Thanks, everybody--and welcome. It's good to see our friend, Director Elmendorf, once again. I want to thank him and his staff for putting together this report. We appreciate your hard work. And we'll put it to good use--because, as I read it, your report makes one thing clear: We haven't solved the problem. We're still spending too much money.
Just look at the numbers. Our total debt is bigger than our economy. And according to your report, our publicly held debt--as a share of our economy--"is higher than at any point in U.S. history except a brief period around World War II." Some seem to think that just because the deficit isn't $1 trillion anymore, we don't have to worry. Problem solved.
But we know better. In 2008, our publicly held debt was 39 percent of GDP. Today, it's 73 percent. In other words, it doubled in just five years. So today--if we have an emergency--we have a lot less leeway. When you owe more than you make, your creditors get antsy. Sooner or later, they cut you off. The problem is, they could cut us off--at exactly the wrong time. We've heard a lot of talk these days about how we need to pay our bills. But we need to make sure we can pay our bills both today--and tomorrow.
Look, we know what's driving our debt. It's spending--especially spending on health care. CBO says most of the spending growth in the near future will be in Medicare, Medicaid, and the Affordable Care Act. In the next 25 years, it expects spending on health-care programs to grow by 74 percent--or maybe even as much as 83 percent.
And yet for all this spending, what are we getting for it? The Medicare trust fund will go broke in just over ten years. That's after payroll taxes went up, after the health-care law made cuts to the program, and after the sequester made even more cuts. All these adjustments--especially the health-care law--were supposed to patch the hole. But instead, we took on more water. Clearly, a little tinkering isn't enough. We need a whole new approach.
Your report says our debt is too high. And the sooner we get to work, the better. You looked at a spending package that would save $4 trillion over ten years--which is roughly what the House budget would do. If we enacted such a law, interest rates would be one percentage point lower in 2038. Our economy would be 7 percent bigger. And our publicly held debt would be just 31 percent of GDP. But if we stayed on the current path, interest rates would rise. Our debt would grow. And our economy would be 4 percent smaller in 2038. That comes out to about $3,200 less per person.
I think the best illustration of our problem is what you call the "fiscal gap." What would it take--in spending cuts, tax hikes, or both--just to keep our debt stable? If we took action now, it would cost us roughly $145 billion per year. But if we waited, it could cost us up to $350 billion per year. We've got one foot on each side of a crater. And every day we wait, the gap grows larger. Every day we wait, it gets harder to bridge the gap.
Washington's motto is "Never do today what you can put off till tomorrow." But tomorrow is closer than we think. And we know what the answer is. We know that with real reforms we can not only pay down the debt--we can help grow the economy and put people back to work. It's not a matter of ability. It's a matter of will.
And with that, I recognize the ranking member for his opening remarks.