Brown, Warren Offer Different Deficit-Reduction Approaches

BOSTON — This summer, we’re taking a look at where Republican U.S. Sen. Scott Brown and his Democratic opponent, Harvard law professor Elizabeth Warren, stand on a series of issues. Today, we look at the two candidates’ proposals to reduce the debt.

Warren’s Ideas

At a campaign event in Worcester Monday, Warren recalled an early experience with debt.

“I borrowed money to go to school, so I started my young adult life with student loans, and I know just how scary those loans can be,” Warren said.

It’s a story Warren uses a lot on the campaign trail to make a point about debt. As for the national debt, Warren approaches it this way: She divides all the money being spent by the federal government into three boxes.

“Box 1 would be, let that money go to people who’ve got big lobbyists in Washington: big oil, big multinational companies, hedge funds, give them money,” Warren said. “Box 2: Pay down the deficit. Box 3: Make the investments to help grow the economy: education, roads, bridges, jobs bill, research, the things that help move us forward.”

Warren says we should stop spending on Box 1 — big companies and hedge funds — and divide that money between Boxes 2 and 3, paying off the debt and investing in the future. But her analysis omits some of the things that take up the biggest chunks of the federal budget: defense and entitlements, such as Social Security, Medicare and Medicaid.

The nonpartisan Congressional Budget Office projects that if Congress does nothing, the deficit will pretty much take care of itself over the next few years. That’s in large part because with the expiration of the Bush tax cuts, revenues are expected to grow by more than 30 percent over the next two years.

At a debate at the University of Massachusetts Lowell last year, Warren said that she supports letting some of the Bush tax cuts expire.

“The tax cuts should not be extended for the wealthiest Americans,” she said. “That’s right. That would be $900 billion over the next 10 years. And that’s money we can spend elsewhere.”

It’s not clear where Warren would spend that money. In a recent ad, she proposes spending some money rebuilding bridges and roads.

“China invests 9 percent of its GDP in infrastructure,” Warren says in the ad. “America? We’re at just 2.4 percent.”

In the short term, spending money on Box 3, investing in the future, would not reduce the deficit.

Brown’s Proposals

Speaking to reporters at a Cape Cod Chamber of Commerce lunch in Hyannis Wednesday, Brown criticized Warren for proposing the spending because it would increase the deficit.

“Bottom line is what Professor Warren is doing when she compared us to China was looking for another trillion dollars of stimulus money,” Brown said. “The first one in 2009 didn’t work, and where’s that money coming from? Trillion dollars. We’re at $16 trillion almost right now in national debt, so where is that money coming from? So when they say investment, bottom line is people had better hold on to their pocketbooks and wallets, because that money is coming out of your pockets.”

The Warren campaign says she is only proposing $100 billion in new spending on infrastructure. Warren has not said how much money she would spend to pay down the debt.

Brown opposes letting the Bush tax cuts expire. At the Hyannis lunch, he reiterated his opposition to raising taxes to reduce the deficit.

“When I went down there, $11.95 trillion national debt,” Brown said. “It’s almost up to $16 trillion right now — $16 trillion of national debt. And what’s the answer for some people? It’s to continue to raise taxes, to do another stimulus, another trillion dollars of spending.”

Later in his lunch address, Brown underlined his support for a constitutional amendment requiring a balanced budget.

“The biggest challenge, as I referenced earlier, is getting our national debt under control,” Brown said. “As you know, our credit rating has already been downgraded. What’s to say it won’t happen again? I hope not. I’m going to do everything in my power to make sure it doesn’t get downgraded, but we can’t keep spending more and more and more money and expect different results. It’s not going to happen. That’s why I’ve supported a balanced budget amendment to prohibit the federal government from spending more money than it takes in.”

Brown voted for the Republicans’ “Cut, Cap and Balance” plan. It would have cut $100 billion in federal spending, capped spending at 22 percent of Gross Domestic Product, and called for a balanced budget amendment.

