By Senator John Thune
Recently, I have had the opportunity to travel around the state to several cities for town hall meetings to discuss our nation's financial stability. I have enjoyed these meetings and believe that all South Dakotans deserve to know the path ahead as Congress prepares to address our nation's debt limit and overall federal spending in the weeks ahead. Our economy continues to be hampered by soaring debt and deficits, and without addressing the out-of-control spending in Washington, the current fiscal imbalances will only get worse.
The tax relief package that was signed into law recently is not perfect and failed to include the meaningful spending reductions our country needs, yet the consequences of inaction for all taxpayers would have been enormous. Our country would have experienced the largest income tax increase in dollar terms in history. The majority of South Dakota family farms and a much larger number of small businesses would have been hit by the death tax, and all Americans who own stocks and bonds would have been affected by higher taxes. According to the non-partisan Congressional Budget Office, if Congress had not acted, the economy would have plunged back into a recession and the unemployment rate would have climbed above nine percent.
While I was pleased that the tax relief package prevented an income tax increase on more than 400,000 tax filers -- or 99 percent of South Dakota taxpayers and 98 percent all small business owners -- it is critically important that the discussion in Washington shift to the need to rein in out-of-control government spending. It has been more than 1,350 days -- nearly four years -- since the Democrat-led Senate has passed a formal budget. Sadly, the deficit has exceeded $1 trillion for four years in a row and this past year, roughly 41 cents out of every dollar spent has been borrowed. While some will argue that our nation's spending problems began before the four years of trillion dollar deficits of the current administration, it is worth noting that it took 43 presidents 232 years to build up $6.3 trillion in publicly-held federal debt, but took just four years for the Obama Administration to accrue $5.3 trillion in additional debt.
As Congress looks to rein in federal spending, any approach must include reforms to our long-term entitlement programs such as Medicare, Social Security, and Medicaid in order to save and protect them for future beneficiaries. These three programs alone account for nearly 44 percent of the federal budget and are projected to account for a much larger portion in future years as more and more citizens reach retirement age. In fact, according to the Medicare Trustees, Medicare will be bankrupt by 2024 unless it is reformed.
Federal spending has been on autopilot for too long. It is far past time for Congress to enact meaningful spending reforms by reprioritizing federal programs and eliminating waste, fraud, and abuse. Our country can avoid a national debt crisis, and it starts with dollar-for-dollar savings attached to the debt limit increase that will be needed by the end of February. Excessive spending got us into this mess and cutting spending is a critical component to balancing the budget and getting our economy growing again.