[Congressional Record Volume 170, Number 149 (Tuesday, September 24, 2024)]
[House]
[Pages H5736-H5741]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
{time} 2030
UNSUSTAINABLE, CRIPPLING FEDERAL DEFICIT AND DEBT
The SPEAKER pro tempore. Under the Speaker's announced policy of
January 9, 2023, the gentleman from Hawaii (Mr. Case) is recognized for
one-half of the remaining time until 10 p.m. as the designee of the
minority leader.
Mr. CASE. Mr. Speaker, tonight I join colleagues from both parties in
focusing attention on what is truly one of the quietest and most
avoided crises in America today. I speak very directly of our Federal
budget and, in particular, its unsustainable, crippling Federal deficit
and debt.
This silent but accelerating crisis threatens all of us, not only
these generations, but generations into the future. This crisis is all
of a fiscal crisis, an economic crisis, a social crisis, and a security
crisis.
Mr. Speaker, it is a crisis that we are, frankly, busy denying. We
are certainly avoiding it and explaining it away, but I think we all
know instinctively in this country, and some of us know very
consciously in this country, that it is an imminent crisis.
Tonight, colleagues of both parties and I, all of us members of our
Bipartisan Fiscal Forum, which has 87 bipartisan Members of the House
who are committed to facing and solving this threat, want to discuss
this issue in a very brief discussion to assure we do not keep sweeping
this crisis under the rug.
We will highlight how our Federal finances work, what is going wrong
and why, what are the severe consequences if we don't correct the
cause, and what can we do about it.
I will go into details later, but I first want to invite my
colleagues to share some of their concerns and perspectives.
Mr. Speaker, I yield to the gentleman from Wisconsin (Mr. Grothman),
a member of the Budget Committee, an accounting and fiscal management
professional before his time in Congress, a
[[Page H5737]]
member also of the Committee on Education and the Workforce and
Committee on Oversight and Accountability, and someone who knows his
way around the budget.
Mr. GROTHMAN. Mr. Speaker, I thank the gentleman for yielding.
I don't know whether the people back home realize how rare it is for
a Democrat to be calling upon a Republican to speak about a bill, but
it is a testament to the size of our fiscal crisis and the fact that we
have a lot of very good, bipartisan type legislators in this building.
In any event, our national debt now stands at an astronomical $35
trillion. It is an unconscionably large debt, which is the result of
decades of wasteful Washington spending, and it is a problem both
parties have contributed to.
To put it in historical perspective, as a share of our economy, the
last time the debt was this high was at the end of World War II. Last
year, the Federal Government spent more than $6 trillion and racked up
a deficit of $1.7 trillion, the third highest annual deficit in our
country's history.
One of the most frightening aspects of our out-of-control spending is
the accelerating interest costs, which, of course, we can't reduce.
So far in 2024, we have spent $870 billion on interest costs. That is
more than we spent on Medicare or the military. It is way more than we
spend on the military.
To illustrate how profligate the government is, let's take a look at
how much of each year's spending was borrowed: 2018, 19 cents; 2019, 22
cents; 2020, 48 cents; 2021, 40 cents; 2022, 22 cents; and 2023, 28
cents. We expect this trend to continue for at least the next 5 years.
One cause of the red ink in recent years has been the use and abuse
of emergency spending. The debt ceiling deal that was passed earlier
this year set caps on discretionary spending, although there is a
loophole that allows certain spending to be designated as emergency
spending, and that is not subject to the cap.
While there are some items that are genuine emergencies, too often,
Congress slaps the term ``emergency spending'' on projects it simply
wants to fund despite the caps.
Here are a few examples of Federal spending that were labeled as
emergency spending: $6.6 million for the replacement of irrigation
systems at two golf courses in Colorado Springs, $12 million for the
renovation of a minor league ballpark in New York State, and $70
million for tourism marketing in Puerto Rico.
These emergency designations add up. Last year, Congress designated
$162 billion in emergency spending. This year, it is up to $196
billion. In fact, over the last 30 years, Congress has provided $12
trillion in emergency spending.
I have been here for some of these, and I don't consider them
emergencies. As soon as ``emergency'' is slapped on them, it means the
money can be spent with reckless abandon.
Clearly, if we are going to tackle our debt and deficit problem,
Congress will have to break its addiction to emergency spending, the
culture of rampant emergency spending abuses encouraged by the CBO's
baseline budget. By law, the CBO is required to assume that any
spending Congress designates as emergency spending will continue on
throughout the entire 10-year budget window and grow with inflation.
