Mr. Speaker, I wanted to bring to my colleagues' attention a recent Washington Post article regarding deficits. What I found refreshing in this article is that it highlights the true reason behind deficits, that is, excessive Federal…
Mr. Speaker, I wanted to bring to my colleagues' attention a recent Washington Post article regarding deficits. What I found refreshing in this article is that it highlights the true reason behind deficits, that is, excessive Federal Government spending.
I realize there have been some difficult choices since September 11, 2001. As we fight the war on terrorism in Iraq, Afghanistan, and other areas that harbor terrorists, we obviously have to increase spending on defense, and I do not think many people would disagree with that, that it is necessary.
However, as any individual or business leader will tell us, when one has to increase spending in one area, they normally hold or decrease spending in another area. That, the Federal Government should realize, is basic Economics 101.
The biggest misconception about deficits is that by themselves they threaten the economy's long-term vitality. Not necessarily true. The real threat is rising government spending. The reason is simple. Government spending must be paid for by either taxes or borrowing, a deficit. If spending rises too high, economic growth may suffer from either steeper taxes or heftier deficits. Spending, Mr. Speaker, is the real culprit.
Robert Samuelson, in his article, notes ``since 1961, the Federal Government has run deficits in all but 5 years. Over that same period, the Gross Domestic Product has expanded by almost a factor of four.''
So we see that the real problem is excessive spending. The Federal Government does not have its own money to freely spend. It either taxes or borrows the money needed to fund its myriad of programs, many of which have long outlived their usefulness, if they had any to begin with.
Yet we continue to spend. In fact, over the past 5 years, the government has increased spending by $586 billion. Spending is now just over 20 percent of the Gross Domestic Product. In fact, it is spending, combined with the 2001 recession, that reduced over three-quarters of the previous budget surplus.
Unfortunately, we are going to see additional pressure to increase spending in the future. Baby boomers will be retiring. We are adding a new prescription drug benefit to Medicare, and we will need to continue funding the war on terrorism. And that is precisely why we need to control Federal spending here in Congress.
Samuelson notes that these future spending pressures will result in three choices: raise taxes; borrow funds, deficit spending; or cut benefits to certain programs. Obviously, all of these choices are difficult.
There is another way, Mr. Speaker, and that is to hold down Federal spending and attack waste, fraud, and abuse in this spending. We must also have a Balanced Budget Amendment. It is much easier to hold spending to a minimum if the law obligates us to do so. Clearly, we as a body have not shown sufficient restraint in holding or reducing spending in meaningful ways.
The second measure is to realistically attack waste, fraud, and abuse here in government. The Heritage Foundation notes: ``If congressional waste cutters had reduced mandatory spending by just 1 percent in 1980, taxpayers would have saved $190 billion through 2003, more than $2,000 per household.''
The 2004 Budget Resolution called for a 1 percent cut in programs to be identified by targeting waste, fraud, and abuse. That is an important step both for this year and for future years. However, we should not stop just at 1 percent. The Medicare program alone could be spared up to $150 billion over
10 years if we effectively could target waste, fraud, and abuse.
Mr. Speaker, our constituents are expecting fiscal restraint. They understand that concept much better, it seems, than even the Federal Government. They understand it from both a business and an individual family standpoint. The recession forced Americans to curb their spending at home. Businesses curbed their spending to hold down costs. They understood that ever over-spending would result in severe problems in the future.
Short-term deficits will not harm our economy. In fact, our economy is improving. However, if we continue to follow an alarming increase in Federal spending, the government will be faced with much more difficult choices in the future and with much more dire consequences.
We must, Mr. Speaker, maintain fiscal discipline and hold down this Federal spending.