Column: Why the national debt mattersWASHINGTON — As I travel around southern Minnesota and talk to middle class folks on Main Street, it is clear they understand something that Washington does not seem to get: Deficits do matter.
By: U.S. Rep. Tim Walz, Worthington Daily Globe
WASHINGTON — As I travel around southern Minnesota and talk to middle class folks on Main Street, it is clear they understand something that Washington does not seem to get: Deficits do matter.
Deficits lead to higher interest rates, which makes it more expensive for you to buy a home or a car, or give your kids an education. It also makes it harder for the small businesses that we count on for innovation and job creation to invest and grow.
And since we started selling more and more of our debt abroad, budget deficits mean an ever-increasing trade deficit, too. That makes our country more dependent on the whims of foreign investors in order to operate — including those that may not have U.S. interests at heart.
Finally, deficits matter because every dollar in the annual budget deficit gets added to the national debt, and eventually that debt has to be paid off — by your children and grandchildren and by mine.
The only way we will ever find solutions to this difficult challenge is to put partisanship aside, take a balanced approach and engage all Americans, especially young people, to make the hard, necessary choices. We have to put aside political games and find common ground.
I believe we have taken some important steps in getting our nation back on the path to fiscal responsibility. This year, Congress voted to restore Pay-as-You-Go budgeting rules that helped balance the budget in the 1990s, but were allowed to expire in 2002.
President Obama has gone a step further in proposing a three-year freeze on non-defense discretionary spending. While I absolutely support his goal of reducing spending, I believe that we should not only reduce funding for programs that do not work, we should eliminate them.
These are important steps. And when combined with a balanced approach to reducing spending and continued economic recovery, they put the goal of balancing the budget again within our reach. At least in the short term.
But the looming retirement of the baby boomers means that the cost of Social Security and especially Medicare will continue to rise, putting us right back in the red for decades to come. If we fail to act now, when we can, we will be faced with annual deficits that dwarf the worst we’ve seen.
One of the most important steps we can take in tackling the debt is to create jobs and grow our economy. That is one of the reasons I supported the Recovery Act, and we’re already seeing signs that the economic downturn we once feared could turn into a second Great Depression may soon be over. That is also why I supported health care reform legislation that the non-partisan Congressional Budget Office confirms will cut the deficit by $138 billion over the next ten years and by $1.2 trillion in the 10 years after that.
President Obama has also called for a bipartisan debt commission, which I supported. This commission is a bipartisan panel of experts who will put all the data and facts on the table and make recommendations to Congress on addressing our budget deficit in the short term and reducing our debt in the long term. I have also pushed Speaker Pelosi to commit to an up or down vote on those recommendations and she has done so. This bipartisan panel held their first meeting this week. I hope we can put partisan politics aside and refrain from cheap political theatrics as the nation tackles this difficult challenge.
The last time our country balanced the annual federal budget was more than a decade ago. Unless we correct the failed economic politics of the past, the future debt projections will be even worse. And unless we change the way Washington works, the rapid growth of the national debt in the coming years has the potential for significant risk to the economy and your pocket book.
To be fair, no single political party bares sole blame for this problem. No single action or one program by itself caused the financial imbalance. That’s precisely why solving it will require elected officials from all different political backgrounds — Democrats, Republicans and Independents alike — to come together to find common sense solutions.
We will need to make some tough decisions. But I believe with a can-do American spirit and innovation, we can tackle anything we set out to accomplish. If America balanced the books a decade ago, then we certainly can do it again. The prosperity and financial security of future generations depends on it.
Tim Walz is in his second term representing Minnesota 1st Congressional District in the U.S. House.