WASHINGTON -- A Republican congressman is cautioning against embracing the possibility of a government shutdown in order to achieve spending cuts and entitlement reforms in the upcoming debt ceiling debate.
Rep. Scott Rigell (R-Va.) appeared on C-SPAN's "Washington Journal" on Tuesday and said he was open to raising the debt ceiling in order to allow the government to pay off its bills, admitting his position may not be popular with some of his Republican colleagues.
On Monday, Treasury Secretary Timothy Geithner warned that the federal government would no longer be able to avoid defaulting on its debts between mid-February and early March, which could potentially cause significant damage to the U.S. economy and its credit rating.
In order to avoid this scenario, Congress needs to raise the $16.4 trillion debt limit. The president could also invoke the 14th Amendment and raise it without the legislature's approval, but the White House has shown no willingness to use that option.
Many Republicans have said they want to use this upcoming fight to extract agreements on spending cuts and entitlement reforms from Democrats -- a scenario Obama said he won't tolerate.
Republicans like Sens. Pat Toomey (R-Pa.) and John Cornyn (R-Texas) and Rep. Charlie Dent (R-Pa.) have said that playing hardball by partially shutting down the government may be necessary to get such agreements.
Rigell, however, said on C-SPAN he didn't think that option was wise.
"Okay, let's walk through that. What we're basically saying is, we're going to balance the federal budget not over time, but in a moment, in a day," Rigell said. "So the next morning, what are we going to pay? Do you think we ought to pay the troops? Most people would say, 'Oh gosh, absolutely!' Well, what about those receiving Medicare? 'We need to do that, they're dependent on that.' What about Social Security? 'Well certainly, we earned that, we paid into that.'"
"And you just go down the line, and most folks, if you really walk through it, it's not a good scenario," Rigell continued, adding that the United States took a long time to get so deep in debt, and it's "going to take us awhile to get out of it."
Rigell was more open to the government shutdown option in 2011, when he was the only member of Virginia's congressional delegation to vote against a last-minute bill to stop such a shutdown. He said then that the deficit "threatens the foundation of our country" and "needs to be addressed now" -- a far different line from his belief in 2013 that there's no quick fix.
On C-SPAN, Rigell, a businessman, also explained another evolution he has had while in office. When he ran for Congress in 2010, he believed that the U.S. government had a spending problem, not a revenue problem. Now, he believes that the government also doesn't have enough revenue.
"After I got into office and heard my Democratic friends make the case from the floor so many times that revenues were not high enough, I thought, well, let me either prove or disprove this," Rigell said. "That took me on a journey of evaluating our budget and looking at historical data -- I'm a data-driven person -- and it led me to this conclusion: We have a revenue yield under the old tax code ... of 16.9 percent. We have not run our republic on that level of revenue since 1959 -- before Medicare and Medicaid were even on the table -- so I knew that we had a revenue problem."
He said he has been advocating to his Republican colleagues to agree to an increase in revenue, but has been disappointed that Obama hasn't proposed enough spending cuts as well.
In the Senate, Lisa Murkowski (R-Alaska) and Susan Collins (R-Maine) have both said Republicans should not use the debt limit as leverage. The U.S. Chamber of Commerce, which often sides with Republicans in legislative fights, is also urging Congress to raise the debt ceiling without requiring that it be tied to cuts.
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The Deficit Has Grown Mostly Because Of The Recession
The deficit has ballooned not because of specific spending measures, but <a href="http://research.stlouisfed.org/fred2/graph/?s[1][id]=FYFSD" target="_hplink">because of the recession</a>. <a href="http://www.whitehouse.gov/omb/budget/Historicals" target="_hplink">The deficit more than doubled</a> between 2008 and 2009, as the economy was in free fall, since laid-off workers paid less in taxes and needed more benefits. The deficit then shrank in 2010 and 2011.
The Stimulus Cost Much Less Than Bush's Wars, Tax Cuts
Republicans frequently have blamed <a href="http://projects.nytimes.com/44th_president/stimulus" target="_hplink">the $787 billion stimulus</a> for the national debt, but, when all government spending is taken into account, the stimulus frankly wasn't that big. In contrast, <a href="http://www.huffingtonpost.com/2011/06/29/cost-of-war-iraq-afghanistan_n_887084.html" target="_hplink">the U.S. will have spent nearly $4 trillion</a> on wars in the Middle East by the time those conflicts end, according to a recent report by Brown University. <a href="http://www.washingtonpost.com/blogs/fact-checker/post/revisiting-the-cost-of-the-bush-tax-cuts/2011/05/09/AFxTFtbG_blog.html" target="_hplink">The Bush tax cuts have cost nearly $1.3 trillion</a> over 10 years.
