Sen. Coats: Government must change fiscal path
Posted: 11/02/2012 at 6:41 pm
By: Justin Leighty
Click here to view in a gallery.
Senator Dan Coats talks with a reporter 8/17/2011. Sen. Coats was at the Greater Elkhart Chamber of Commerce talking with representatives of the RV industry. (Truth Photo By J Tyler Klassen)
Indiana Sen. Dan Coats talks with a reporter on Aug. 17, 2011. Coats addressed the Greater Elkhart Chamber of Commerce at Elcona Country Club on Friday.
Truth Photo By J Tyler Klassen
“We’re broke, and we’re going to stay broke unless you back people who not only say the right things but do the right things,” the Republican — soon to be Indiana’s senior senator — told the group of business leaders and elected officials.
Coats, who isn’t up for re-election this year, focused on the looming “fiscal cliff” and the deeper problem of the federal budget.
“We’ve got to get ahold of this thing or we’re going to be a declining nation,” he told the group.
He focused on four areas needing reined in: Spending, complex exemptions and credits in the tax code, regulatory reform and the “third rail” of politics, entitlement programs.
“If they’re not structurally reformed in a sensible way ... they’re going to come down,” Coats warned on the entitlement programs.
Next year will be the key to fixing the federal budget problem, he said, because Congress will step back in 2014, the next election year, “2015, in the estimate of a lot of people, including myself, is too late. We’re going to hit the wall, and so 2013 is going to be the golden year, the key year,” Coats said.
If tax cuts are allowed to expire at the end of the year, the average family of four in Indiana will see their taxes increase by $4,100.
Congress will likely act before then, though the options are either to “belly up to the bar” and fix the problems, or at least keep the status quo until next year, Coats said.
Though he’s not running this year, the election played a big role in the discussions between him and the audience.
The uncertainty out there about federal tax rates and what Obamacare will mean for business owners is holding them back, he said.
“I think the jobs report today indicates that we are still struggling to get our head above water,” he said. The economy is not growing nearly fast enough to get people back to work.”
He also said, “There’s this dark cloud of uncertainty over business owners in terms of what their tax rates are going to be, what their health care obligations are going to be, what our economy’s going to be like, so they’re holding back on expanding their plant, buying new equipment, on hiring more people,
“They basically say that, ‘This stalemate at the federal level is just causing a lot of uncertainty and it’s holding down our ability to expand and make good decisions for the future,’ and so there’s a challenge to the new president, the next president, or to the Congress: It is to provide certainty in terms of what the policies will be regarding all these factors that affect business decisions.”
He continued, “it’s not just the economy, it’s hurting people. It’s hurting kids that don’t have jobs coming out of school, it’s hurting those who’ve worked in the workplace that have lost their job or cut back in their pay, it’s these 23 million people that are out of work or underperforming in their work, we can’t keep going like this at this anemic rate of growth.”
Coats continued, saying the problem is one of “simple math,” echoing Gov. Mitch Daniels. “We are heading toward a financial crisis which, if we don’t address pretty soon, well, it will be too late. We cannot keep spending $1.3 trillion a year more than we take in without having a serious impact on our economy and putting more and more people out of work,” Coats said.
He also answered questions on several topics from the audience and from reporters.
When asked about Libya, Coats, a member of the Senate Intelligence Committee, expressed his frustration.
“We have a situation that needs explaining,” said the former ambassador to Germany, “and needs a time line. We need the truth of what has happened as a consequence of the calls for help.” He pointed to an assassination attempt on the British ambassador, who was pulled out, and an attack on the United Nations presence, which then pulled out of the country before the attack which killed the U.S. ambassador and several others.
“To define what happened in seven hours, and seven weeks later say we still don’t know the answers, is either gross incompetence or gross cover-up. We need to address this as one or the other.” He believes the report to the committee is being held by the administration until after the election.
“This is not right,” he said.
THOUGHTS ON OBAMA
“Change comes about either through leadership or through crisis. We’re not getting the leadership, in my opinion, we need to bring people together. The great uniter the president wanted to be has not taken place,” Coats said. “What Ronald Reagan did and Jack Kennedy did was bring people together to get things done, and that has not happened in this administration,” he said.
He also said the president and the Democrat majority in the Senate are responsible for pushing the country so close to the cliff. “The president has said he’s not going to take it up before the election. The leader of the Senate, Harry Reid, said we’re not taking it up before the election. The House said they’re willing to take it up, but that’s only one of the three, and being in the minority in the Senate we do not have the ability to override the majority.”
He added, “I think probably the greatest mistake the president made was turning down the Simpson-Bowles Commission report as a base on which to start” fixing the budget issues, since it was a bipartisan effort.
Coats also disagreed with the idea that Obama is a pragmatic politician. “A pragmatist would’ve jumped on Simpson-Bowles. It gave him cover,” Coats said.
“The president has passed on many opportunities to be a pragmatist, to be someone as he described himself in his campaign as a uniter,” Coats said.
“There is proof on the table that four years of the current policies have not worked very well,” he said.
HOW CAN TAXPAYERS CONTINUE WITH STUDENT LOANS AS THEY ARE?
“We never should’ve turned the whole thing over to the federal government, the Department of Education,” he said, noting that he fought it and it was stuck into Obamacare.
“Just like anything else that goes there, that department becomes the policy initiator for that. In this economy they kept encouraging kids to stay in school, borrowing more money, more money, more money,” he said.
“The default rate is up five times. So instead of the private sector, banks and guarantory agencies saying, ‘Look, you’re at the level now where you’re not going to be able to pay this back, we can’t keep loaning money like that, you’ll have to figure out something here,’ ... Depending on who’s in charge, if they can get it done, they’ll pass a law basically saying you don’t have to pay it back because you’re too saddled with debt.”
WHAT DO YOU EXPECT IN THE INDIANA SENATE RACE?
“Obviously I would like to have somebody there who won’t cancel out my vote because he’s on the other side of the aisle. This race for the Senate here is too close, I think, for anybody to predict what will happen on Election Day. Control of the Senate is at stake, and I think the clear choice for people is not just one of the two candidates, but do you want Harry Reid to be leading the Senate or do you want to give the other guys a shot?”
He said he’s seen a mix of polls on the race between Republican Richard Mourdock and Democrat Joe Donnelly, but, “I’m not a big believer in relying too much on polls.”
WILL LEADERS REALLY MAKE THE NEEDED CHANGES, OR KEEP PUTTING IT OFF?
“I’m trying to be an optimist on that question, because I think the reality of not doing what we need to do — addressing excessive spending, reforming our tax code, restructuring entitlements and getting ahold of this regulatory, out-of-control regulatory regime — not doing that is producing results that are just unacceptable to the American people, he said.
“I hope everybody that’s up for election and everybody coming back for this lame-duck session and the next Congress will recognize that this is the responsibility given to them by the American people, and they’re not going to stand for anything less other than a solution. I want to continue to maintain that two more years of gridlock in the Congress is going to have a devastating effect on this country.”