Murfreesboro Daily News Journal - Corker Pushes CAP to Cut Federal Debt Proposed Act Would Chip Away at Debt over 10 Years

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By: Ealand Ragland-Hudgins

College students, business leaders and public officials gathered at MTSU to hear a senator's plan to put congressional spending in a strait jacket.

Sen. Bob Corker, a Chattanooga Republican, visited the university Monday to give details on the Commitment to American Prosperity, or CAP Act. The goal of the act is to reduce discretionary and mandatory spending to approximately 20.6 percent of the nation's gross domestic product over 10 years.

If approved, the legislation would begin in 2013, when the projected GDP is $16.4 trillion. Spending would be capped at $3.649 trillion. Spending, Corker said, is currently 63 percent of the $14.72 trillion GDP.

"Indebtedness is something we have complete control of in Congress. We just have to have the courage to deal with it," he said. "It's the No. 1 threat to our future. If we stick with current policies, (debt) will never go away."

Discretionary spending ($1.2 trillion) is the part of the federal budget that goes through the appropriations process, including funding for military, education and veterans benefits. Included in mandatory, or entitlement, spending ($2.1 trillion) are the Social Security and Supplemental Nutrition Assistance programs.

Corker said Congress typically fights over the discretionary portion of the budget. If it was all taken away, he said, the budget still wouldn't be balanced.

"We have to deal with the entitlement programs. Otherwise, we can't grow the economy. It forces us as Congress to reformulate programs," the senator said.

Finance professor Ghassem Homaifar said his students are concerned about the way taxpayer dollars are handled.

"The deficit is being financed with balloon debt. They pay only on interest and not the principal," he said., adding that his students are glad to hear about Corker's plan.

Homaifar said his classes would like to see lower interest rates and increased transparency with how money is issued and spent, which would resolve many people's uncertainty.

"I agree with you. I think the CAP Act or something like it can do exactly what you're saying," the senator said. "Regardless of how bad you think Washington is about spending, it's worse. We have a problem and we need to address it."

John Tubb, a senior finance major, said Corker's plan sounds good, but he's worried about the impact it'll have on job creation.

"The growing debt worries me, but if the interest rates are low, that'll keep banks from hiring students like me who will be looking for a job," said Tubb, of McMinnville.

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