Brown also believes a substantial amount of money can be saved by eliminating fraud. He cites his work with Democratic Sen. Tom Carper, of Delaware, investigating fraud in Medicare and Medicaid. The Government Accountability Office estimates that Medicare and Medicaid make as much as $64 billion in improper payments. Carper and Brown have also worked on waste, fraud and abuse at the National Oceanic and Atmospheric Administration, which regulates fishermen.

So two very different approaches. Brown would chip away at spending and supports a balanced budget amendment. He does not fully explain which cuts he would make to balance the budget. But he opposes the single biggest measure the Congressional Budget Office says would reduce the deficit: letting the Bush tax cuts expire.

Warren supports letting the Bush tax cuts expire for the wealthy. She also supports increasing taxes on oil and gas companies and on people who make more than $1 million a year. But it’s not clear how much of that money she would spend on other things. Like Brown, she does not give full details on how she would eliminate the federal budget deficit.

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  • Richard Garner

    Brown (as well as other Republicans) always repeat that “talking point” line that the 2009 stimulus did not work.  This is a meaningless statment.  It seems to me that it worked in the sense that without it things would be a heck of a lot worse.  Of course, people would say, well why have the best of these two choices (stimulus vs no stimulus).   Well, perhaps there were other choices, but is Brown and/or other Republicans suggesting any others?  No, they seem to be suggesting the choice where we simply didn’t do anything.  Now, I suppose there could have been better policy than the stimulus that did get passed.  But what is that?  I’m all ears.  Anyway, to be more concrete,  nothing regarding public policy is that simple.  And these stu…d one-liners that come up in campaigning are simply ridiculous.  

  • J__o__h__n

    Finally WBUR is covering issues in this race instead of nonsense like ancestry. 

    Thys is correct to point out that Warren doesn’t mention two other boxes: military and entitlements.  He should have challenged Brown’s claim that the stimulus didn’t work and discussed whether Brown supports the Republican Ryan bill which will gut Medicare and Social Security, any cuts to defense spending, and continued subsidies to oil and gas companies.

    Also an analysis about whether infrastructure spending v. austerity would better the economy now so as to better pay of the deficit in the future would have been informative.  And how a balanced budget amendment would have had an impact on the recession and state budgets that depended upon federal deficit spending.   

  • steve13565

    This has to be one of the silliest stories I have heard in a long time.  The commentator obviously knows nothing about economics.  He makes no comment about the fact that Brown’s prescriptions show a total lack of understanding of the economics of a national economy like the United States’ economy.  Brown goes on and on about how the first stimulus did not work, when it did.  Where is the money for the spending going to come from – the Fed of course.   We are sovereign in our own currency, so if the Fed says there is more money in the economy, they just make it so.  Private institutions that lend their depositors or investors money also create money.  The fact that these private entities are holding on to their money instead of investing it, takes money out of the economy.  That is what the idea of stimulus is all about.  The stimulus money puts money into the economy and also draws out the money being withheld by the private sector.

    When the country lost trillions of dollars in stock value when the market crashes, do you think someone actually goes out and burns up a pile of money?  When the market recovers, as it has done quite well since 2009, do you think someone is actually putting the ashes back together?

    Brown clearly understands nothing of this.  Or at least he pretends not to understand.  When other Republicans spout such nonsense, I can believe some of them are pretending.  In Brown’s case, I fear he may actually believe this stuff.

    What this says about the WBUR commentator, I really have to wonder.

  • Steven Coffey

    The difference in the tone of these two candidates is so striking.  Warren comes off as a didactic, nerdy college professor type (actually, she is), and Brown comes across as a down to Earth everyday guy with common sense.  One thing I like about Scott Brown is that he’s not an extremist right winger, like some of the other congressman and senators from the deep red states.  He’s a centrist who takes a practical approach to problems.  Thank you Senator Brown for giving me a reason to go to the polls this November, because God knows I won’t be going there to vote for Obama or Romney!

    • J__o__h__n

      Tax cuts for the rich aren’t centrist or common sense.  Brown isn’t an extreme right winger compared to the national Republican party but he isn’t very moderate and signs onto the same false economic views that they do.  I’d like someone “nerdy” setting economic policy.

