House Minority Whip Steny Hoyer called Monday for policymakers to work toward a sweeping debt-reduction deal now — before the November election — arguing that the nation cannot afford to waste eight more months before getting its finances in order.
In a speech hosted by the Democratic think tank Third Way, the Maryland Democrat said policymakers should stave off across-the-board cuts set to hit the Pentagon and other federal agencies in January as part of last summer’s agreement over the federal debt ceiling. But the only sensible way to keep those budgets intact, he said, would be a so-called grand bargain to raise taxes and restrain entitlement spending.
Many analysts say such a deal is unlikely in the heat of the campaign season. But Hoyer argued Monday that, whatever the outcome on Nov. 6, the political climate is not likely to inspire more compromise.
“It is not going to get easier to reach an agreement. In fact, it will only get more difficult as time passes and our debt grows,” Hoyer said. “That’s one reason why I will keep pushing to reach an agreement before November – and why everyone concerned about our debt ought to do so, as well.”
“The conventional wisdom in Washington is that our window for reaching a solution is after the election, during a lame-duck session,” he said. “By then, we’ll know the shape of the 113th Congress, feel the pressure of the looming sequester and once again confront the expiration of the [George W. Bush-era] tax cuts. That’s where people – including many in this room – see a leverage point for making progress.”
However, Hoyer said, “the action necessary to reaching a solution requires bipartisan support and a sharing of responsibility for the tough decisions that must be made. The shared power that now exists provides a unique opportunity to build on the dialogue both sides began last year. ”
Hoyer noted that despite the spending cuts mandated by the last summer’s Budget Control Act, the nonpartisan Congressional Budget Office recently projected that the portion of the national debt held by outside investors would rise from about 70 percent of the overall economy today to 190 percent by 2035.
“Even accounting for the economy recovering and continued belt-tightening as directed by the Budget Control Act,” he said, “our debt will still begin to crowd out everything else in the budget.”