Is it time to hit the brakes on debt-financed spending or keep the gas flowing to avoid a double-dip recession?
That debate was in full force on the Hill this morning. As President Obama's fiscal responsibility commission discussed the president's goal of significantly cutting the annual budget deficit in the next five years at the Dirksen Senate Office Building, the president's Education secretary participated in a press conference in the Rayburn House Office Building asking Congress for $23 billion in debt-financed spending to shore up struggling school districts' budgets and avert teacher layoffs this fall.
Education Secretary Arne Duncan's plea is part of more than $100 billion in new deficit spending that the Obama administration is requesting this week, including $37 billion for the Afghanistan and Iraq wars, $47 billion in unemployment benefits extensions and $24 billion for state Medicaid budgets. Fiscal commission co-chairman Erskine Bowles, meanwhile, told the 18-member panel that at least $470 billion would have to be cut from the budget each year to meet interim deficit reduction goals. "These are not easy choices," he said.
Rep. Jan Schakowsky, D-Ill., a member of the debt commission, said meeting a deficit reduction goal by 2015 shouldn't be done by cutting off spending that is creating jobs in the present. "It's a worthy goal, but not at the cost of sacrificing the overall economy in terms of how it impacts ordinary people," she told National Journal. Schakowsky said she is worried about a double-dip recession.
Meanwhile, Rep. Jeb Hensarling, R-Texas, another commission member, said the president's new spending requests undercut his deficit reduction goals. "You have to be able to lead by example," he told NJ. "There is that old adage: 'Your actions are so loud, I can barely hear your words.' I don't see where the example is coming."
The commission's meeting in the Senate Budget Committee hearing room was the panel's second public event, as Bowles, former chief of staff to President Clinton, and co-chairman Alan Simpson, the former Wyoming Republican senator, try to get at least 14 of the 18 members to agree to a set of deficit reduction measures that the commission would forward to Congress for a vote in December. The panel today debated the proper goals to strive for -- whether to come up with enough spending cuts and revenue increases to stabilize debt levels, achieve balanced budgets or even develop surpluses. Simpson and Bowles announced that they would hold an open session on June 30 to hear from any members of the public who want to propose ideas for the commission to consider.
On the other side of the Capitol, Duncan appeared with House Appropriations Chairman David Obey, D-Wis., and House Education and Labor Chairman George Miller, D-Calif., to push for the education funding, which Obey said will be included in a supplemental spending bill for fiscal 2010 that his panel is scheduled to mark up on Thursday. "The economy is still in trouble," Obey said. "We have an obligation not to let up in efforts to save or produce jobs.... We have two choices. We can sit frozen in the ice of our own indifference, as Franklin Roosevelt once said, or we can take action to save those jobs."
Duncan said the $23 billion request would save more than 200,000 jobs. "This is an absolute crisis," he said. "I want to get this bill done now."
Asked if he would support offsets for the money during the Appropriations Committee markup on Thursday, Obey told NJ: "We have proposed lots of offsets in this bill for virtually everything the committee has added that the president did not request, but I'm not going to cut other education programs in order to free up money for this."
At the fiscal commission meeting, members politely sparred over whether deficit reduction would necessarily come at the expense of the economy. "The reason the president created this commission is because of his understanding... which is if we don't deal with our fiscal circumstances and the mounting national debt that we have, that we will pay a very, very dear price," said Sen. Mike Crapo, R-Idaho. "That price will be... frankly, the ability to have the American dream."
At the education funding press conference, American Federation of Teachers President Randi Weingarten said such arguments sacrifice short-term needs for long-term ones. "I often hear those who are opposed to it say, 'It will create more of a deficit, and what are we doing for our grandchildren if we create that deficit?'" she said. "Well, what are we doing for our children if we don't have the education opportunities they need next year?"