Woodall: Debt Crisis Escalating

In part two of our with Rep. Rob Woodall, the freshman congressman weighs in on the current debt crisis.

Earlier this week, when Standard & Poor’s (S&P) due to the country’s large budget deficits and increasing debt, Rep. Rob Woodall (R-GA-07) described the downgrade as “a big deal ... big and bad.”

The administration has since been on the offensive with Treasury Secretary Timothy Geithner making assurances that the United States’ triple-A credit rating is in no danger of being downgraded.

Woodall disagrees with Geithner’s assessment and said the debt outlook rating is very serious.

“Geithner has to go out there and make people feel better because it’s really that scary,” he said. “It’s really so catastrophic that his job is to make people feel good because even thinking about feeling bad has that much of an impact on the economy.”

Woodall said his job, in contrast, is to convince voters the situation really is serious in order to make sure elected officials are held accountable. Currently, lawmakers have been dealing with four separate budget related issues: the debt limit, the fiscal year 2011 appropriations, the fiscal year 2012 appropriations and the 10-year budget.

“We’re ready to leave it all out there on the field,” Woodall said referring to himself and the freshman class of 86 other Republican representatives. “We really do believe that the nation suffers if we don’t stand our ground. Somebody has to go out there and be in front.”

Woodall said one of the nice things about representing Georgia’s 7th Congressional District is that he has the freedom to make tough choices without worrying about the impact those decisions will have on the political makeup of the Congress.

“If I am defeated pushing the cause, we’re not going to elect a liberal democrat,” he said. “We’re just going to elect another conservative, a conservative of a different flavor to get right back in the game and keep pushing it.”

That belief gives Woodall a tremendous sense of freedom, he said.

“I don’t have to do the political calculations … I don’t have to worry about that because a conservative is going to represent the 7th District of Georgia no matter what,” Woodall said. “I just have to go out there and do the very best I can for two years and the rest of it takes care of itself.”

For Woodall, doing his best means fighting for $6 trillion in new cuts and addressing the country’s $14.3 trillion debt.

As the country’s annual deficits have ballooned from an average of 2-5 percent of gross domestic product in the years spanning 2003 to 2008 to a significantly higher 11 percent of GDP in 2009, the accumulated debt has also risen. Each year the United States runs a deficit, it must borrow money to meet its obligations. By law, the United States cannot borrow any more money once the total debt reaches the statutory debt ceiling, which is currently $14.3 trillion. That limit could be reached as soon as early May. If the Congress does not raise the debt ceiling, the United States could be forced to default on its debt.

“The debt ceiling is one of those things that shuts the government down,” Woodall said. “If we are not allowed to borrow, the law of the land today says we don’t send out anything.”

In other words, Woodall says, if there is not enough money to pay all of the country’s obligations, the government shuts down and none of the obligations are paid. Woodall has co-sponsored legislation to change that.

“If we ever got to a government shutdown, the good news is we could begin to re-open the government one important program at a time. What we might find is there are a whole class of programs where no one cares if they get opened back up or not,” he said.

While some lawmakers favor separating debt reduction negotiations from discussions about whether or not to raise the debt ceiling, Woodall said the debate provides an opportunity.

“The debt ceiling is a big deal,” he said. “We’ve increased the debt held by the public by over 50 percent in the last two years alone. We increased it by 25 percent in the two years before that.”

With the public focused on the staggering amount of debt, Woodall believes the possibility exists to push through meaningful spending cuts.

“There is no set of circumstances that I can vote for a debt ceiling increase that does not include the recognition and the solution for the out of control spending,” he said.

Whether the country defaults on its debt or continues borrowing at the current rate, both outcomes could be “cataclysmic,” Woodall said.

According to Woodall, the problem has become so large the discussion is no longer about growing the economy to bring the country out of its economic doldrums. As the economy rebounds, interest rates go up – a very serious problem given how much of the United States debt is currently financed over a short term. Once the debt comes due and must be refinanced, the rates will be much higher further escalating the debt crisis, Woodall explained.

“We’re not just borrowing a new $1.4 trillion in higher interest rates, we’re refinancing $7 trillion more at high interest rates,” Woodall said. “We’ve never faced that.”

Still, Woodall remains optimistic his party will be able to make a difference by cutting debt at every opportunity and addressing spending in each annual budget rather than pushing solutions down the road to be dealt with by future lawmakers.

“I believe we’ve tackled these cataclysmic things sooner and better than our friends on the left,” he said. “We’re going to have to lead the way.”

Visit Dacula Patch tomorrow for the final installment in this three part series.