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Judd Gregg: Debt Will Come Back to Haunt Lawmakers

Image: Judd Gregg: Debt Will Come Back to Haunt Lawmakers Sen. Judd Gregg, R-N.H.

By Sandy Fitzgerald   |   Monday, 21 Jul 2014 07:49 AM

Under President Barack Obama, the U.S. debt stands at $18 trillion and will likely triple within another five to seven years, but both president and Congress are answering that trend with more spending, says former lawmaker Judd Gregg.

"It has been a Congress that has put its foot on the accelerator, with members seeking to pacify their politically-favored constituencies at every turn," Gregg, a former governor and three-term Republican senator from New Hampshire, wrote in a commentary in The Hill.
"In doing so, it is driving up the debt at a rate that guarantees a fiscal crash for the next generation."

The two most recent cases are the "fix" for the Department of Veterans Affairs and a highway bill, Gregg wrote.

The VA bill will expand services at a cost of about $50 billion over the next 10 years, according to the Congressional Budget Office, and hit the Senate floor as an emergency so that a rule to use existing funds to pay for it could not be used, Gregg wrote.

"Then, just to increase the fiscal insult, the future spending under the bill was converted from annual appropriations to a mandated program, adding billions of unpaid spending to the debt," said Gregg.

In addition, an agreement is coming on a Highway Trust bill that's loaded with pork for many senators' states, he wrote.

"A bridge here, a subway there and fairly soon you have enough votes to pass the bill,"  Gregg wrote. "A gas tax increase to pay for a trust fund that is otherwise going broke would, of course, be much preferable. But that might require tough votes. It is much easier to borrow from our kids' futures to do this type of thing."

But Gregg wrote he doesn't believe Congress will have any trouble signing off on the Trust Fund or other spending measures. He said that while there are many people complaining that Congress is doing nothing heading into summer vacation, the opposite is happening, and the only legislative action being approved is to spend money that is not available.

"This is done in a manner that allows many politicians, from the president to rank-and-file House members, to avoid the consequences of having lit the fuse of this fiscal bomb," Gregg said.

The Federal Reserve, though, is pumping even more new money in, and after it printed "a couple of trillion dollars" to relieve the debt and float the economy, it likely won't see inflation as an issue, Gregg writes.

"This will allow most of this new money to continue to slosh around the neighborhood, pushing off the pain of the president and Congress's excess," Gregg said.

He does not expect the Fed to change course and decide that inflation is a threat.

But eventually, the debt will come home to haunt lawmakers, he said.

"At some point, unsustainable debt falls on the heads of a government that has created it — and of the people who have elected that government," Gregg wrote.

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