Press Releases

Roe Statement on the Cut, Cap & Balance Act

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Washington, July 19, 2011 | comments

WASHINGTON D.C. – U.S. Congressman Phil Roe, M.D. (TN-01) released the following statement regarding his vote supporting the Cut, Cap and Balance Act:

We are in the midst of a debt crisis created by decades of irresponsible government spending. 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.  That is why I voted for the Cut, Cap and Balance Act, which includes concrete proposals that will help put our country back on a path to stability.

While it’s critical that our government not default on our debt, we need to first enact long-term reforms that prevent runaway spending and lower our long-term debt. This legislation prevents future Congresses from raising spending by putting caps into law to ratchet down the amount the government is allowed to spend each year, bringing spending into line with the historic average. Further, it requires Congress to send a Balanced Budget Constitutional Amendment to the states, which in my view is the most important long-term reform we can achieve.

If we do not pass major enforceable spending cuts, we are weakening our national security and other countries stop viewing us as the world’s leading economy.   I urge the Senate to take action and pass this important legislation.

BACKGROUND:

Enforceable Spending Caps:

  • Spending as a percentage of GDP has averaged around 20 percent since the end of World War II.   But spending is now averaging 23 percent of the GDP, bringing us to this debt crisis.
  • Current projections indicate that federal spending is set to double.  As any family or business can tell you, long-term spending beyond the amount of revenues is economically unsustainable and makes no economic sense. 
  • The credit rating agency Moody’s has indicated if budget cuts associated with a debt limit increase are not credible and lead to a balance in the ratio of debt to GDP, then they will likely face a downgrade.   “To retain a stable outlook, such an agreement should include a deficit trajectory that leads to stabilization and then decline in the ratios of federal government debt to GDP and debt to revenue beginning within the next few years.”

Cut, Cap and Balance puts into place statutory, enforceable caps to ratchet down the amount the government is allowed to spend each year, bringing spending into line with the historic average of 20% of GDP by 2021.

Balancing the Budget:

“We don’t need a constitutional amendment to do our jobs.”  -- President Obama, July 15, 2011

  • This president clearly does.  A constitutional mandate to pass a balanced budget every year would legally force (not simply “urge” or “encourage”) the government to only spend what it takes in.  American families do what they have to do to live within their means; so too should their representatives in Washington.
  • All other options have been exhausted, including the Graham-Rudman-Hollings Act (1985), the Budget Enforcement Act (1990), and the Pay-As-You-Go requirements (2010).  Cuts, caps, and “commitments” are important tools to control spending, but they are temporary. What one Congress passes, another Congress (or even the same one) can always undo. A constitutional amendment is permanent.  
  • Balancing budgets is not an untested idea, as 49 states currently abide by some form of a balanced budget requirement.

Cut, Cap and Balance requires passage of a Balanced Budget Amendment in order to raise the debt limit.  It provides that the president can request a debt ceiling increase only if a qualifying BBA passes Congress and is sent to the states for ratification. 

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