Johnson: Day of fiscal reckoning is closer than we think

Freshman U.S. Sen. Ron Johnson said he aspired to go to Washington because he believes the government is in a fiscal crisis.

Johnson, in a stop Friday at The Reporter, spoke about the nation’s urgent fiscal problem and the need for leaders to become serious in addressing it.

“I didn’t run to be a senator,” the Oshkosh businessman said. “The reason I ran is I recognized we’re (the federal government) bankrupting this nation. This is unsustainable.”

Johnson said that for years, leaders have made promises that will financially burden future generations.

The Congressional Budget Office is reporting a record $1.5 trillion U.S. deficit for fiscal year 2011 and the country is approaching a debt of $14.29 trillion.

The fiscal problem, Johnson said, is something that’s got to be solved. He said he is willing to work with anybody who is serious about the issue, but admitted that historically, presidential leadership has been needed to bring about a solution.

Debt ceiling

Johnson said he and 22 senators recently joined in sending a letter to President Barack Obama calling for the administration to develop a contingency plan in the event Congress rejects a debt ceiling increase.

The letter called on the Obama administration to begin working with budget experts in Congress to allocate spending within a $2.6 trillion “Debt Ceiling Budget.” The plan would ensure that essential services would be funded on a priority basis.

“Taking responsible action now will avert a crisis in the future,” the letter said.

Johnson, on Friday, said it’s irresponsible to assume the debt ceiling will be increased; to use “scare tactics” on the markets and citizens; and to avoid having a contingency plan in place.

“The fact of the matter is this president is not particularly engaged (in the fiscal situation) at all,” Johnson said.

He added that there seems to be no constraint when it comes to spending.

“(For now) we can just print more money,” he said. “We haven’t hit the ‘day of reckoning.’”

Johnson said he believes that day will come sooner rather than later.

A first step in addressing the country’s fiscal situation, he said, is to establish “hard spending caps” that would instill fiscal discipline and force leaders to prioritize spending.

Johnson said government is too big. Spending, he said, has increased dramatically over the past three to four years.

“We need to cut spending in the next fiscal year,” said Johnson, adding that he believes spending needs to be reduced to 2008 levels at a minimum.

Johnson said if the budget is ever to be balanced, spending needs to be on a “glide path” with revenue.


Part of the Commitment to American Prosperity (CAP) Act calls for a 10-year “glide path” to cap all spending — discretionary and mandatory — to a declining percentage of the country’s gross domestic product (GDP). Eventually, spending would be brought from its current level of 24.7 percent of the GDP to the 40-year historic level of 20.6 percent.

Johnson said his “very strong preference” for a final solution would be a constitutional amendment that backs the Cap Act “that just limits the size of government.”

Reports are that if left on its current trajectory, by 2035 U.S. debt would reach an estimated 185 percent of GDP. Then, interest payments on national debt would reach nearly 9 percent of GDP — as much as is spent on national defense, education, roads and all government agencies combined.


Johnson and his wife, Jane, moved from Minnesota to Oshkosh in 1979 when he began a business — producing plastic sheet for packaging and printing applications — with his wife’s brother.

Johnson worked to grow the business, known as PACUR, over the span of 31 years.

The political newcomer defeated three-term U.S. Sen. Russ Feingold in the November 2010 election.

Johnson said just as he worked to build relationships in his business life, he is trying to build relationships in Washington, D.C.

“If you’re a successful leader in business, you lead,” he said. “You gain consensus. You don’t boss people around. You persuade.”

Johnson said his career as a U.S. senator will be rewarding if he is able to help fix the nation’s problems.

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