Jobs & Economy

Southern Wisconsin’s families continue to work hard to make ends meet in an uncertain economy. The unemployment rate in Wisconsin is high at 6.6 percent as of December 2012, while the national unemployment rate is 7.9 percent. As the economy struggles, much focus has been on increasing taxes to address our deficit and our debt.  These tax increases would hit job creators, like those small manufacturers located in industrial parks in our communities, and hard-working families.  Our local manufacturers and families are already forced to live under the strains of the current difficult economy.  Asking them to pay more will hurt our local communities.  What the federal government needs to do is stop spending too much.  It simply can no longer afford to spend money that it doesn’t have and take out more loans to pay for that spending.

Economic growth comes when American families and small businesses work, save, and invest. Congress needs to prioritize legislation that encourages job creation by keeping taxes low, controlling government spending, and addressing the severe problems ahead if we do not reform critical government programs that are driving up our national debt. Left unchanged, these programs will continue to take up a larger portion of our budget each year, crowd out other government spending, and hurt our economy. As the Chairman of the House Budget Committee, I take seriously my responsibility to help improve accountability, monitor federal spending, and prevent government waste and abuse, while putting forward long-term solutions to our debt crisis.

A Down Payment on the Nation’s Debt

One of the biggest threats to our country’s economic growth now and in the future, is our mounting debt.  Our debt is the product of massive spending increases that occurred under many presidents and many Congresses over many years, but we are reaching a tipping point and can no longer afford to kick the can down the road and expect that we can solve our fiscal problems in the future. 

To understand the magnitude of the nation’s fiscal problems, it is important to take into consideration a number of economic milestones that have been passed during the past few years. The total debt surpassed its $14.29 trillion statutory debt limit in May of 2011, and unless Congress passed legislation to increase the statutory debt limit, the U.S. would exhaust its borrowing authority.  Most policy makers and economists agreed that if the debt limit was not raised, the federal government would not be able to pay its obligations such as defense operations, Medicare reimbursements, and Social Security checks – possibly triggering a default with serious negative repercussions for the economies and financial markets around the world.  Nobody wants the US to default on its obligations, but at the same time, we cannot just rubber stamp a debt limit increase.  For this reason, the House and the Senate passed the Budget Control Act of 2011 with bipartisan support, which created enforceable discretionary spending caps to cut and restrain spending over the next ten years, provide a mechanism for increasing the debt limit in two steps, and establish a Joint Committee to produce deficit reduction legislation.  I supported this law because it would cut government spending, avoid default and help create a better environment for job creation.

In November of 2011, the national debt surpassed the $15 trillion mark.  Shortly thereafter the Co-Chairs of the Joint Select Committee on Deficit Reduction issued a statement indicating they were not able to reach a bipartisan agreement prior to the committee's deadline.  The committee’s inability to agree on specific cuts triggered “sequestration cuts” – automatic, across-the-board spending cuts totaling $1.2 trillion – that were to take effect in 2013.  These cuts would have resulted in a 10 percent reduction in Department of Defense programs and an 8 percent reduction in certain domestic federal government programs.   It is disappointing that the Joint Committee missed an opportunity to tackle our most pressing fiscal and economic challenges; however, this committee faced an extraordinary challenge after Senate Democrats failed to pass – or even propose – a budget.  In fact, the Senate has not passed a budget in more than 1,300 days – nearly four years.  The simple truth is that we don't need special commissions and committees to develop solutions; we need the President and Members of Congress to do their jobs.

I introduced the Path to Prosperity, the Fiscal Year (FY) 2013 budget, which was passed by the House of Representatives in March of 2012.  This budget would avoid sequestration cuts by cutting spending in a smart, sensible manner that does not threaten our national security.  The House-passed budget cuts government spending from its current elevated level of 24 percent of the economy to 20 percent by 2015.  Relative to the President’s proposed FY 2013 budget, the Path to Prosperity budget cuts spending by more than $5 trillion over the next ten years and shows more than $3 trillion in lower deficits over the next ten years.  The House-passed budget sharply reduces publicly held debt as a share of GDP over its first ten years.

