An important part of being a politician is to keep your name before the public in the press. House Majority Leader Eric Cantor (R-VA) did a lot of that recently in the debt ceiling hostage-taking by the Tea Party wing of the GOP as its articulate spokesperson and rising star. While congress is on vacation, to keep his name in the press, Cantor signed off on an opinion piece in The Washington Post, “Removing the obstacles to economic growth.” He says there are two: “The first is the federal government’s debt crisis” and “The second is the jobs crisis.” He should know, since his majority is responsible for creating the first one and for doing nothing about the second one. Cantor blames President Obama for each.
The so-called debt crisis is a product of the previous Republican administration that decided to wage two wars and to finance them with deficit increases instead of tax increases. “In fact, you need a war to really get a big deficit,” says Christopher Chantrill on usgovernmentspending.com. “The peak deficits came during World War I (16 percent of GDP in 1919) and World War II (24 percent in 1945).” Moreover, “The deficits of the Great Depression only came to about five percent of GDP, and the big $1.4 trillion deficit for FY 2009 amounted to 13 percent of GDP.”
The real problem with extreme government debt would be the interest burden it would create. If interest payments reached 12 percent of GDP, that could cause a government default. The US is far from reaching that point. However, it was using the debt ceiling to extort political concessions that made a routine financial process look like the crisis it became. Cantor kept his name in the press then by walking out of negotiations with Vice President Biden.
In his Washington Post opinion, Cantor writes, “Republicans passed a budget this spring, written by Rep. Paul Ryan, that would address our challenges head-on by putting in place common-sense reforms to manage our debt over the short and long term.”
That is not what the nonpartisan Congressional Budget Office’s analysis says. The CBO found “that by the end of the 10-year budget window, public debt will actually be higher than it would be if the GOP just did nothing.” In addition to requiring additional raises in the debt ceiling, the CBO also acknowledged, “that seniors, disabled and elderly people would be hit with much higher out-of-pocket health care costs.”
Who needs facts when rhetoric will do?
“President Obama is wrong to think that the answer is to increase spending or raise taxes when so many millions of Americans are out of work.” Cantor’s interpretation of what the president thinks is not what the president says. In a televised address on July 25, 2011, President Obama petitioned for a “balanced” approach that includes spending cuts as well as revenue increases from tax increases for wealthier Americans. In that speech Obama also debunked the Cantor/GOP rhetoric about the debt ceiling allowing the congress to spend more money.
As to jobs, Congress has offered only one piece of legislation that has the word “jobs” in its title, but that is all. It is HR 1745, the ‘‘JOBS Act of 2011.” Cantor does not mention it in his op-ed piece, probably because it does not have anything to do with jobs. What it does is to allow states the option of using federal unemployment benefit dollars to repay federal loans to help balance their budgets or provide tax breaks to businesses.
According to Cantor, however, “the Obama administration’s anti-business, hyper-regulatory, pro-tax agenda has fueled economic uncertainty and sent the message from the administration that ‘we want to make it harder to create jobs.’” HR 1745 takes money away from the long-term unemployed. Where is the job creation in that?