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1st District candidates talk about federal debt

The U.S. Capitol Building in Washington D.C.

The U.S. Capitol Building in Washington D.C. (Photo by Heath Haussamen)

The Democrats’ ideas for addressing the debt include ending tax cuts for the wealthy and U.S. involvement in Afghanistan; Republican Janice Arnold-Jones says the federal government must balance its budget.

This post continues a series on the U.S. Senate and 1st Congressional District candidates’ stances on various policy issues. NMPolitics.net intended to run this post a month ago and only today discovered that we had dropped the ball completely. We apologize to our readers, the candidates and the voters for that.

The three Democrats seeking New Mexico’s 1st Congressional District seat in the U.S. House share many ideas for reducing the nation’s debt, while the lone Republican in the race says the simple answer is balancing the nation’s budget.


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For example, Democrats Michelle Lujan Grisham, Marty Chávez and Eric Griego all agree that tax cuts for the wealthy should end, and that the United States should conclude its involvement in the war in Afghanistan.

“I agree that we need to cut the deficit, but we need to do it the right way,” Grisham told NMPolitics.net. “We can cut the deficit without sacrificing our core beliefs or abandoning our commitment to our most vulnerable citizens.”

“While everyone can agree we need to fix this deficit, I refuse to do it on the backs of New Mexico’s working families and seniors who did nothing to create the problems we face today,” Chávez said.

“If Congress is serious about reducing the national debt, they must stop coddling millionaires and Wall Street bankers,” Griego said.

Republican Janice Arnold-Jones, meanwhile, said the federal government must stop spending more than it takes in using a “comprehensive plan that includes a combination of tax reform and simplification, entitlement reform, spending reductions and a commitment to a plan that will put our national debt on a clear path downward.”

“If Congress follows its own rules, our government will be forced to stop spending more money than our government has,” she said. “It’s a simple concept!”

The questions

The 1st Congressional District candidates made their comments in response to questions from NMPolitics.net about the economy. NMPolitics.net gave them no word minimum or limit, telling them to say what they had to say. The only criterion was that they not engage in personal attacks.

Here are the questions NMPolitics.net asked:

  • The United States’ debt has become a major issue – politically and otherwise – in recent years, especially as nations like Greece, Italy and Portugal struggle to deal with overwhelming problems. How serious is the problem in the United States?
  • What specific funding cuts and/or revenue increases will you support to get the problem under control?
  • What policy changes, if any, are needed to address the problem?

Their responses, published in their entirety:

Michelle Lujan Grisham (Courtesy photo)

Michelle Lujan Grisham (Courtesy photo)

Michelle Lujan Grisham

“The debt problem in the U.S. is different from the crisis in Europe in unique ways. Not only have we had to shoulder the majority of the financial burden of two major wars during the last decade; economists agree that the Bush tax cuts for the wealthy have contributed the most to our current deficit without creating the jobs our former president promised.

“Fortunately, President Obama has pulled our troops out of Iraq and he has a plan to bring our troops home from Afghanistan, although I prefer they return sooner.

“I agree that we need to cut the deficit, but we need to do it the right way. As a former secretary of health, I know exactly where to look to find waste and fraud in Medicare and Medicaid. I know how to streamline spending, focus more on preventative health care and get a handle on the excessive spending on end-of-life medical care. We can cut the deficit without sacrificing our core beliefs or abandoning our commitment to our most vulnerable citizens.

“As a an effective reformer, I will stand up to special interests and finally end the tax breaks for Big Oil and get rid of corporate tax loopholes. People are struggling. We must put regular people ahead of corporate special interests. Passing the Buffet Rule into law and making millionaires pay at least 30 percent of their wealth in tax is a first step.

“The next logical step is to finally end the Bush tax cuts for the wealthy and give tax cuts to the middle class. With a fair tax system, we can afford to protect Social Security and safeguard Medicare from the draconian cuts that Republicans have proposed. The Republicans want to take away the safety nets for the people who are hurting the most, while making all of the Bush tax cuts permanent, including all the cuts for the wealthy.

“My Republican opponent, who will march to the orders of the Republican House leadership, will vote for the Ryan budget plan that ruins Medicaid by turning it into a block grant program, potentially leaving 19 million people without care. Republicans don’t understand that health care is an economic driver in New Mexico. Their cuts to Medicare will wipe out entire hospitals here, and force New Mexicans to raise taxes at the state and local levels if they want access to health care.

