Guam – Vice Speaker B.J. Cruz is warning that if Oklahoma GOP Senator Tom Coburn’s proposal to eliminate all funding for the Guam Military buildup goes through, then there won’t be enough money to pay back the tax refund bond that Governor Calvo has proposed.
Cruz points out that the Calvo Administration is expecting the buildup to result in revenue increases for GovGuam of between $52 and $150 million dollars but, if the Oklahoma Senator’s proposal is enacted, it would severely hamper Guam’s ability to repay to the tax refund bond.
As a result, Senator Cruz is recommending that the decision on whether to issue a $340 million bond should wait until January.
The Vice Speaker says the joint 12-member congressional committee is charged with recommending $1.5 trillion in cuts from the Federal deficit. Their recommendations must be acted on by Congress by December 23 of this year.
Waiting until January says Cruz would allow us to see how much the Congress has cut and whether the Guam buildup was effected. Only then, says Cruz, can we determine whether we can afford the Governor’s tax refund bond.
READ Vice Speaker Cruz release in FULL below:
For Immediate Release
(August 22, 2011 – Hagåtña, Guam) The decision on whether to issue a $340 million bond should wait until January. That is what Vice Speaker Benjamin J.F. Cruz is saying in light of recent talks in Washington proposing substantial cuts in federal spending, including on the military buildup.
Early this month, Cruz wrote to Governor Eddie Baza Calvo recommending to delay any further action to pursue additional borrowing until it is clear how cuts in federal spending will impact Guam.
The concern stems partly over a deal early this month between Congress and President Barack Obama to raise the federal government’s debt ceiling. It called for U.S. Congress to appoint a joint 12-member congressional committee tasked with identifying $1.5 trillion in deficit reductions. Both chambers of congress must vote to approve the recommendations by December 23. If Congress does not pass the recommendations by then, across-the-board cuts in federal spending, including cuts in military spending will begin.
“The Administration is banking on annual increases of $52 to $150 million in revenue resulting from the buildup alone,” Cruz said. “At this point, questioning the government’s ability to pay for the new borrowing is not only prudent, it is the responsible thing to do.”
Cruz is now calling attention to a prominent U.S. Senator’s proposal to cancel the Guam Buildup and close Department of Defense funded schools. U.S. Senator Tom Coburn from Oklahoma presented his plan to save $69.5 billion dollars by reducing military spending overseas, including Guam; a plan which may severely reduce and hamper Guam’s ability to repay to the bond. While Senator Coburn is the primary author of this proposal, other high-ranking federal officials, like Secretary of State Clinton have warned that dramatic cuts were possible.
Back in Black proposal by Senator Tom Coburn states:
“One of the military deployments to cancel that makes the most strategic sense is the military deployment to Guam. The original plan for Guam was a result of a bilateral agreement with the Japanese government to transfer 8,600 Marines and 9,000 dependents from Japan to Guam. Japan agreed to pay for approximately $6 billion of the total costs, which are now expected to run to as high as $23.9 billion. These conventional troops could
be maintained in the continental United States at a far lower cost.”
The proposal can be viewed at: