Durbin Says U.S. Can Cut Deficit and Spend on Needs
Senator Richard Durbin
Andrew Harrer/Bloomberg
U.S. Senator Richard Durbin.
U.S. Senator Richard Durbin. Photographer: Andrew Harrer/Bloomberg
The U.S. can continue to spend on infrastructure and education while reducing its debt, said Senator Dick Durbin of Illinois, the chamber’s second-ranking Democrat.
“Despite the need for deficit reduction, there is an imperative for us to invest in the fundamentals of a strong and growing economy,” he said today in a speech to the City Club of Chicago.
“All programs” need to be on the table for spending cuts, including ones that benefit his home state’s agriculture economy, Durbin told reporters. “Some of these programs I believe can be cut dramatically and not compromise the ability of agriculture producers to survive a tough economy, low prices and bad weather.”
Durbin is a member of the bipartisan National Commission on Fiscal Responsibility and Reform, created by President Barack Obama to identify tax and spending options to cut the deficit. The Congressional Budget Office said on Aug. 19 that the 2010 shortfall will be 9.1 percent of gross domestic product. The commission is to report in December on ways to bring the deficit down to 3 percent of the economy by 2015.
On the broader economy, Durbin said he does not expect much improvement before November’s election.
No October Surprise
“I don’t expect a dramatic October surprise from our economic statistics,” he said. “I think we are getting progressively better at a very slow pace.”
Durbin said Washington can do more to boost the economy.
“There is money to be spent from the original stimulus package,” he said. “Secondly, the small business bill, I think, is a way for us to send help to small businesses quickly.”
Obama today said his economic advisers will examine “additional measures” to promote hiring and growth. He urged Senate Republicans to drop their “blockade” of a measure to help small businesses through tax incentives and lending aid.
Durbin said the deficit is a “serious threat” to the nation’s future and called for the government to continue spending to support growth, pointing to events during the Great Depression.
Focus on Unemployment
In 1937, Durbin said, unemployment had dropped to about 14 percent when Congress and the Federal Reserve decided the deficit was a bigger problem and lost focus on unemployment.
“When they started hitting the brakes, it went back up to 19 percent,” he said. Those decisions needlessly lengthened the Depression, Durbin said.
“The lesson there is if you are going to help this economy back into recovery, don’t quit on it,” he said. “Make sure that you make the investments and stick with it until you have gotten over the hump and have real job creation.”
The deficit is at its highest level since World War II, Durbin said.
“Back then, we owed most of the money to ourselves,” he said. “Today, we owe most of the money to China.”
The deficit commission is led by Republican former Senator Alan Simpson of Wyoming and Erskine Bowles, who was chief of staff under President Bill Clinton.
Durbin told reporters the race between Democrat Alexi Giannoulias and Republican Mark Kirk for Obama’s former U.S. Senate seat in Illinois remains “very tight.”
Durbin is the campaign chairman for Giannoulias, the Illinois treasurer competing against Kirk, a five-term congressman from Chicago’s northern suburbs.
Giannoulias today picked up the endorsement of former Army General Wesley Clark, while Kirk is scheduled later today to formally win the backing of Peoria, Illinois-based Caterpillar Inc.’s chairman, Jim Owens.
Durbin said he is feeling well after having a small mass removed from his stomach earlier this month. “I couldn’t have asked for a better outcome,” he said.
To contact the reporter on this story: John McCormick in Chicago at jmccormick16@bloomberg.net
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