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Newt Gingrich

Former House Speaker; Chairman of Gingrich 360

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Debt ceiling deal is only the first step in fixing US economy

Jun 07, 2023

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President Biden and House Speaker Kevin McCarthy averted a catastrophic default on the nation’s debt with a last-minute agreement to suspend the debt ceiling. Now that the U.S. debt limit has been suspended until January 1, 2025, Republicans want to focus on controlling federal spending.

Straight Arrow News contributor Newt Gingrich understands the challenges of budget battles well, having served as House Speaker from 1995-99. He cautions that the debt ceiling deal is only the first step in fixing the U.S. economy.

For the first time ever, the debt ceiling included genuine cuts in spending; billions of dollars less than were spent last year. That was a good step. It also included some real policy changes, making it easier to build infrastructure, making it easier to invest in oil and gas and other kinds of energy. It also had, I think, a step towards blocking the IRS from hiring thousands of new agents to harass the American people. 

But it was tiny compared to the scale of the problems. And if that was the last step, I would have voted no. However, if it’s the first step towards turning the system, the first step towards more spending cuts, more reforms, a better approach to the government, then I think it’s a great start. That means that the House Republicans in particular, as the most solidly conservative group in Washington, have a real obligation over the rest of this year to continue having hearings, to continue investigating corruption and fraud and waste, and to have a series of appropriations bills where they continue to make spending cuts. If they follow through, if this was just the first step, then it’s all going to work. 

When I wrote my new book, “March to the Majority,” part of what struck me was … you know when we got elected in ‘94 with the Contract With America, we didn’t jump overnight to a balanced budget. It took three years of work, one day at a time, step by step, and then finally, we were able to get to four consecutive balanced budgets for the only time in your lifetime. The way you do that is you build on what we’ve already accomplished. Now, the debt ceiling was a step and I think Speaker Kevin McCarthy intends for it to be the first of many steps. If he can achieve that, if he can bring his conference together, he can continue to negotiate with President Biden, we might find ourselves in a year or two, in a dramatically better place.

You know, the debt ceiling bill that passed as a first step was pretty good. As a last step, it’d be pretty bad. And here’s the key difference. As a first step, it turned the corner. For the first time ever, the debt ceiling included genuine cuts in spending; billions of dollars less than were spent last year. That was a good step. It also included some real policy changes, making it easier to build infrastructure, making it easier to invest in oil and gas and other kinds of energy. It also had, I think, a step towards blocking the IRS from hiring thousands of new agents to harass the American people.
But it was tiny compared to the scale of the problems. And if that was the last step, I would have voted no. However, if it’s the first step towards turning the system, the first step towards more spending cuts, more reforms, a better approach to the government, then I think it’s a great start. That means that the House Republicans in particular, as the most solidly conservative group in Washington, have a real obligation over the rest of this year to continue having hearings, to continue investigating corruption and fraud and waste, and to have a series of appropriations bills where they continue to make spending cuts. If they follow through, if this was just the first step, then it’s all going to work.
When I wrote my new book, “March to the Majority,” part of what struck me was … you know, when we got elected in ‘94 with the Contract With America, we didn’t jump overnight to a balanced budget. It took three years of work, one day at a time, step by step, and then finally, we were able to get to four consecutive balanced budgets for the only time in your lifetime. The way you do that is you build on what we’ve already accomplished. Now, the debt ceiling was a step and I think Speaker Kevin McCarthy intends for it to be the first of many steps. If he can achieve that, if he can bring his conference together, he can continue to negotiate with President Biden, we might find ourselves in a year or two, in a dramatically better place.
And the starting point will be the budget which the Republicans are going to bring out, which will be a balanced budget. It’ll take time to get there. It took us four years. We originally thought it would take seven. I think the current Republicans believe that the problem is so huge, the spending is so enormous, that it may take them up to 10 years. My hunch is they can get it done faster than that.
But the key is to set the goal, to say we’re really going to balance the budget, bring inflation under control, cut taxes and regulations to create a lot more economic growth. And in that setting, we’re going to see the United States once again, have the most stable currency in the world, the most powerful economy in the world, and the greatest level of freedom in the world. That’s what our goals ought to be.

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