Sen. Tom Coburn said Tuesday that Ben Bernanke’s remarks that Congress should not cut spending sharply while the economy is faltering shows the Federal Reserve chairman is ignoring the vast sums of money wasted in Washington.
“Well, I think he doesn’t know about all the federal government programs that don’t accomplish anything now that we get no return for in the federal government`s $350 billion worth of waste every year,” the Oklahoma Republican told Fox News’ Neal Cavuto.
“I would tell you that would have a positive effect on the economy, not small — that’s $3.5 trillion over 10 years that we could easily do, and nobody would ever miss that,” Coburn said. “I was at a dinner with Alan Greenspan a week before last, and he said the last thing you want to do is raise taxes, because it would be far more negative on the economy than cutting spending.”
Coburn said he understands the need to be careful when scaling back government spending, “but to continue to waste $350 billion a year in the federal government, that’s pure waste or fraud or duplication, that’s not going to have anything but a positive effect if we eliminate that.”
Cavuto asked Coburn what he would do to attain necessary cuts, as the congressional supercommittee is looking at lower overall spending reductions than the Oklahoma senator has recommended, which could amount to $9 trillion over 10 years.
“First of all, what is the problem? And the problem, Neil, is there’s no way we get out of this unless we address the depth of the problem over the long term — and we all know short-term interest rates and even long-term interest rates are going to be low for the next year, year-and-a-half,” Coburn said. “But after that, when they start creeping up — and if you look at the numbers, the only way our country recovers fully is that if we make these difficult choices, so that we can fund the debt that we have today, and not add another $15 trillion over the next 15 years.
“For every 1 percent rise that we’re going to see starting about a year-and-a-half from now in the interest rates that our government pays, it will be $160 billion a year — so what Congress did in August, plus what they’re going to do with the supercommittee, is not going to even cover 2 percent rise in the long-term interest costs,” he said. “And we’re at about a third of what our historical interest costs are now. So we know that’s going to go up — we’re not going to have low-interest rates, 1.5 percent 10-year bonds two years from now. That’s not going to happen.”
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