Debt Crisis: What’s the President’s Plan?
For months Congress and the administration have debated how to end our debt crisis with long-term spending reforms and avoid defaulting on our country’s obligations. While some cling to the notion that we can tax, borrow and spend our way to prosperity, this path is unsustainable, and the American people want serious spending cuts and reform.
The government spends more than it takes in, and this is the reason for our debt crisis. While we cannot go back and rescind money that has already been spent – like the near trillion-dollar “stimulus” bill – that added to our ever-growing national deficit, we can cap future spending and reform programs on autopilot to achieve savings now that will compound over the next decade.
However, our future prosperity and our national security are threatened if we continue this cycle of taxing, borrowing and spending. We are not in this crisis because we fail to tax the American people enough – we are in this crisis because we spend too much.
I also strongly believe that we should not be raising taxes at a time when our economy is in a fragile state. Research by economic experts clearly demonstrates that spending reforms, not tax increases, are the most effective path to fiscal consolidation. Similarly, reducing the deficit is an important part in lowering the unemployment rate because we need to give our markets confidence that America will not always have unsustainable debt. Congress needs to get its financial house in order to help create a sustainable economy.
As we enter the third quarter, our economy remains extremely fragile, with signs of continued weakness. Employers are slow to hire and too many are still losing their jobs. The economy is not generating enough jobs and unemployment remains above nine percent. The stakes couldn’t be higher. Now, more than ever, the American people need the president to lead.
Unfortunately, so far in this debate, the president and his administration have: established a commission to recommend long-term fiscal reforms; ignored that commission’s recommendations by sending Congress a budget that did not have any long-term economic reforms and plenty of tax increases to pay for more spending; delivered a speech outlining the need for long-term economic reforms that was light on specifics, other than the need for tax increases; asked for a debt ceiling increase that did not have any associated reforms; and finally accepted Republican demands for spending reforms, but delivered a bottom line that any deal must include tax increases. How is this leadership?
In contrast, House Republicans put forward concrete proposals to eliminate our long-term debt, which have so far been met with only demagoguery on the other side of the aisle. In May, the House unanimously rejected, and I voted against, the administration’s plan to raise the debt ceiling without any spending reforms. While it’s critical that our government not default on our debt, we need to first enact significant spending cuts and lower our long-term debt. If we do not pass major enforceable spending cuts, we are weakening our national security if other countries stop viewing us as the world’s leading economy.
The federal government is at a crossroads, and tough decisions must be made. Rhetoric will not lower the deficit and inaction will not cover the Treasury’s bills. Only strong leadership and concrete proposals will help put our country back on a path to stability.