By Ed Potosnak
In Article One of the Constitution, the Founding Fathers required Congress to control debt and spending. Our current Congress is failing. In fact, 535 Members of Congress could not agree on how to get spending under control and failed to meet their Constitutional responsibility, shirking this obligation and deligating it to a small supercommittee of six to do what they couldn’t do. This supercommittee is coming up on its deadline, and it appears that they too may fail. Meanwhile, our families and bussiness are suffering at their hand.
How did we get here?
On September 8, the Joint Committee on Deficit Reduction, often called the “supercommittee”, had its first official meeting. The committee was formed as a result of a congressional battle over whether or not to pay our current obligations. In the end, a compromise deal was signed by President Obama on August 2nd of this year. Failure to raise the debt ceiling would have had dire consequences to the American economy, including default on our treasury obligations.
In an effort to get something passed and avoid default, the legislation punted spending reductions to a supercommittee composed of twelve legislators whose goal is to find specific cuts to make up $1.2 trillion of the $2.1 trillion in deficit reductions by November 23. If Congress does not approve the agreement, the $1.2 trillion in spending cuts will automatically be divided equally against defense and non-defense spending, excluding Social Security, Medicaid and some low-income programs. I remain hopeful that this select group can move beyond partisan politics and come to an agreement.
It’s important to put the current debt crisis into historical perspective. When George W. Bush took over the responsibility of the budget from Bill Clinton, the budget was running a surplus. The deficit crisis we face now is the result of the failed policies of the Bush Administration, and I am afraid this new Congress is trying to take us back to those broken policies.
In 2008, Nobel Prize winning economist Joseph Stiglitz estimated the total cost of the Iraq war at $3 trillion, including both direct expenses and the war’s detrimental effect on the economy. It’s worth noting that, at the beginning of the war, George Bush estimated the cost at between $50 billion and $60 billion. In 2010 Stiglitz called his own estimate too low. Some of his additions included ongoing medical care for our troops, the war-generated increase in oil prices, and the neglect and lengthening of our commitment in Afghanistan. Let’s not quibble about the details and call it an even $3 trillion. That’s still a lot of money to have spent in order to deal with imaginary weapons of mass destruction, as compared to the $2.1 trillion that the supercommittee needs to cut.
When President Obama signed the agreement forming the supercommittee, the Republicans immediately declared victory. And as is all too often in Washington, politics as usual began, and the political rhetoric from both sides was lobbing across the Capitol.
An important factor in understanding our economic crisis is to know just how much financial damage the current recession has done. According to the Pew Economic Policy Group, real estate wealth decreased $3.4 trillion in the United States during the period from July 2008 through March 2009. During this time, stock wealth decreased by $7.4 trillion, wages lost amounted to $360 billion, and the Gross Domestic Product was reduced by $650 billion. Add to it the cost of the stimulus packages, the cost to the FDIC to bail out failed banks, the cost of bailing out Fannie Mae and Freddie Mac, and so on. In human terms, 5.5 million workers lost their jobs early in the crisis, and the vast majority of those jobs have not come back. Lost jobs result in lost wages, which means the loss of tax revenues for the government.
The bottom line is that we need to get people back to work. The best way to address the debt is through a strong economy with full employment. I will create jobs with sensible policies. As a small business owner, and teacher, I understand the challenges our families and businesses face, and I will work everyday I am in Congress to implement solutions to our problems.
If it weren’t for Bush’s war in Iraq and the Republican generated financial meltdown, the current deficit and unemployment problems would not exist. The Republicans who caused these problems are less extreme than the Tea Party that has a stranglehold on our country, and are standing in the way of sensible policies to spur job creation and improve the economy. Hopefully, the election in November of 2012 will reverse this trend and usher in a Congress that can get the job done.
A North Plainfield resident, Ed Potosnak is a 2012 Democratic Candidate for Congress in NJ-7.