Oct 05 2009 -
Senator Says Spending, Entitlement Reform Urgently Needed
The federal government’s budget year ended last week, an event that marked an unfortunate milestone. Our nation closed out the fiscal year that ended September 30 with an estimated $1.6 trillion budget deficit, which, according to the Congressional Budget Office, is 11 percent of our overall economy and more than triple last year’s deficit. This represents the first time in our nation’s history that our annual budget deficit has been more than $1 trillion.
Considering the economic turmoil our country has experienced in the last year, some may find it easy to dismiss this record amount of red ink as a one-time event. However, the reality is far different. President Obama’s budget office has stated that under his proposal we will continue to see overwhelming deficits in the years ahead. To the tune of $9 trillion over the next ten years, this new debt will be added to our nation’s credit card and will more than double our national debt. The Heritage Foundation estimates that by 2019, America will be spending a staggering $800 billion each year just to pay the finance charges on this debt.
As bad as this situation already is, these staggering debt figures do not include the cost of the plan for a government takeover of health care being pushed by the president and congressional Democrats. To make matters worse, these trillion dollar deficits are in addition to the pending crisis caused by the unsustainable growth of entitlement spending on Social Security, Medicare, and Medicaid – programs we must preserve. Spending in this area alone is set to explode in the coming years as the Baby Boom generation begins to retire.
PUBLIC ANGER JUSTIFIED
As Washington continues to go down the road of 1,000 page bills and trillions of dollars of spending and new debt, the anger shown by the American public is understandable and justified. We have seen this frustration at town hall meetings and other events across the country – including a recent gathering of tens of thousands of concerned Americans who converged on the National Mall in Washington, D.C., to voice their opinion and say “enough is enough.”
Unless reform is implemented, there will be consequences to our pending long-term spending spree. Big deficits could fuel inflation, weaken the dollar further, and lead to higher financing costs for all Americans on everything from college education to home mortgages and auto loans.
Our nation’s continued pattern of deficit spending is also causing those who are financing it – led by the Chinese government – to have second thoughts about continuing to buy American debt. The Wall Street Journal recently reported: “The [budget deficit] forecasts come as international lenders, especially China, are growing bolder about questioning whether they will keep buying U.S. government debt at today’s voracious levels, at least without a big increase in the interest rates paid out by the bonds. Rising rates would make the U.S. government’s borrowing costs much higher.”
RESTORING FISCAL ORDER
When he campaigned for president, then-Sen. Obama correctly stated that our current level of deficit spending was unsustainable. Speaking earlier this year, President Obama reiterated this, saying: “We can’t keep on just borrowing from China, or borrowing from other countries because … we have to pay interest on that debt. And that means that we’re mortgaging our children’s future with more and more debt.”
Now is the time for the president to back those words with action. Rather than continuing to pursue policies that will increase taxes and the size of the federal government, we need to be looking for ways to cut spending and reform our unsustainable entitlement programs. This will be a difficult task, but one that must be undertaken for the good of our nation’s future. My Republican colleagues and I stand ready to work with the President and Democrats in Congress to make the tough choices and implement the needed reforms to get America’s fiscal house back in order.