James Baker talks Trump budget, warns of “ticking fiscal debt bomb”

James Baker talks Trump budget, warns of “ticking fiscal debt bomb”

Former Cabinet secretary and White House chief of staff James Baker says “the biggest threat” facing the United States is the “ticking fiscal debt bomb.”

His comments Friday on “CBS This Morning” come as President Trump’s budget proposal is facing opposition from both Democrats and some Republicans.

Mr. Trump’s blueprint calls for cutting $10.9 billion from the State Department; $2.6 billion (nearly a third of its current funding) from the Environmental Protection Agency; and the elimination of funding for The National Endowment for the Arts and the Corporation for Public Broadcasting, which support PBS and NPR.

“You can’t be strong politically or diplomatically or militarily if you’re not strong economically,” Baker said. He pointed to America’s debt-to-GDP ratio, which is currently around 105 percent.

“That’s not sustainable for any country. So we’re going to have to figure out ways to reduce that, to cut our budget,” Baker said. “You can’t get the necessary cuts, of course, from discretionary spending like cutting the discretionary programs in the federal government. Sooner or later, if you want to get the budget in balance, you’re going to have to take on entitlements. That’s difficult politically, but Ronald Reagan did it back in 1983. It can be done without political damage.”

Baker, who was treasury secretary under President Reagan from 1985 to 1988, said the Washington Post’s comparison of Mr. Trump’s budget blueprint to Mr. Reagan’s when he first took office is “absolutely fair.”

“President Trump’s governing blueprint represents the most ambitious effort to cut domestic spending and pare back the federal government since former president Ronald Reagan came to Washington in 1981,” Washington Post correspondent Dan Balz wrote.

Reflecting on that era, Baker said, “We got a lot of grief, if you remember back then. … We were throwing widows and orphans out in the street. It was a horror show. Everything was going to go to hell in a handbasket. It was going to be the end of western civilization as we know it. Well, we found out that’s really not correct, and we do have to take on those programs at some point.”

“The military option is fraught with considerable risk and danger. North Korea has an incredibly large army poised just 30 miles from Seoul, the capital of South Korea. We have a security alliance with South Korea and Japan, of course, which has frankly been the basis of stability in the Pacific for a long, long time. That’s a tough option,” Baker said.

Further sanctions on the North could work if they are multi-lateral, he added, but China plays a key role in that.

“If we can get China to come along and support more robust sanctions, that would be perhaps one approach that might work. China does not want a nuclear Korean peninsula. They’re against that too. But they also don’t want the collapse of the North Korean government and the influx of refugees that problem would present to them,” Baker said.

http://www.cbsnews.com/news/trump-budget-proposal-ronald-reagan-james-baker-former-treasury-secretary-of-state/