By Jonathan Bronstein, Talk Radio News Service

House Majority Leader Steny Hoyer (D-Md.)

When financial giants Bear Stearns and AIG crashed, the American government came to their rescue to maintain stability of the economy. When “too big to fail” Freddie Mac and Fannie Mae did fail, the American government stepped in and prevented their demise.

However, “If a fiscal meltdown comes, there will be no one to bail out
America,” said House Majority Leader Steny Hoyer (D-Md.), adding that the U.S.’s lack of a responsible fiscal policy for the last 30 years has placed the nation in dire economic straits.

Hoyer spoke yesterday at the Bipartisan Policy Committee.

America’s 2009 budget is contending with a $1.7 trillion deficit, which will only inflate the national debt to $11 trillion. More than $3 trillion of that debt is held by foreign lenders, specifically China.

“Our debt has never been higher…(This) is our sad, debt-ridden fiscal state,” said Hoyer. As a result “hundreds of billions of dollars every year – hundreds of billions that could strengthen our national defense, or help young Americans go to college, or fund research for the next energy breakthrough – will instead go to interest payments, merely to keep us solvent.”

Hoyer stressed that Congress must take the lead and reform the nation’s economic policy in order to prevent such a devastating, demoralizing and dangerous event from ever occurring.

The first, and most important way to reshape America’s fiscal future is to reform the entitlement programs, such as Social Security Medicare and Medicaid.

“We will not bring our debt down if we do not reform entitlements,” Hoyer said, but cautioned that it will not be possible without bipartisan support. He cited Social Security reform in 1986, which was only possible because of a compromise between the Democratic Speaker of the House, Tip O’Neil, and President Ronald Reagan.

By Michael Ruhl, University of New Mexico – Talk Radio News Service

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House Minority Leader John Boehner (R-Ohio)
Photo by Michael Ruhl

House Minority Leader John Boehner (R-Ohio) called congressional voting cards “the most dangerous credit card in the history of the world”, because then enable Congress and the president to engage in reckless spending. This was not Boehner’s first criticism of Obama, but his statement came on the 101st day of the Obama Administration, a time which Boehner has criticized as being pock marked with excessive borrowing, reckless spending and a massive growth in government.

Boehner said that Democrat’s “record on spending and debt is staggering, but our economy is growing weaker, and it’s not going to get any better by growing the size of the government here in Washington.”

Boehner believes that the Democratically controlled Congress has enabled and contributed to the recklessness, and thinks it is up to the Republicans to put a stop to it. Republicans must be “the party of better solutions” if they are going to stand up to the Democrats in Congress, Boehner said, adding that he hopes Democrats will be committed to a bipartisan policy approach..

Citing the elections of 2008, Boehner said “out brand has been tarnished”, but to help the party serve the American people, Republicans must stand up to the Obama Administration when disagreements arise, and to offer alternative solutions.

Leader Boehner applauded President Obama on his strategy towards Afghanistan and Iraq, but showed concern at Obama’s greater national security policy.

“The big question continues to be: what is the Administration’s overarching plan to fight terrorism? Judging from their recent decision to release 30 terrorist detainees with no plan on where to put them, it continues to beg the question,” referring to Obama’s closure of the Guantanamo Bay detention center without knowing where the detainees will be sent.

By Kayleigh Harvey – Talk Radio News Service

Credit cards could be considered a type of addiction like drugs, the House Subcommittee on Commercial and Administrative Law heard today, when discussing “Are Credit Cards Bankrupting Americans?”

While the answer did not resound with a deafening yes, it seems that credit cards and the confusion surrounding the rules and regulations that go with credit cards definitely do not help with the growing number of bankruptcy cases.

Adam Levitin from Georgetown University Law Center said, “It’s possible to drastically simplify credit cards. Most of the of the complexity of credit cards is not to serve any particular consumer desire or need…instead credit cards are complicated for complications sake.”

Levitin added, “There is nothing particularly surprising about high credit card debt correlating with bankruptcy. People who are in bankruptcy have debt. What is important to note is that debt, dollar for dollar, credit card debt has a much higher correlation with bankruptcy than any other type of debt.”

Noting that he was not a psychological expert, Levitin stated that there was a connection between consumer addiction and consumer credit. He said, “It is like drug use in this sense. There is definitely an addictive quality to credit…there definitely are parallels between the way consumers use credit and what we see with addictive products.”

Angered at the current actions taken by credit card companies, who grant loans to people already in high debt, Congressman Bill Delahunt (D-Mass.) said, “Not only does it enhance if you will, the pain for the bankrupt, but it disadvantages other unsecured creditors and hurts the retailer, because they are receiving a diminished pro-rata share. If your interested about the retailer in America, if you’re interested in commerce in America, you’ve got to take and put this issue into this equation. It isn’t just about the credit card industry. It’s about business in America.”