The Deficit Grew Under George W. Bush
When George W. Bush took office, <a href="http://www.whitehouse.gov/omb/budget/Historicals" target="_hplink">the federal government was running a surplus</a> of $86 billion. When he left, that had turned into a $642 billion deficit.
The Deficit Is Shrinking
<a href="http://www.whitehouse.gov/omb/budget/Historicals" target="_hplink">Last year's federal budget deficit</a> was 12 percent lower than in 2009, according to the Office of Management and Budget.<a href="http://www.whitehouse.gov/omb/budget/Historicals" target="_hplink">The deficit is projected to shrink</a> even more over the next several years.
Investors Are Paying Us To Borrow Money
<a href="http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield" target="_hplink">The interest rate on 10-year Treasury bonds</a> is <em>negative</em>, according to the Treasury Department. Investors are even paying us for 30-year Treasury bonds, when adjusted for inflation.
Investors Are Not Running Away
<a href="http://www.businessinsider.com/niall-ferguson-has-been-wrong-on-economics-2012-8" target="_hplink">Conservative commentators</a> have been warning for years that investors will run away from Treasury bonds because of the national debt. So far it's not happening. <a href="http://www.huffingtonpost.com/2012/05/30/treasury-yield-record-low_n_1555975.html" target="_hplink">Interest rates on Treasury bonds</a> continue to hover at historic lows.
Health Care Reform Reduces The Deficit
<a href="http://www.huffingtonpost.com/2012/09/04/republican-platform-2012-factual-mistakes_n_1840795.html#slide=1461142" target="_hplink">Republicans have blasted the Affordable Care Act</a> as "budget-busting." But <a href="http://www.huffingtonpost.com/2012/09/04/republican-platform-2012-factual-mistakes_n_1840795.html#slide=1461142" target="_hplink">health care reform actually reduces the deficit</a>, according to the Congressional Budget Office.
The U.S. Is Borrowing Less From China
<a href="http://krugman.blogs.nytimes.com/2012/08/30/fear-of-china-syndrome/" target="_hplink">The U.S. government is borrowing much less from foreign countries</a> than before the recession, according to government data cited by Paul Krugman. That is because the U.S. private sector is financing our bigger deficits.
We Spend A Lot On Defense
<a href="http://www.cbpp.org/cms/index.cfm?fa=view&id=1258" target="_hplink">Defense spending constituted 20 percent</a> of federal spending last year, or $718 billion, according to the Center on Budget and Policy Priorities. This adds up to <a href="https://twitter.com/AJInsight/statuses/241269134996959234" target="_hplink">41 percent of the world's defense spending</a>, according to Bloomberg TV anchor Adam Johnson. <a href="http://www.huffingtonpost.com/2012/07/19/mitt-romney-military-budget_n_1687601.html" target="_hplink">Mitt Romney has vowed</a> to not cut defense spending if elected president.
We Spend A Lot On Health Care
<a href="http://www.cbpp.org/cms/index.cfm?fa=view&id=1258" target="_hplink">Health insurance, including Medicare and Medicaid, constituted 21 percent</a> of federal spending last year. In contrast, education constituted 2 percent of federal spending. Meanwhile, <a href="http://www.miamiherald.com/2012/08/19/2956609/middle-aged-blues-over-paul-ryans.html" target="_hplink">Mitt Romney and Paul Ryan have promised not to change Medicare</a> for Americans age 55 and older.
Republicans May Want Large Deficits For Now
<a href="http://www.businessinsider.com/corporate-taxes-deficits-and-labor-vs-capital-during-reagans-first-term-2012-7" target="_hplink">The federal budget deficit ballooned</a> under Ronald Reagan, and that may be just the way Republicans like it. <a href="http://www.forbes.com/2010/05/06/tax-cuts-republicans-starve-the-beast-columnists-bruce-bartlett.html" target="_hplink">Some Republican thinkers</a> have proposed <a href="http://www.nytimes.com/2010/02/22/opinion/22krugman.html" target="_hplink">"starving the beast"</a>: that is, cutting taxes in order to use larger deficits to justify spending cuts later. Since Republicans ultimately want lower taxes and a smaller government, what better way is there to cut spending than to make it look urgent and necessary?
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