U.S. Sen. Johnny Isakson told the Rotary Club of Buckhead Monday that while controlling the federal deficit is a daunting challenge, steps can be taken to rein in government spending.
Isakson, who proudly called himself a "Buckhead boy," said that both parties shared blame for a 60-year period of the country accruing debt, both personally and nationally.
"We got too used to leverage," Isakson said. "Too much leveraging will kill you." Now he said the country will have to meet the challenge of 60 years of "deleveraging," or reducing debt.
He presented a five-step program for controlling spending.
- As a result of the recent debt limit crisis, a congressional "supercommittee" will look at cutting "discretionary spending" by 11 percent over the next 10 years. Isakson said that the country's financial stability would require that much time. In response to a question from the audience, he predicted that Republican and Democratic members of the supercommittee, would reach agreement on spending because automatic reductions will be triggered if they don't identify $1 trillion in cuts by the end of this year. He also said the Bowles-Simpson plan for reducing the defict should be brought to the floor.
- Social Security and Medicaid shortages can be met by raising the age of receiving the entitlement benefits to 68 pr 69. He said the message for his children and grandchildren would be "you're going to have to work longer, and you're going to live longer."
- Isakson gave his support to U.S. Rep. Paul Ryan's plan on Medicare. With the present expenses "we cannot sustain Medicare as we know it," he said. He called for a "premium support" payment at age 67 that would allow people to choose their own health insurance plan and physician. "Means testing" would give those with fewer resources more of a payment. This Medicare reform would "re-empower the consumer, re-empower the private sector," he said.
- As called for under the Bowles-Simpson report, he said "it's time to put taxes back on the table," referring to an examination of federal tax deductions. All deductions, he said, should be evaluated in regard to their benefit. The ethanol benefit was one that should be eliminated, he said. Although his background is in residential real estate, he said that even the popular mortgage interest deduction should receive scrutiny.
Under the Obama administration, regulation of business has "gone too far," he said. A Buckhead busiessman told him in the OK Cafe one moring "I just fired a salesman so that I can hire two compliance officers." While Isakson said "regulation's not a bad thing, it's a good thing, we're gone too far in trying to eliminate risk." Because of excessive regulation, he said, "there's more money sitting on the sidelines in corporate America than any other time in our history."
In response to a question from the audience, Isakson predicted the housing market would eventually recover. The founder of Northside Realty, Isakson said that family members of his company were caught up in the housing mortgage bubble of giving subprime mortgages too easily. But now, he said, "we've gone from way too liberal to way too strict." Isakson assured the group that the housing market "will come back — we're a nation of owners, not tenants."