Create Environment for Economic Growth, Job Creation

C-SPAN’s “Washington Journal” on Thursday focused on negotiations under way to find $2.4 trillion in savings in the federal budget in order to offset about that level of an increase in the federal debt ceiling.  At this point, August 2 is the operational deadline for increasing the cap on the amount of debt the federal government can legally borrow.

There’s pressure coming from the White House and the Democrat leadership of the Senate to raise taxes to increase revenues to meet the $2.4 trillion mark.  The trouble is, history shows that higher taxes don’t go to the bottom line but, instead, fuel more government spending.

Economics Professor Richard Vedder of Ohio University studied the decades since World War II and found that for every dollar in tax increases, Congress spent $1.17.  Americans know that the problem isn’t that people are under-taxed.  Rather, Washington spends too much.  Voters last fall sent a clear message that they want government spending reined in.  They know it’s morally wrong to make the next generation pay the bills for the way we live today.  In just the last two years, government spending increased by 22 percent, on top of the money that was spent in the economic stimulus bill.

Serious spending reforms are needed for the sake of America’s fiscal well-being.

One of those reforms is a balanced budget amendment to the U.S. Constitution.  The federal deficit is 15 times bigger today than it was in 1997, the last time there was a vote in Congress on a balanced budget amendment.  It’s time to bring it up again.  I’m a co-sponsor of legislation and have formally asked Senate leaders to hold hearings on a balanced budget amendment.

In the meantime, the current debt-ceiling debate provides an opportunity to help bring fiscal accountability and responsibility to Washington.  It also emphasizes the need for pro-growth policies out of Washington, including less debt, but also regulatory relief, more exports, lower and simpler taxes and greater certainty about taxes, lower health care costs, and an increased domestic energy supply.

Friday, July 1, 2011