House Republican Conference Secretary John Carter today called for replacement of the Budget Control Act passed into law last week with a new debt reduction plan that will cut at least an additional $2 trillion in spending over the next ten years, in light of the U.S. credit downgrade and market losses.
"We passed the best deal we could possibly get from Democrats last week to try to head this off," says Carter, "and many GOP representatives like me had to hold our noses and vote yes solely for that reason. The alternative we faced was no spending reduction and a technical default on U.S. bonds, which would have undermined the dollar far worse than has happened. Looking at the markets and our credit ratings since last Monday confirms we did the right thing to head off a total economic calamity. But we now have an initial $2.1 trillion spending cut in place with a guaranteed vote in the House and Senate on a Balanced Budget Amendment. That gives us the political leverage we need for a new package that cuts the necessary $4 trillion, repeals this stop-gap bill, and restores America's credit rating."
Standard and Poor's said last month that the U.S. needed a minimum $4 trillion in spending cuts over the next decade to avoid a downgrade. The House-passed Cut, Cap, and Balance Act provided $5.3 trillion in cuts, but was blocked by President Obama and Senate Democrats.
Carter also said a necessary ingredient in a new bill is a moratorium on all new job-killing federal regulations. The author of the "Take off the Brakes on the American Economy Act," H.R.1235. says while revenue increases are necessary to eliminate the deficit, the way to increase revenues is by increasing taxable earnings through job growth, rather than raising tax rates. Carter cites tens of thousands of high-paying jobs currently blocked by Obama Administration regulators, including Gulf oil drilling permits, opening of public lands for energy exploration, shovel-ready construction jobs put on hold by regulators, and employers fearful to hire over impending regulatory changes.
"Government has become the biggest obstacle in America to job growth and economic recovery," says Carter. "Until we tame this monster we are condemned to more taxes, higher debt, and continued economic decline."