Former two term Congressman Mark Neumann has been traveling the state of Wisconsin extensively for months in his campaign for the US Senate. Neumann is attempting to convince Wisconsin Republicans that he is the best candidate to not only defeat Tammy Baldwin but reduce the federal debt when he gets to Washington. The 2010 US Senate election in Wisconsin saw the Tea Party affiliated Johnson get propelled to victory after a surprise endorsement from the Wisconsin GOP at the party's statewide convention. If Neumann can win the support of the state's GOP, recent polls show him in a virtual dead heat with the Democrat's candidate Tammy Baldwin in the general election.
I had a chance to talk debt reduction and the direction of the Republican Party with Mark Neumann last week when he joined me by phone.
I asked Neumann if he thought that the current establishment Republican's in Congress have a credibility problem when it comes to reducing the debt because of the deficit spending during the Bush administration. He said, "As far as a credibility gap I think what you are seeing is the Republican Party moving rapidly in the direction of Ron Johnson and people like Jim Demint, Tom Coboun and Rand Paul. I think you are seeing the Republican Party move in that direction very quickly recognizing that the fiscal conservatives are who they want running the United States of America today and for good reason."
There is no doubt Neumann is looking to contrast himself with the moderate former governor Tommy Thompson, whose campaign has been meet with skepticism by fiscally conservative Republicans throughout Wisconsin and the entire country.
But Neumann was not interested in engaging in intra-party finger pointing, reserving his criticism during our interview solely for the Obama administration, "The deficit spending under the Bush administration had grown back to about 480 billion dollars but it was still approximately a third of deficits Barack Obama has been running. The increase in government spending by 20% in a one year period of time from 2008 to 2009 is clearly the crux of the problem that we are facing today. I can't emphasize that enough that spending went up at the federal government level by 20% it went from 2.9 trillion to 3.5 trillion in a one year period of time and then they never brought it back down."
When I asked if he thought Washington as a whole has been lulled into a false sense of security with the 10-year treasury yield hovering around 2% Neumann said, "I don't think they have accepted the reality of how bad off we are financially in this country with our government borrowing 16 trillion. The fact that our debt exceeds our GDP should be a wake up call to everyone that we are in serious trouble. I think the one that bothers me most and when you ask is there a false sense of security, if you look at the debt per person in America vs. the debt per person in Greece. In America if each man woman and child were to pay off their portion of the debt it would be $50,000, in Greece that number is $39,000. Our debt to GDP has now crossed 100%, Greece's debt to GDP is 130% but we are going to catch them over the course of the next 4-5 years. So yes I do believe there is a false sense of security. And I think we need to act quickly to get our house in order."
Neumann chalks up the low yields in the Treasury market to the intensity of the crisis unfolding in Europe, "Part of treasuries being so low is because Europe is in as much trouble as they are, as bad as our situation is it is still better than the Europeans, but that doesn't change the fact at all that we need to cut government spending and get our budget balanced and start paying down some of that debt to get our ratios back to a reasonable number where this nation can continue to exist financially."
I asked Neumann how long he thinks the US has to address the debt in a serious way and what he sees as the potential catastrophic event if Washington does not address the debt. He had this to say, "To define catastrophic I believe Greece would be the model, on a smaller scale than I think the US would be but would be something of that order to answer your question but how long, last fall I got the person who worked with me on budgets for four years when I was in Congress and we took about a six month period of time and went through the budget. In terms of length of time to balance the budget I would say no more than five years. We came up with a detailed plan that is at our website that shows specifically how to balance the budget over a five year period of time. We've laid out 150 specific line item entries to show what programs we think should be reduced and/or cut as a partial list but a good start. (The list can be found here) The plan gets to balance by ending Obamacare and cutting about 1.4 trillion out of the federal spending, so when you are asking about the time frame I would say no more than 5 years."
When I raised the possibility that it is the Obama administration's policy via the Federal Reserves to simply monetize the debt by inflating the dollar into oblivion Neumann didn't buy it, "That would be giving him credit for having a plan but I'm not willing to go that far, I'm not sure anybody in the Obama administration or the Reserve has a defined plan to get us to a balanced budget or get this budget fiasco back in order."
While Neumann thinks that all options are on the table when it comes to reducing the debt it doesn't seem that military spending would be high on his target list, "I think military and defense of America as being the number one priority of this government. When you look for wasteful spending I think all items are under consideration, but I have to tell you as far as prioritizing spending, I think defense remains our number one priority. And if it was me I think we need to transition out of a social welfare state where people have their hands out and they are collecting money and refocus our priorities in this nation on the top priorities would be defense."
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About the Author: Shaun Booth is editor of MilwaukeeStory.com.