April 22, 2010

Crapo: New Budget Ignores The Debt Threat

Resolution calls for higher spending, higher taxes and higher debt

Washington, D.C. - Senate Budget Committee member and Idaho Senator Mike Crapo voted against a new budget blueprint from Majority Democrats and the White House because it is heading in the wrong direction by doubling federal debts by and sharply increasing taxes on middle Americans and small business.

"If this spending plan is adopted, we are headed for a record level of spending at $3.8 trillion in Fiscal Year (FY) 2011," Crapo said. "This proposal calls for a short-term, unenforceable freeze on discretionary spending, at levels that are already highly-inflated by last year's bailouts, and it makes no effort to address the main cause of our growing debt crisis, the unsustainable and exponential growth of entitlement spending."

Crapo has been involved this week in negotiations among Senate Budget Committee members on FY11 budget proposals and says the Majority wants to raise taxes and spending at a time when the nation continues to face an economic downturn. "If the policies set forth in this budget are enacted, the federal debt would increase by $15,250 for every single American citizen over the next five years. This measure ensures less prosperity for our children by piling federal debt on them and our economy."

Crapo offered an amendment during the Budget Committee markup, calling for future budgets to contain a "Truth in Debt" statement, which would require future budget resolutions to contain a clear statement of the resolution's effect on the federal debt, and the debt per citizen. The statement would also have to contain comments as to the circumstances making it in the national interest to allow the gross federal debt to increase, rather than taking steps to reduce the debt. This amendment was approved by the committee.

Crapo also offered an amendment to require the budget to include in the debt calculations of the budget resolution, the debt obligations of Fannie Mae and Freddie Mac. The Congressional Budget Office has estimated that, in the wake of the housing bubble and the unprecedented deflation in housing values that resulted, the government's cost to bail out Fannie Mae and Freddie Mac will eventually reach at least $381 billion. Crapo's amendment would show the American people the true picture of how much our national debt has been increased by the bailout of these institutions. Crapo's amendment was defeated by a party-line vote of 10-13.

After consideration of 30 amendments, the Budget Committee approved the FY 2011 Budget Resolution by a vote of 12-10.

"We cannot continue to borrow our way out of this nightmare scenario," Crapo added. "It has been estimated that our economy would have to grow at double-digit levels for 75 years just to close the debt gap. So, we cannot tax and spend our way out this problem. Clearly, the problem is not that taxes are too low; the problem is unrestrained spending."