Bredesen calls for federal spending freeze until budget balanced; Blackburn wants entitlement reforms, balanced budget amendment

Bredesen calls for federal spending freeze until budget balanced; Blackburn wants entitlement reforms, balanced budget amendment

September 11th, 2018 by Dave Flessner in Breaking News

Updated at 7:10 p.m. on Tuesday, Sept. 11, 2018, with more information.

Democratic former Gov. Phil Bredesen speaks at a summit on the opioid crisis put on by Healthy Tennessee, Friday, Aug. 24, 2018, in Nashville, Tenn. Bredesen said Friday that his first action in the U.S. Senate would be to file or co-sponsor legislation to repeal a 2016 law criticized for weakening federal authority to curb opioid distribution. The announcement sought to put his opponent, Republican U.S. Rep. Marsha Blackburn, on the spot for supporting the law. (AP Photo/Mark Humphrey)

Democratic former Gov. Phil Bredesen speaks at a...

Photo by Associated Press /Times Free Press.

As chairman of the Senate foreign relations committee, U.S. Sen. Bob Corker is regularly briefed on threats to the United States from around the globe.

But the retiring, two-term Republican insists the greatest danger facing America isn't from ISIS, North Korea or Russia, but from the growing federal debt Corker calls a "dangerous crisis staring us in the face."

The candidates vying to replace Corker in the U.S. Senate both agreed Tuesday with the need to reduce federal budget deficits to avoid a future fiscal crisis. But Democrat Phil Bredesen, a former governor, and Republican Marsha Blackburn, an eight-term member of Congress, differed over whether Social Security should be reformed to reduce its cost and whether a constitutional amendment is needed to mandate Congress to balance the budget.

Bredesen, who cut state spending when he was elected governor to balance the state budget during the Great Recessi0n in 2009-2010, said he wants Congress to freeze federal spending outside of Social Security until tax collections catch up with the $3.3 trillion U.S. budget.

"If you pin spending — without gimmicks like making up for inflation — and let revenues catch up with it at a projected growth rate of 5.15 percent, our deficit would be wiped in the next 5.7 years," Bredesen said. "This means that if President Trump wants to balance the budget, he can get it done within his time in office if he has a second term. This is not some far away lofty goal."

Blackburn, who calls herself "a deficit hawk," also voiced support for across-the-board spending cuts but she said she also favors making recent tax cuts permanent and adopting a constitutional amendment to mandate balanced federal budgets every year.

Bredesen traveled to Chattanooga to outline his deficit-reduction plan Tuesday to the Chattanooga Area Chamber of Commerce. He billed the plan as the latest of his "fresh ideas" for Washington, D.C.

Bredesen said Congress needs to set spending priorities to cap overall discretionary spending until the growth in tax collections matches what the federal government spends. Such an approach would require inflation-adjusted cuts in overall spending of 2 to 3 percent a year, but Bredesen said that is far less than the 9 percent cut in state spending he made while governor when the Great Recession reduced the state's tax collections.

"Everyone gives lip service to fixing the deficit, but there has been no action," Bredesen said. "Democrats — my own party — have never been great on the subject, but since the Reagan era, Republicans have completely fallen off the wagon, as well."

The current $21 trillion federal deficit is projected by the Office of Management and Budget to increase by nearly $1 trillion more next year. Despite the strong economy, the U.S. budget deficit through the first three quarters of the current fiscal year was up 16 percent over last year to $607 billion. Revenues rose 1.3 percent, even with this year's tax cuts, but spending rose 3.9 percent.

At 78 percent of gross domestic product (GDP), federal debt held by the public is now at its highest level since shortly after World War II and equal to about $65,000 for every American. If current laws generally remained unchanged, the Congressional Budget Office projects the federal debt will approach 100 percent of GDP by the end of the next decade and 152 percent of the nation's annual economic output by 2048.

U.S. Rep. Marsha Blackburn introduces Vice President Mike Pence at a tax policy event Saturday in Cleveland. Pence also spoke at a fundraiser for Blackburn later that day in Chattanooga.

U.S. Rep. Marsha Blackburn introduces Vice President Mike...