This is obviously reckless.
Keep in mind, emergency spending is meant for one-time spending, not
spending that goes on in perpetuity. You would never know that based on
the way the CBO does these things.
In fact, the most recent CBO baseline update demonstrates the need
for this bill. In the June report, CBO raised the projected spending
over the next 10 years by $945 billion. Nearly all of this projected
increase is due to $95 billion in supplemental foreign aid spending
Congress passed earlier this year.
Does it make sense for CBO to assume this temporary spending will
continue for all 10 years? It is ridiculous on its face.
To address this challenge, I am pleased to work with the gentleman
from Hawaii (Mr. Case) to introduce the Stop the Baseline Bloat Act.
This bill would amend the relevant law to ensure emergency spending is
not included in CBO's baseline. Getting our fiscal house in order, we
must start with a neutral baseline, and this bill will make a
meaningful step toward fiscal sanity.
Mr. Speaker, for this reason, I am pleased that this bill will be
marked up by the House Budget Committee tomorrow morning. I hope this
commonsense bill receives widespread bipartisan support.
I thank the gentleman from Hawaii (Mr. Case) for his leadership in
putting this bipartisan Special Order together and for leading the Stop
the Baseline Bloat Act.
Mr. CASE. Mr. Speaker, I thank the gentleman for highlighting not
only the overall crisis, but certainly many of the process concerns
that we all have in terms of full transparency and full accountability
from the perspective of getting our budget under control.
Mr. Speaker, I now yield to the gentlewoman from Pennsylvania (Ms.
Houlahan), an entrepreneur and a small business person herself, a
member of the Committee on Armed Services and Permanent Select
Committee on Intelligence, and somebody that also knows her way around
a budget.
Ms. HOULAHAN. Mr. Speaker, I thank the gentleman for yielding and for
the opportunity to speak on this Special Order.
Mr. Speaker, I rise today with my colleagues as a very proud member
of the Bipartisan Fiscal Forum Steering Committee. Together, we are
very much committed to addressing one of the greatest threats to our
Nation's long-term stability, and that is that of our unsustainable
debt trajectory.
We also understand that we simply can't afford to treat our fiscal
future like a political football. I represent Pennsylvania's Sixth
Congressional District, a very purple community, where people
understand that fiscal responsibility isn't a partisan issue, but it is
a community value. We know that our prosperity both at home and across
the country depends on smart and responsible fiscal stewardship.
Before coming to Congress, I was a business leader in Pennsylvania,
and I have seen firsthand the risks and consequences of debt when it is
not carefully managed. Businesses that ignore fiscal discipline may
eventually falter. They may lose investors, may lose opportunities, or
may even fail.
In the same way, if we continue on our current fiscal path as a
nation, we could also find ourselves on similarly dangerous ground.
Over the past few years, this Nation and consequently the Federal
Government has faced very costly and unprecedented challenges, from
responding to the global pandemic, to defending our allies abroad from
brutal, illegal attacks, to historic emergency national disasters.
These crises have demanded investments and American leadership to
protect our country and to support our global partners.
However, as interest rates now dip and inflation lowers and eases,
now is, in fact, the time to refocus our efforts. In the coming months,
we must have serious conversations about the future of our long-term
fiscal health. As we look toward this future, the long-term
implications of our national debt demand our attention and demand
action.
Right now, as has been mentioned, the U.S. national debt is over $35
trillion, larger than our entire economy's GDP. On a similar note,
according to the Congressional Budget Office, if we fail to change
course, interest payments on that debt alone are projected to exceed $1
trillion annually by 2033. That is $1 trillion just to pay the
interest, money that could otherwise go toward infrastructure,
families, education, and national security.
Speaking of national security, I want to be clear: Our economic
security is absolutely directly tied to our ability to defend ourselves
and to lead on the global stage. The more that we borrow, the more we
depend on foreign creditors, and the less flexibility that we have in
making decisions that are in our national interests.
As our interest outlays increase, the less funding we have to spend
on things like our military's preparedness. We cannot afford to have
our hands tied by debt when it comes to protecting this Nation.
In Congress, we face critical deadlines in the coming months. As we
prepare to vote on yet another short-term
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funding extension this week, we are reminded that a bipartisan full-
year compromise for fiscal year 2025 government funding has yet to be
reached.