    • SaysWho

      “Warren comes off as a didactic, nerdy college professor type (actually, she is)”.

      Hmmm. Those great entrepreneurs that the exceptional Republicans always rant about are nerds also (Bill Gates, Steve Jobs).

      The scientists and engineers that develop drones for the military and all the new technology to make oil exploration so profitable, lot of them are nerds and at onr time were (God forbid) professors.

      I didn’t realize the biggest qualification for a Senator was how they appear. Would you feel better if Liz Warren wore a cowboy hat and drove a pickup truck?

      • Steven Coffey

        Are you seriously trying to compare Elizabeth Warren with Bill Gates or Steve Jobs, each of whom made significant contributions in the real world?  Look, I respect Elizabeth Warren for her intellect, but in my opinion, one of the qualifications for public office is the ability to connect with the people.  Scott Brown does that MUCH more effectively than Elizabeth Warren, and I just personally agree with his views over Warren’s.

  • steve13565

     I added this to my own blog about this story:

    I should also point to some other sources for the money that I failed to mention in my comments on the WBUR web site.

    The federal government can say to wealthy individuals, “If you aren’t
    going to put your money into the economy, then give it back to us, and
    we will put it into the economy.”

    Getting the money back from the wealthy can take several forms. One
    form is to issue government bonds and notes, so that the wealthy lend us
    their idle cash, and we put it to good use in creating jobs and
    investing in the future of the economy.

    The other way, is to raise the taxes on the wealthy, (or rescind tax
    cuts). If they aren’t investing that money in the economy, then giving
    them tax breaks to keep more money is obviously not helping. This
    method of raising money does not raise the government debt, and the new
    taxation rate will put us on a path to surpluses when the economy

    Just think, a lot of the money that the wealthy are withholding from
    productive uses is going into non-productive financial derivatives. To
    put it another way, the wealthy have so much money, they don’t know what
    to do with it all. So they have taken to gambling in financial markets
    for fun and profits. If they lose a bet, they stop having fun, and we
    have to pay for it in the sick economy their losses bring on.

    • Nacho

      >>The federal government can say to wealthy individuals, “If you aren’tgoing to put your money into the economy, then give it back to us, and we will put it into the economy.”

      “BACK to us?” Are you seriously implying that a wealthy persons money (or any persons money) was given to them by the government? That anyone’s money or by extension their possessions are the government’s property?

      • steph

        I was thinking the same thing. Some of these left wing lunatics think everything belongs to the state and the state is kind enough to let you have a portion of what you earn. How dangerous does this clown sound?

      • http://twitter.com/kuroikittee Kittee

        Or perhaps Steve is suggesting that the money wealthy individuals are not investing is the product of rent seeking, ergo “back to us” refers to the people…

  • steve13565

    Public radio used to be  thought of as educational.  In this case it is dis-educational.

    If any story makes it look like Brown is talking sense (common or otherwise) about the economy, then it is dis-educating the listeners about economics.

    I would really enjoy listening to reporter pick out statements from candidates on economic topics if that reporter knew more about economics than I do.  Obviously this reporter has a long way to go.  I wonder if WBUR has a farm team they could send him down to until he was ready for the majors.

    I do not claim to be an expert in economics, so it shouldn’t be hard to find someone who puts more effort into understanding economics than I can.

  • X-Ray

    Warren wants to spend tax money from the millionaires and pay down the debt and
    “invest” in infrastructure, in other words, spend more. First of all, the
    millionaires are nice targets but taking all their wealth won’t make a dent in
    our 16 trillion dollar debts. One the other hand Warren wants to spend more. We
    are already borrowing 1/3 of all Federal spending. Do the numbers, it doesn’t
    work, it is a pipe dream, her “plan” is delusional.

