In April 2011, Standard & Poor's warned America that it might downgrade the nation's credit rating if Washington failed to enact serious reforms to get spending and borrowing under control. Unfortunately, Congress did not listen, and passed the Budget Control Act in August 2011. Days later, S&P downgraded the rating.
This past week, Moody's offered its own credit rating downgrade warning. This ratings agency said that unless Congress scales back the debt-to-GDP ratio -- which is the proportion of the nation's debt is to the size of the total economy -- then it, too, will downgrade America's credit rating. America stands at $16 trillion in debt right now, and there is no plan in Washington to pay it down; only efforts to scale back the rate at which the debt grows.
I believe that we have ample time to get a solution in place to avoid yet another downgrade -- and perhaps repair the S&P downgrade from 2011. First and foremost, we have to avoid the fiscal cliff. At the end of the year, major tax increases are set to go into effect that could ultimately lead to a recession in 2013 -- a projection offered by the nonpartisan Congressional Budget Office. The House has passed legislation to make the tax cuts permanent and to create a path for fundamental tax reform in 2013 -- but so far, the Senate and President refuse to act.
Second, we need responsible budgets in Washington that create certainty and that do not further dependence. This past week, the House passed a six-month spending bill (to get us through March 27, 2013), but I ultimately voted against it because it 1) spent more than the last fiscal yearand 2) gave a green light to Obama's policy to discontinue work requirements for welfare recipients. In the mid-1990s, Republicans and Democrats worked together to pass major welfare reform that required work by able-bodied adults if they were to receive certain welfare benefits. It was a great success -- and millions of Americans found a job, instead of getting a welfare check. But with Obama's new policy, welfare recipients have one more reason to just stay on the government -- how sad, not just for our national debt -- but because work is a good thing, Mr. President.
Third, this six-month CR continued foreign aid for Libya and Egypt. And, given the recent attacks on our embassies in Libya and Egypt, I am concerned about hard-earned American tax dollars going to those nations.