Republicans Blast Obama After National Debt Surpasses Economic Output
Fiscal watchdogs and Republican lawmakers are expressing dismay at new figures showing the U.S. debt has now exceeded the nation's economic output, a threshold used by President Obama's fiscal commission in 2010 to warn that massive federal deficit spending would sink the U.S. economy.
According to the Bureau of Economic Analysis, the U.S. gross domestic product reached $15.17 trillion at the end of the third quarter 2011. That number is higher today, though a formal report on fourth quarter 2011 growth still has yet to be released. But with the national debt currently at $15.23 trillion and set to go up with the president's latest debt ceiling increase, the 100 percent GDP-to-debt threshold has been reached.
"It is like watching a horror movie," Sen. Marco Rubio, R-Fla., told WOKV-AM in Jacksonville on Monday. "You know those movies where the people in the audience are screaming, 'Don't go in that door!' because you know the killer is there? Well, it is the same thing with this debt. We know how this ends."
What does 100 percent debt-to-GDP spell? Not quite Greece, though, it's not far off from what sank the European nation.
"The Greek economy is broken. The U.S. economy is not broken," said former Congressional Budget Office Director Doug Holtz-Eakin, head of American Action Network.
"But if we were so foolish to do things as we are now," the U.S. economy will break, Holtz-Eakin warned, noting that the debt is equal to the median income of Americans 300 million times over.
"Every American (would have) to give up a year of income to pay it off," he said of the debt.
A White House official who asked not to be named noted that Obama already has a detailed plan for a balanced approach to cutting $4 trillion in federal red ink.The White House, supported by congressional Democrats, often points to the recession and soaring debt it inherited from the George W. Bush administration to explain why it had to dive into deficit spending.
But in his 2008 run for office, then-Sen. Barack Obama said stopping the deficit spending is the first step to recovery. "The first thing you do when you're in a hole is what? ... You stop digging. So the first thing that we're going to have to do is to stop adding to our deficit," he said.
Republicans readily point to that statement as they blame the massive increase in debt on Obama's economic stimulus plan and health care reform measures -- $5 trillion during this administration as the Treasury Department's own figures show.
"This dismal benchmark underscores the president's aversion to making tough fiscal choices in an election year," Sen. John Cornyn, R-Texas, a member of the Senate Finance and Budget committees, said on Monday.
Cornyn said Obama should heed the warning of his fiscal commission and start slashing costly programs from the budget. The fiscal commission recommended cutting $4 trillion over 10 years from spending increases scheduled by the government's "base-line budgeting" technique.
"Next month, the president will submit his budget to Congress and voters will see if we have a leader who possesses the audacity to right the ship or one who will continue to lead us down a path that has brought economies in Western Europe to their knees."
The co-chairs of the National Commission on Fiscal Responsibility and Reform were not immediately available for comment, a spokeswoman told Fox News. In offering their recommendations in December 2010, former Wyoming Sen. Alan Simpson and former White House Chief of Staff Erskine Bowles said the national debt was 62 percent of GDP, which would mean the debt grew two-thirds its size in just one year.
As the president prepares to grapple with rousing complaints about the sluggish economy during a tough reelection year, he announced Monday that he was replacing his chief of staff with his budget chief, Jack Lew, who is integral to the budget debate.
Nearly one year ago, Lew told the Senate Budget Committee that the administration will live within its means.
"Our budget will get us, over the next several years, to the point where we can look the American people in the eye and say we're not adding to the debt anymore; we're spending money that we have each year, and then we can work on bringing down our national debt," Lew testified.
But a spokesman for Sen. Jeff Sessions, R-Ala., ranking member of the Senate Budget Committee, called the president's fiscal year 2012 budget proposal "debt-doubling," and said Lew had falsely characterized the budget in a claim the White House continues to repeat.
A spokesman for House Majority Whip Eric Cantor also pointed to the president's promise in 2009 to cut the deficit in half.by the end of his first term as another broken promise.
"The president's plan is not panning out as promised," said Cantor spokesman Mike Long. "At $15.23 trillion, the national debt is now equal to our economy, and under the president's watch the debt has grown by $4.6 trillion. It's clear his economic policies are failing Americans."
Holtz-Eakin said the president did announce that he wants to chop $489 billion off the defense budget over the next decade, suggesting he is at least looking in the right direction on budget cuts.
But Holtz-Eakin said most bipartisan and nonpartisan analysts say that's about a tenth of what needs to get done.
"That's a 10 cents on the dollar down payment," he told Fox News. Instead, Holtz-Eakin said the administration and Congress have no choice but to look at entitlement programs like Medicare, Medicaid, Social Security and farm programs, which take up 60 percent of the budget.
Not doing so, he said, is a failure of elected officials.
"What they're pretending is that they can keep what they have, but they can't it's going to fall apart," he said. "They can take the cuts when the world falls apart or they can fix them now."