October 18th, 2009
03:08 PM ET
13 years ago

Gregg: U.S. could be on path to a 'banana republic' situation

WASHINGTON (CNN) – A leading fiscal mind on Capitol Hill and a one-time Obama Cabinet pick sounded the alarm Sunday over the projected long-term financial challenges the country faces.

“This deficit is driven by us,” New Hampshire Republican Sen. Judd Gregg candidly said Sunday on CNN’s State of the Union when asked about the federal government’s projected $1.42 trillion operating deficit for the 2009 fiscal year.

“You talk about systemic risk. The systemic risk today is the Congress of the United States,“ the Ranking Republican on the Senate Budget Committee told CNN Chief National Correspondent John King, “that we’re creating these massive debts which we’re passing on to our children. We’re going to undermine fundamentally the quality of life for our children by doing this.”

“Now you can’t blame that on [former President] George [W.] Bush,” Greg said, noting that using the Obama administration’s projections the budget deficit for the next ten years is $1 trillion per year. And Gregg said that during the same ten-year period, public debt as a percentage of gross domestic product would increase from 40 percent - which Gregg called “tolerable but still too high” - up to 80 percent.

The figures, Gregg told King, “mean we’re basically on the path to a banana-republic-type of financial situation in this country. And you just can’t do that. You can’t keep running these [federal] programs out [into the future] and not paying for them. And you can’t keep throwing debt on top of debt.”

“Standards of living will drop if we keep this up,” Gregg also said.

After repeated promises from the White House that the final health care reform bill will be deficit neutral, Gregg said a Democratic plan to avoid otherwise automatic Medicare cuts without having a funding source for the projected expense of $250 billion over the next decade was “gamesmanship.”

Asked about criticism leveled Sunday by former Republican-turned-Democrat Sen. Arlen Specter of Pennsylvania that Republicans were being obstructionist in the health care reform debate, Gregg replied, “Well, I suppose he has to call us something now that he’s left the party.”

Responding to the Democratic charge that the GOP is “the party of ‘no,’” Gregg pointed to Republican health care reform proposals including his own and another co-sponsored by Republican Sens. Tom Coburn and Sen. Richard Burr, as well as a bipartisan proposal put forward by Sens. Ron Wyden (D-OR) and Robert Bennett (R-UT).”

Gregg said the versions of health care reform voted out of the Senate Finance Committee and the Senate Health, Education, Labor and Pensions Committee would amount to “a huge expansion of government.”

“You’re talking about taking the government and increasing it by $1-$2 trillion over the next ten years,” Gregg said. He added that he thought growing government at that rate would have a “very debilitating effect” on the overall economy and the ability of Americans to get health care in the future.

At one point earlier this year, Gregg, who is not seeking re-election to his Senate seat in 2010, was President Obama’s choice to head the Commerce Department. But the fiscal hawk removed himself from consideration because of differences with the new administration on several policy issues.

Filed under: Health care • Judd Gregg • Popular Posts • State of the Union
soundoff (105 Responses)
  1. Liberal4Obama

    What is Gregg talking about? President Obama inherited a 1.2 Trillion dollar deficit from Bush and the good for nothing GOP.

    October 18, 2009 08:08 pm at 8:08 pm |
  2. Annie, Atlanta

    But it's ok, senator Gregg, to run two wars, one based on a lie, and let wall street run amok, while cutting taxes on the top 5%? That's ok, right? It's amazing how Republicans are only on board when it helps them and their corporate ceo friends and contributors, who then stash their cash in the Caribbean or Switzerland. Yet we keep voting these guys in. When are we going to learn? We need to wake up, America.

    October 18, 2009 08:12 pm at 8:12 pm |
  3. JT the concerned College Freshman from MO

    “Coming together is a beginning. Keeping together is progress. Working together is success.”
    Henry Ford quotes (American industrialist and pioneer of the assembly-line production method, 1863-1947)
    Personally, I believe that if we can pull together as one nation who is united, that would be the solution to truly getting out of this recession not only in our economy, but the recession in ourselves that is holding us back from doing what is right to help one another in this world. Just imagine our successes and what we can do if all 306 million plus of us pull together as one. As an 18 year old teenager, I have hope that one day before I die, I can see America becoming a truly great nation again. Lets not let us down. Our future depends on it, literally. CNN, please post this! I think a lot of people need to hear this. God bless our country, President Obama and his family, and God bless the world.

    October 18, 2009 08:15 pm at 8:15 pm |
  4. Jason B

    As Ayn Rand said, "Whenever destroyers appear among men, they start by destroying money, for money is men's protection and the base of a moral existence." Make no mistake, the Obamunists – Obama, Pelosi, Reid plus all who say Aye with them – are destroyers.

    October 18, 2009 10:01 pm at 10:01 pm |
  5. That one guy

    He's right. But it is Bush and Obamas fault.

    October 18, 2009 10:15 pm at 10:15 pm |
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