| Cut, Cap, and Balance
In 1995, Congress nearly passed an amendment to the U.S. Constitution that would have required the federal government to balance its budget each year and live within its means. The measure failed to pass by one vote.
Sixteen years later, our debt problem and Washington’s spending addiction have gotten worse. Consider the following:
v In FY 1995, the deficit was $164 billion. This year, OMB projects it to be $1.65 trillion, an increase of906%.
v In FY 1995, the deficit as a share of GDP was 2.2%. This year, OMB predicts it will reach 9.8% of GDP, an increase of 345%.
v On January 26, 1995, the national debt was $4.8 trillion dollars. Today, it is $14.29 trillion, an increase of198%.
v In FY 1995, the federal government spent $1.52 trillion. This year, OMB estimates it will to reach $3.82 trillion, an increase of 151%.
v In January 1995, the unemployment rate was 5.6%. Today, the unemployment rate is 9.2%.
Left to its own devices, Washington will continue to make promises to the American people it can’t keep and, in doing so, continue to spend money it doesn’t have. This is a recipe for failure that will ruin our great nation.
That is why I co-sponsored the Cut, Cap, and Balance Act of 2011, which passed the House with bi-partisan support this month. The bill would cut total spending by $111 billion in FY 2012, place a cap on future spending to prevent a repeat of the current runaway spending, and balance the budget through an amendment to the U.S. Constitution that would require congressional passage and state ratification.
Disappointingly, the Senate Democrats chose not to vote on the Cut, Cap, and Balance Act last week, rejecting this opportunity to not only raise the debt ceiling, but to also put in place spending cuts and budgetary reform that would prevent the very real risk of Moody’s and Standard & Poor’s revoking America’s Triple-A credit rating. A downgrade in our rating would crash financial markets all over the world and would create higher interest payments here at home. The Senate’s failure to lead during this critical time is nothing short of irresponsible. Unfortunately, it’s what we’ve grown to expect from a Senate that has not only failed to produce a debt ceiling proposal, but hasn’t passed a budget in more than 800 days.
The Cut, Cap, and Balance Act of 2011 is the only clear and comprehensive measure put forward that will hold Washington accountable to taxpayers and reduce the tremendous burden of debt that we are placing on our children and grandchildren.
Some have suggested that the solution to our debt problem is to raise tax rates, even though President Obama himself said in 2009 that, “You don’t raise taxes in a recession.” Considering the fact that the U.S. currently spends $3.7 trillion annually and brings in only $2.12 trillion per year, new taxes could not possibly bridge the difference and do so without destroying jobs and obliterating our economy.
Increasing the tax rate on small businesses, the very people who are the primary source of job creation in our country, is bad and unsound fiscal policy. Furthermore, it’s against the will of the American people. A new Rasmussen surveyshows that the majority of Americans also oppose the president’s calls for higher taxes to be coupled with a debt limit increase. According to the survey, “Just 34 percent think a tax hike should be included in any legislation to raise the debt ceiling.”
Let me be clear: we have too much debt because we spend too much, not because we tax too little.
This year, the federal government will spend twice what it spent just ten years ago. If we don’t act now, economists expect the U.S. to face a Greece-like debt crisis within two to three years. We need to stop spending money we don’t have.
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