Sit right back and I'll tell you a tale, the tale of a fateful ship.
It started from this traffic port, about the debt limit ship.
The tide of over-spending has turned and the rip currents that are swirling around can bring down the credit rating of the United States in an instant if Congress and the Administration can't come to an agreement and raise the debt ceiling befoer August second. A temporary fix would be seen as a slow leaking air preserver.
The young Republican class has been part of that voice demanding such change. Representative Diane Black (R-TN), who is a member of the Ways and Means and Budget Committees, and 76 other Congressional freshmen sent a letter to President Obama on June 6th asking for a scorable debt reduction plan. She asked for a response within 30 days. Well, 30 days is up and that letter never got a response. On the day of the latest chapter of this fiscal fiasco, I caught up with her.
LL: You rallied 76 freshman to sign onto your letter asking for a scorable debt reduction plan, and asked for a response within 30 days—still no word from the President. What is your message to the President on the day he meets with leaders in a special debt summit?
Rep. Black: I would tell the president that for months now, House Republicans have made our demands clear on the debt limit: we need significant spending cuts and reforms. The American people want a real change in the way Washington does business—that is why they sent me and my freshman colleagues to Congress.
But what my colleagues and I will not stand for is a. deal on the debt limit that includes more taxes on small businesses and the very job creators we are relying on to get our economy back on track. When I talk to the job creators in my District, I consistently hear that because they have such a lack of confidence in our economy and in Washington, they can’t grow.
My small business owners believe that one more regulation, tax increase or mandate might sink them. The fact is that we are in this mess because Washington spends too much, not because we tax too little, and we can’t reach a debt deal on the backs of job creators.
LL: Back on June 6th when you sent your letter to the President you said you were worried that the Administration did not have a credible plan to reduce our debt. Do you think its status quo now or worse?
Rep. Black: I decided to write that letter to the president after Secretary Geithner met with our freshman class of lawmakers and made it clear that the Administration did not have a plan of its own to reduce the debt. For me that showed a very basic lack of leadership from the President on a critical issue. Our nation’s financial health is something the president should have been directly engaged in months ago, which is what I and my colleagues asked him to do: come forward with a plan. By not putting something to paper that can be scored by the Congressional Budget Office, the President is not doing his job.
It’s the 11th hour now, and he is finally at the table, but I believe he should have been there months ago. If we can’t get this done, I will place the blame squarely on his shoulders.
LL: We now have multiple credit ratings agencies threatening to downgrade American bonds without significant long-term steps toward deficit reduction. The credit worthiness of the country is at stake.
What message does the President's silence mean to you?
Rep. Black: I question how serious the President is about avoiding this pending crisis. Alarm bells have been ringing left and right about our country’s staggering debt and you didn’t see the president come forward: Standard and Poor’s warning back in April; Moody’s coming out and saying they might downgrade us; the Department of Treasury reporting that our nation’s debt will be greater than our GDP this year. Again, I see this as a basic lack of leadership from the president.
LL: Do you think the President is taking a more active role now or is he playing before the cameras?
Rep. Black: I thought the press conference the President held last week was not productive for negotiations. He claimed that Congress hasn’t done its job, yet we have passed a budget, we have come forward with ways to rein in spending, forwarded legislation that will help create jobs and grow the economy, and worked on reforming programs to make sure they are sustainable.
On the other end of Pennsylvania Avenue, all the President has done is give a speech on deficit reduction—the event he held. In April at George Washington University. I felt that press conference last week was all too similar to the GW speech—they were both political events from a president who is running for re-election.
LL: Are you hopeful anything will come out of these talks?
Rep. Black: I am always hopeful. I believe that House and Senate Republican leadership are going into the White House today with the American people—and common sense—on their side. It is time to end the spending binge in Washington, period.
LL: Compromise is key here for both parties. What would you be happy with?
Rep. Black:The negotiations over the debt limit are a real chance to change the way Washington does business. We need to make sure that we walk back from the edge of the fiscal cliff, and we need to make sure that steps are taken so the United States is never in this situation again. There are a lot of solid proposals out there that I could get behind--let's start by talking about a spending cap plan, a balanced budget, and other very strong proposals that have been forwarded by House and Senate Republicans.
LL: Are you willing to vote no and risk a default if the deal does not meet your standards?
Rep. Black: I have always said that before I even consider voting yes I want to see significant spending cuts along with structural reforms so the United States is never in this situation again. Even after the vote on the debt limit, we will still be facing over $14 trillion in debt. This debate is just is the beginning of solving our nation’s debt problem, and I will fight that fight for as long as it takes.
A Senior Talent Producer at CNBC, and author of "Thriving in the New Economy:Lessons from Today's Top Business Minds."
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