  • DC

    this article is a little unclear or a little too abridged.  It seems a lot of  details are un-addressed by both candidates.  BUT if we used her 3 box system, Box 1 might does or could include a lot of defense contractors, who continue to fatten on our nickel by a population who feels kind of helpless when the spin is all about “national security”.  Makes it sound like we will all die and the country will be taken over without it.  Funny how countries with far less  defense expenditure per capita, and overall, seem to manage to survive even when WE the 800 lb gorilla, or any number of 500 lb gorillas, try to take them over.  And they have far fewer resources including tech, manufacture capacity (though we ARE giving up a lot of that to China and others) than we do, per capita or otherwise.  So IF we curtailed defense, which even some pentagon brass say we could easily do by as much at 25-30% or more, part of that savings could go to reducing the debt AND debt service, it would ease the budget considerably.  
    Box 2.  SS/med/pensions/benefits have to be curtailed.  Hey, the private sector has had to suck it up.  It is time for the feds to do likewise, even 25% at first then gradually more, to get in line with the real world.  As long as benefits are more appealing in govt than private, we are going to have more people trying to work for the govt, which bloats payrolls, ie labor expenses.  If we are going to go beyond pretending to be a free enterprise sytem, we are going to have to stop making govt jobs so much better than private.  There are some professions and trades that probably inherently need to be funded by gov’t, ie teaching, police/fire, military, etc.  Though it is likely, if we really put our heads together, we could improve on those as well.  Not that they are perfect, but there are efforts to privatize prisons, school food and other programs, etc.  Some successes.  Some need time to mature. But the point is, THEY CAN!
    Those savings, or a good portion of those can go to further pay down the debt, which will decrease the money paid on debt service.
    As far as box 3, investing in the future. Somethings need to be left on their own with some input but not a lot of $$.  Jobs need to come from need of product/services, not need of employees.  We take such care to “protect’ employees, but when we do so too much, we encourage a lot of production that is inherently, to some noticeable degree, not a value added to the economy.  We really are subsidizing, directly or otherwise, to a substantial degree, a lot of big screen TV, cars with a lot of “features” like big stereo systems, low gas mileage, power seats/windows/mirrors etc etc, that do not add to the use of a vehicle any more than eating at a restaurant adds to the nutritional value of a meal.  But we behave as if these are “needs”, rather than “wants”.  There was a time when even cell phones, laptops, TV’s, and much more, really were not all that necessary in the big picture.  Over time, these things get more entangled in our lives and become more essential than less to allow for more than mere survival, without much dignity.  IF we put a stop to all the crap (way too many fashion options, expensive entertainment (good concerts and theatre are now over $60 a seat, and that is the back row!).  We have come to “expect” a lot, and give a little in exchange in way to many venues of life.  Free market, if people were “just a little” more smart, would increase value of goods and services, quality over quantity, and make this a better nation to be part of.  There would be a lot more pride in ownership and a lot less jealousy in status/image.  What this country needs is “more steak, less sizzle”.  We have forgotten about quality of life over quantity of toys.
    Back to Box 3.  Investing in the future?  Absolutely! IF, and ONLY IF, it is actual investment in people and infrastructure that can add inherent value to goods and services.  Our roads, bridges, tracks, airports, sewer, water, utilities, etc, need to be in good order and kept that way.  Bad roads don’t help anyone, or anything we produce, get anywhere in any condition worth paying for.  A lot of eggs break on bad roads.  And sewer and water? Well, just look at a lot of the 3rd world to get the value in those.  But they need to be managed like a business, for a little profit to put back into the infrastructure, not to spend on limos, fancy meals in the Capital building, and showoff air shows, fancy inaugurations (what an insult during hard times!!!???!!! How many get invited, wined and dined and how many pay how much for it??  Talk about governmental fat.  It ‘s like the weddings that cost tens to hundreds of thousands of dollars.  IS the  5K wedding marriage less married than the 50K marriage?  But wouldn’t it be a real value to couple and everyone, if they saved even 25% of that money and put it on a house or in the bank, like, drum roll….. SAVINGS!!!  WTF is SAVINGS?  IF the govt doesn’t demonstrate fiscal responsibility and prudence with money taken as taxes from all folks, why should those folks, regardless of income status, do likewise with their own money??  Good example Uncle Sam.  Nice.  I want my kids to emulate you?   …… right…. 
    Education?? What better way to “invest” in the nation and the future than to education, including TRAINING for actual skills, whether for goods or services or both.  If we want to INVEST, the best possible place is in education and training.  With smart, capable, willing and talented population, we can accomplish and/or fix just about anything.  So, the way the money in box 3 is spent, is really the only issue.  Fat should be trimmed and used to pay down the debt. 
    Research should be shared by private and public resources, but with a goal to seed the private research from public funds.  I am not so sure we need “National Laboraties” solely funded by taxes.  There are not a lot of things that add inherent value to the economy and life, worldly, national or locally, that should entail costly research. About the only marginal issue should be medical research.  Even that should be mostly private I think.

