The easy way out would have been to vote against the compromise on raising the federal debt ceiling earlier this month, U.S. Rep. Mike Coffman told a crowd at a fundraising luncheon for the state GOP last Thursday in Denver.
If he’d done that, Coffman said, he could have told conservative audiences he stood in the way of more government borrowing, and he could have told liberal audiences he had drawn the line against deep spending cuts.
“But it’s something that had to be done,” he told members of the Colorado Republican Party’s Capital Club, which gathers every month at Maggiano’s Little Italy restaurant in downtown Denver.
“The fact is, we have to govern,” Coffman said in response to questions from some skeptics in the crowd. “It’s one thing to be in the minority, it’s another thing to be in the majority.”
Republicans took control of the House of Representatives in the 2010 elections, when the Aurora Republican won a second term.
Coffman said the debt ceiling compromise, approved by Congress just hours before the federal government would have reached its borrowing limit, secured the most spending cuts possible because of the dynamics between opposing sides that have both dug in their heels.
“For every Republican vote we lose and have to go across the aisle to get a Democrat vote, the (spending reduction) numbers go down,” he said. “Is it the best deal we could have got? I think it is, because we are deadlocked. You and I disagree with that,” he said directly to a Capital Club member who questioned his vote.
The standoff over the debt ceiling makes stark the differences between the core values of the two parties, Coffman said, and it’s not going to be resolved easily or anytime soon.
“I, along with most Republicans will not increase taxes. The Democrats are not going to do entitlement reform. The deadlock, I believe, will be broken in the 2012 election, and the country will chose which way to go,” he predicted.
The problem that only Republicans are willing to tackle, he said, is the explosive growth ahead for what the government terms “mandatory spending,” or entitlement programs such as Social Security and Medicare, along with interest on the debt. Those sums account for 62 percent of the federal budget and aren’t debated every year as part of annual appropriations measures by Congress.
“The growth of entitlement spending, unless reformed, will add another $14 trillion to the debt,” Coffman said, and the only way to head off this calamity is to adjust the eligibility formulas, something he said Democrats in Congress are loath to consider.
But forcing the federal government to face up to the crisis, he said, is exactly what voters can count on GOP lawmakers to do.
“If not for Republican control of the House of Representatives,” he said, “we wouldn’t be having that debate at all. This country would be simply be slipping into insolvency.”
And the reason it looks like a crisis, he said, is because it is one.
“If we act soon, we can turn this around,” he said. “If not, we’re going to be in a Greece-like situation where there’ll be so many folks depending on the government that there’ll be civil disturbances in this country.”
Coffman said that fixing runaway entitlement spending only takes a few simple, though drastic, measures, but he worried aloud whether Republicans will be able to communicate the depth of the problem and the wisdom of the party’s proposed solutions.
Democrats took a House seat in a special election in New York recently by hammering the Republican candidate for his vote on a GOP proposal to reshape Medicare, a constant campaign theme sounded by Democrats in the run-up to next year’s election. But Coffman said an analysis of that election shows a different message than the one usually drawn from it.
“If Republican would have been out front about what the (Medicare) reforms are, instead of not fighting back,” he said, “we could have held that seat.”
Then he outlined his proposals to rein in entitlement spending and added that “the sooner we do these reforms on entitlement, the less dramatic they have to be.”
To fix Social Security — which critics contend isn’t a problem at all, and is, in fact, running a surplus based on payroll tax hikes instituted during the Reagan years — Coffman said the retirement age must be raised gradually for those under age 55, eventually reaching 70 from the current 65.
Medicare will need to be “income-adjusted” for those under age 55, so that the government health insurance pays out most to those who can least afford it on their own, Coffman said. He also suggested that shifting the program from one administered by the federal government to one handled by private insurance carriers would save money.
To tackle the costs of Medicaid, a federal program administered through the states for the poor and disabled, Coffman said the government should take a page from the Clinton era.
“What we need to do there is exactly what we did in 1996 in welfare reform, where we said from a federal perspective, this is no longer an entitlement,” he said. Instead, the feds will tell the states they’re getting a limited amount of funds and then say, “You can devise your own solutions to the problems.”
These steps, he said, would go a long way to breaking an entitlement-spending wave that threatens to engulf the economy.
“To me, these are not bold ideas, but in the context of Washington and the Democrats, they’re very bold,” he said.
While he charged Democrats with failing to consider taking on entitlement reform, he said Republicans intend to be equally intransigent over the question of higher tax revenue.
“Republicans are opposed to increasing the tax burden,” he stated flatly. “We’re all for tax reform,” he added, but noted that closing loopholes in the tax code would need to be met with commensurate reductions in the overall tax rate,” so that the government doesn’t take any more money from the economy than it is currently.
“That would be a stimulus in and of itself,” he said, by cutting the “extraordinary compliance costs” of navigating the complex tax code.
Coffman contrasted the approach of President Barack Obama over the last two years with the one taken by President Ronald Reagan during the 1980s and said history shows that cutting taxes, not treating the private sector as the enemy, is the route to recovery from deep recessions.
Even with all the federal spending undertaken since Obama was inaugurated to stimulate demand and get the economy moving, Coffman said, the “demand-side” approach has come up short.
Ticking off Obama initiatives that have included the massive federal stimulus — which Coffman termed “a grab-bag of liberal programs that had collected dust over the last 30 years” — and the Cash for Clunkers program and investments in renewable energy, Coffman stated simply: “It hasn’t worked.”
Since World War II, he said, the average length of recessions has been five quarters before the economy returns to its pre-recession levels, with the longest stretch lasting just seven quarters. “We are now in the 12th quarter of this economic downturn with no end in sight,” he lamented.
The problem, he said, is that Obama looks to how President Franklin Roosevelt responded to the Great Depression and concludes that, “FDR didn’t spend enough,” an observation that drew titters from the crowd. But otherwise, Coffman said, Obama and congressional Democrats are taking a similar approach, one he said is equally misguided.
“Raising taxes during a down economy, increasing the regulatory burden on businesses, demonizing business — which this administration does on a daily basis — and being opposed to foreign trade,” even though the Obama administration says it supports free trade, were all methods Roosevelt applied without much success, Coffman contended.
Coffman contrasted the economy’s performance under Obama with how the economy rebounded under President Ronald Reagan, who, he said, turned things around quickly by cutting taxes.
Instead of looking to the past, Coffman said, Obama should cast his eyes to the north. Even Canada, which has “gone down a different path than the United States,” he said, is seeing strong growth because it has “reversed direction” on its social welfare programs and slashed its top corporate tax rate to half what the U.S. government charges.
But changing direction won’t be easy, Coffman said, referring several times to the choice voters will make in next year’s election as pivotal.
“We are in an incredible struggle. And it’s not going to get any easier.”
Coffman acknowledged that tackling the country’s problems with what looks to outsiders like one endless shouting match isn’t endearing Congress to the public.
“People complain about Washington today,” he said. Referring to Congress, he added, “I think we have an approval rating of 13 percent, is it?” He noted that he was recently asked by a reporter whether he was concerned about that.
“Historically,” he said with a grin, “we’ve been somewhere between pedophiles and trial lawyers, and pedophiles are passing us up.”