Kelly's Korner

LAST WEEK, all Americans got a stark reminder of something citizens in New Hampshire have known for some time: Our nation’s fiscal crisis is poised to wreck the country’s economic future.
Skeptical that Washington will reach agreement on a long-term debt-reduction plan, the Standard & Poor’s credit-rating agency took the extraordinary step of downgrading its outlook for U.S. Treasury securities to “negative.” Hard to believe, isn’t it? The greatest nation on earth — and the global economic engine — has essentially been declared a risky bet by experts who evaluate risky bets.

S&P isn’t the first to pull the alarm on Washington’s inability to put its fiscal house in order. The International Monetary Fund has raised concerns about America’s debt load and implored us to clean up our act. And Moody’s, a firm similar to S&P, continues to entertain the prospect of a downgrade.

These ratings aren’t just inside baseball for Wall Street financiers. When Treasuries become a riskier investment, higher interest rates inevitably follow.

The result? It will be more expensive for individuals and businesses to borrow money — discouraging investment, growth and job creation.

Nothing less than our quality of life is at stake.

And yet some in Washington continue to believe that bold action is unnecessary. President Obama is chief among them. Having refused to acknowledge the magnitude of the challenges we face, the President has so far declined to lead a substantive debate on how we can put our nation on a path to solvency.

A few days before S&P announced its downgrade, President Obama focused on deficits and debt in a major address — but avoided the opportunity to initiate a serious discussion about America’s entitlement programs, which account for about 60 percent of federal spending. While he was quick to demagogue House Budget Chairman Paul Ryan’s substantive plan to address Medicare, the President failed to propose a credible alternative.

According to the Government Accountability Office’s most recent report, entitlements face a $99 trillion unfunded liability. That means these programs will eventually grow to consume every dollar of revenue the government takes in — and stand to drive our country into bankruptcy. Rather than address America’s spending problem at its root cause, President Obama instead issued a call for higher taxes — continuing to antagonize already skittish job creators in the private sector.

It should come as no surprise that the Obama administration is in denial over the state of our country’s deteriorating fiscal condition. The President kicked off 2011 by announcing a budget that would put public debt on a path to reaching $20.8 trillion — or 87 percent of Gross Domestic Product — in 2021. Under his budget, net interest payments alone on the debt would rise more than four-fold over the next decade, from $214 billion this year to $931 billion in 2021.

Having voted against it when he was a senator, the President is now asking Congress to raise the debt ceiling (the amount of money that the federal government is legally allowed to borrow). By the way, a statement from the Treasury last Tuesday indicated that we’re currently about $25 billion shy of the existing $14.29 trillion limit.

No one wants to see the government default on its obligations. But with Congress having raised the debt ceiling 11 times since 1997, it’s clear that both parties have failed to take the necessary steps to rein in runaway spending.

I cannot in good conscience raise our debt ceiling without Congress passing real and meaningful reforms to reduce spending. Those reforms should include a balanced-budget amendment, statutory spending caps with sequestration if Congress fails to meet deficit-reduction targets, spending cuts to eliminate waste and duplication, and entitlement reform.

It’s not too late to make the tough decisions that will signal to investors — and to the world — that America is serious about addressing its fiscal crisis.

Congress and the President must make the tough decisions that will preserve the greatest nation on earth. We owe our country nothing less.

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Kelly Ayotte, a Republican, represents New Hampshire in the United States Senate. She lives in Nashua.