Last December, the President’s own Fiscal Commission offered a plan to reign in our budget deficits and debt. While I did not support the final package – especially the tax increases it proposed – it did contain several meaningful suggestions for ways to get federal spending under control.
Yet last February, when the President submitted his budget for 2012, he ignored their advice and provided no plan to reign in deficits and debt.
Last month, Standard and Poor’s downgraded the outlook for the U.S. credit rating because Washington appeared to have no plan to reign in our budget deficits and debt.
In recent weeks many Congressional Democrats were proving them right when over 100 of them called for an unconditional increase in the U.S. debt limit. They signed a letter calling on their colleagues to establish “the Democratic position in favor of a clean extension of the debt ceiling” – something Secretary Geithner has also repeatedly called for.
It is time to come clean with the American people about our deficits and debt. At over $14 trillion, our debt is as large as the entire U.S. economy and is putting the American Dream at risk for future generations. It has become an anchor on economic growth – costing us 1 million jobs at a time when the unemployment rate has not been this high for this long since the Great Depression.
Erskine Bowles, who chaired President Obama’s Fiscal Commission and served as Chief of Staff to President Clinton, has said that the era of debt denial is over. While it doesn’t appear that all of his Democrat colleagues have gotten the message, with today’s vote this House will declare to the American people and to the credit rating agencies that business as usual in Washington is over. Not only is the era of debt denial over, but so is Washington’s out of control spending.
Today, we are making clear that Republicans will not accept an increase in our nation’s debt limit without substantial spending cuts and real budgetary reforms.
This vote, a vote based on legislation I have introduced, will and must fail. Now, most Members aren’t happy when they bring a bill to the floor and it fails, but I consider defeating an unconditional increase to be a success, because it sends a clear and critical message that the Congress has finally recognized we must immediately begin to reign in America’s affection for deficit spending.
Research by international experts clearly demonstrates that spending reforms, not tax increases, are the most effective path to fiscal consolidation. That means that together, we must look for responsible ways to tackle our runaway spending. And though it is difficult, and not always popular, it requires us to deal with entitlement reforms that are the largest driver of America’s deficits – including health care spending programs like Medicare.
We all know that failing to act and address our debt head-on would be very similar to actually defaulting on our debt. In both cases, we would experience a significant downgrade in our credit rating, which increases interest rates making payments for things like a car and home loans more expensive. It would also increase the cost of imports, meaning higher gas prices. And, it would make an already shaky economy even worse – leading to less job creation.
The greatest threat to the U.S. economy and to international financial markets would be guaranteed simply increasing the debt limit, without cutting a penny of spending. This vote makes clear that deficit reduction will be part of any bill to increase the debt limit, and is a necessary part of this process.
A “no” vote today is a vote to put us on the path toward exactly what the markets – and the American people are demanding – an America that is a strong, reliable and secure financial investment for the future. I urge all my colleagues to vote “No” on this unconditional increase.