Early next year, we will once again face the debt ceiling. These are
not abstract deadlines. These are real and pressing moments where we
have the opportunity to get control of our fiscal future together, but
that opportunity is slipping away if we continue to delay these
difficult decisions and if we continue to politicize this issue.
So that is why the Bipartisan Fiscal Forum exists. We are here. We
are here to sound the alarm, and also to propose durable solutions,
solutions like a bipartisan fiscal commission, or the Fiscal
Responsibility Act that we passed just last year.
Our mission as a group is to raise the profile of this issue with our
colleagues and with the public while ensuring that we have healthy,
constructive debates on fiscal policies here in Congress.
As a bipartisan group, we know that this is not about scoring
political points. This is about securing a sustainable future for our
children and for our grandchildren. We may not agree on every solution
or on the levers to pull, increasing revenues or decreasing costs, but
we cannot afford to continue to keep kicking the can down the road.
I urge my colleagues on both sides of the aisle to please come
together, to set aside partisanship, and to work toward a balanced,
sustainable budget. We owe that to the American people.
Mr. CASE. Mr. Speaker, I thank my colleague so much for her very
realistic and eyes-wide-open assessment of our Federal budget, and
especially the focus on its impact on our national security from her
own perspective in that space because I think we sometimes forget that
this is a security risk, as well as a risk elsewhere.
Mr. Speaker, I yield to the gentleman from Michigan (Mr. Huizenga),
the co-chair of our Bipartisan Fiscal Forum, a small business person
himself in his prior life, a member of the Financial Services
Committee, Foreign Affairs Committee, and a leader in this area.
I thank the gentleman for joining us.
Mr. HUIZENGA. Mr. Speaker, I appreciate the gentleman from Hawaii
(Mr. Case), my friend, for yielding time. This is a very important
discussion to be having, not just among ourselves, but with the Nation
and with the country.
Mr. Speaker, I start by thanking the gentleman not only for his
sincere interest in this issue, but our growing friendship, as well. As
I tell people back home, so often, you need to have a relationship
first to then be able to build trust. When you build that trust, that
is when you can go and find those solutions.
I am sure the gentleman has some constituents in Hawaii, much like I
have constituents over in Michigan who sometimes say: Why are you even
talking to those people? Let's just ignore them.
Well, sorry, folks. We can't do that. That is not reality. We have to
deal with our colleagues, and guess what. We have gotten a very special
group of people who have said: We realize that we are not going to be
able to solve every problem. We are not even going to try to solve
every problem, but this is a growing issue and problem for us that we
need to focus and concentrate on.
Mr. Speaker, the gentleman is using this as an opportunity, the same
as I will, to discuss some difficult truths about what we are facing
and what my constituents back in southwest Michigan and the gentleman's
constituents in Hawaii are all dealing with.
Frankly, the size of our national debt is just climbing at an
alarming rate. It now exceeds over $35 trillion with a t.
Probably like a lot of our colleagues here, I visit schools and I
talk to kids, and I will oftentimes ask them: How many zeroes in a
trillion? Usually the first answer is: A lot.
Yes, that is true. I tell these kids: You know what you need to do at
some point today? Write down a 1 with 12 zeroes behind it, but then
don't start at the left. Start at the right and see what $1,000 looks
like, what $100,000 looks like, what $1 million, $10 million, $100
million, and $1 billion looks like, and you still see all these zeroes
that you have to keep counting through.
Well, that $35 trillion that we have spent here on the big giant
credit card, Uncle Sam's credit card, is actually projected to reach
closer to $57 trillion in the next 10 years.
There are consequences to that. There are consequences to that. We
can joke around and maybe understand that people aren't aware of what
is going on. I have sort of had this running joke in our office that we
need to put a big giant debt clock up here in the House Chamber to just
remind people.
We have got to go out there and make sure that people understand that
what is happening is this debt is crowding out other priorities, so
much so that, this year, if projections hold true, we are going to see
interest on the debt to exceed our military spending.
{time} 2045
Just think of that: Interest on the debt for what we have already
spent is going to exceed what we are going to be spending not just on
the military but also for every program that touches kids here in this
country.
That is more than Medicare. That is more than the military. We have
to get serious about this.
I think everybody can understand the concept of having a credit card
that has gotten a little too high, and they feel like they have had to
use it because of inflation and the things going on. Think about how
the interest on your credit card is now outpacing your grocery bill or
outpacing your auto loan. How can you possibly function as a family?
