While he supports the stimulus package that’s been approved and put into place, U.S. Rep. John Barrow didn’t like the budget presented to Congress last month.
The three-term Savannah Democrat balked at the projected deficits in the $3.55 trillion budget, the first submitted by President Obama, and he’s concerned over the projection of escalating deficits.
Changes to the current budget are expected to see spending surge to $3.94 trillion, and the Obama White House is anticipating a record-setting deficit of $1.75 trillion for this year.
Critics have charged that the budget would increase the federal deficit by more than $9 trillion by 2019.
“I’m already worried about it,” Barrow said of the future deficits, “which is why I was unable to support the budget that passed the Congress. I’m concerned not because there isn’t a lot of stuff that needs to be done. I’m concerned about it because of the extent to which we’re accepting enormous deficits at the end of five years is the new normal.
“We never had $500 billion a year deficits before now and really never regarded that as normal before. When you consider the enormity of the deficit we have, it’s an improvement over what we have right now, but it’s not a situation that’s acceptable in the long run.”
Barrow said the government has taken on long-term debt “to pay the light bill.” It makes the government go into long-term debt for things of value, he said, rather than to pay for operating expenses.
“But we haven’t been doing that in the federal government for the last decade,” he said.
“The recovery act represents a significant investment in things that have more lasting value than what we’ve been doing the last decade and that’s the promise, the benefit makes it more worthwhile.”
Barrow has championed the $787 billion economic stimulus package, known as the American Recovery and Reinvestment Act. He supported such provisions as the building of new schools and the pouring of resources into creating a smart power grid.
“I haven’t been able to support all aspects of the administration’s economic policies,” he said. “But I do think the recovery act has been a huge step in the right direction. On balance, I think it will do far more good than harm. We have to invest in things we have neglected for too long now.”
Barrow voted against the financial sector bailout on three occasions and has decried the lack of accountability and transparency for the money given to banks and financial institutions.
“We had no way of knowing what we were going to get for our money on the other side of that $700 billion investment,” he said. “We’re still having a hard time figuring what we purchased for our money. I couldn’t support that plan because it was a plan to be named later. There were too many ways that money could be misspent or misdirected. The AIG episode is one example of that.”
What Barrow doesn’t have a problem with is the ouster, at the behest of the White House, of General Motors CEO Rick Wagoner. Wagoner was replaced by GM’s chief operating officer Fritz Henderson.
The automaker, once the largest in the world and now No. 2 behind Toyota, and Chrysler received more than $17 billion in assistance from the federal government in December 2008.
“I have no absolutely no problem with the representatives of the taxpayers speaking up and asserting their interest as shareholders when these companies come to the taxpayer for relief,” Barrow said. “When you come to the taxpayers and ask for equity, you should get what every equity owner has in its business, a stake in its management and a willingness to speak up. We’re the lender of last resort. We have an obligation to our creditors to make sure we’re getting a value and we’re getting a vision that matches the size of the problem.
“This is not a matter of government telling private enterprise what to do. This private enterprise coming hat in hand to the government and asking for help and the government saying these are the conditions on which this help will be available.”
Barrow countered that the Big 3 need a direction and vision to map out a long-term recovery of the domestic auto industry. GM employs 123,000 in North America, Ford has about 88,000 workers in the U.S. and Chrysler has about 58,000 workers.
“If it’s important enough to save,” Barrow said, “it’s important enough to make sure we’re getting value for our dollars.”
General Motors is said to be exploring possible bankruptcy options, and Barrow said bankruptcy for a concern such as GM, which is both a manufacturer and a service industry, is different.
“My preference is to do everything we can to keep General Motors out of bankruptcy,” Barrow said. “We have too much of our rolling stock in this country being serviced by these companies to watch them go down the drain. The value of the brand can take a huge hit as a result of passage of bankruptcy, which is all out of proportion to the benefits you get out of it.”