debt limit, they have no plan for substantive reform
Question of the Day
Democrats have yet to put forth any plan to deal with America’s fiscal crisis. The national debt is at $14.3 trillion and growing daily; this year’s budget deficit alone is projected to be $1.5 trillion. The nation is in danger of defaulting on its loans, and yet all President Obama has done is produce a speech, while Senate Majority Leader Harry Reid has wasted his majority by voting against every budget that has come to the floor. Apparently, the only thing more bankrupt than the Treasury is the party in power.
Despite the looming Aug. 2 deadline to raise the statutory debt ceiling, the bicameral, bipartisan negotiations led by Vice President Joseph R. Biden are moving at a glacial pace because Democrats refuse to deal with entitlement spending. The four meetings so far haven’t come close to resolving the biggest stumbling block: Republicans want Medicare reform and no tax increases, but Democrats won’t touch entitlements without tax hikes. Medicare, one of the largest generators of debt, is on track to go belly-up in 13 years.
House Republicans, represented in the talks by Majority Leader Eric Cantor, are standing behind the budget proposed by Wisconsin Rep. Paul Ryan, which puts Medicaid into block grants to the states and changes Medicare into a premium support system of private insurance plans. On Friday, Senate Minority Leader Mitch McConnell said any talk that Medicare reform wasn’t part of the solution to the debt crisis is “silly talk” and “nonsense,” pointing out that 60 percent of government spending comes from Medicare, Medicaid and Social Security, which can’t be changed in the annual congressional appropriations process. Mr. McConnell vowed he’d only support a final debt-ceiling package that included entitlement reform and spending caps for 2012 and 2013.
The only tentative agreement reached so far by the group of five Democrats and two Republicans is for spending cuts of $1 trillion, but the debt ceiling would need to be increased by at least $2 trillion to get the agreement to stick past the 2012 election. House Speaker John A. Boehner reiterated late last week that “spending cuts should exceed the amount of the increase in the debt limit,” that the cuts “should be actual cuts and program reforms” and that “with the exception of tax hikes, which will destroy jobs, everything is on the table.”
The House will vote this week on a so-called “clean debt limit” ceiling with no cuts attached, which Republicans oppose but are bringing to the floor so that when the bill fails, it’ll show the political will isn’t there for increasing the ability to borrow without spending cuts and entitlement reform. Until last month, Mr. Obama was adamant that the debt ceiling be raised without addressing the central problems involved. Republican House leaders refused to give the president a new credit card, so Mr. Obama was forced to negotiate the debt ceiling with some spending cuts.
Next year’s election will be a national referendum on Democratic mismanagement of the economy. The reality is that Democrats control the presidency and the Senate; debt will continue to increase as long as Democrats stand in the way of change. America’s financial crisis won’t be solved without entitlement reform and dramatic spending cuts.
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