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. Michael

    So AGAIN I ask Mr. Gregg and the other GOP members, what would they do to get us out of a situation they themselves got us into? How do they suppose we correct our fiscal travails that wouldn't have happened if regulation had been in place to keep the financial industry from crippling our economy? Oh, that's right; the GOP doesn't BELIEVE in regulation! So how would they get our economy back on track, by cutting taxes? Oh, wait...didn't they already try that? That didn't work out too well, did it? So maybe we should cut spending. I'd go along with that, except for the fact that they themselves spent BILLIONS on the Iraq war, Part D drug prescription benefit, adding a new government post, among other things. It's very interesting how short a memory people have when they're out of power.

    October 18, 2009 06:14 pm at 6:14 pm |
  2. Norman Richardson

    Is CNN trying to be "FOX lite" . You seem to be trying to create new controversy to pass off as news.

    October 18, 2009 06:15 pm at 6:15 pm |
  3. victim of republican greed

    Will someone please hire Sarah & Todd so we can get them off the list of the unemployed?

    October 18, 2009 06:19 pm at 6:19 pm |
  4. Dennis

    Judd Gregg is absolutely correct on this one. Huge deficits are unsustainable which currently is the result of huge war expenses and decreased revenues caused by large layoffs because of the financial crisis caused by Wall Street.

    Therefore the solution is quite simple. Eliminate the huge military budget and the funding of the needless war machine and tax the hell out of the very people who were the cause of the reckless fiscal policies. This will get the budget back in balance in short order.

    I seriously doubt that Judd would buy into this solution, since he has continuously supported the failed policies of Reagan and Bush who were responsible for the bulk of the debt this country has today.

    October 18, 2009 06:19 pm at 6:19 pm |
  5. On the other hand...

    Senator Gregg states clearly here what so many people who support Obamacare just ignore; this outrageous debt is sinking the future of our country. It is better to talk about this now instead of waiting until people pay more than half of what they earn to help the Federal government pay this back. That is, those lucky enough to find jobs as our economic problems are perpetuated under such a heavy debt load.

    October 18, 2009 06:20 pm at 6:20 pm |
  6. Every

    John King is biased! He always INFACTUATED with repuglicans and give them more time or a bigger voice on his show! Gregg is just another doomsday repuglican talking head! He and these tea baggers, republicans and some socalled independents hide behind manufactured policy differences, so their racist agenda cannot be attacked! Here is one example! George Bush squandered 5 trillion, did not pay for 5.4 trillion in tax cuts, child medicare, or disability bills, bailouts, and left Obama over 8 trillion deficit! HOW IS OBAMA HURTING OUR GRAND CHILDREN! GEORGE BUSH DID THAT, HE DID NOT PAY FOR NOTHING! Almost 400 billion of Presidents 1.4 trillion budget deficit is from George Bush! Under George Bush this country almost went into depression, 2 Wars, 2 nuclear threats, Wall Street, Auto, Mortgage, Healthcare, and Banking crisis! WHERE WERE THESE TEA BAGGER PROTESTERS AND DEFICIT HAWK REPUBLICANS! WELL, BUSH WAS A WHITE MAN!

    October 18, 2009 06:21 pm at 6:21 pm |
  7. m jeff

    Another GOP Clown waking up after being sleep for eight years.

    October 18, 2009 06:21 pm at 6:21 pm |
  8. connie

    Well Mr. Gregg who should we blame. When Clinton left office there was a federal budget surplus and after 8 years of GWB and the Republicans now we have a deficit exposion. Where were you then?

    October 18, 2009 06:23 pm at 6:23 pm |
  9. emsnews

    Naturally, the GOP operatives won't take any blame for doubling and redoubling the national debt over and over again. Reagan tripled it and not one GOP mouth sounded any alarms at all.

    When Clinton came into office, suddenly these spend thrifts became balance budgetteers. Then when Bush climbed into the White House, they happily doubled the debt, as per usual.

