From the very beginning of the great debt ceiling debate, the U.S. Chamber of Commerce underscored the critical importance of avoiding a first-ever default of the United States and the need for sensible reductions in spending to prevent the nation from eventually lapsing into insolvency.
Default would destroy the full faith and credit of the United States. It would trigger damaging economic consequences, such as higher interest rates for everyone, less capital to fuel consumers and Main Street businesses, and significantly fewer jobs. And unsustainable spending, driven largely by entitlements, would have only one result — national bankruptcy.
To avoid this catastrophe of Washington’s own making, the Chamber of Commerce called for an agreement that adhered to some essential principles. Foremost, the debt ceiling must be raised to prevent default. It must be accompanied by serious spending restraint — dollar-for-dollar deficit cuts that are equal to or greater than the expanded borrowing authority. The spending cuts need to be enforceable. And deficit reduction must be achieved through genuine spending restraint — not anti-growth tax hikes. All told, the plan must get our nation off its current long-term course, which is charging full-steam ahead toward insolvency.
At the last possible moment, Congress and President Barack Obama finally did the right thing and reached a bipartisan agreement to raise the debt ceiling, preventing economic catastrophe. Default has been avoided. Disaster has been averted — for now. While far from perfect, this is a workable agreement that incorporates many of the key principles advocated by the chamber.
It’s important to remember that this deal represents the beginning of the process, not the end. We must avoid returning to business as usual in Washington if we want to restore economic growth, reduce spending and create millions of new jobs.
Lawmakers must remain sharply focused on the challenges that remain. We must bend the curve of entitlements through sensible reform. Overhauling our tax code to increase revenues — without raising rates — is long overdue. We must create a regulatory environment that fosters growth and spurs entrepreneurialism, legitimate risk-taking and job creation. And we must adopt — and adhere to — long-term solutions to deficit spending.
Clearly, we have a great deal of hard work ahead of us to restore our economy and put our nation’s finances on a sounder footing. This bipartisan agreement lays a path for accomplishing those goals for the American people. And it keeps the pressure on Congress to see it through. But we still have a very long way to go.
— Tom Donohue is president and CEO of the U.S. Chamber of Commerce.
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