“Former President Clinton had the right idea. He and Democrats made the wealthy pay their fair share. Our fairer tax system, combined with the right investments, resulted in economic growth and millions more jobs. That effort balanced the budget. We need to do it again.

“When I am elected, I will fight for New Mexicans, especially senior citizens and vulnerable families, and ensure that spending cuts are made in a sensible, targeted way, while investing in our priorities.”

Marty Chávez (Courtesy photo)

Marty Chávez (Courtesy photo)

Marty Chávez

“While everyone can agree we need to fix this deficit, I refuse to do it on the backs of New Mexico’s working families and seniors who did nothing to create the problems we face today.

“As we’re solving the current financial mess, it’s important to understand how we got here. George Bush gave massive tax breaks to the rich and sent the children of working families overseas to fight two wars he didn’t pay for.

“And when Congress called off the regulators, Wall Street went wild, looting our economy and running off with every last dime they could shove in their pockets. I promise that as we fix our deficit, it will not be done on the backs of the middle class and working poor. It will not be done at the expense of Social Security, Medicare or Medicaid. It will be done on the backs off the Wall Streeters and job exporters who today are making more money than ever.

“In Congress, I will fight to repeal the Bush tax cuts for those making over $250,000 per year and work to bring our troops home from Afghanistan as safely and quickly as we can.

“My comprehensive understanding of what moves the levers of our economy will be vital as we take on the gamblers who destroyed our economy and make sure that they can never harm us like this again.

“The recent budget proposals by Paul Ryan and the GOP destroy Medicare and Medicaid as we know it. In Congress, I will hold Republicans accountable and fight to strengthen and improve these programs because it’s unfair to ask seniors to shoulder higher costs while giving a tax breaks to the richest few.

“This kind of wholesale destruction of health care security for the most vulnerable New Mexicans is completely unacceptable. The distance between the values and priorities that this budget are based on and mine could not be farther apart.

“At a time when it’s incredibly clear that what we need are more American jobs, the GOP has created NEW tax breaks for shipping jobs overseas while lining the pockets of Big Oil and billionaires with even more tax cuts. Economists say the shock to aggregate demand from the devastating cuts in this budget would result in losing roughly 4.1 million jobs through 2014. This is the exact opposite of what we need to be doing right now.

“Another thing Congress can do is help simplify and streamline our tax code to make the rules and regulations easier to understand for small business owners. Having certainty and stability will enable business owners to focus on creating jobs and investing in their businesses. We should also remove the loopholes and subsidies that allow mega-corporations to pay little or not taxes and end tax credits for Big Oil and other profitable industries while looking to the industries that will be guiding our economy in the future for investment.

“I also support the creation of an infrastructure bank to help invest in our current and future infrastructure needs including high-speed rail, updated air travel infrastructure, clean energy manufacturing, roads, highways, bridges, our power grid, mass transit, and water and sanitation systems. Investing in these areas will help create thousands of jobs and enable the United States to compete on a global scale in the future.

“Accomplishing these goals won’t be easy, and I know something about taking on tough fights and winning. There’s no question that it will take tough leadership in Congress to break through the red tape and prevail with real solutions for our economy and rebuilding our middle class.”

Eric Griego (Courtesy photo)

Eric Griego (Courtesy photo)

Eric Griego

“Our current high national debt is caused by two simple facts:

“First, President George W. Bush spent trillions in tax cuts for millionaires and big corporations and two wars overseas. Then millions of Americans lost their homes and savings because of Wall Street’s irresponsible gambling away of people’s future. America was then saddled with a severe recession and high unemployment – and deep reduction in personal, business and government revenue. The Bush-era policies and mistakes drove up the deficit and increased the national debt from $5.7 trillion to $10.7 trillion.

“Secondly, inheriting the economic mess and lower tax revenues created under Bush, Democrats and President Obama worked to repair the economy and help people get back on their feet. Unfortunately, Republicans in Congress weakened the Recovery Act and joined Big Oil to kill green jobs legislation that would have created millions of American jobs and made the U.S. the world leader in clean energy. As a result of lower revenue due to the Great Recession, the wars, the extension of Bush tax cuts for the rich, and the recovery programs to turn the economy around, the national debt has climbed further while we wait for a full economic recovery.

