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Gingrich Campaign Press Release - Conservatives Must Hold Firm in Debt Ceiling Fight

July 08, 2011

UPDATE: Read Newt's latest on the debt ceiling fight - The Time for Talk Is Over

The Washington establishment is doing everything it can to make successful debt ceiling negotiations impossible for conservatives.

We are told we have to be for a tax increase or be irresponsible.

We are told we must be for draconian cuts in popular programs at enormous political cost or we are not serious.

We are told if we hold firm for spending cuts and refuse to give in to President Obama's demands we will be responsible for the United States defaulting and be punished by the voters.

All of this is nonsense and conservatives should take the establishment of both parties head on.

We know this from experience. In 1995, House Republican leaders decided we would balance the budget when no one in the establishment thought it was possible. We rejected the establishment's false choices and set out to balance the budget in seven years. In fact, it only took three.

The result of the policies we enacted were four straight years of balanced budgets, the repayment of over $400 billion in debt and the creation of over 8 million new jobs.

From this background of successful budgeting, let me suggest five keys to turn the current debt ceiling negotiation into an historic success, which achieves the conservative goals of cutting spending, capping future spending, and passing a balanced budget amendment.

1. Stop Paying the Crooks

The current system of federal bureaucracy is riddled with payments to crooks. A recent report on theft of food stamps itemized $8,000,000 stolen by four people, including current and former city employees, in New York City. It suggested billions in theft and over payment in food stamps alone.

A report on Social Security a few weeks ago suggested $8 billion in impropery payments in 2009.

The Center for Health Transformation published "Stop Paying the Crooks," indicating between $70 and $120 billion in Medicare and Medicaid is paid to crooks annually.

The New York Times published a series of articles in 2005 estimating over 10% of New York State Medicaid was paid to crooks. By comparison, many credit card companies pay no more than .03-.04 percent in fraud.

This means you are about 330 times (33,000%) more likely to pay a crook as a taxpayer than as a credit card holder.

When asked about spending cuts conservatives should respond, "First, stop paying the crooks".

2. Management is the hidden flaw in the entire federal government.

Beyond the issue of fraud, ineffective management in the federal government wastes an enormous amount of money.

Everyone argues about policy but almost no one looks at implementation.

IBM's Center for the Business of Government suggested that $100 billion a year could be saved by simply managing the federal government as well as a sophisticated modern corporation.

Mike George, one of the pioneers of Lean Six Sigma as a management tool, has founded Strong America Now committed to applying Lean Six Sigma to government. He believes this management approach will save up to $500 billion a year.

Imagine saving $1.25 to 5 trillion over the next ten years simply by running the government for effectively.

So the second conservative answer when asked where you can cut spending ought to be trillions of dollars in in mismanagement.

3. Conversation is the key to entitlement reform.

In passing welfare reform in 1996, we proved that the American people would support very large changes if they were part of the conversation and understood what was being proposed, how it would affect them, and why it was better than the current system.

Similarly, in passing Medicare reform in 1996 we involved AARP and spent a year training our House members so they could go home and answer questions until people were satisfied.

There are two big opportunities for conversation today.

The House Ways and Means Social Security subcommittee could launch a yearlong series of hearings on future retirement programs in which only Americans under 30 could testify.

Going around the country listening to young people would start a dialogue about their life expectancy, their job prospects and their hopes and dreams which would lead to an entirely new conversation about social security for their generation.

Similarly, a conversation with older Americans based on their right to choose would lead to a much wider willingness to accept options in Medicare.

The American people will be very suspicious and even hostile toward a mandatory change in entitlements in which they are not part of the conversation. However, the very same people could end up being very supportive of the right to choose between different options.

4. Revenue from growth versus revenue from taxes

One of the favorite obsessions of the Washington establishment is the need to raise taxes.

Conservatives are constantly presented with questions which assume that the only way to raise tax revenue is to raise taxes. The elite media then works overtime to make conservatives seem fiscally irresponsible for refusing to raise taxes.

This is exactly what happened during the budget negotiations of 1990 at Andrews Air Force Base. The Republican establishment in the first Bush White House joined with the Democrats to insist on a tax increase. Once it became clear that the fix was in for tax increases, I refused to participate in any further negotiations, and 125 other conservative Republicans ended up joining me in voting against the budget.

We refused because we understood it was the wrong model. Jack Kemp, Ronald Reagan and many other conservatives spent much of the 1970s arguing that the key to more revenue was a bigger economy, not higher taxes. In fact, they asserted that the best long term approach to balancing the budget was to cut taxes and regulations and increase economic growth.

The more people who go to work, the more people who pay taxes. Therefore, a full employment economy is a necessary step towards balancing the budget.

In the 1990s we followed this same model and achieved four straight balanced budgets by cutting taxes and regulations, leading to job creation.

Conservatives must reassert the power of jobs to increase revenues by putting people to work and the power of higher incomes to increase revenue by giving people a higher standard of living from which they can pay more taxes.

Reestablishing a public understanding of the power of economic growth and creating a renewed belief that private sector prosperity is the key to public sector revenues has to be a major goal of conservatives.

5. Courage

Really large change inevitably requires a really large fight. Interest groups who have spent decades living off your tax money aren't going to cheerfully give up just because someone asserts it is in the public good.

The establishment wants conservatives to believe they have an obligation to cave in every time things get tense. Somehow the liberals never have the same pressure.

The news media does not put pressure on President Obama to accept a spending cut only solution to the debt ceiling. They do, however, assert that conservatives will be punished if they refuse to surrender their principles and vote for a debt ceiling increase with taxes increases and/or with inadequate spending cuts.

Conservatives must summon the courage to ignore this pressure and be willing to fight for what is right. In doing so, they can remind themselves that the first reelected House Republican majority in 68 years came after the government shutdowns of 1995 and 1996.

The Washington news media was hysterical. Liberals were enraged. Tourists were inconvenienced.

However, our conservative base was very happy. Finally they had elected people who were prepared to insist on real change even if things got tough.

Being firm led to both a policy and a political success.

On policy, the two shutdowns led to an appropriations agreement which was the first discretionary spending cut since 1969. It also led to welfare reform (with two out of three people leaving welfare and going to work or to school).

Ultimately, standing firm led to the first four balanced budgets in our lifetime. Proving we were serious changed the attitude of the Clinton White House toward working with us.

Politically, the conservative base went all out to win the 1996 House races and we won reelection despite Clinton winning the Presidential race.


Conservatives can win the three goals of cap, cut and balance if they use arguments which dominate the media bias and the media distortion.

This is the year to achieve a decisive breakthrough in fiscal policy that sets the stage for sustainable, long term federal spending and economic growth.

Conservatives have to be courageous and use the right arguments to win the debate. If they do 2011 will be a year of great progress for America.

Newt Gingrich, Gingrich Campaign Press Release - Conservatives Must Hold Firm in Debt Ceiling Fight Online by Gerhard Peters and John T. Woolley, The American Presidency Project

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