If Congress doesn't get its act together, and fast, the U.S. has the potential to head down the same path as Ireland, Spain or Greece, says an iconoclastic former suburban senator with a lifetime of banking experience.
"What I fear is because of politics, because of legislators who are afraid to take tough votes and are more worried about their next re-election, that they will wait too long and when they finally address the matter it will be because it is too late and we have the kind of catastrophe on our hands that is happening now in Europe, with Greece the first country to be on the brink of default," Peter Fitzgerald, formerly of Inverness, told the Daily Herald from the Chain Bridge Bank he founded in McLean, Va.
Fitzgerald, a Republican U.S. senator from 1999-2005, was known for unabashedly clashing with those inside and outside his party, particularly over spending, during his one term in office.
In 2000, he filibustered a spending bill because it included funds for the Lincoln Presidential Library in Springfield, highlighting the fact that state leaders had failed to promise competitive bidding for the project.
He also was the sole member of the Senate to oppose an airline bailout following 9/11, asking rhetorically, in a floor speech, "Who will bail out the American taxpayer?"
Watching the country's debt ceiling negotiations from just a few miles outside the beltway, Fitzgerald says there are serious flaws to the plans on the table. Democratic Senate Leader Harry Reid's plan would raise the debt ceiling through 2013, while GOP House Speaker John Boehner's plan would extend borrowing authority for only the next six months. Both plans project future cuts, which Fitzgerald calls problematic.
"Projections 10 years out don't mean anything," Fitzgerald said, "I was there 10 years ago in 2001, and whatever they were projecting then clearly isn't happening now."
As for the tea party's favored "cut, cap and balance," a balanced-budget amendment to the Constitution could be hard to enforce, he says.
After all, he points out, Illinois is legally bound by the state Constitution to have a balanced budget.
"Sure, I agree with the Republicans in cutting and capping, and I think a balanced budget amendment is a laudable goal, but it isn't enforceable," Fitzgerald said.
He also says Republicans are too beholden to spending on Homeland Security and defense, and Democrats need to sit down and seriously address entitlement reform, including such programs as Social Security and Medicaid.
As last-minute negotiations are taking place before the Aug. 2 deadline, Fitzgerald predicted the debt ceiling will be raised.
"But budget cuts will just be future budget cuts that may never take place."
In his view, that's problematic.
"As a result of the budget cuts not being credible, the rating agencies will begin to downgrade U.S. debt," he said. And not just from a AAA rating down to AA. "If this pattern continues it could get even worse," he said.
"It's not going to be much fun to be in Congress or in the administration the next 30 years because their predecessors have partied while they were in office, raising spending, going to war without ... paying for it and cutting taxes.
"And that party is now over. It's over for both parties."