Short-term spending disussions come on same day as new deficit presentations
Washington, D.C. - The debate on Capitol Hill reflects a contrast this week, according to Idaho Senator Mike Crapo: as Senators debate short-term spending bills to keep the government running, they may be ignoring the bigger picture posed by the growing $14 trillion in debt. Crapo joined the chairmen and members of the President's Commission on Fiscal Responsibility and Reform for two presentations today, on Capitol Hill and broadcast on C-SPAN, to urge members of Congress to address more than just short-term spending decisions to keep the government running.
Crapo and Commission chairs Erskine Bowles and Alan Simpson participated in the D.C. launch of the "Moment of Truth Project," seeking to build on the conclusions of the deficit commission last year that $4 trillion should be cut immediately from federal spending to avoid the default of federal benefits and U.S. credit. At the same time, Crapo and colleagues on the Senate Budget Committee also took testimony today from Bowles, Simpson and advocates calling for sharp reductions in the national debt, spending caps and tax reform.
Crapo called it "sleight of hand" to discuss voting on short-term measures but not debate long-term deficit reduction ideas, when presentations are made on both issues on the same day in the U.S. Senate.
"We are trying to place band-aid after band-aid on short-term resolutions to keep the government operating," Crapo said. "We are not dealing with the fact that 40 cents of every dollar we spend is borrowed money. This is an important fight, and we need to be working on short-term spending cuts like those being debated. But we have an even greater problem when experts say we need to reduce our debt by at least $4 trillion. The Government Accountability Office (GAO) has shown where we are wasting money by duplicating programs we can cut without reducing benefits. We have a road map from the deficit commission, and we have the GAO recommendations to reduce government overlap. What we lack is the political will to advance beyond keeping the federal government running for another two weeks."
Crapo is a member of the "Gang of Six" bipartisan Senate group seeking to advance the deficit commission's ideas before Congress. He stressed that the group remains at work and that spending reductions and tax reform remain on the table.
"As of January, our nation's total debt was at 96 percent of our gross national product, approaching the point where economies do not survive historically," Crapo said. "By 2020, interest on the debt, alone, could rise to nearly $1 trillion by itself. That will make it more expensive to raise capital and create jobs and will eventually shrink the economy and result in worse spending cuts and potential tax increases if we do not act."
Crapo warned continued borrowing to sustain current spending would be self-defeating and would result in higher interest rates and keep investors away from the U.S. economy. He pointed to stark numbers from the Congressional Budget Office: just a one-percent rise in interest rates will result in another $1.2 trillion in additional deficits over ten years.
"It is almost like Congress is fiddling while the nation burns," Crapo concluded. "We talk about short-term spending but we shy away from the serious medicine we need to get the economy recovering for the long-term. Certain tax cuts can add substantially to productivity, growing our goods and services and creating jobs for the long term.
"We must create incentives to invest, work and save. A real and sustainable fiscal reform package must include spending cuts, entitlement reforms, and comprehensive tax reform that unleashes economic growth."
# # #