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David Walker: Budget Debate “Like Arguing About the Bar Tab on the Titanic”

Fin - Daily Ticker - US

tick, tock, tick, tock…

Congress has a week to reach a budget compromise and prevent a government shutdown. Earlier this week both parties appeared closer to a deal that would cut about $33 billion from this year's budget. However, Tea Party pressure on the GOP to stick with the $61 billion in cuts outlined in the House bill is adding new complexity to the situation. "We're going to continue to fight for everything that's in it," Speaker of the House Boehner said Thursday.

As dire as the U.S. fiscal situation may be, the GOP and the Tea Party are playing with fire, says David Walker CEO of Comeback America Initiative, former U.S. Comptroller General and head of the Government Accountability Office (GAO) in both the Clinton and the second Bush administration's.

"They're talking about limited government, individual liberty, fiscal responsibility, I'm all for that and most Americans probably are too," Walker tells the Daily Ticker's Aaron Task and Dan Gross. "The difficulty is that they have unrealistic expectations about how much you can do and how quickly you can do it."

On top of staying steadfast on their budget cut goals, House Republicans are holding up the negotiations over ideological issues. Speaker Boehner is standing his ground on the House bill's defunding of Planned Parenthood and National Public Radio. Negotiating over these items with little economic impact is not time well spent, in Walker's view. In fact, he says, the entire back and forth over the $30 billion or so on a $3.7 trillion budget misses the point. "This like arguing about the bar tab on the Titanic," he quips.

Beyond the immediate budget debate, a potentially even larger issue looms in the form of the debt ceiling. The government is expected to reach the $14.3 trillion borrowing limit sometime this spring. Tea Party Republicans have vowed not to raise the ceiling. Again, Walker is pushing for a more pragmatic approach. Left up to him, Walker recommends raising the debt ceiling and using the debate to "focus on the real threat and those are structural deficits that lie ahead."

The most pragmatic approach is to "bring back statutory budge controls," he says. More specifically, the "path forward" requires both parties to agree on annual debt-to-GDP targets, that if not met trigger, "automatic spending cuts, automatic freezes in certain aspects of mandatory spending and automatic tax surcharges."

Sound like a common sense approach, which probably explains why it's not being discussed in Washington.

What do you think: Should Congress agree to Walker's plan?