Posts Tagged ‘debt ceiling’

Nevada Delegation Splits On House Speaker Plan To Reduce Federal Spending, Raise Debt Ceiling

By Sean Whaley | 6:41 pm July 28th, 2011

CARSON CITY – Rep. Joe Heck, R-Nev., announced today he will back a spending reduction plan put forth by House Speaker John Boehner because it proposes a balanced budget amendment that will protect the United States’ AAA credit rating.

A vote on the plan scheduled for today was delayed, however.

Senate Majority Leader Harry Reid has said the plan is “dead on arrival” in the U.S. Senate if it passes the House.

Rep. Shelley Berkley, D-Nev., opposes the Boehner plan. Nevada’s third congressional district is currently vacant.

In announcing his support for Boehner’s plan to cut federal spending and raise the debt ceiling by an Aug. 2 deadline, Heck said: “Default is not the real problem – the real problem is the potential for a downgrade to the United States’ AAA credit rating. What would it mean to Nevadans if the United States lost its AAA credit rating? If the United States loses its AAA credit rating, interest rates will rise on everyday items such as credit cards, car loans, student loans, small business loans and mortgages.”

In a conference call with reporters today, Heck said: “And I have full faith in the speaker’s leadership and I think that given the hand that he was dealt, with the constant to and fro with the White House, that he has got a plan on the table that accomplishes the necessary goals to prevent a downgrading of our credit report.”

Rep. Joe Heck, R-Nev. / Nevada News Bureau file photo

Boehner’s plan only calls for a vote in the House and Senate on a balanced budget amendment.

Heck said the actual spending reduction in the plan is only a first step. The real solution to reducing federal spending is a balanced budget amendment.

“I think the House plan is an excellent down payment,” he said. “It’s by no means the final payoff. And I think the way we eventually fix this issue is to pass the balanced budget amendment and have it ratified by the states.”

Rep. Shelley Berkley, D-Nev. / Nevada News Bureau file photo

Berkley told the Las Vegas Review-Journal she did not like the two-step process to raise the debt ceiling because it would require another round of debate a few months down the road.

Audio clips:

Rep. Joe Heck says Boehner’s plan will prevent a credit downgrade:

072811Heck1 :20 our credit report.”

Heck says the long-term solution is a balanced budget amendment ratified by the states:

072811Heck2 :16 by the states.”

Cato Institute Senior Fellow Says Federal Government Spending Must Be Cut To Sustainable Levels

By Sean Whaley | 3:18 pm July 26th, 2011

CARSON CITY – A senior fellow with the Cato Institute said today the partisan fight over reducing federal spending is really between one class of people who work, produce, save money and pay taxes and a second group that lives off of the first group.

“This whole political clash between the Republicans and Democrats is really a clash in the electorate,” said Gerald O’Driscoll, a senior fellow with the Cato Institute. “And the first group wants to stop paying as much taxes; certainly does not want to pay the taxes that are implied by the debt that has been racked up in order to pay off on promises to the second group that can’t be fulfilled.

“This is reality coming home and that’s ultimately what underlies this great political debate,” he said.

O’Driscoll, who lives in Reno, was interviewed on the Nevada NewsMakers television program.

Gerald O'Driscoll, senior fellow with the Cato Institute

The demand to cut federal spending has been linked by Republicans to raising the debt ceiling. The deadline for Congress to act on raising the debt ceiling is one week away, with Republicans and Democrats apparently still far away from any kind of agreement on how to cut spending.

O’Driscoll said federal government spending is at unsustainable levels right now.

“As recently as the Clinton Administration, government expenditures were 18.2 percent of total output of goods and services, GDP,” he said. “And they were 20 percent, a little under 20 percent, going into this downturn. Now they are 25 percent. That is more than the economy can pay.”

O’Driscoll said the federal income tax and other associated tax revenues produce about 19 percent of GDP on average, so the government can’t afford to spend 25 percent.

“That is unsustainable,” he said. “That is a big cutback that has to occur.”

The Cato Institute is a public policy research organization that describes itself as being “dedicated to the principles of individual liberty, limited government, free markets and peace. Its scholars and analysts conduct independent, nonpartisan research on a wide range of policy issues.”

Audio clips:

Gerald O’Driscoll, a senior fellow with the Cato Institute, says the debate over the debt ceiling and federal spending is really about those who pay taxes and those who consume them:

072611Odriscoll1 :30 can’t be fulfilled.”

O’Driscoll says the reality of federal spending levels is pushing the debate:

072611Odriscoll2 :06 great political debate.”

O’Driscoll says current federal spending is unsustainable:

072611Odriscoll3 :20 economy can pay.”