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.
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.
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.
This program aired on August 10, 2012.