Terry: “Our disapproval rating is well-deserved”
August 11th, 2011
Omaha, NE – Before a group of business leaders from around the state, Nebraska’s Congressional delegation took questions on the economy Thursday, and defended the bitter debate over the nation’s debt ceiling in Washington. But after all the flack and dysfunction, none of them appear to have come home with a shift in position – left, right or center.
About six hundred people from the Bellevue, Lincoln, Omaha and Nebraska State Chambers of Commerce gathered at the Strategic Air and Space Museum in Ashland, NE to hear from Nebraska federal delegation, as each stood up to explain and defend the recent, chaotic display in Washington.
“I have to say, our disapproval rating is well-deserved, well-earned,” said Omaha’s representative in the House, Congressman Lee Terry. “Well, I don’t know if it is well-earned, but it was earned. It’s been an ugly process.”
Terry apologized for the tenor of the debate. But said “as you know, when you start cutting, it gets loud.” But, he added the cuts of over $1 trillion to seal the debt ceiling deal were necessary. He also said Standard and Poor’s decision to downgrade the U.S. debt from AAA to AA+ was justified.
“We’re downgraded because we have failed as a Congress to take control of our future obligations and debt,” Terry said. “That’s where they’re coming from. We can’t continue to be blind to the fact that our unfinanced obligations going forward is less sustainable than today’s deficits.”
Nebraska’s Republican Senator Mike Johanns echoed Terry’s call to reform the nation’s most expensive obligations – namely Social Security, Medicare, and defense. “This conversation is just so long overdue, in this really great nation.”
But despite S&P’s inclusion of political dysfunction in justifying its decision to downgrade, none of the political leaders at the podium showed much willingness to shift on their old positions, namely: cut spending and don’t raise taxes.
“When we hear the President talk about corporate jet exemptions and taxing the rich, are you kidding me?” Johanns asked. Closing tax loopholes and rolling back the Bush tax cuts, Johanns said, wouldn’t come close to reaching the numbers needed to dent the deficit.
“Let’s just say you if you earn over $250,000, you go back to the old rates, and we’ve done all of that,” Johanns said. “Let’s just say we can somehow find the votes in the House and the Senate to do all of that, we can run the government for 20 days at the current rate of spending. Are you kidding me?”
But according to various estimates, President Barack Obama’s proposal to roll back the Bush tax cuts on the highest earners would raise about $800 billion over ten years. Closing tax loopholes would presumably add to that figure. One retired business owner in the audience, who didn’t give his name, questioned the representatives’ unwillingness to bend on taxes.
“Two years now, we’ve had these tax breaks,” he said. “And I’ve heard don’t tax the people who create the jobs. Where’s the jobs?”
Nebraska’s lone Democrat in Congress, Senator Ben Nelson, also opposed increasing taxes, and said businesses need certainty in the tax code.
“For us to be able to have job creation, we have to have, first of all, certainty in the tax code, certainty as to regulatory control and certainty as to the economy,” Nelson said. “We lack certainty in all those areas right now. If business is sitting on the sideline, as I’m informed , with maybe as much as $1.5 trillion in cash, business is not going to invest that money until there is stability and certainty.”
But there isn’t expected to be any stability and certainty until the newly appointed bipartisan “super committee” comes up with its plan to get the deficit under control – using some, or no, combination of spending cuts and tax hikes or reforms. That committee has been charged with recommending a plan by November. If it isn’t agreed to, automatic spending cuts will go into effect.
So there could be at least three more months of arguing in Washington and uncertainty around the country.
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