“Unfortunately, Republicans in Congress today are insisting on the same failed policies that drove up the deficit and hurt the middle class and small businesses. In their budget plan, they not only call for making the Bush tax cuts for millionaires permanent, but even introduce $2.6 trillion in new wasteful tax breaks for the richest 1 percent and big corporations.

“Even after the trillions in deficit spending in Iraq and Afghanistan, some in Congress are pushing a war against Iran, while telling our veterans and returning heroes ‘good luck’ finding a job. Too many in Congress also take big campaign contributions from Wall Street, then fight to de-fund critical consumer protection agencies designed to regulate Wall Street excesses. And instead of working to reduce the skyrocketing cost of health care that is draining on families and businesses, they also take millions from the health insurance industry and work to kick families off of health insurance. They do this all the while calling for cuts to Social Security and Medicare!

“America can’t afford to waste anymore trillions of dollars on taxpayer giveaways to the 1 percent. If Congress is serious about reducing the national debt, they must stop coddling millionaires and Wall Street bankers and work to:

“ • Restore revenue by creating jobs and putting Americans back to work;

“ • Repeal the Bush tax cuts for the richest Americans;

“ • Get millionaires and big corporations to pay their fair share by adopting the Buffett Rule;

“ • Strengthen the Affordable Care Act to bring down the crushing cost of health care; and

“ • Bring our troops home from Afghanistan and avoid getting into another costly war.”

Janice Arnold-Jones (Courtesy photo)

Janice Arnold-Jones (Courtesy photo)

Janice Arnold-Jones

“Being the world’s largest economy makes the United States’ debt problem incredibly serious. We must fix our debt problem because the world economy depends on the United States to get our debt under control.

“The obvious first step in fixing our debt problem is for the government to stop spending more than it takes in. That means we must balance the budget now – in 1978, Public Law 95-435 was passed and amended in 1980 by Public Law 96-389 to read: ‘Congress reaffirms its commitment that budget outlays of the United States Government for a fiscal year may be not more than the receipts of the government for that year.’

“It’s an important law, ‘budget outlays of the United States Government for a fiscal year may be not more than the receipts of the government for that year.’ Surely, if the New Mexico Legislature has the discipline to balance its budget annually, the U.S. Congress can do the same.

“If Congress follows its own rules, our government will be forced to stop spending more money than our government has. It’s a simple concept!

“Of course, this will lead to tough decisions, but we can avoid much of the pain that often comes with tough decisions by hammering out a comprehensive plan that includes a combination of tax reform and simplification, entitlement reform, spending reductions and a commitment to a plan that will put our national debt on a clear path downward.

“During this financial crisis we’ve all been forced to come up with comprehensive plans to reduce our personal debt and balance our household budgets, and it is time government do the same.”

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4 comments so far. Scroll down to submit your own comment.

  1. No, it’s the Republicans who are stalling the economy.
     
    Republicans and democrats alike ( as well as all citizens who went along with policies )deserve blame and chastisement.
     
    Consider the harm done by the uncertainty caused by the Republicans playing chicken with the debt ceiling:
    http://economistsview.typepad.com/economistsview/2012/05/whos-really-creating-economic-uncertainty.html
     
    Consider that additional borrowing now would pay us at least as much as it costs, and probably more; that it would be a money-making investment:
    http://delong.typepad.com/sdj/2012/05/fiscal-policy-in-a-depressed-economy-late-may-presentation-spine.html
     
    Surley they know that the vast majority of tax cuts went to the middle class.
     
    No – or, at least, that’s a very very misleading thing to claim. The very rich got a far, far bigger benefit than the middle class. Rich people got a very, very big tax cut – although because there are a lot more middle class people the total cost to the treasury was a bit more balanced. It’s like saying to your 11 kids: I’ll give you a total of $20, ten of you will get $1 each and one will get $10; that’s fair because the middle class gets half the benefit, and the rich get the other half. 
    https://www.nytimes.com/2007/01/08/washington/08tax.html
     
    Ask Greece about running deficits to lift themselves out of recession. Or Ireland, or Spain, or Portugal, or Italy.
     
