OF EPIC PROPORTIONS
By Senator Mike Crapo
On January 7, the Congressional Budget Office (CBO) released its budget outlook for Fiscal Years 2009-2019. With a sobering prediction that this year's deficit will total $1.2 trillion (without factoring the cost of any new stimulus bill), the report cites what many already know or suspect: the slowdown in economic activity and policy responses to challenges in the housing and financial markets have significantly affected the federal budget. In fact, CBO stated that the U.S. will likely see the "longest and deepest" recession since World War II. While not the next Great Depression, as many Idahoans know, times are tough.
Solutions to this staggering problem are not simple or short term. According to CBO, declines in federal receipts from individual and corporate income taxes will continue, largely due to major losses in asset values. And, any stimulus package will only add to the already skyrocketing deficit. The new deficit numbers indicate that we're faced with the proposition of even more borrowing and going an additional $ 1 trillion in the hole for a new stimulus bill. Can we really spend our way to prosperity, or is it time to stop digging? Will borrowing money from future generations, and shifting it around from one person or group to another, really lead to long-term investment and growth and economic stabilization?
What is needed is a strong dose of fiscal responsibility on the part of Congress, and a realization by all of us that we must control government spending. What can rightly be called "mission creep" across the federal government has led to deficit creep. And, to make matters worse, the urgent need for reduced government spending comes when demands on certain federal programs are growing. Furthermore, we need to consider the much larger problem looming down the road-unmanageable fiscal demands on entitlement programs like Medicare and Social Security over the next 20 years. Solutions are not the stuff of sound bites and will require patience, wisdom, consultation with a broad range of experts and, most of all, support of taxpayers throughout the process.
As a member of both the Senate Finance and Senate Budget Committees, I will be reviewing the upcoming economic stimulus package in coming weeks and the federal budget when it is released later this winter. While not yet complete, the economic stimulus package under consideration in Congress right now is threatening to become an avalanche of special funding, much of which is unrelated to stimulating our economy as a whole. Additionally, news about the much-heralded package of tax breaks looks to be somewhat overblown: indications are that much of the package will include refundable tax credits to those who pay no taxes in the first place, which are, technically, tax outlays (spending), not tax cuts. I will continue to press my colleagues to craft legislation that controls entitlement spending, maintains the tax relief and incentives that have benefited the vast majority of individuals and small businesses over the past eight years and updates and streamlines costly procedures, rules and regulations across federal agencies. Congress has the "power of the purse," and the purse is large. We must focus our immediate attention on the $1.2 trillion gaping hole in that purse that needs mending.
My priorities remain unchanged: Congress must be frugal with hard-earned taxpayer dollars. In the long term, the United States benefits from policies that support steady, sustainable economic growth for individuals and businesses, strong and highly-responsive national security and healthy families and communities. I welcome and encourage your input as Congress reviews the economic stimulus package and the federal budget in the coming weeks and months.
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