    I like Brown as well.  He, like Warren, has come from a limited, sound upbringing by others as well as their own wits.  They are pretty damn honorable folks, or so it seems. No one, including candidates, is perfect and we need to stop being so f…ing gullible when someone’s underwear isn’t perfectly white.  Scrutiny is good, nit picking is a waste and breeds cynicism in most of us.  They may be able to do some pretty heroic things, but no one is a messiah, or they probably wouldn’t be found dead (maybe crucified though) in govt at just about any level, save dog catcher.

    I wish I had spent more of this energy on Brown.  But I have to say, I would like to see both of them in the senate, Brown to continue to try to buck the party structure, while holding onto his values, and Warren to light some new fires and shed some fresh light if at all possible.  Hopefully either or both will not become just another politician, of which, we have far too many, as we do designer underwear.  Who cares if I, or you, or them, have  white, black, tiger print, or Sponge Bob Squarepants underwear??  Does it really matter?  If  it does, it is time to move to a country where it doesn’t and hope it doesn’t get infected.

  • gardenia

    Scott Brown is a very attractive, young man, who votes a straight Republican Party line.  All of the time.  I strongly feel that Elizabeth Warren has far more than just cute(used to pose nude for Cosmo)as Scott did not so long ago.  Let him just drive around in his pick-up truck.  Serious government is not for him.  We in Massachusetts need and want better.  Go, Elizabeth Warren.  You are much smarter than “pretty boy”.

    • DC

      Do you really think he totes party line all the time?  Isn’t he more like an independent republican who leans to Republican as any democrat would the the democrats?   He has gotten in some hot water for independence more than once is a fairly short term.  I wish we were a state where an independent senator could run successfully. Not sure there even is one?  Sadly, as long  as we have such a deeply embedded 2 party system, there is little to no room for an independent to raise funds for a successful campaign. Can make noise but winning an election is another thing altogether, sadly.  So far no 3rd party has been able to really establish itself in our political system except perhaps on some of the smallest venues.  And to make it tougher, an independent does not have a party by definition so it is doubly slanted.  Regardless of agreeing with his views or not, you have to give Ross Perot a lot of credit for staying independent and funding his own campaign almost entirely out of pocket.  We need more like him to just challenge the 2 party strangle hold on our nation.

  • Ken

    Elizabeth Warren does not demonstrate any ability to deal with the federal budget.
    She can find new tax dollars for additional spending, but never for deficit reduction.
    Giving away money is easy, paying off debt is the more difficult challange.

  • Kodiak_G

    I respect Scott Brown. But I cannot vote for a politician who pledges to an interest group to vote a certain way. I believe in a balanced approach to deficit reduction–spending cuts and moderate tax increases. Mr. Brown has pledged to Grover Norquist and his ATR group that he will, under no circumstances, support any tax increases.  This means only spending cuts to social insurance programs. As a voter, I want politicians in Washington who are willing to compromise, not a senator who has already chosen how he will vote before any legislation is written or debate has been made. The Senate was designed to be deliberative; if Mr. Brown has chosen to not take a deliberative stance on one of the most important issues Congress is tasked with, I am unable to support him.

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