Even as the European debt crisis rocks U.S. markets, congressional Democrats are poised to go on a huge spending spree during the next few weeks, potentially creating hundreds of billions of dollars in new red ink just before the Memorial Day recess.
Congress is looking at a crush of votes on big-ticket items sure to set up a debate on deficits less than six months before the November elections, The Hill reports.
Over the next three weeks, Democratic leaders are looking to send President Barack Obama a slew of measures costing more than $200 billion, according to The Hill. They include:
- A multiyear extension of unemployment benefits likely to cost tens of billions of dollars
- An extension of expiring tax provisions
- Medicare doctor payments totaling $180 billion
- Afghanistan war supplemental spending totaling $33 billion
Virtually none of these costs will be paid for, creating new massive deficits – a fact that Republicans are emphasizing as they approach midterm elections in November.
Republican leaders have been pointing recently at Greece’s dismal fiscal situation as a warning, claiming that the United States will be headed for a similar fate unless the deficits are curtailed.
“We are on a path which will go to where Greece is, there's no question about that, if we don't adjust our present financial house,” Sen. Judd Gregg, R-N.H., said during an interview Monday night on the Fox Business Network.
“If we continue to spend much more than we take in . . . we'll double our debt in five years and triple it in 10 years and essentially be where Greece is in about seven years,” he said.
“So we know we are headed in that direction unless we do something about reducing the level of debt and reducing the level of our spending.”
Gregg told Fox that the signs of a crisis are already here – pointing to recent downgraded ratings of U.S. debt.
Asked how Americans will know that the crisis has hit, Gregg responded: “Well, when people stop buying our bonds.”
“Basically, when they tell us that they don't have any confidence in our debt being repaid and they force us to pay a much higher interest rate, something that is unsustainable,” he said. “They essentially say to those of us in the United States, just trying to sell debt to finance our daily operations of government, we do not believe you can repay the debt or can repay it in a way to make us buy your debt at a reasonable price.”
GOP members are banking on deficits being one of the biggest issues in November. This year’s budget shortfall is expected to be $1.5 trillion, and annual deficits are expected to average $1 trillion over the next decade, according to Congressional Budget Office estimates of Obama’s budget proposal.
“Washington Democrats’ out-of-control spending spree is scaring the hell out of the American people,” said Michael Steel, a spokesman for House Minority Leader John Boehner, R-Ohio. “It has to stop.”
The unemployment benefits program, which provides someone with up to 99 weeks of jobless benefits, has received two month-long extensions in the past two months. The price tag for the next extension designed to last for the rest of this year is expected to be in the tens of billions.
Both Republican- and Democrat-led Congresses approved past extensions of Medicare doctor payments or the “doc fix” instead of letting them lapse, The Hill pointed out. And both parties have backed Iraq and Afghanistan war spending bills that haven’t been offset.
Democrats have responded to GOP critiques by blaming the large deficits on Republicans, who did not offset their bills on tax cuts, the wars and their Medicare prescription drug benefit, among other priorities.
“As much as [Republicans] would like you to forget, they passed an agenda that benefited big corporate special interests and the wealthy at the expense of middle-class families and then turned around and left our grandkids with the bill,” Doug Thornell, a spokesman for Rep. Chris Van Hollen, D-Md., told The Hill.
“Democrats inherited an economic disaster from a party who had about as much fiscal responsibility as MC Hammer. We have taken responsible steps to clean up their mess. It’d be nice if Republicans reined in their political ambitions, grabbed a mop and joined us.”
Since taking over Congress in 2007 and the White House last year, Democrats have enacted a pay-as-you-go law requiring them to offset their major priorities and pushed through an overhaul of the country’s healthcare system that should reduce deficits.
But Republicans have pointed out that the pay-go law allows for many exceptions, including allocations for “emergency spending.”
Sen. Tom Coburn, R-Okla., who has noted that Democrats approved $173 billion in deficit spending since the pay-go law was signed by Obama in March, has said he also would oppose any of the coming measures, including the war supplemental, that aren’t paid for.
“Dr. Coburn will use every tool at his disposal to force Congress to pay for these provisions,” said Coburn spokesman John Hart. “Our country is headed toward a Greek-like collapse because Congress refuses to make hard choices
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