Mr. President, I come this morning to speak about a need for fiscal responsibility. Over 200 years ago, George Washington warned that ``Government is not reason. It is not eloquence. It is force. Like fire, it can be a dangerous servant or…
Mr. President, I come this morning to speak about a need for fiscal responsibility. Over 200 years ago, George Washington warned that ``Government is not reason. It is not eloquence. It is force. Like fire, it can be a dangerous servant or a fearful master.'' Even when government functions properly as a servant, Washington observed, it is dangerous.
Mr. President, I rise today to talk about--and to urge a need for something to happen in this Senate and in this Congress--fiscal responsibility. While Congress has been talking about spending measure after spending measure over the past several weeks, Americans have been talking about Congress' loose spending of their tax dollars. What many lawmakers have referred to as the fiscal policy of the Government has come to mean nothing more than the Government's dangerous tendency toward fiscal recklessness.
Fiscal responsibility is premised on the simple concept that less is more. Less government spending means more freedom for individual Americans and increased levels of economic activity and rates of economic growth for the country. Several studies confirm this.
A Public Finance Review study indicated that: ``Higher
total government expenditure, no matter how financed, is
associated with a lower growth rate of real per capita gross
state product.''
A study by the Journal of Monetary Economics found that:
``There is substantial crowding out of private spending by
government spending. Permanent changes in government spending
lead to a negative wealth effect.''
And an International Monetary Fund study showed that:
``Average growth for the preceding 5-year period was higher
in countries with small governments both periods.''
The cumulative evidence in these studies suggests one important thing--government spending hampers the economic growth of our country. Even more than this, the growth of government spending is economically destructive.
Every dollar the government spends is one taken from an American, and is one less dollar in the productive, private sector economy.
Every dollar the government spends to fund agencies imposes large costs on the economy's productive sector, no matter how small the agency.
Every dollar the government spends on programs such as welfare and unemployment insurance encourages bad behavior by providing incentives for Americans to remain unemployed and choose leisure over work. Every dollar the government spends this way goes to making Americans passive supplicants rather than active citizens, particularly at a time when the number of those dependent on the government is growing and the number supporting it is shrinking.
We have been seeing those numbers talked about over the last good number of years--who is taxed and who is not, who is paying in to the Government versus who is not. We are now edging toward 50 percent of the American people not paying taxes, and yet we still hear this great debate in the Senate about, well, the tax cuts are only for the wealthy. The tax cuts are for people who pay taxes versus those who do not pay taxes. There is a very important reality check that has to occur out there.
When I am home visiting with folks at our town meetings and I say a family of four making $27,000 to $30,000 a year does not pay Federal taxes anymore, that is a fact. Yet somehow we get this rich versus poor debate in this Chamber. It is really those who pay taxes versus those who do not pay taxes and become the recipients of the largesse of Government.
Every dollar the Government spends to subsidize both health care and education distorts competitive processes in the marketplace and makes States increasingly more dependent, and their budgets become distorted because they are the ones that have had that historic Government responsibility. Every
dollar the Government spends to deliver services is one that should be in the private sector allowing the marketplace to choose its efficiency and its effectiveness.
There are some interesting figures. In 2005, Washington spent $2.470 trillion, raised $2.154 trillion, and ran a $317 billion budget deficit. This deficit is 2.5 percent of gross domestic product. Some will say that is the lowest ever; it doesn't mean anything. $317 billion is a lot of money.
Spending increased by 8 percent in 2005 and is up 33 percent overall since 2001.
In 2005, inflation-adjusted federal spending neared $22,000 per household, the highest level since World War II.
Federal spending has increased by 33 percent since 2001, from $1.863 trillion to $2.470 trillion. Defense and 9/11-related costs have only accounted for a smaller-than-expected portion of this:
From 2001 to 2003, spending expanded by $296 billion, 45 percent of which went to defense and 9/11-related costs, and 55 percent of which went to new Federal spending unrelated to defense and 9/11. This is an 11 percent jump in Federal spending, the fastest growth in a decade.
From 2001 to 2005, discretionary spending surged 48 percent, from $649 billion to $969 billion.
Current spending on entitlement consumes nearly 60 percent of all program spending, a record 10.8 percent of gross domestic product, and is projected to nearly double over the next decade.
Long-term trends project the cost of Social Security, Medicare, and Medicaid to jump from 8.4 percent of GDP in 2005 to 18.9 percent of GDP by 2050. Federal program spending is projected to reach 27.6 percent of GDP by 2050.
By 2050, our children and our children's children will be footing the bill for our current fiscal irresponsibility.
Nearly 200 hundred years ago, Thomas Jefferson said that ``although a republican government is slow to move, yet once in motion, its momentum becomes irresistible.'' There was a time not too long ago when Republicans stood up, made the case for smaller government, and made it happen. From 1998 to 2001, we did this by enjoying record budget surpluses.
The time for action is upon us once again.
The Federal Government's spending momentum, however, makes tax cuts, reductions in pork, and slashes in subsidies only first steps toward a real solution. The only long-term, fundamental, permanent reform that would effectively dispel the danger of current fiscal recklessness and restore fiscal responsibility is a balanced budget amendment to the Constitution like the one I reintroduced earlier this year.
Jefferson once said, ``with respect to future debt; would it not be wise and just for that nation to declare in the constitution they are forming that neither the legislature, nor the nation itself can validly contract more debt than they may pay?'' I think he's right and urge my colleagues to join me in supporting a balanced budget amendment to our Constitution to restore the past principles of fiscal responsibility envisioned by the Founding Fathers and to safeguard the future by providing a bill of economic rights for our children.
It is important we understand the impact that Federal spending has, and it is clearly time some of us come to the floor and challenge all of us to recognize what we are doing, where we are going, and the amount of money being spent. Now we recognize more than ever before, with the natural disasters hitting our country that are unprecedented in their impact on human lives, that we have a new responsibility to help those citizens who have lost everything gain a little back. Somehow we think we can go on doing that at our current level of spending, but it is time we get a little realistic about some belt tightening around here, even if it is at last year's rate of spending versus an increased level of spending for the next budget.
I think Americans want us to wake up, realize what we are doing, and the impact this kind of spending has both in the short term on our economy and in the long term on our economy both for us, our children, and our grandchildren.
I thank the Senator from Colorado for yielding.