By JOAN McCOY
Leader staff writer
Sen. John Boozman (R-Ark.) had lunch in Cabot on Tuesday with chamber of commerce members from Cabot and Jacksonville, telling them that being there together showed their commitment to the ideal of regionalism.
“What’s good for one community is good for another. It just makes sense to work together,” said Boozman.
Then with an anecdote about being sworn in with the Bible his dad carried in World War II, the senator led into what he said is the greatest crisis the country has faced since that war—the national debt and the need for a law that will require a balanced budget much like the one in Arkansas.
It might not be easy, the senator said, but now a rating service has questioned the nation’s ability to pay the debt on its bonds.
The large budget deficit was one of the reasons given by Standard & Poor on Monday for downgrading the nation’s credit outlook to negative.
Right now, the national debt is $14.3 trillion but interest on that debt is low. Just like with home-mortgage loans, bad credit leads to higher interest rates. And raising interest on the nation’s debt by just 1 percent will increase the debt by $140 billion a year, Boozman said.
“We’re at the tipping point. It’s got to be done,” he said of cutting spending and balancing the budget.
And if that wasn’t clear, he reiterated that it’s time to “answer the call…make the tough call…rise to the occasion…do what we’ve got to do.”
The most pressing issue is for Congress to pass a law allowing the secretary of the treasury to raise the debt ceiling so the government can continue to operate and pay its debts, Boozman told the group. Not doing it would cause the government to default on bonds and other debt.
But he said in a brief interview after the meeting that he won’t vote for such a law unless it is accompanied with a law to balance the budget over time.
Boozman did not elaborate during his speech about how the budget could be cut.
Asked later what he would cut, the senator said many government programs have too many layers of bureaucracy that duplicate administrative services. Some of those could certainly be cut, he said.
Not raising the debt by July 8 could also cause the government to default on Social Security payments, experts say.
His comments were in line with recent reports that the Republicans realize they have no choice about raising the federal debt ceiling from the current $14.3 trillion to prevent economic disaster, but they won’t do it without legislation to curb spending and rein in future deficits.
In addition to costing more to borrow money because bonds go into default if the debt ceiling isn’t raised, experts say that devalued Treasury securities would harm individuals and pension funds, and interest rates would rise on other forms of debt: mortgages, credit cards and state and local borrowing.
Raising the ceiling is non-partisan, Boozman said. “It has to be done.”
Cabot Mayor Bill Cypert was part of Boozman’s audience in the dining room of First Baptist Church.
In addition to wanting to hear what the senator had to say about the national debt, the mayor said he was there for an update on the $1.1 million federal appropriation to begin engineering and right-of-way acquisition for the north interchange that has been talked about for a decade.
Cypert learned when he took office in January that the money was appropriated, but not for Cabot. Instead, it was mistakenly set aside for the Chalk Bluff Road project in Clay County.
Boozman, a former Third District congressman who was elected to the Senate in November, said he also learned about the clerical mistake when he took office. The problem can be remedied, the senator said.
Clay County knows it doesn’t get to keep the appropriation, but giving it to Cabot will require adding it to an appropriate bill, he said.