    October 18, 2009 06:24 pm at 6:24 pm |
  10. Len (Colorado)

    Seantor Gregg,

    I do not recall you saying anything about the Bush Administration's 9 trillion dollar deficet. And where were you when the Bush Administration launched an "illegal war in Iraq" and were spending billions of dollars per month! And much, much more.....You and the entire Republican Party are nothing but hypocrits!!!

    October 18, 2009 06:26 pm at 6:26 pm |
  11. Lynne in CA

    Hmmm.. if I remember correctly, Bill Clinton had the national debt paid off during his presidency. George W. Bush leveraged America by billions of dollars to fund a war based on lies. Yep...more Republican rhetoric.

    October 18, 2009 06:27 pm at 6:27 pm |
  12. Barack reads his lies, Unions Thrive and the Economy dies.

    Nice to see someone in Washington has a brain on their shoulders. We used to be a country to be envied, now we are a country going into pathetic almost irreversible debt, mortgaging our future, and a country about to destroy our healthcare system and destroy our utility industry with Cap and tax.

    Hold onto your wallets everyone, Obama is coming to take as much as he can from you, all in the name of Yes he can, and will.

    Obama's administration, takes credit for anything positive, but never has the guts to take the blame for any of their policies. According to them, Bush is stil running the show, what a joke these guys are. Grow up and take some responsibility for your pathetic actions. With Bush the Dow was over 14,000 and the unemployment rate was under 6% and real wages were growing. With Obama, we are going in the exactly the opposite direction, but sure enough they believe Bush is still running the show, lol.

    October 18, 2009 06:31 pm at 6:31 pm |
  13. Cindy from NC

    It is amazing that anyone who has had to live within a budget, and that is pretty much every adult, doesn't understand that you can only get by for so long covering bills by using new debt . No matter if you are an individual, a busines, or the US Goverment! Did all those liberals who called us conservatives, idiots, blah, blah, blah, and voted for Obama not realize that Social Security was already bankrupt from all the IOUs the federal goverment has been exchanging for real money? That has been happening for quite some time, Democrate and Republican parties both guilty. Many voters didn't trust Obama, not because he's black, but because of his socialist leanings. The more he pushes goverment intervention the more debt we will incur. What is so scrary is that we have barrowed so much money from our enemies and there appears to be no end in sight. The American people are to be taxed so heavily for health care that there will be nothing left to pay off China. If they decide to demand payment will we sell our children like the third world countries? Silly question?, crazy thinking?; well we have already put IOUs in their bank accounts.

    October 18, 2009 06:31 pm at 6:31 pm |
  14. Jim in Florida

    God, Obama is making a mess out of everything he touches and all we hear on the "news" id Rahm Emmanuel blaming Bush for everything.

    When is this administration going to show some backbone in foreign policy and some common sense in economic matters. Too busy running around the world blaming Bush andf apologizing for America. Obama'sm every speech still sounds like he is running for President.

    Toy wanted the job Obama, now grow up , stop adoring yourself in the mirror every morning and act like a President.

    October 18, 2009 06:31 pm at 6:31 pm |
  15. Mike A

    The Bush years and Republican majority have already caused a drop
    in the standard of living in all but the very top thanks to a total lack of government oversight of the financial secotr and their irresponsible tax cuts for the very richest in the country.

    October 18, 2009 06:32 pm at 6:32 pm |
  16. S M R

    Mr. Gregg: Where in GODS EARTH were you when 43 was spending President Clintons surplus?,starting a war in Iraq with NO WMD(cost 10 billion a month)? bailing out A.I.G and Wallstreet with NO REGULATION OR OVERSIGHT?, TAX BREAKS FOR THE RICH when we couldn't afford it (2 WARS)? GET MY DRIFT?

    October 18, 2009 06:33 pm at 6:33 pm |
  17. HJA

    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.”

    That's right. Don't spend money on people. We have to keep feeding the national war machine. Bush and Cheney didn't pay for the war, they borrowed against it. That's much better. Borrow to kill people. It's the thing to do! Spoken like a true Republican.

