Johnson, Thune at odds on debt ceiling

Talk about it

South Dakota’s U.S. Senators are as divided as their respective political parties on how to handle the nation’s debt-ceiling issue.

However, Sen. John Thune, R-S.D., parts ways with some in the GOP who contend that failing to raise the debt ceiling before Aug. 2 would not be harmful. Both Thune and Sen. Tim Johnson, D-S.D., agree that Congress needs to act, and soon.

“The consequences of not acting are very serious. I don’t think there’s any question but it will impact the markets,” Thune said. “Not dealing with this is not an option.”

Johnson said a failure to raise the debt ceiling “would result in national economic chaos” and “a direct tax increase on all Americans in the form of higher interest rates.”

“It means a failure to pay for things we have already bought. It does not authorize a single dime of new spending. It just allows America to pay its bills,” Johnson said.

While both hold out hope that they can support the so-called “Gang of Six” proposal being hammered out by a bipartisan group of senators, they disagree sharply when discussing details of any plan.

Specifically, the “Cut, Cap and Balance” plan that cleared the U.S. House late Tuesday draws praise from Thune and scorn from Johnson.

“The House Republicans’ Cut, Cap and Balance proposal is the worst of the tea party ideas in one package,” Johnson said. “Time should not be wasted on irresponsible political theater.”

Johnson borrowed a quote from Bruce Bartlett, an economic adviser to President Ronald Reagan, calling the House plan “especially dim-witted.”

“This is quite possibly the stupidest Constitutional amendment I think I have ever seen. It looks like it was drafted by a couple of interns on the back of a napkin,” said Johnson, quoting Bartlett.

“This is the best approach I’ve seen for addressing the real problem,” Thune said, adding that he has co-sponsored “very similar” legislation in the Senate. “A lot of thought and work went into this.”

Thune said he especially likes that the proposal would reduce spending in both the near and longer terms without raising taxes. He restated his oft-repeated refrain: “We do not have a revenue problem in Washington; we have a spending problem.” He said failing to reduce the deficits and the nation’s debt will lead to a national security problem.

Johnson said he believes the Cut, Cap and Balance plan is at odds with the views of most South Dakotans.

“This would keep subsidies for corporate jet owners and cut student loans. It would help hedge fund managers and cut research. They don’t think big oil should give up any subsidies,” Johnson said.

Thune said the Balanced Budget Amendment piece of the House plan would force fiscal discipline on politicians who need it.

“The 49 states with balanced budget amendments have gotten it right. We haven’t had that kind of discipline in Washington. We need some kind of imposed discipline,” Thune said. “This is a straightforward way that most people understand.”

Tags: debt ceiling, news, politics, congress