You can't.
We have to understand the debt that we have delivered here is helping
drive some of that inflation. Interest rates that are there, the money
that is getting taken away from other programs, is real.
I am the father of some college-aged kids and a small business owner,
as you were kind enough to mention. My family is in construction. I am
a former realtor. I understand and talk to people on a regular basis
about what this means in their lives, and there is a real factor
impacting your family, my family, and all of our constituents'
families, as well.
In addition to the debt threatening to bankrupt our Nation's promises
to seniors, to fueling inflation-causing interest payments, the
national debt also slows economic growth. It drives up interest rates
and leaves us less prepared for emergencies, whether it is a COVID-like
emergency, a military-like emergency, or a natural disaster emergency.
Suddenly, these things could plunge our Nation into even more chaos
than what it would be normally because we are having these issues.
For these reasons, and with the help of many of our colleagues who
are speaking tonight--Mr. Grothman spoke, Mr. Moore is going to be
speaking, Mr. Case, and so many others--we are really trying to tackle
this with our Bipartisan Fiscal Forum.
My co-chair, Scott Peters, has been a great partner in this, and he
and I together introduced H.R. 5779, the Fiscal Commission Act,
earlier. That would force our Congress to tackle our national debt by
voting on a package of policy recommendations designed to get our
Nation's fiscal house in order, both in the short term and in the long
term.
As was quoted by Ms. Houlahan earlier, we are looking at real cuts in
Social Security. We are looking at real cuts in Medicare. Those should
not be acceptable. We have to wrestle this dragon to the ground.
I am proud that our legislation passed the House Budget Committee on
a bipartisan basis, but we have a lot more work to do. The purpose of
tonight is continuing to raise that awareness with a national audience,
not just our colleagues but our constituencies, as well.
We have to make sure that people understand crystal clear how serious
this issue is and the real impacts it has, making life less affordable
and more difficult on our constituencies, not just in the short term
but certainly in the long run for our kids and our grandkids.
I know the Bipartisan Fiscal Forum, with my colleague's leadership
and others, stands ready to work with anybody. We will work with
anybody who is interested in this.
As has been stated, we may not always agree on the path, but we agree
on the destination. That is the important part: making sure that we get
to that destination because that really is
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what we owe our kids and grandkids and future generations of Americans.
Mr. CASE. Mr. Speaker, I appreciate my colleague's leadership very
much. Not only do we agree on the destination, but we agree on the
problem. When you can agree on what the problem is, you can usually get
to a solution. What we need to do is all agree on that problem on a
bipartisan basis.
Mr. Speaker, I yield to my colleague from Utah (Mr. Moore), a
steering committee member of the Bipartisan Fiscal Forum, a member of
the Budget Committee and the Ways and Means Committee, another small
business person, and somebody who also knows his way around a budget.
Mr. MOORE of Utah. Mr. Speaker, I thank the gentleman from Hawaii for
yielding. I really appreciate this opportunity.
Mr. Speaker, I rise alongside a bipartisan group of colleagues to
discuss our Nation's greatest threat: the unsustainable deficit and
spiraling national debt.
I thank my friend, Congressman Case, for hosting this Special Order
this evening and for his continued leadership on the Bipartisan Fiscal
Forum.
Today, our gross national debt exceeds $35 trillion. Our budget
deficit is expected to reach $1.9 trillion this year. Spending on
interest payments just to service our debt will surpass what we spend
on Medicare and national defense each, individually. This is the grave
reality of our fiscal situation.
As we all know, this is not an easy issue, and it is a problem
created by both parties. Durable and lasting solutions will likewise
require bipartisan partnership to address these difficult budgetary
realities.
I am grateful for groups like the Bipartisan Fiscal Forum, where
Members who recognize the catastrophic threat posed by our fiscal state
come together to elevate this issue and find commonsense solutions.
As a father of four boys, this issue is deeply personal to me. I want
my sons' generation to have the same chance at the American Dream that
previous generations have had.
Our national debt matters, and if we don't deal with it, our children
and their children will bear the burden of higher inflation and
interest costs, slower economic growth, and the national security risks
associated with bloated Federal Government.
Utah, my State, is a model for responsible budgeting with a balanced
budget every year and a consistent rainy-day fund. This is why, during
my first term in Congress, I established a Debt and Deficit Task Force
back home in Utah, comprised of leaders from across the State to create
a framework of solutions for how elected officials should address our
Nation's debt crisis with Utah's fiscally responsible values.