By Kayleigh Harvey – Talk Radio News Service

At a House Judiciary Subcommittee hearing on “Consumer Debt: Are Credit Cards Bankrupting Americans?” Adam Levitin from Georgetown University Law Center said, “It is like drug use in this sense. There is definitely an addictive quality to credit…there is definitely are parallels between the way consumers use credit and what we see with addictive products.”

 

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By Kayleigh Harvey – Talk Radio News Service

At a House Judiciary Subcommittee hearing on “Consumer Debt: Are Credit Cards Bankrupting Americans?” Adam Levitin from Georgetown University Law Center said, “There is nothing particularly surprising about high credit card debt correlating with bankruptcy. People who are in bankruptcy have debt. What is important to note is that debt, dollar for dollar, credit card debt has a much higher correlation with bankruptcy than any other type of debt.”

 

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By Kayleigh Harvey – Talk Radio News Service

At a House GOP leadership stakeout this morning Republican leader Congressman John Boehner (R-OH) said: “The President’s budget spends too much, taxes too much and it borrows too much from our kids and grandkids…if you look at the debt numbers in his budget you will see that over the next six years President Obama will create more debt than his 43 predecessors have in the last 220 years.”

 

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The U.S House Budget Committee held a full committee hearing on the economical outlook and budget challenges.

The discussion focused on the economical problems that are facing America today and the crucial issue of unemployment. The need to create more jobs was discussed and a solution that was presented favored lowering taxes on private business. This solution will could lead to an increase in employment.

A key point that was stressed involved investing in a long term economic strategy, to be able to increase the employment and create sustainable jobs.

Douglas W. Elmendorf, Director of the Congressional Budget Office, presented testimony regarding the state of the economy and issues in developing an effective policy response.
Elmendorf said that America must change its economical policies and make them more efficient to recover from the economical downturn it has suffered.

” The expected severity and persistence of economic weakness have led the great majority of economists to think that both large-scale fiscal stimulus and significant new financial and monetary policies are needed to generate a strong recovery in the next few years. Fiscal policies are most effective if they are timely, are cost effective and do not exacerbate the nation’s long-run fiscal imbalance,” Elmendorf stated.

He also referred to the difficulties in constructing a stimulus package that is economically effecient and statisfying the broader objectives. Policymakers want to know which people benefit from a policy and what society will receive in return.

Kevin Hasset, Senior Fellow and Director of Economic Policy Studies at the American Enterprise Institute, presented testimony that America’s economy has been through bad times before and that the economy recoverd. Hasset also highlights the importance debt could have.

” We have not yet reached the point where skyrocketing debt levels have caused heightened concerns among investors in U.S. Treasuries. If this Committee wishes to avoid testing those waters, it should consider stimulus efforts with genuine steps toward run deficit reduction,” Hasset stated.

U.S. Representative Hilda Solis (D-Calif.) said the new administration must invest in environmental and energy changes and should “get started in the next six months.”

In order to attain the necessary energy and environmental changes, Solis said it will take “political will,” and “leadership,” but emphasized it will not take a lot of money. She said that it will not be easy to convince Congress of the need for these big changes in environmental and energy policy, saying there are “not a lot of members in the House of Representatives, in my opinion, that grasp this concept.”

Solis advocated “greening our buildings, greening our infrastructure.” She felt this would increase jobs that would “stay here” and would allow for areas to “sustain communities.”

Senior Fellow at the Center for American Progress Van Jones said the economy is collapsing because the U.S. economic structure over the last 30 years was “not sustainable.” He felt that there are three inherent flaws in the U.S. economy: it has been “based on consumption, not production,” the U.S. can’t “run the economy forever based on debt,” and one cannot run an economy based on “environmental destruction, not environmental restoration.”

Jones claimed that energy change would not be as difficult as it seems because, “We have a Saudi Arabia of wind energy in this country, we have a Saudi Arabia of solar energy in this country.” He also said that energy investment “pays for itself” because it will lower overall energy cost, and will immensely increase available jobs. He claimed that if the government invested $100 billion, “we can have two million new jobs in two years.”

JayEtta Hecker, Director of physical infrastructure issues at the Government Accountability Office, says that the sale of US highways and bridges for periods of time to private enterprises brings necessary money to cash-strapped governments. However, when embarking upon these public-private partnerships, she warns that we must be wary of the resulting changes in toll prices for consumers (:35).

 

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Senator Carl Levin (D-MI) backs CARD Act at a press conference today with Senator Dodd. (0:32)

 

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