Joint Economic Committee Hearing -- 7/27/2011

"Maximizing America's Prosperity: How Fiscal Rules can Restrain Federal Overspending"

Jul 27 2011

With the August 2nd debt limit deadline fast approaching, we stand at a crossroads on our fiscal path and economic future. If we do not restrain and permanently reform federal spending, we place our nation in grave danger.
Today, the House will vote on a common-sense, reasonable compromise to raise the debt ceiling by $2.4 trillion. In giving the President every penny of debt ceiling he has requested, Republicans have asked for immediate spending cuts and a multi-year framework to balance the federal budget.

Even before the House has begun debate on the measure, the President announced he planned to veto the bill if it came to his desk. One has to wonder why the President believes that spending cuts and balanced budgets are "unrealistic policy goals".

Another thing that we face right now, that's something that I find completely unacceptable, is the fact that amidst all of this debate and discussion that we've had in recent weeks about the debt limit, amidst the offer on the part of what are now most of the Republicans in the United States Senate to raise the debt limit under the circumstances that I've outlined, the President of the United States responded to those offers by threatening, promising perhaps, to cut Social Security benefits to current retirees if the debt limit is not immediately raised and raised only consistent with the conditions that he's demanding right now.
President Obama is now threatening to cut Social Security payments if the debt ceiling is not increased. Under the law, the President and Secretary Geithner have great discretion to direct funds in the case the debt ceiling is not raised, so Americans should take his threat seriously. Currently the United States borrows roughly $125 billion every month. Instead of cutting Social Security for America’s seniors and disabled men, women, and children, as the President proposes, I have identified almost 20 line items in the budget he could trim instead.
There is a way forward. The circumstances in which we now find ourselves are, to be sure, threatening. They are intimidating. They are daunting. And they bring about substantial disagreement within this body and within the body that meets just down the hall from us. But there are answers, there are solutions so which we can agree. I believe that the "Cut, Cap, and Blance" Act provides the proper solution and it's a solution that can appeal to liberals and conservatives alike, to democrats and republicans alike, and I call upon all within the sound of my voice to take a careful look at this legislation and to jump on board and become supporters.
If you're creating a budget, what's the first thing you need to know: how much you have or how much you want to spend?

The answer to this question exposes a fundamental difference between how Republicans and Democrats approach the nation's finances. And it was on full display last week in the Senate.
July 4th is Independence Day, the day we signed the Declaration of Independence. Varied historical accounts assert that it wasn't completely signed by all 56 delegates until August 2, 1776.

While it is sheer coincidence that 235 years later August 2 is once again looming as an important date in American history, it is an important fact to point out.
We've got to make changes right now. And the only way that we can commit to future cuts, to future structural reforms, the only way we can bind future Congresses is by amending the U.S. Constitution, to change the way we spend money, limit spending as a percentage of GDP and to require a supermajority to spend more than we have or to raise taxes.