Published December 26, 2010
"Apocalyptic pain" from an out-of-control debt could cause 18 percent unemployment and a massive contraction in the economy that would destroy the middle class, a leading Republican deficit hawk said in an interview that aired Sunday.
Sen. Tom Coburn, R-Okla., who recently issued a report on government waste, warned that the U.S. only has about three or four years to get its fiscal house in order or it could find itself facing austerity measures seen in Greece, Ireland, Spain, Portugal and earlier in Japan.
"The history of republics is they average 200 years of life. And they all fail in the history over fiscal matters. They rot from within before they collapse or are attacked," Coburn told "Fox News Sunday."
"The problem that faces our country today, the last 30 years we have lived off the future, and the bill is coming due," he added.
The senator, who was recently elected to a second -- and he pledges -- final term in Congress, said he's not trying to scare anyone, but eliminating waste in the federal government's ledgers is imperative not just to prevent default but a massive implosion that he defined in catastrophic terms.
"I think you'll see a 15 to 18 percent unemployment rate. I think you will see an 8 to 9 percent decline in GDP. I think you'll see the middle class just destroyed if we don't do this. And the people that it will harm the most will be the poorest of the poor, because we'll print money to try to debase our currency and get out of it and what you will see is hyperinflation," Coburn said.
"If we didn't take some pain now, we're going to experience apocalyptic pain, and it's going to be out of our control. The idea should be that we control it," he said.
Coburn said he can come up with $350 billion off the top of his head in inefficiency and waste that could be eliminated without impacting anyone in a practical sense. He noted $50 billion in programs that are duplicative and $100 billion in Medicare and Medicaid fraud that was not addressed in the health care law.
"We have 267 job training programs across 39 different agencies. Why do we have 267 of them? We have 105 programs to encourage people to go into science and technology, engineering and math. That's 105 sets of bureaucrats. None of them have metrics on it," he said.
"The Pentagon can't even audit its own books. It doesn't even know where its money is going. And we refuse to have the tough forces go on the Pentagon so that at least they are efficient with the money they're spending," Coburn added.
In one of his last acts in the lame-duck session that ended last week, Coburn, an obstetrician who earned the nickname "Dr. No" for his refusal to spend taxpayer dollars, was a critical factor in getting a health care program for Sept. 11 responders reduced in scope and cost. The $7.2 billion program was cut to $4.3 billion and was paid for through additional fees and reductions in other spending.
Coburn called the agreement a rare example of Congress being willing to do the hard work.
"I took all the heat, but we solved the problem and spent $7.2 billion less than we would have, and there is not going to be any difference in impact for the people we're trying to help," he said.
Coburn acknowledged that most of the cuts he is currently proposing are discretionary spending, which is only a fraction of the budget. Still, he said, a couple hundred billion dollars of the nearly $1 trillion in stimulus spending could be cut without hurting a fragile recovery.
The senator, who was also a member of President Obama's deficit commission that deadlocked earlier this month on recommendations for Congress to reduce its debt, added that structural changes need to be made to the way government works.
"The very fact that we have $1.1 trillion in tax expenditures every year that directs capital in a way that the government says it should be directed rather than the way it should be directed based on markets, tells us that we have a terrible tax system," Coburn said.
"I don't care if you're rich or poor, liberal or conservative. If we don't fix the problems in front of us, everybody is going to pay a significant price," he said.