Coburn: U.S. "going to get another downgrade"
CBS News-- As Washington prepares for yet another battle over the growing national debt and an increase of the debt ceiling, Senator Tom Coburn says there's no doubt that the worst is going to happen again. "We're going to get another downgrade. I can tell you right now," said the Oklahoma Republican. "You can have a great legal case for suing the rating agencies for not downgrading us again because we have not demonstrated the political will to solve the problems," he said in an interview with Bob Schieffer for Face to Face.
Coburn, a member of the Simpson-Bowles debt commission and a long time spending hawk, says that last year's downgrade of the nation's credit rating from AAA to AA+ by the ratings agency Standard and Poor's was just the beginning. The agency made its decision just days after congress passed an 11th hour compromise to raise the nation's debt ceiling, cut spending, and establish the since failed Super Committee to identify further deficit reduction.
At the time, Standard and Poor's said it was it a "weakened" view of the country's political institutions, as well as the gulf between the two parties that "makes us pessimistic about the capacity of Congress and the Administration to be able to leverage their agreement this week into a broader fiscal consolidation plan that stabilizes the government's debt dynamics any time soon," in a statement.
Coburn says nothing has been done to change that outlook. "We should see another downgrade because we have not done the structural things that will fix our country. If you look what's getting ready to happen to us, in another five years, we're going to have $22 trillion worth of debt. We're going to have 120% of our total GDP in debt. If you look at historic interest rates, we're going to be paying $800 billion a year in interest. Where are we going to get that money?" he said.
In his new book, "The Debt Bomb", Coburn, a doctor, paints a bleak picture of the country's ability to deal with the mounting national debt and the tough choices required of politicians to solve the problem.
"I just think people need to know how we got where we are, and what the cause of the real problem is. As a physician, treating the disease rather than the symptoms is the important thing, and you have to diagnose what the real disease is. You use symptoms to get there. And the real disease in Washington is winning the next election at all costs rather than fixing the actual problems of the country," he said.
A second-term Senator, Coburn, like many other critics of Washington, says there's a lack of leadership in Washington to tackle the debt.
"If we can agree that's the problem - America will come together and coalesce around a compromise set of solutions. How you raise taxes, how you raise revenues is important, because you can raise revenues one way which stunts the economy, versus you can raise revenues in a way which actually encourages the economy. There's 2.5 trillion dollars sitting in business bank accounts right now not being spent. Why is that? Because there's no confidence, and certainty, about the future. Why is that? Because there's no leadership to get that confidence," he told Schieffer.
"We're our own worst enemy, because we're thinking short-term. You know it really isn't going to matter 10 years from now who controls the Senate and who's the President, because the financiers, the international financiers, are going to be telling us what to do.... I mean the reason the Senate's not doing anything of consequence is people don't want to take hard votes before an election. Well that's ridiculous. We're thinking about the small ball when the big ball is getting ready to roll into the gutter," he added.
Coburn said the underlying issues that must to be addressed are long term mandatory spending as well as changing the tax system to increase revenues.
"One of the ways you do is totally reform the tax code. We have $1.1 trillion in deductions and credits in the tax code. That's spending. We don't call it spending but directed spending through the tax code. That has to come down. And as you bring it down what you do is you lower the rates and broaden the base. I actually believe everybody in this country ought to be paying some taxes. I don't care where you get your money, if you're getting any money you ought to pay something so that makes you participate in the process," he said.
But, he said no fix can happen without significant changes to the entitlement programs, Medicare, Medicaid and Social Security, that are the programs many attribute as the cause of the nation's bleak long term fiscal outlook.
"The real problem is we're going to change Medicare. It has to be changed to be able to save it. Because we can't borrow enough money to continue it the way it is. We're going to make social security sustainable, and we're going to help the people who are on the bottom end of the rung actually better than what we're helping today but we're going to have to put some earnings limitations on social security. We're going to have to advance the age of eligibility," he said. "Those are all things people don't want to hear, but it's going to happen. Because if we don't do it, our people who are loaning their money, loaning us the money, are going to make us do it. We're going to be like Greece. That's the point I make in the book. In 2-5 years, if we have not changed what we're doing, we're going to be in the same shape Greece is in today," he said, referring to the fact that Greece became deep in debt in past because it spent heavily on welfare and entitlement programs for its citizens.
But many, including Coburn, say that the tough votes can't happen in an election year and with the debt ceiling increase looming in early 2013, some say the post-election lame duck session of Congress may be the best if not only opportunity to begin to solve some of the nation's problems.
"We have to reform the tax code, I think we should be doing it right now, Americans deserve to have that from the people they've elected up here. It doesn't look like that's going to happen, so we're going to do that in a lame-duck Congress where nobody's accountable - maybe that'll be a positive thing, maybe people will do what's in the best interest of their country rather than their party," he said.
However, Coburn says the real time to take action is now. "The fact is we've put ourselves in a six-week box to fix things that normally take six months to fix. Which goes back - why are we waiting?"
