Op-ed: A balanced approach to deficit reduction

July 23, 2011|By Tim Kaine

In just over a week our nation will reach its legal debt limit.  Absent action in Washington, our country and our Commonwealth will face drastic consequences.

It's likely we will see not only our nation's credit rating downgraded, but Virginia may lose its triple-A bond rating for the first time since 1938.  The government will pay more, Virginia will pay more and American families will pay higher interest rates for their cars, their homes, their student loans and a whole host of other expenses.

Defaulting on our debt when America is struggling to recover from the worst economic period since the Great Depression would cause further economic turmoil and possibly drive us back into recession.

The stakes of this debate could not be higher.  But, instead of recognizing the gravity of the situation, the Tea Party and its allies in Washington have engaged in a dangerous game of brinksmanship with our economic stability as their bargaining chip.

My Republican opponents in Virginia's U.S. Senate race share their approach.  Jamie Radtke and Tim Donner believe we should "just say no" to raising the debt ceiling and that (despite overwhelming evidence to the contrary) there will be no negative impact to America defaulting on its obligations.  George Allen takes an equally irresponsible stance.  As senator, Allen voted to raise the debt ceiling four times while at the same time voting for spending bills that turned America's largest surplus into America's largest deficit.

Now, Allen calls for conservatives to use the debt-ceiling vote as "leverage" to further their agenda and praises the gridlock in Washington as "a great opportunity."

I could not disagree more.

The full faith and credit of the United States should never be "leverage." Defaulting on our obligations would be disastrous for millions of families and businesses.

Instead, I believe Congress should put partisanship aside and vote immediately to raise the debt ceiling and pay our bills.  Then, it should get to work on a realistic plan to tackle our deficit and get our economy moving again.

There are many in Congress who believe we can cut our way out of this problem. They, like George Allen and my other opponents, support legislation that makes drastic cuts to Medicare, Medicaid, Social Security and other programs that the middle class depends on, while asking nothing of wealthy individuals and corporations.  Their "cut, cap and balance" plan is anything but — it's all cut and no balance, and actually makes it harder to ask the highest-earning individuals and companies to pay their fair share. 

And, their approach will cost us approximately 700,000 jobs.

Rather than treating spending cuts as the only goal, we need an approach that views cuts as a means of freeing up revenue for new investments that will strengthen our economy in the long run. 

That's why I support a balanced approach to solving our fiscal crisis that includes three elements: spending cuts, new revenue sources and strategic investments that will grow our economy.

 As governor during the worst economy in 70 years, I'm familiar with the type of tough cuts Congress needs to make. From my second year in office to my last day, I made thousands of cuts amounting to more than $5 billion.  I started with my own salary, but circumstances dictated deeper and more difficult cuts.

Unlike George Allen and the Tea Party crowd who call for across-the-board spending cuts or unrealistic caps on spending, my administration evaluated each program on the service it provided to our community and based our decisions on where to cut accordingly.  There were no sacred cows and nothing was off limits, but we recognized that not all budget cuts are equal.

Efforts to reduce the deficit through cuts alone, however, will only slow job growth and leave more Americans without the economic opportunities they deserve.

Instead, we need to balance cuts with new revenues.  We should eliminate tax loopholes and subsidies for corporations who don't need them, like major oil companies that are seeing record profits.  And, Republicans must confront reality on the Bush tax cuts.  These tax cuts, which were never paid for and never intended to be permanent, are a weight on our economy.  We cannot address our fiscal crisis without repealing these tax breaks for millionaires and billionaires. 

Finally, the best thing we can do to reduce the deficit is grow the economy.  And that is going to require investing in programs that will actually do so. 

In Virginia, we prioritized investments in education and economic development. These investments helped Virginia's economy continue to grow even during the worst economy in 70 years. At the close of my administration, Virginia was one of only two states that were top 10 in median income and lowest 10 in unemployment rate, while also being rated the "best state for business" four years in a row.

By taking a balanced approach to spending cuts and engaging in sincere negotiation rather than partisan posturing, Virginia survived the recession with a growing economy and a top-notch credit rating.

Washington would do well to heed our example.

Kaine is a Democratic candidate from Virginia for the U.S. Senate election in 2012.

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