Encima Global president and former Reagan adviser David Malpass says Congress should pass legislation that links debt or spending to GDP, thus forcing the government to cut spending when it exceeds a set ratio.
"For example, if the debt-to-GDP ratio is over 65 percent in fiscal years 2012-2014 (as it surely will be), or over 60 percent in 2015-2018, or over 50 percent thereafter, the president could be required to submit budgets that are no greater than the previous year's nominal spending," Malpass writes in The Wall Street Journal.
In the 2008 debates, notes Malpass, President Barack Obama promised to "go line by line to make sure that we are not spending money unwisely.”
“He should be held to that promise," says Malpass.
Moreover, like a CEO, Obama should be made responsible for overspending, and (though Congress won't like this) he should have more authority to stop it.
"Until President Ford, all presidents had the authority to impound, or not to spend, all the money that Congress appropriates," says Malpass. "A 1974 budget law requires that every penny be spent, but it could be suspended or modified to allow the president to carry out cutbacks and rescissions."
"Governors in fiscally responsible states often have such authority."
The Los Angeles Times reports that Treasury Secretary Timothy F. Geithner said his department had taken "extraordinary measures" to postpone the date at which the U.S. would start defaulting on its obligations, which reached the $14.3 trillion debt ceiling on May 16.
© 2017 Newsmax Finance. All rights reserved.