Kerry warns of economic disaster if supercommittee fails

Deficit impasse would trigger cuts, shake confidence

November 08, 2011|By Michael Levenson, Globe Staff Cut
  • People are going to have to be willing to take some hits here, said Senator John F. Kerry about a deficit reduction deal.
People are going to have to be willing to take some hits here, said Senator…

Senator John F. Kerry warned yesterday that the country could face an economic calamity with rising unemployment rates, escalating interest costs, and deep cuts to social programs if the so-called supercommittee cannot meet a Nov. 23 deadline to fashion a deficit-reduction deal.

The failure to reach an agreement would send a very dangerous signal to global markets that Congress is incapable of handling the nation’s financial problems, he said. In addition, he said, the automatically triggered cuts would gut programs for the poor.

About 100,000 children would be forced out of the Head Start program, 35,000 low-income children would lose child-care services, 173,000 tenants could be evicted from subsidized housing, and 1 million pregnant women and young mothers would lose supplemental nutrition support, he said.

Homeland security efforts also would be slashed, he said, with layoffs hitting 9,000 Transportation Security Administration screeners and 3,700 agents of the FBI, the Drug Enforcement Administration, and the Bureau of Alcohol, Tobacco, Firearms and Explosives.

“It’s very difficult, it’s very, very tough, and the stakes could not be higher,’’ Kerry, a member of the bipartisan-deficit reduction panel, said in an interview with Globe editors and reporters. “A lot of people just aren’t digesting the full measure of this challenge to the country.’’

Part of Kerry’s message seemed targeted to critics in his own party, some of whom have said it might be better to let the committee fail and accept the automatic cuts that would result, because those cuts would spare Medicaid while cutting defense.

In addition, Kerry is facing pressure from his allies in the AFL-CIO, the AARP, and liberal groups, which are planning a large march to his office in downtown Boston tomorrow, to demand Social Security, Medicaid, and Medicare not be slashed as part of any deficit-reduction deal.

Kerry said the best option for Democrats and the country as a whole is to reach a fair deal that restores the markets’ confidence and asks each side to budge.

He argued the ultimate goal is to preserve Medicare, Medicaid, Social Security, and other programs by making sure they are financially solvent in the future. As a percentage of gross domestic product, federal revenues, he said, have fallen to a 60-year low while spending has hit a 60-year-high, and 40 cents out of every dollar spent is borrowed.

“It’s simply not sustainable,’’ he said.

Kerry said he was willing to support the proposal floated last week by Senator Max Baucus, which would have sliced $3 trillion from the deficit over the next decade through equal parts new revenue and cuts, including reductions in Social Security and Medicare.

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