10 Questions on Spending & Debt for the Obama Administration & Treasury Nominee Jack Lew
1. Why Haven’t President Obama’s Deficits Gone Down “Considerably,” Despite YOUR Projections That They Will? Is The Federal Government SPENDING Too Much?
Despite Four Straight Years Of Trillion Dollar Deficits, Jack Lew Projected That The President’s Budget Deficits Will Go Down. “The deficit is coming down considerably because of the decisions we’ve made that have gotten the economy growing again.” (OMB Director Jack Lew, 2012 Budget Overview, Accessed 1/9/13)
2. Has the Obama Administration Confronted The Deficit & Spending ‘Head-On? Are The Obama Administration’s Deficits Threatening Our Future?
Jack Lew Said That Not Confronting The Deficit Head-On Would Create Problems. “I think the question of ‘is there a fiscal policy around which a consensus can be built?’ is really central to when this is going to become an issue. I think that if you look at the trend we’re on, it is very reminiscent of the trend that we were on several years before it became an issue of, I think, broad concern. When Ross Perot touched that nerve in 1992, there was an objective reality that was scary. There was an actual current-year budget deficit that was scary in its size- five percent of GDP, but it was projected, in a very short time horizon, to double. I think we’re in a position right now, where if the policy process, the political debate, can’t frame this issue early enough, we are almost inevitably find ourselves in that position, whether it’s two years, three years, or four years from now.” (Jack Lew, Remarks At Woodrow Wilson Center, 9/13/02) IN VIDEO AT: 1:09:56 – 1:11:01
3. President Obama Stated That He Won’t Negotiate With Congress To Cut Spending Around The Debt Limit. Do You Still Believe Congress “Can’t Be Written Out Of The Process?” If So, Is The President Prepared to Negotiate On Spending Cuts Asked For By The Congress?
Jack Lew Acknowledged That When Discussing Budgetary Issues, “Congress Can’t Be Written Out Of The Process.” “I think that if you look at the debate that’s going on right now that is probably going to slow things down for a little bit, it’s this fight between Congress and the President, or I should say the President and the Congress, on what the discretion and the authority of each should be. I think it’s a fundamental mistake to assume that it has to be either/or. It has to be both! Congress can’t be written out of the process.” (Jack Lew, Remarks At Woodrow Wilson Center, 9/13/02) IN VIDEO AT: 1:17:59 – 1:18:25
4. Has The Obama Administration Ignored Paying Off Old Bills, Instead Using The Debt Ceiling Increase On New Spending? If Not, What Past Bills Did The Obama Administration Pay With The Last Debt Ceiling Agreement (Considering Our Debt INCREASED Since Its Passage)?
With More Spending In Sight, Jack Lew Admits That Raising The Debt Ceiling Is Used Only “To Pay The Bills That’s Already Built Up.” “One thing that may not be clear to all people outside of Washington- the debt ceiling gives you no authority to spend new money. It only gives you authority to pay the bills that’s already built up.” (OMB Director Jack Lew, Bloomberg’s “Fast Forward,” 7/26/11)
5. As President Obama’s Treasury Secretary, Will Jack Lew Ensure That Using Past Bipartisan Debt Reduction Agreements As Precedent Remains “The Right Way To Do It”? If So, What Spending Cuts And Entitlement Reforms Will The Administration Be Open To Negotiating?
Jack Lew Believes That “A Bipartisan Balanced Budget Agreement” Is “The Right Way” To Reduce The Deficit: “In terms of bipartisan cooperation, I think it is very important to remember that 1997 was a bipartisan balanced budget agreement. 1990 was a bipartisan balanced budget agreement. That is the right way to do it. In 1993, it is also important to remember that there was extremely significant deficit reduction, and that was part of solving the problem, and that was not a bipartisan effort. I do not think that we should be looking at the 1993 model. We should be looking at 1990 and 1997. That is what is good for the country. That is where I think ultimately the answers lie.” (Jack Lew, United States Senate Confirmation Hearing For OMB Director, 9/16/10)
6. Is A Deep Economic Spiral Needed In Order To Make The Obama Administration Take Serious Action on Spending & Deficits?
Jack Lew Wished That The Government Would Be Able To Talk About Budget Deficits In A Responsible Manner. “I think the point made earlier- that the pain of a deficit is the response to trying to erase it- is very true except with the exception that I think was also noted earlier- until the markets get scared. In 1992 the markets were scared. There was not a prospect of a healthy economy. Now, I hope we don’t have to get back to the prospect of an economy in a deep spiral to take seriously the fact that everything needs to be looked at at the same time when we talk about fiscal policy.” (Jack Lew, Remarks At Woodrow Wilson Center, 9/13/02) IN VIDEO AT: 1:16:25 – 1:17:01
7. Have President Obama’s Ballooning Deficits And Debt Left An Inadequate ‘Cushion’ To Cope With Emergencies? If Not, Has The Obama Administration Adequately Addressed Spending And Fiscal Responsibility Over “A Multi-Year Period?”
Jack Lew Admits That Fiscal Responsibility Is Essential Over “A Multi-Year Period.” “When you look over a multi-year period, you can’t assume that nothing bad is going to happen. You have to leave a cushion. You have to be in a position where if there’s a war, you can make an adjustment without crippling domestic discretionary spending, without having to cut Social Security or Medicare.” (Jack Lew, Remarks At Woodrow Wilson Center, 9/13/02) IN VIDEO AT: 21:05 – 21:22
8. Will The Obama Administration Agree That Any New Stimulus Spending Must Be Offset With Spending Cuts Elsewhere?
Jack Lew Said That Stimulus Spending That Increases The Deficit “Cannot Become The Normal Rule.” “In order to create millions of jobs, in order to create economic growth where it did not existing, it was, I think, critically important at the beginning of this administration to actually increase the deficit. That was the exception to the rule. That was the way to stimulate the economy. It cannot become the normal rule. If it becomes the normal rule, we are on a path that goes nowhere good.” (Jack Lew, United States Senate Confirmation Hearing For OMB Director, 9/16/10)
9. President Obama Firmly Believes That Deregulation Caused The Financial Crisis. Would A Vastly Different View In The Treasury Department Cause Chaos In His Administration?
Jack Lew Does Not Believe “Deregulation Was The Proximate Cause” Of The Financial Crisis. “‘Lew, a former OMB chief for President Bill Clinton, told the panel that ‘the problems in the financial industry preceded deregulation,’ and after discussing those issues, added that he didn’t ‘personally know the extent to which deregulation drove it, but I don’t believe that deregulation was the proximate cause.’” (Shahien Nsiripour, “Jacob Lew, Obama Nominee And Former Citigroup Executive, Doesn’t Believe Deregulation Led To Financial Crisis,” The Huffington Post, 5/25/11)
10. Do President Obama’s Trillion Dollar Budget Deficits Prevent The U.S. From Financial Flexibility In Times Of Emergency & Natural Disaster?
Jack Lew Criticized The Bush Administration For Increasing Spending After 9/11. “I had conversations with some of the congressional leaders on budget issues right before September 11. The week before, actually. And we were having the same conversation then. If the line is erased, what will replace it? Then September 11 came, and it just blew the line away. I don’t believe it had to blow the line away. I think one could have responded in a responsible way. One could’ve said, ‘we have a surge of spending now, because there’s XYZ we have to do, but over a five year period we’re going to get back to it.’ There’s no appetite for that kind of conversation right now.” (Jack Lew, Remarks At Woodrow Wilson Center, 9/13/02) IN VIDEO AT: 1:15:45 – 1:16:24