Waters holds town hall on debt ceiling, congressional budget impasse
BY GARY WALKER
A raucous crowd of over 150 people attended an early morning town hall meeting July 23 to hear Rep. Maxine Waters (D-Westchester) give an update on the ongoing debt ceiling discussion in Congress, as well as her take on the ramifications of a government default for her constituents.
Waters began by giving a brief description of the debt ceiling and why it was important to have Congress raise the limit, which has been done over 80 times since the 1960s. The congresswoman noted that the vast majority of resistance to raising the ceiling comes from conservative congressional Republicans, who advocate for slashing federal spending but vigorously oppose tax revenues.
She also noted that the debt limit was raised 18 times by Ronald Reagan and on seven occasions under George W. Bush – both Republican presidents – without fanfare or demands for spending cuts.
The debt ceiling, which was established in 1939, functions as a cap on how much can be borrowed by the Unites States government and it has been raised several times under both Democratic and Republican presidents. It currently stands at $14.2 trillion.
Waters said President Barack Obama has offered to make concessions by considering revisions to Medicare and Social Security, a move that she opposes. But she feels that her Republican colleagues in the House are siding with high-income earners and corporations against the middle class.
“They have decided that rather than repealing the Bush tax cuts for the richest people in America, they’re going to get the money to pay down the deficit by using our Social Security money by changing Social Security, Medicare and Medicaid as we know it,” she asserted. “And I’m worried about that.”
Waters, who is in favor of raising the ceiling, said the acrimonious debate has held up budget talks and has prevented lawmakers and the president from pursuing policies to jumpstart the nation’s economy.
“It’s at the top of everything,” she told the audience. “We can’t even talk sensibly and logically about the budget until we get this issue resolved.”
The congresswoman devoted more than an hour to answering questions from the audience about the debt ceiling and the proposed budgets from Democrats and Republicans.
Many of the questions and statements from the audience had a partisan tone to them, with some claiming the president had not shown leadership on budget discussions. Others chastised the previous administration for the costly wars in Iraq and Afghanistan and a 2005 prescription drug bill that Republicans, who until 2006 held majorities in both the Senate and the House, did not pay for.
One speaker pointed out that Obama had voted against raising the debt ceiling as a United States senator and asked Waters to comment on that fact.
“I think that he now realizes that what he said then as a senator does not quite fly as president when he has the whole nation to consider and to balance all of these competing interests,” Waters answered.
Dr. David Offenberg, a professor of finance at Loyola Marymount University, said despite proclamations from “Tea Party” affiliated Republicans, the possibilities of severe economic repercussions are real.
“There are two major implications. First, the United States will probably default on its debt. That would be historic, but not in a good way,” Offenberg said. “Keep in mind, U.S. Treasury bonds are traded more than any other security in the world…more than any one stock, or gold, or oil. That means that the financial world relies on the U.S. Treasury bond as risk-free investment.
“If we default on our debt, foreign investors will immediately sell off their holdings. That would in turn increase the demand for foreign currencies and decrease the demand for dollars,” the professor explained. “The dollar would crash, oil prices would skyrocket.
“Second, the U.S. government will stop spending money. Government jobs and contracts will disappear, which will slow down the recovery. We would likely end up back in a severe recession.”
Waters pointed out that many large corporations do not pay taxes as one of many examples of corporate tax loopholes that she and other lawmakers would like to close. “(General Electric) did not pay any taxes last year. They got a tax refund,” she said. “And they ship jobs overseas.”
Waters said she favors a “balanced approach as much as I can” regarding budget matters and the deficit, and said she was open to considering certain cuts, as long as there were revenue increases as well.
“But I’m also very clear on some things, like not touching Social Security, Medicaid and Medicare, so that you all know where I’m coming from,” Waters added.
Offenberg, like many, feels that the stalemate over the debt ceiling has partisan overtones. “To be fair, many economists believe that the U.S. now has an unsustainable level of debt, and efforts need to be made to bring the public debt down in the coming years,” he noted. “There are many ways to do that responsibly via methodically reducing government spending and raising taxes.
“Failing to raise the debt ceiling is just irresponsible, but plays well to a certain part of the electorate who has not had a good economics class yet.”
The congresswoman said the debt ceiling impasse is diverting legislators’ attention away from what most polls suggested the public is most concerned with – employment.
“We need to be creating jobs,” she said to sustained applause. “We need to repair our infrastructure throughout this nation. We have bridges that are falling down, roads that need repairing, sewer systems that need to be redone.
“When we create jobs and people are paying (taxes), then we can afford the basic, necessary and sensible services that we must have in this country.”
The congresswoman said many of her colleagues do not host many town hall meetings anymore.
“They don’t like to hear the opposition, they don’t want to hear people shout at them, but I can take it all,” she said with a smile. “I have no problem with that, and we will continue to have them.”
Carol McMillan, the vice president of the Westchester-Del Rey Federation of Republican Women, said she was glad that Waters called the town hall meeting.
“I just think that it would be good for one group not to demonize another,” McMillan said. She also claimed that many local Republicans that she knows feel “disenfranchised” in the 35th Congressional District, which Waters represents.
At the end of the town hall, the congresswoman recognized local Westchester and Playa del Rey residents in the audience, including Los Angeles Airport Commissioner Valeria Velasco and Jeffrey and Candace Yip.
Waters assisted the Yips, who live in Westchester, in beating back an attempt by cellular phone company T-Mobile to install a tower five feet from their home. The Argonaut reported on the story last summer.