Mr. President, I am glad to be here today with the Senator from Missouri, my friend Claire McCaskill. We are introducing a bill called the Commitment to American Prosperity Act, the CAP Act. It is a 10-page bill designed to limit spending in Washington and set our country back on a sustainable fiscal path.
We have cosponsors in Senators ALEXANDER, BURR, MCCAIN, ISAKSON, CHAMBLISS, INHOFE, and KIRK. I thank them for joining us in this effort. I hope many more will do the same.
I spent a lifetime in business, and I came to the Senate not to score political points, not to be involved in messaging, but to solve our country's problems. Everyone in this body understands we have tremendous fiscal and financial issues with which to deal. This morning I was happy to see 33 Senators meet over at the visitor center from both sides of the aisle to listen to people involved in the financial industry talking about the path we are on and what that is going to lead to as far as the ruination of our fiscal situation and our ability to borrow money at low rates as we are today. All of us know what that will mean to our citizens.
There is no one who doesn't understand how problematic our financial situation is. I know the Congressional Budget Office just said that this year alone we will have a $1.5 trillion budget deficit. I think everyone in this body is very aware that we cannot continue on that path. For that reason, Senator McCaskill and I have crafted a 10-page bill, a very simple bill. It does a lot, but there are not a lot of whereases. One of its purposes is to cap spending relative to economy.
Most people understand that when we look at economies in other countries of the world, people look at the amount of spending their government does relative to their economic output. Senator McCaskill's husband is a businessman. When he looks at the amount of debt he has in his company, he looks at that in relation to revenues and the amount of income he has and his ability to pay the debt. That is the way the world looks at the health of countries.
For the last 4 years--this is the post-entitlement period--our country has been spending 20.6 percent of our GDP or economic output at the Federal level. Everybody knows that right now we are way above that number, at over 24 percent. So again, not to try to create some messaging tool but to solve this problem, Senator McCaskill and I have joined to say we need to get back to the norm over a 10-year period, on a glide path that takes us back to fiscal health and to that 20.6 percent of our economy being spent at the Federal level.
The legislation calls for multiyear averaging so we can make sure that economic differentials don't create volatility, so we know exactly what those targets are in advance, so we can go about our work in appropriations in a methodical and thoughtful way. In addition, it creates something called sequestration. That means if Congress does not have the courage, which we recently have not shown, to do the things it needs to do to make those cuts to live within this glide path we have laid out, then sequestration will take place. The Office of Management and Budget, 45 days after the end of the year, if we have not done those things we need to do to make sure we are on this glide path, will, on a pro rata basis, take money out of the accounts of both mandatory and nonmandatory spending. In addition, if there is an emergency that comes up, it would take a two-thirds vote by both Houses of Congress to overcome those spending limits.
To my knowledge, this is the first time in the entitlement era that we have ever tried to put in place a total spending limit on government. Many of us talk about discretionary spending. All of us know that discretionary spending is less than a third of all Federal spending. All of us know that if we don't redesign the entitlement programs that are about two-thirds of our spending at the Federal level, then there is no way for us to deal appropriately with this issue. So for this reason, this bill would kick in, if it is implemented, in 2013, giving us time to redesign the entitlement programs, especially Medicare and Social Security, so that we know they are here for future generations, so we know that seniors have the benefits they need.
This is the first time we would be putting everything on the table in a comprehensive way as we look at the Federal budget. Simply, this bill will cause us to live within our means.
The problem we find ourselves in today is not a Republican problem or a Democratic problem. Both parties have contributed to the situation. What this bill would require us to do is to set priorities. It would mean that we would have to ensure that programs are being run as effectively and efficiently as possible. I know our main cosponsor, Senator McCaskill, has spent a lot of time looking at waste and abuse within the Federal Government. One of the best things about this bill is, if we want to limit spending relative to the country's economic output, it is obviously easier to do so if the economy is growing. So what that would mean is that both parties would be joined at the hip to put in place policies that promote economic growth.
I thank Senator McCaskill for her courage in stepping forth with me and others on this bill. It is my hope that we will have people from both sides of the aisle who will join us in this effort. Again, this is being put forth as a serious bill. It is a bill that has no ideology base, simply a bill to solve a problem. We are going to a 40-year average of spending relative to our country's gross domestic product. We are not trying to do things differently than in the past. Both of us know we have not had the courage in recent times to live within our means, to set priorities as they need to be set. This bill is something that will take us toward that end.
We have a very monumental vote that will be taking place a little bit later in the year regarding the debt ceiling. All of us know it would be irresponsible not to be responsible prior to that debt ceiling vote. We offer this bill as a responsible way to put us on a glide path toward a place that is reasonable for this country, giving us time to redesign the programs that need to be redesigned. It is my hope this bill or something of its nature will pass prior to the debt ceiling vote. It is also my hope that we will go ahead and vote on actual cuts to the Federal budget prior to that time so we can show markets around the world and the American people that we have the ability to work together to solve what I think is our most pressing domestic issue and that is getting our fiscal house in order.
I again thank Senator McCaskill. She has been a leader on fiscal issues since she has been here.
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