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.