U.S. Rep. Bill Shuster sees obstacle to debt solution in White House

The vote is not expected to end the gridlock over raising the federal debt limit.

Rep. Bill Shuster, R-Hollidaysburg, said in a statement that the vote on the “commonsense plan” will make it clear “that the impediment to solving our debt crisis is not found in the House of Representatives, but in the West Wing and the president’s own unwillingness to show courage and leadership to reign in the monstrous debt he had a large part in creating.”

Shuster’s statement appears to support the measure. But a Shuster spokesman declined Monday “as a matter of policy” to comment on how Shuster would vote.

The measure on Monday had 87 co-sponsors in the House and 39 in the Senate, including Sen. Pat Toomey, R-Pa., according to www.cutcapandbalanceact.com.

The basics of the proposal are:

n Pass a balanced-budget amendment to the Constitution.

n Cut spending to bring down this year’s $1.5 trillion deficit.

n Cap federal spending at 18 percent of the gross domestic product. It’s currently at 24 percent of the GDP.

The future of the legislation is uncertain in the Senate, and President Obama on Monday vowed to veto it.

“The time has come to act,” Shuster said. “Veto threats, scare tactics on Social Security and empty words will not avoid a default in our debt. Fiscal restraint, balanced budgeting and smaller government will.”

Obama must decide where to spend the federal government’s limited money should the government fail to raise the debt ceiling, according to Shuster spokesman Jeff Urbanchuk.

“I’m sure at some point we will raise the debt ceiling,” said Hugh Jones, retired chairman of the Shippensburg University political science department. “It’s inevitable. It’s necessary, but at what cost? From everything I read and see, it is very serious because our frail position in the world economic system is not what it used to be. I don’t feel it’s a game of chicken, because it’s too serious to be a game of chicken.”

The government is in gridlock, Jones said. Republicans and Democrats are split within their parties.

Shuster said, “The House will act while President Obama continues to twist in the wind on the debt limit. He avoids offering any concrete plan of his own to address our debt crisis in a fiscally responsible manner and continues to prefer empty rhetoric over strong leadership.”

“I don’t think anybody knows what’s going on,” he said. “We’re wrapped up in a royal political battle that would make a good TV series, but this is life, not a soap opera. You have complete total chaos in the House of Representatives. They don’t know what they’re doing, and more importantly, the American public doesn’t realize the situation we’re in. It’s not like the Pennsylvania Legislature not passing a budget. If our whole economic system collapses, we’re going to have a lack of Constitutional tranquility.”

A wide range of economists have warned about dire consequences in financial markets if the nation defaults on its debt. The deadline is Aug. 2.

A wing of the Republican party wants to beat Obama in 2012 at all costs, Jones said.

“If this requires bringing down his administration which brings down the country, they may be crazy enough to do it,” Jones said. “The idea of a constitutional amendment is ridiculous. It takes years for an amendment to get proposed and ratified. That’s just smoke and mirrors.”

By the numbers

Washington’s spending in recent years has been higher as a percentage of the nation’s economic output than at any time since World War II. At the same time, the federal government’s revenues are the lowest in more than 60 years, according to www.factcheck.org:

n Federal spending is expected to equal 24.1 percent of the nation’s gross domestic product in the fiscal year ending Sept. 30. The figure is lower than the 25 percent recorded in fiscal year 2009, the highest since 1945.

n Federal revenues are expected to drop to 14.8 percent of GDP this year, lower even than the 14.9 percent attained in both 2009 and 2010. Only one year (1950, at 14.4 percent) has been lower since World War II.

Federal income tax accounted for 41.5 percent of federal receipts in 2010, down from 49.6 percent recorded prior to the Bush tax cuts of 2001 and 2003, according to www.factcheck.org.

Corporate taxes brought in only 8.9 percent, also down sharply since the recent recession. Payroll taxes and other “social insurance” payments accounted for 40 percent of total receipts in 2010.

Social Security and Medicare programs for the elderly accounted for 33.5 percent of federal spending in 2010, national defense 20.1 percent.

Interest payments on the federal debt alone accounted for 5.7 percent of all federal spending, and is increasing. The U.S. is borrowing about 36 cents of every dollar spent so far this year. It borrowed 37 cents on the dollar last year, and 40 cents in fiscal 2009.

The federal deficit was 10 percent of GDP in fiscal 2009, and 8.9 percent last year when the economy started to recover and is projected to go above 9 percent this year. High spending and low tax revenues have combined to produce the record high deficits.