Corker calls for halt to 'wave of debt'

Corker calls for halt to 'wave of debt'

August 19th, 2010 by Mike Pare in News

Facing "a looming wave of debt," today's generation of Americans may be the first to leave the nation worse than they found it, U.S. Sen. Bob Corker says.

"You'd be embarrassed if you watched the way Washington spends your money," the Tennessee Republican said Wednesday at the Chattanooga Area Chamber of Commerce's annual meeting.

Staff photo by Dan Henry/Chattanooga Times Free Press - Sen. Bob Corker speaks Frank Fischer, with VW, left, and Dr. Jim Catanzaro, president of Chattanooga State, before the start of the 2010 Chattanooga Area Chamber of Commerce annual meeting held at the Chattanooga Convention Center August 18, 2010.

The former Chattanooga mayor said he has drafted a bill he plans to offer after the November elections to help control government spending. The nine-page bill would cap spending to a portion of the nation's gross domestic product and force a change, he said.

Corker said he doesn't expect the measure to pass in January, but he hopes it will help people focus on the issue.

"This is a draconian problem that affects everyone in the room," he said.

Tennessee Democratic Party Chairman Chip Forrester said in a telephone interview that it was Republican President George W. Bush who "got us where we are right now."

The last federal budget surplus was under former President Bill Clinton, Forrester said, and President Barack Obama has appointed a deficit commission to eye ways to attack the problem.

Corker, giving the nearly 1,300 people at the Chamber meeting what he called "a little bit of shock and awe," said the nation will surpass Greece in terms of public debt to GDP within 20 years if the course of spending doesn't change.

By 2030, public debt in the United States will be at 146 percent of GDP, he said. Greece, when it was bailed out by the European Union earlier this year, was at 120 percent of GDP.

The Tennessee senator said that, in 1970, 62 percent of the federal budget was discretionary spending such as on education and highways. Now that level has fallen to 38 percent while spending on mandatory items such as Medicare and entitlements has risen to 56 percent of the budget.

By 2035, interest on the nation's debt will be 25 percent of the budget if current spending stays on course, he said.

More foreigners also are holding U.S. debt than in the past, Corker said. In 1960, foreign debtholders accounted for 5 percent of the total. Today, that number has risen to 46 percent, with China holding 10 percent, he said.

Corker said both Democrats and Republicans are to blame.

"Both parties enabled us to get into the position we're in," he said.

Meanwhile, Corker told the Chamber group that Chattanooga's business growth is "the talk of the state."

"We've got hope," he said.

As mayor, Corker helped lay the groundwork to attract Volkswagen to Enterprise South industrial park. But, Corker said, the jobless rate is still high and some rural Tennessee counties don't have needed infrastructure or a big employer may be leaving, and they face a difficult economic picture.


WHAT OTHERS SAID

* Tom Edd Wilson, Chattanooga Area Chamber of Commerce chief executive:

The city has been transformed into "an economic development leader," with Business Facilities magazine recently naming Chattanooga as the No. 1 metro area for economic growth potential. The Chamber is developing a new job growth initiative dubbed "Chattanooga Can Do - Building Tomorrow Today."

* Tom White, outgoing Chamber chairman:

The business group helped companies announce 1,198 jobs in the last 12 months. That's $47 million in new labor income, according to the Chamber.

* Ron Harr, incoming Chamber chairman:

The city has come a long way since 2002. "Back then we weren't sure site selectors even knew how to spell Chattanooga. But we are on the map. Now we are successfully competing for some of the most sought-after economic development projects in the world."