The problem with the U.S. government, a Congressman said Thursday, is not revenue, but spending.
With
the complicated budget issues facing the nation’s government, U.S. Rep.
Lynn Westmoreland is using the summer break from Congress to answer
questions throughout his region.
Westmoreland, R-Newnan, was in Carroll County Thursday to try to explain the numbers being discussed.
“When
you start talking about discretionary spending, non-discretionary
spending, cuts to taxes, reduces in tax breaks, revenue and spending, it
gets confusing,” he said.
In an effort to make the figures align
better, Westmoreland and his aides created charts to better explain to
his audience at the Carroll County Chamber of Commerce the possible
outcomes of the different cuts, increases and the national debt.
If
the oil companies incentive, tax breaks on corporate jets and Bush era
tax cuts and the war money spent in Afghanistan, Iraq and Libya were not
spent, the daily equivalent would equal what the U.S. spends in three
hours.
In comparison, the U.S. budget has had to borrow about 33
percent of the budget from other countries and U.S. citizens for years,
Westmoreland said.
“This proves we have a spending problem, not a
revenue problem,” he said. “There’s never been anyone come in my office
and not want more money. Eventually, we have to say we don’t have any
more money.”
When asked if he thinks the 12-person financial
committee selected by President Barack Obama would be effective,
Westmoreland said he did not think it would. Some of the primary money
drains, like Social Security, are exempt from potential cuts, but those
programs are among the ones that most need reform.
“When 10,000
people are added to the lists (to receive Social Security, Medicare,
food stamps or other programs) every day ... there is fraud,” he said.
People
who are physically able to work receive disability while people unable
to work are denied. Westmoreland said similar claims are made throughout
the overworked agencies. The agencies need to have a smaller focus to
catch errors and save the funds.
One of the biggest areas the
committee of 12 is allowed to cut is the military. With the current
global climate, Westmoreland thinks it would be unwise to make deep cuts
in the military and defense budget.
A bill introduced by Westmoreland and passed in the House would review how bank failures are determined.
Almost
70 community banks in Georgia have failed in the past several years.
Five banks that were either based in Carroll County or had branches here
have failed since 2007. Georgia has had about 20 more banks close than
any other state.
Westmoreland said the problem started when banks
started foreclosing on properties and selling them at large discounts
just to move the properties. It caused property values in the
neighborhood to drop, making mortgages worth less. The drop in value did
not just affect home owners, it affected the banks that held the
mortgages.
When the Federal Deposit Insurance Corp and other
government organizations step in, the bank is required to either collect
the difference in property value compared to the mortgage from the home
owner or pay the difference. When the small community banks cannot pay
the difference, the FDIC steps in to sell the bank to another company,
usually larger. The bigger banks get loss-share agreements and financial
incentive to balance the assets of the purchased banks.
“It has a
snowball effect. Those big banks fire-sell properties and more
community banks can’t afford to stay in business,” Westmoreland said.
His
bill, currently being reviewed by the Senate, would require a review of
the FDIC, Office of Comptroller General and other involved
organizations to review the accounting practices.
If the bill passes in the Senate, the study will begin.
At
the same time, Westmoreland will be working on legislation that would
allow the community banks to spread the financial difference over a
space of five years rather than requiring immediate repayment.
“That would stabilize a lot of these community banks,” he said. “We’re continuing to work on it.”
The
move is not just for the banks. Many people invest in community banks
and, when the FDIC takes over, they lose all the money they invested.
Daniel
Jackson, CEO and president of Carroll County Chamber Commerce and
Carroll Tomorrow, said he was pleased with the turnout for Westmoreland.
“It proves that people are interested and concerned. (Congress) knows people are frustrated,” Jackson said.
The
chamber and Carroll Tomorrow tend to avoid politics but when the issues
of national concern have direct impact on the area businesses, Jackson
began to feel the need to make sure everyone had the details of the
national finances available to them.
“Things are not improving at the speed we’d like,” he said.
Locally,
however, businesses are growing slowly. Several local companies have
added workers and are out of room to expand in current facilities but
are not confident enough in the economy to try expand and add more
employees.
“Once things are more stable and consumer confidence
improves, I think there’s a possibility of quick growth in our
community,” he said. “It’s not all bad news, but when that’s the only
thing front and center, it weighs heavy on the mind.”
Jackson said the people he spoke with after the meeting felt they were getting accurate numbers and a straight story.
“We
can’t depend on the U.S. Congress to fix the problems,” Jackson said.
While it is tempting to step away from the situation and withdrawal, he
said, everyone needs to be involved.