Photo by Doug Strickland /Times Free Press.

Bredesen said he will share ideas later in his campaign about how specific federal health care programs may be improved to reduce costs. But he said congressional appropriation committees and executive agencies should be able to find ways to streamline their operations to hold the line on overall spending through 2023 or 2024 until growing tax collections catch up with what government is spending.

"I present this as a fresh idea, but this is what everyone else has to do in business and with their families," Bredesen told several dozen Chattanooga business leaders.

Bredesen said the deficits have been created by both parties and a bipartisan approach will be needed to bring the budget more into balance. He chided his opponent, Republican Deputy Whip Marsha Blackburn, who has served in the U.S. House since 2003, for not doing more to control the deficit.

Blackburn has voted to increase military spending and cut taxes, but she also has been an advocate for reforming government entitlement programs such as Social Security, Medicare and federal pension programs, which absorb more than 60 percent of the federal budget. In 2015, Blackburn voted for a measure to block grant Medicaid spending back to the states.

"Tennesseans are tired of Washington wastefully spending their money, and it's just another reason the Senate is broken," Blackburn said in a statement Tuesday. "I'm a committed fiscal conservative. Beginning with my time as a state senator — where I led the opposition to the state income tax — to my time in the House, I've been a deficit hawk, and I plan to take that same steely commitment to the U.S. Senate."

While cutting spending is important, Blackburn also said she favors pro-growth policies, such as making the recent tax cuts permanent and removing costly government regulations, to promote more economic growth and tax revenues.

"Congress should move to make the tax cuts permanent and examine further cuts for the middle class and small businesses," Blackburn said. "Cutting spending alone will not solve the problem, we must grow our economy."

Bredesen said he supported some of the recent tax cuts but he wanted more tax loopholes closed and more attention to cutting the deficit.

Blackburn also is a supporter of a constitutional amendment that would require the federal government to balance its budget every year, as states like Tennessee are required to do.

Bredesen said a constitutional amendment to balance the federal budget "has some problems" because it could force costly cuts in spending during a recession just when such spending is most needed.

Democratic critics of the measure also worry that such a requirement could force cuts in Social Security and Medicare benefits, which are projected to run out of reserves and become fiscally insolvent by 2026 for Medicare and 2034 for Social Security, without some changes.

"During her 16 years in the swamp, Marsha Blackburn has presided over a ballooning national debt and deficit," said Mark Brown, a spokesman for the pro-Democratic Party group known as Tennessee Victory 2018. "Her idea of fixing it was to end Medicare, privatize Social Security, and cut nearly $1 trillion in Medicaid spending for the poorest Tennesseans and Americans."

Without a constitutional mandate, however, Bredesen's recommended spending freeze to balance the budget could easily be overturned by a simple vote of Congress.

As Tennessee's governor from 2003-2011, Bredesen said he helped write eight consecutive balanced state budgets, even when faced with a $300 million shortfall one year, and he said the state's rainy day fund grew while he was governor.

But Bredesen's record has been blasted in $2 million worth of TV attacks against him by the conservative political action committee funded by the libertarian Koch brothers, Americans for Prosperity. They accuse Bredesen of "reckless spending" when he was governor.

"While Tennessee's budget was in crisis, Bredesen supported higher sales taxes, gas taxes, and more," the television ads from Americans for Prosperity claim. "While Tennesseans struggled through a recession, he wasted 9 million taxpayer dollars upgrading his Governor's mansion" including a $4 million party cave and gilded bathrooms.

Bredesen says the ad is simply untrue and he never raised sales or gas taxes while governor, although he did say in his second term he was open to a fuel tax boost. Gas taxes were finally increased at the urging of Gov. Bill Haslam last year after the GOP-controlled legislature approved the gas tax hike to help improve roads and cut business taxes.

Bredesen also never lived in the governor's mansion, which was remodeled as part of the Legislature-approved budgets. Gov. Bill Haslam was the first to live in the remodeled governor's home in 2011.

Contact staff writer Dave Flessner at dflessner@timesfreepress.com or at 423-757-6340.