Sen. Lindsey Graham (R-South Carolina) has a warning for the US: if we don’t reform entitlements, we could end up like Greece.
On Saturday, the Republican presidential candidate told Business Insider that the US risks a Greek-style financial crisis if Congress doesn’t reform entitlement programs.
“If you can’t do a grand bargain where you reform entitlements and flatten out the tax code, we could become Greece,” Graham said.
Years of debt and subsequent austerity measures have stifled the Greek economy.
This week, Greece defaulted on its loan payments to the International Monetary Fund. The country will vote tSunday on a referendum that will decide if Greece will accept another bailout from its three main creditors: the IMF, the European Central Bank, and the European Commission
In order to prevent a similar situation, Graham proposed a broad range of solutions outlined in the 2012 Simpson-Bowles plan — a broad, relatively centrist entitlement reform agreement that died in Congress in 2011.
The Senator said that in order to curb rising costs of Medicare, Social Security, and other programs, he’d raise the retirement age, trim benefits, and flatten out the tax code.
Graham said he would be willing to eliminate some tax deductions to get centrist Democrats on board. Graham told Business Insider that the Senate Democrats like Sen. Chuck Schumer (D-New York) and Sen. Dick Durbin (D-Illinois) had expressed interest in entitlement reform, as long as the plans included new revenue.
The South Carolina Senator said his plan may upset the hard-liners of both parties, but could be a good compromise.
“You’re not going to get Bernie Sanders, you’re probably not going to get the folks on the right to agree on revenue,” Graham said. “We got to have a bipartisan plan in order to avoid becoming Greece.”
It’s unlikely the US would run into a problem like Greece’s, since the US controls the currency that it owes its debt in. If the debt became too great, the US could physically print its way out of debt, which would devalue its currency significantly and lead to inflation, but would not leave the country at the mercy of the IMF or other creditors.
The South Carolina Senator also brushed off concerns about Greece leaving the European Union and seeking a greater alliance with Russia.
“That’s be like getting a ticket on the Titanic. I’m not so sure that’s the way to go for Greece,” Graham said.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.