In addition to the, automatic across-the-board spending cuts, an across-the-board tax increase was also slated to go into effect in January of 2013.  This simultaneous increase in taxes and automatic cuts in federal spending was deemed the “fiscal cliff."  According to the Congressional Budget Office, going over the fiscal cliff would have substantially reduced the deficit; however, this restraint would have also reduced our nation's economic growth from 4.4 percent to negative 0.5 percent in 2013, putting us at risk of another recession. Fortunately, there was bipartisan consensus that action needed to be taken.  Recognizing the importance of acting to prevent the expiration of current tax rates, the House passed H.R. 8, the American Taxpayer Relief Act of 2012, by a bipartisan vote of 257 to 167—with my support—on January 1, 2013.  H.R. 8 prevented a tax rate increase on 98 percent of taxpayers and made these lower tax rates permanent so they would not expire again.  H.R. 8 also makes permanent 97 percent of the tax relief provisions for small businesses enacted in 2001 and 2003.  Without Congressional action to address this issue, the American people would have been hit with a $4.4 trillion tax increase; instead revenues will increase by $600 billion.  In the end, the choice presented to Member of Congress was to either raise taxes by $4.4 trillion or by $600 billion—I voted for the latter.  This bill also delays the Fiscal Year 2013 sequestration for two months, giving Congress the opportunity to focus the nation’s attention on the fact that we are spending more money than we have. 

While not perfect, I supported H.R. 8 because this legislation prevents tax increases on 98 percent of taxpayers, or 114 million households, and delays the automatic across-the-board cuts to our armed forces and key priorities.  The House had already passed legislation to prevent tax increases for every American family, and it is unfortunate that President Obama insisted on taking more from hardworking taxpayers.  In addition, the House passed the Sequester Replacement Reconciliation Act, a bill that outlined various cuts and savings to mandatory programs that would make up for ending the sequester, such as stopping fraud by eliminating government slush funds, putting an end to bailouts, and reducing waste and duplicative programs.  Regrettably, the Senate failed to take action on this alternative to sequestration.  In the coming months, Congress will debate the best ways to address the debt ceiling and avoid across-the-board sequester cuts, which will now go into effect on March 1, 2013, unless action is taken to replace them.  In this debate, we must return our attention to the real problem:  out-of-control spending.  Washington’s reckless spending drives the debt and this debt is hurting the economy today.  We’ll never get our debt under control unless we tackle its main drivers:  spending money we don’t have.  Unless we get at the heart of the problem, Americans will face a debt crisis – one that will threaten our most vulnerable in particular – and it is our responsibility to prevent such a crisis. 

No Budget, No Pay Act of 2013

Looking ahead to the President’s budget proposal for FY 2014, on January 14, 2013, the White House announced that it will not meet the statutory deadline of submitting its budget proposal to Congress by February 4.  The President has only met this deadline once since taking office.  This, combined with the Senate’s refusal to comply with the statutory requirement to pass a budget for nearly 4 years is a true failure of leadership.  To bring these failures to an end, the House passed H.R. 325, the No Budget, No Pay Act of 2013 by a vote of 285 to 144.  This legislation allows the Treasury to borrow to only pay its bills coming due until May 18, 2013.  At the end of that period of time, the debt limit would be increased by the amount that was borrowed to pay the government’s bills until May 18, 2013.  It also requires both houses of Congress to pass a budget as stipulated by federal law.  Under this bill, if either the House or Senate fail to pass a budget, its members’ pay will be withheld.  H.R. 325 is currently pending in the Senate. 

I voted in favor of this bill because every family sets a budget to pay its bills.  Congress should do the same.  The House will comply with the budget law and we will not consider another debt-ceiling increase unless the Senate passes a budget.  The House will not just keep raising the debt ceiling either.  We need to take this opportunity to make a down payment on our debt reduction and point our country in the right direction.

Job Creation and Economic Growth

The economic growth that our country needs cannot come from Washington.  It originates from the creativity and entrepreneurial spirit of the American people.  This spirit can only thrive if the government creates an economic-friendly environment that allows businesses to grow and create jobs.  In the 112^th Congress, the House Majority has pursued an agenda focused on job creation and economic growth.  As such, we passed 55 bills aimed at empowering small business owners and reducing regulatory burdens, fixing the tax code to help job creators, increasing competitiveness for American manufacturers, encouraging entrepreneurship and growth, maximizing domestic energy production, paying down America’s unsustainable debt burden and beginning to live within our means. 

Unfortunately, 40 of these bills, despite most of them garnering bipartisan support in the House, died in the Democrat-controlled Senate.  Reforming our tax code and eliminating the broken policies of the past is an area where both parties can find common ground and bring positive changes that will allow businesses to grow and create jobs. I will continue to work to advance policies that address our economic challenges, foster innovation and investment, and help job creators without raising taxes on working families and small business owners. 

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