America Must Restore Fiscal Sanity

Floor Speech

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Mr. OBERNOLTE. Madam Speaker, I thank the Member for yielding.

Madam Speaker, I stand deeply concerned today about the state of our economy. Last week, the Department of Labor released the latest statistics for inflation in the United States. It shows that inflation continues to occur here at a rate above 8 percent, a 40-year high.

Even more alarmingly, the Department of Labor says that core inflation has increased in August over the month of July and that real wages have declined 3.4 percent on an annualized basis.

What that means is that my constituents cannot buy the same quantity of the things that they need this year as they could last year, even if they got a raise for the labor that they produced.

Madam Speaker, every single day I hear of constituents who are desperate because of the results of this inflation. Imagine my embarrassment when I have to tell them that inflation was caused by actions of their own Federal Government. Economists already answered why we are experiencing this inflation. It is a combination of several things.

As our economy emerges from the pandemic, there has been an increased demand for goods and services, and a constrained supply chain which restricts our ability to respond to that increased demand. An economist will say that will make prices go up.

The other thing that has occurred is that this Federal Government has dumped almost $5 trillion of excess government spending into our economy over the last 18 months--$5 trillion. To give you an idea of how big that number is in context, normally our Federal Government only spends about $5 trillion in a given year. So we are increasing government spending by a rate of almost double that of the normal rate. Madam Speaker, when that occurs, you put even more pressure on goods and services, and that causes prices to increase further.

Earlier this year, the San Francisco branch of the Federal Reserve Bank wondered why inflation was so much worse here in the United States than that experienced by other countries, particularly in Europe. They did a study and several months ago they released the results of this study, and their findings were stark. They said that deficit government spending is at the root cause of why inflation is so much worse here in the United States than it is in other countries.

Madam Speaker, when the actions of government result in people paying more--that is called a tax. Inflation in the United States represents an unseen tax paid by every single American family. Unfortunately, this is a tax that is borne disproportionately by those who can least afford to pay it--the impoverished and the working poor in this country.

I have an even deeper concern this evening, Madam Speaker. Several weeks ago the Congressional Budget Office released their long-term fiscal forecast in which they analyze the finances of the United States over the next 30 years. They do this every year, and Congress, frankly, never pays attention. Madam Speaker, Congress and the American people need to start paying attention to what the CBO has to say.

The CBO says that our current national debt stands at over $30 trillion. If you do the math, that is over $90,000 for every single American man, woman, and child--over $90,000 each--and that is today.

The CBO says that right now our Federal Government runs a deficit of about 30 percent of all Federal spending. That represents about 4 percent of our gross domestic product. At the end of the forecast period, the CBO says that our deficit will nearly triple to 11 percent of our GDP.

At that time, just paying interest on the national debt will eclipse all of our Federal spending on Social Security. It will eclipse all of our Federal spending on Medicare. In fact, it will become the single largest expenditure of Federal Government, requiring over half of all Federal tax revenue to pay--over half. That is under the current fiscal conditions.

Ironically, the Federal Reserve Bank is being forced to raise interest rates as a result of the inflation that this Federal Government has caused. Every time the Fed takes the action that they are likely to take this week in raising the discount rate by three- quarters of a point, it increases the cost of our interest payments on our national debt by $180 billion a year, which makes the problem even worse.

In fact, the CBO says that if the Federal Reserve is forced to raise interest rates by 3 percentage points--and we know that they have already gotten to about halfway there--that by the end of their forecast period, just paying interest on the national debt will consume over 100 percent of Federal tax revenues.

In other words, Madam Speaker, we won't even have enough money to pay the interest on the debt that we have rung up. That is unacceptable. This should be something that everyone in this Chamber is talking about because what the CBO says is that sometime in the next 30 years there will come a day of reckoning. The sooner it comes, the less painful it will be. It will be painful no matter what we do, but if we wait it will be extremely painful.

Madam Speaker, we must get our fiscal house in order. The only way to solve this problem is to reduce our habit of deficit spending. Now, I know my colleagues on the other side of the aisle like to say this is an easily solved problem. The problem is that we don't tax Americans enough. Well, the CBO had an answer to that, too.

They said that over the next 30 years, in their forecast period, average Federal tax revenues will be over 18 percent. That is a substantial increase over the current Federal tax revenue over the last 50 years. In other words, Madam Speaker, what we have is not a revenue problem, we have a spending problem. The only way we can get this problem under control is to reduce our Federal spending and control our deficit.

Madam Speaker, almost every year in this Chamber multiple bills are introduced attempting to impose a balanced budget requirement-- sometimes within our House rules, sometimes within our Federal Constitution. I, myself, introduced a balance budget amendment last year in this Chamber.

We try to do it in a responsible way that won't disrupt the economy. We do it over a 5-year phase-in period. We allow for periods of fiscal emergency to be declared in which the President, with the concurrence of Congress, can override the requirement that the Federal budget be balanced in times of warfare and times of economic crisis.

Madam Speaker, we must pay attention to this problem. We must balance our Federal budget. If we do not, not only us but our children will pay the terrible consequence.

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