Even though our national debt now sits at over $16 trillion--nearly the size of our entire economic output each year--many in Washington still refuse to implement a commonsense plan to balance our budget and get our country back on track. As complex as our fiscal problems may be, the solution lies in a pretty simple principle: The federal government must kick the habit of spending money it does not have.
This week, the House Budget Committee unveiled a plan that does exactly that. The House Republican Fiscal Year 2014 Budget Resolution is a plan that will end wasteful spending, fix our broken tax code, and strengthen and preserve soon-to-be-bankrupt programs like Medicare and Medicaid. Through basic program reforms, and modest spending reductions this proposal sets a path to balance our budget in 10 years--without the need to raise taxes!
Improving the lives of Americans
Budgeting isn't a mere academic exercise, it's critical to addressing Washington's uncontrolled spending, which has created uncertainties about future tax rates, interest rates, and inflation rates. These uncertainties prevent investments in new businesses This translates into fewer jobs, lower middle class incomes, and diminished future opportunities for America's youth. Meanwhile, the unsustainable path of programs such as Medicare and Medicaid threatens the retirement security for America's seniors. Without a solution to these problems, we will see our economy recovery unperform.
Tax Code Reform
There is perhaps no better way to spur investment, and to grow our economy, than comprehensive tax reform--a process not seen in Washington for a quarter century. Recognizing this, the House budget proposes to reform and simplify our tax system by closing loopholes, eliminating brackets, lowering rates, and removing costly compliance burdens from the backs of millions of American families and small businesses.
While Obamacare slashes Medicare payouts and breaks the program's promise to seniors, our budget reforms the program into something sustainable for future generations. Moreover, it makes absolutely no changes for those who are in or near retirement. Those not yet near retirement age will look forward to a strengthened Medicare program that offers them a wide range of coverage options--including traditional Medicare--so they can choose health care coverage that fits their needs.
Because of the tax hikes that the President insisted upon in January, revenues are projected to double over the next decade--while annual budget deficits will remain roughly $1 trillion. Clearly, higher taxes will not fix our fiscal challenges, and will only place heavier burdens on our economy. Slower growth will, in turn, yield more debt, higher interest payments on our debt, and even jeopardize our nation's credit rating, which would wreck our economy. The House budget realizes that fiscal health is a key component of reviving our economy, and it reduces annual deficits by $4.6 trillion over the next ten years through targeted spending reforms. The result: a budget surplus at the end of the ten-year budget window. As for misinformed critics who may allege that we cut too much, consider this: Current law projects our country will spend about $46 trillion over the next decade; by only trimming spending back to $41 trillion, as we have done, we finally balance our nation's budget and end Washington's reckless borrow-and-spending binge.
Passing a Budget
After four years of delay, the Senate is finally working to pass a budget this year. While I disagree with some of their proposal--it never balances, for instance, despite adding $1 trillion in new taxes--this is an important step. By finally putting pen to paper and drafting a budget, as federal law requires them to do, the Senate is laying out its priorities. By comparing that to our House budget, we might identify common ground, and build a bipartisan foundation upon which we can solve our nation's greatest problems. This is a welcomed development. I look forward to debating these issues with my colleagues in coming months.