    Wrong again. See: http://krugman.blogs.nytimes.com/2012/04/24/rogoffs-bad-parable/
    http://krugman.blogs.nytimes.com/2012/02/25/european-crisis-realities/
     
    Better you should ask the UK how their attempt to get prosperity by cutting spending has worked out:
    http://krugman.blogs.nytimes.com/2012/05/28/britains-trap/
     
    You will reflect that I never wrote that.
     
    True. Janice Arnold-Jones said that in the original post by Heath. My apologies if I made it seem that you said it. That wasn’t my intention.
     
    The key point here is the one Delong lays out in the column I cite above:
     
    … for reasonable parameter values expansionary fiscal policy appears highly likely to be self-financing at the zero nominal lower bound in which there is a non-zero multiplier. Moreover, even for unreasonable parameter values expansionary fiscal policy appears highly likely to pass its benefit-cost test.
     
    In other words, deficits right now are a money making investment. Right now is when we should be borrowing money to fix roads, bridges, schools, and to develop alternative energy, and to improve public transit, and all the other things that will (a) employ people; and (b) give us the things that will improve productive capacity in the future. Right now we can borrow at negative interest rates. We should grab that opportunity, and make the whole country richer.
     
     
     

  2. The conservatives lie; that’s the lesson of Sweden:
    http://krugman.blogs.nytimes.com/2012/05/16/sweden-sweden-as-conservative-icon/
    Sweden is NOT cutting government spending.
     
    I was referring to the article about Sweeden’s response to their own financial crisis in 1992.
    They did cut benefits -and- raise taxes ( on everyone ).
     
    Yes, we need to rein in health care spending, and that means Medicare and Medicaid and private health insurance. So I agree with this: Some limits on Medicare and Medicaid – we can’t have a pay for everything policy.
     
    But this is just crazy:  everyone should pay at least a little.  Homeless people should pay income tax? People living on disability, or living on only social security, or the mentally handicapped, or people in kindergarten – should they pay income tax? With what? They do pay sales tax and excise taxes and property taxes (probably indirectly) so what’s the problem?
     
    Absolutely all citizens should pay at least a token amount. (Citizens excludes children ).
    If people are truly unable to contribute, make the payment  $1, but we should be and are all in this together.
    Republicans and democrats alike ( as well as all citizens who went along with policies )deserve blame and chastisement.
    But the blame the rich rhetoric from the democrats above is divisive and just plain wrong.
    They all have education. Surley they know that the vast majority of tax cuts went to the middle class.
    They know that on average the highest earners do pay much more in absolute and relative terms.
    The biggest unfairness of the tax code is horizontal – people in all income brackets pay wildly divergent sums
    from other people in the same bracket because of deductions.
     
     
    And this one is totally bogus: Slowly raise retirement age.  Social Security isn’t the problem, the problem is health care spending.
     

    To be sure, social security input and output for an individual are close to equal but it is a problem, a big problem because of demographics -
    input is coming from relatively fewer and fewer workers going to more and more retirees. 
    When you retire from a 401K, it’s because you save up a bunch of money. NOTHING IS SAVED FOR SOCIAL SECURITY. And because of our
    aging society, that money has to come from current incomes which means young people will have to pay more to support retirement of the old.
    Roosevelt wanted social security to be a retirement plan, but government (our democracy) has proven itself incompetent to do this
    (because we/they) spent all the savings. So we have to think of it as a welfare plan for the elderly ( because that’s what it is ).
    We do have to limit social security because demographics and no assets means it is insolvent.
     
    But the award for Stupidest Idea of This or Any Other Century should go to for this idea: That means we must balance the budget now… .
     
    You will reflect that I never wrote that. In fact I don’t believe we need to balanace the budget – ever.
    But we do have to get to within one years taxable percentage of GDP 
    ( close enough that for every year we ‘grow out of last years debts by the end of this year )
    That is why we should s-l-o-w-l-y raise retirement ages ( by one month every calendar year ) so we don’t shock they system,
    but slowly become more solvent long term. I you look at the long term projections, however, spending rises to 25% of GDP.
    The long term average of tax revenues is 18% of GDP. Clearly that is not sustainable.