    October 18, 2009 06:35 pm at 6:35 pm |

    I hope cnn wil print this one. What is wrong with all of these right wing NUTS, why can we not blame bush? after all he is the one that ran up the debt while the republicans sat back and let him run amok. billions in cash on palates sent to iraq that was never accounted for, also billions in no bid contracts to haliburton. billions that was under the table and hidden so no one would know about it. also he robbed social security plus he did not include the cost of his wars in the budget . and the republicans sat idly by while all of this was happening.

    October 18, 2009 06:35 pm at 6:35 pm |
  19. Tek

    Actually, you can blame the previous president. The Bush administration is one of the biggest spending administration is history. Conservatives that blame Obama are just being hypocrites because they are the ones that voted for all the big spending projects during the previous administration.

    October 18, 2009 06:38 pm at 6:38 pm |
  20. victim of republican greed

    It has to be difficult to be a wingnut and live in constant contradiction:
    While we would all like to see the fewer abortions, the wingnuts then seem to be OK with the deaths of 45,000 who do not have health insurance. Tax cuts for the rich are OK, but not for the middle class. Debt is OK if it is for wars and bailing out banks, but not for job creation or health care. They want small government, except when they want government to step in and regulate cases like Terry Schaivo, women's bodies and wiretapping.

    I think everyone would feel better if they were a democrat.

    October 18, 2009 06:38 pm at 6:38 pm |
  21. Hank in Seattle

    "“Now you can’t blame that on [former President] George [W.] Bush,” Greg said..."

    Simply put, hogwash! The CBO projected that deficits above $1T would result from the Bush tax cuts. John McCain called them irresponsible in 2001 and 2002...and guess what? They were irresponsible! Add an unfinanced invasion of Iraq based on faulty assumptions, utterly lax enforcement of banks and financial firms, and unsound policies on health, the environment, and science. That's the path we took to where we are today.

    The policies of George Bush, enthusiastically endorsed by the Republican Party, put this country in the financial ER. We are going to be in the ICU for a while and then recovering for quite a while longer. Don't blame the doctor when you act foolishly and require emergency medical care. That the bill for returning to health is high should be of no surprise.

    October 18, 2009 06:38 pm at 6:38 pm |
  22. Greg, San Francisco, CA

    You're a banana, Gregg. You were asked to join the administration and actually help and instead have become a lying nuisance. You seemed to be A-OK with running the Iraq War into the indefinite future without paying for it.

    October 18, 2009 06:44 pm at 6:44 pm |
  23. Kurt Skaronea

    When one group stands and says we are all right and you are all wrong beware. The Bush administration passed medicare expansion and tax cuts without paying for it. Senator Gregg is a partisan hack which is a shame. His points are absolutely true. But he fails to clearly state why we are where we are at, and the steps necessary to correct the deficit issues. The recession mandated the spending levels we are at. Those levels will be curbed going forward. Health care reform if done properly will begin to bring down the budget deficit. Next up, social security reform that is real. Clear those two issues up and our future is bright.

    October 18, 2009 06:46 pm at 6:46 pm |
  24. HarryB

    Funny, we never knew that Gregg was a deficit hawk when Bush and his Merry Warmongers was turning Bill Clinton's huge budget surplus into a huge deficit. Would a few more tax cuts lower the deficit, Judd?

    October 18, 2009 06:52 pm at 6:52 pm |
  25. Susan

    Guess what, Sen, Judd. The standard of living here has already decreased because of Bush tax cuts that were supposed to create jobs and didn't, Bush war spending that was supposed to be limited and wasn't, and skyrocketing health care costs, which will, indeed, ruin this country unless the government takes control. Insurance companies are in it for profit, not for the welfare of us. They make money by denying services and dropping the insured once they make a claim. We have to raise taxes in a fair manner...the wealthy are NOT paying anywhere near their fair share. I challenge you to support the flat tax...no deductions, everyone, and I mean everyone, pays 15% off the top of all their income. The only deductions would be for charitable giving. I dare you!

    October 18, 2009 06:53 pm at 6:53 pm |
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