You and your neighbors were probably among the many who called, wrote, e-mailed, and visited my offices in Gold River and Washington DC while the House and Senate negotiated a deal to reduce spending and avoid default on our nation’s debt. Although people fell along the entire spectrum – from wanting to raise the debt limit without any spending reductions to wanting to leave the debt ceiling where it was and everywhere in between – nearly everyone expressed disappointment at seeing more of the same from Washington.
The S&P Ratings Service underscored this disappointment, saying that “the effectiveness, stability, and predictability of American policymaking and political institutions have weakened” and “the fiscal consolidation plan … falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics.”
I agree. As I have argued for years, we need to face our fiscal problems now, not later. That is why the vote in raising the debt ceiling was at least a hopeful sign. For the first time in my memory, the Congress refused to OK a fundamental request for such a raise unless it was accompanied by some real credible spending cuts. This is just a first step of many that must be taken if we are to restore the confidence of the markets and, more importantly, the people.
Our downgrade from a AAA credit rating to AA+ is the first time in our nation’s history that we have not had the best rating available. With the sharp volatility in the stock market after the downgrade was announced, we are already seeing some of the consequences – consequences of the downgrade, yes, but ultimately consequences of our out-of-control levels of debt.
The rating services are awaiting further evidence that our federal government will continue on a changed course of direction. Ultimately it is the resolve, dedication, work ethic and integrity of the American People that will render the final verdict.
The news is bleak but the American people do not tolerate nonsense and will recover from the ongoing economic downturn. Just as other generations have rebuilt themselves through the Great Depression, World War II, and the “malaise” of the 70s, so too will we restore our economy to bring prosperity back to our families and balance to our budgets – as long as government allows the American people to do so.
So far during our District Work Period I have seen the most encouraging signs that folks here are going to push through any economic adversity. Students like those I met at Heald College are engaged in job-focused training. JP Morgan Chase is opening new branches in our Third District that will mean new jobs and new loans for area small businesses. Jamie Dimon himself, Chase’s CEO and Chairman, was present for a grand opening of a branch in Citrus Heights to underscore his belief that America still has the capacity to grow our economy through innovation, creativity and the entrepreneurial spirit.
It is the underlying common sense of our people and the private sector job creation that will get us to where we need to go. I have every confidence in the world we will get there. I know you are frustrated. I am too. Your drive and convictions will ensure our country will be OK.
Sincerely,
Daniel E. Lungren
Member of Congress
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