    We must run deficits now. That’s the way to get ourselves our of this recession and get people back to work. We need to invest in infrastructure. As the economists say, Y=C+G+I+Nx. The way to increase income is to increase spending. Then, when unemployment is back down below 6% (or thereabouts) we can start cutting government expenditures below government income because C and I (non-governmental spending) will pick up the slack and keep the economy going. But to try to balance the budget now is guaranteed to keep us poorer longer.
     
    We have run deficits of more than a trillion dollars a year for four years and will likely continue doing so!!!!
    But it hasn’t really helped. That’s because this was a FINANCIAL crisis, not just a recession. The book ‘This Time is Different’
    details the historical difference. The problem remains with overleveraged consumers. But transfering this debt to be government debt
    (which is what is happening ) has its own perils.
     
    Ask Greece about running deficits to lift themselves out of recession. Or Ireland, or Spain, or Portugal, or Italy.
     
    The truth is a governemnt debt crisis ( which is what we want to avoid ) is not a problem until its a problem, but then it’s too late.
    Right now, US bonds are still for very low interest because the world thinks we good for our debts.
    But each new bond of debt we issue is paid by future generations in inevitably a slower paced US economy.
    When doubt arises, interest rates rise very quickly, and like the insolvent Europeans, we will decline.
     
    I don’t want that to happen.
     
     
    Of course, the people who are fighting so hard to keep the tax cuts in place for themselves because they make over $250,000 a year don’t really care whether average Americans are poorer, so they’ll vote Republican. They’ll make the country as a whole poorer, so they can keep being so much richer than the rest of us.
    The average American receiving $400,000 more in Medicare benefits than they paid in is not a problem caused by the rich.
     

  3. The conservatives lie; that’s the lesson of Sweden:
    http://krugman.blogs.nytimes.com/2012/05/16/sweden-sweden-as-conservative-icon/
     
    Sweden is NOT cutting government spending.
     
    Yes, we need to rein in health care spending, and that means Medicare and Medicaid and private health insurance. So I agree with this: Some limits on Medicare and Medicaid – we can’t have a pay for everything policy.
     
    But this is just crazy:  everyone should pay at least a little.  Homeless people should pay income tax? People living on disability, or living on only social security, or the mentally handicapped, or people in kindergarten – should they pay income tax? With what? They do pay sales tax and excise taxes and property taxes (probably indirectly) so what’s the problem?
     
    And this one is totally bogus: Slowly raise retirement age.  Social Security isn’t the problem, the problem is health care spending.
     
    But the award for Stupidest Idea of This or Any Other Century should go to for this idea: That means we must balance the budget now... .
     
    We must run deficits now. That’s the way to get ourselves our of this recession and get people back to work. We need to invest in infrastructure. As the economists say, Y=C+G+I+Nx. The way to increase income is to increase spending. Then, when unemployment is back down below 6% (or thereabouts) we can start cutting government expenditures below government income because C and I (non-governmental spending) will pick up the slack and keep the economy going. But to try to balance the budget now is guaranteed to keep us poorer longer.
     
    Of course, the people who are fighting so hard to keep the tax cuts in place for themselves because they make over $250,000 a year don’t really care whether average Americans are poorer, so they’ll vote Republican. They’ll make the country as a whole poorer, so they can keep being so much richer than the rest of us.

  4. It is troubling that this entry, perhaps the most important to our nation, has drawn no comments.

    In many ways, it may be a crisis of democracy – people will vote for self interest over group interest.
    But ultimately when the group fails the individual interest also fails.

    The lessen of Sweden may be instructive. Sweden faced the reality of unsustainable benefits,
    but agreed to reduce benefits AND pay more in taxes to put them in a better position. 
    But Sweden is a small relatively homogeneous country – the individuals identify with the group.

    America is a large and diverse country. Can we still pull together as Americans and do what is
    right for the country? Or are we selfish and destined to watch our decline?

    It’s pretty straight forward:

    1. Simplify the tax code, making it fairer horizontally.
    2. Broaden the base, everyone should pay at least a little.
    3. Slowly raise retirement age
    4. Some limits on Medicare and Medicaid – we can’t have a pay for everything policy.

    This is largely what Bowles-Simpson suggested, but strangely not a single reference above.

    History will judge, not only the candidates above, but we as citizens on how well we do the right things,
    or how we let down a great nation into decline. 

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