Appleton Post Crescent: Sen. Ron Johnson urges Obama to prepare debt contingency plan

By Larry Bivins

WASHINGTON — Sen. Ron Johnson has moved to the frontlines of the battle in Washington over budgets and deficits.

Last week, the Oshkosh businessman admonished Senate Democrats for not having produced a 2012 budget proposal. On Wednesday, he led a contingent of 22 Senate Republicans in urging President Barack Obama to prepare a $2.6 trillion contingency plan to run the government should Congress refuse to raise the nation’s debt limit beyond $14.3 trillion, as the administration has requested.

“Taking responsible action now will avert a crisis in the future,” the senators said in a letter drafted by Johnson’s office.

Treasury Secretary Timothy Geithner has warned lawmakers that failing to increase the debt ceiling could have profound economic consequences for a nation still struggling to recover from a recession.

“A default would inflict catastrophic, far-reaching damage on our nation’s economy, significantly reducing growth, and increasing unemployment,” Geithner wrote in a recent letter to Sen. Michael Bennet, D-Colo.

A financial default, Geithner added, “would call into question, for the first time, the full faith and credit of the U.S. government.”

Johnson and his GOP colleagues objected to such predictions.

“We believe it is irresponsible to spread panic instead of taking responsible action to calm the markets,” their letter said. “We believe it is irresponsible to ignore the broken political system and the very real possibility that the debt ceiling might not be raised in time. And we believe it is irresponsible not to develop robust contingency plans now — just in case.”

Republicans have demanded substantial spending cuts in exchange for allowing the government to borrow money to pay its bills and continue operating at a normal level. Republicans and some Democrats also want to tackle reform of entitlement programs, which most fiscal experts agree are the chief drivers of the nation’s debt.

On Wednesday, the Senate rejected a plan proposed by House Budget Chairman Paul Ryan, R-Janesville, that would convert Medicare from a fee-for-pay system into a voucher program and would provide block grants to states to administer Medicaid.

Johnson voted for the measure, but five Republicans joined the Democratic majority in the Senate in opposing it.

Johnson, who is a co-sponsor of a budget-balancing bill proposed by Sen. Pat Toomey, R-Pa., said in an interview Thursday that he supported Ryan’s plan because it begins much-need serious discussion about how to reconcile continuing to provide those programs when they are eating up so much of the federal budget.

“If we don’t reform them, they won’t exist,” Johnson said.

Johnson, a freshman who has made government spending, debt reduction and repealing the health care law his primary goals, has become a regular critic of Obama’s fiscal stewardship. He said he initiated the letter out of disappointment in what he called a lack of leadership by the president. He said the fact that Obama’s 2012 budget proposal received no votes Wednesday exposed “how incredibly unserious that budget was.”

“That’s one heck of an indictment,” Johnson said.

When asked whether he didn’t believe the dire predictions of what would happen if Congress refuses to raise the debt ceiling, Johnson said, “There will be far more serious consequences if they don’t plan for that possibility.”

Speaking on the Senate floor last week, Johnson lashed out at his Democratic colleagues for not having come up with their own 2012 spending plan.

“Our deficit for this year will be approximately $1.5 trillion,” Johnson said during a statement on the Senate floor. “The fact that President Obama and the Democrats who control the Senate have not put forward a responsible budget is not only disappointing, it’s alarming.”