“YOU CAN’T SPEND MORE THAN YOU HAVE”
WASHINGTON, DC – The President released his Fiscal Year 2011 budget Monday which confirmed that his recent rhetoric of fiscal responsibility is – well – rhetoric. Describing the budget, White House Spokesman Robert Gibbs said, “We have to return to some very common-sense principles that every day Americans live by. Every time they go to the grocery store, or want to go to the movies, or cash their paycheck, and that is you can’t spend more than you have.”
I could not agree more.
As a member of the House Committee on the Budget, I began reviewing this budget within minutes of its release. Several of the proposals are discouraging, particularly as Americans continue to recover from a global economic slump.
By the President’s own estimates, spending will reach a record $3.8 trillion for FY 2011 and the debt will double in five years and triple in 10 from the time Obama began his presidency. This budget proposal retains a $1.6 trillion deficit for FY 2010. Despite all the talk of deficit reduction, the FY 2011 deficit projection is still $1.3 trillion. Let’s not forget the $2 trillion in proposed tax increases by 2020 and the negative impact that has on economic growth.
Since entering the White House, the President has increased non-defense discretionary spending by a staggering 84 percent. To compensate for this binge, President Obama has proposed a non-defense, non-homeland security, non-Veterans, non-international affairs, non-Pell Grant and non-emergency spending freeze. This move – according to his Administration – would save up to $250 billion over ten years. In short, this stunt would only apply to a whopping 13 percent of the United States budget.
Further, the President’s budget would require an additional increase to the debt limit prior to October 1, 2011 – despite this week’s increase of $1.9 trillion. Within the debt limit legislation is a budget enforcement mechanism known as pay-as-you-go (PAYGO), requiring all future legislation to be paid for. However, a compromise among Democratic leaders exempts changes to the alternative minimum tax and the reduction of estate taxes for two years from the PAYGO provisions. Adjustments to the Medicare Sustainable Growth Rate (SGR) formula will receive exemptions for five years. A permanent “doc fix” to the SGR will cost taxpayers $371 billion over ten years, which by itself exceeds the savings from the spending freeze by nearly $120 billion. Let me be clear. While I agree Congress needs to repair this Medicare reimbursement method, I believe the solution must be paid for.
While the President’s three-year freeze is a step in the right direction, it is a baby step. Congress must do more to reign in the runaway spending. I support a conservative jobs plan that will: eliminate job-killing federal tax increases until the unemployment rate drops below five percent; freeze domestic discretionary spending at FY 2008 levels; remove unnecessary barriers to domestic energy production; and offer assistance to small businesses and community banks struggling with the downturn in the commercial real estate market.
House Republicans continue to reach out to Democratic Members of Congress with solutions to boost our economy. These common-sense principles can be viewed online at solutions.gop.gov – and they don’t spend more than we have. These are practical steps towards advancing economic growth while creating jobs without expanding the scope of our federal government. My faith is in the American entrepreneur – not the federal government – to grow our economy.
For more information, visit www.harper.house.gov.