The four main pillars of our framework include growing the economy,
saving and strengthening vital programs, focusing America's spending,
and fixing Congress' budget process.
I know that several of my colleagues involved in the Bipartisan
Fiscal Forum have recognized many of the same structural issues and are
working hard to change the tide here in Washington.
As a member of the Budget Committee, I have been proud of the work we
have done this Congress to raise the profile of our national debt and
deficit crisis.
Earlier this year, the committee passed my Fiscal State of the Nation
Act, which would require the nonpartisan Comptroller General to provide
an annual update on the Nation's finances to a joint meeting of
Congress and help the Nation understand the scope of the problem.
I applaud Chairman Jodey Arrington for leading the charge on a lot of
important legislation and conversations that are making the dangers of
our Federal debt crisis feel more real to the American people.
The committee also advanced a very important and significant
bipartisan Fiscal Commission Act, crucial legislation led by
Congressman Huizenga from Michigan and Congressman Peters from
California.
The bill would establish a commission tasked with identifying
policies to improve the fiscal situation in the medium term and attain
a sustainable debt-to-GDP ratio over the longer term. The commission
would operate in an open and transparent manner, and importantly, it
provides for expedited consideration on the House and Senate floor.
That is something we haven't always had in these similar types of
approaches, that there would be expedited consideration to force a
House and Senate floor vote.
While establishing a fiscal commission is critical in the short term,
I know many of my colleagues would agree that we need to reform our
budget process to help make sustainable budgeting possible.
To illustrate the scope of the budget process challenges, here are a
few figures: Congress has not adopted a budget on time since 2003;
Congress has not passed all appropriations on time since 1996; and the
only time Congress has passed both the budget resolution and
appropriations by the deadline was 1977.
The Budget Committee is working hard on budget process reform, and I
know members of the Bipartisan Fiscal Forum have ideas to revamp the
process, as well.
A bipartisan bill I introduced with Congresswoman Marie Gluesenkamp
Perez to tackle this problem is the Comprehensive Congressional Budget
Act, which would take the next step toward an effective and inclusive
congressional budgeting process by including all spending and revenue
in the budget process and requiring contributions from committees with
direct spending or revenue jurisdiction.
I emphasize ``all spending'' because, as I listed off things where we
have fallen short over the last 50 years, it is not even highlighting
the most important aspect: We don't vote on more than 75 percent of our
budget. All 435 of us and 100 Senators are responsible in our Article I
duty for our Federal budget, and we vote on approximately 23 percent of
that.
This Comprehensive Congressional Budget Act would force Congress to
take into consideration the entirety of the budget, and it would give
the committees the right responsibility. We would have to roll up our
sleeves and actually have to deal with the entirety of the budget
because the fact that we just vote on appropriations bills doesn't
solve a single thing.
Next year will be an important year as we deal with major fiscal
cliffs. Beyond the annual appropriations process, we will have to deal
with the reinstatement of the debt limit in addition to trillions of
dollars of tax expirations that will affect every American family.
Groups like the Bipartisan Fiscal Forum are incredibly valuable as we
take on the challenges and opportunities ahead of us in 2025.
Mr. Speaker, I look forward to continuing this important work.
Mr. CASE. Mr. Speaker, I thank so much my colleague for his
leadership, as well. I really appreciate his highlighting the
intergenerational consequences of not solving this issue today.
Mr. Speaker, may I inquire as to the time remaining.
The SPEAKER pro tempore. The gentleman from Hawaii has 20 minutes
remaining.
Mr. CASE. Mr. Speaker, I really appreciate my colleagues spending the
time here tonight.
Now, I will go back and add a little bit of detail, so that we can
fully illustrate what the issue is, how we got here, what the
consequences are, why we need to do something about it, and how we do
so.
The first thing I will start with is something very basic, and that
is: How do our Federal finances actually work? First and foremost, our
Federal finances are no different in concept than our family or
business budgets, fundamentally.
In our Federal finance situation, our taxes and fees create revenues
for our government. Our programs create the expenses for our
government. If the revenues exceed expenses, we call that a surplus. If
expenses exceed revenues, that is a deficit. We calculate both revenues
and expenses and surpluses and deficits on an annual fiscal year. When
we are talking about a deficit or surplus, we are talking about what
happened in a particular fiscal year.
How do we address a deficit if we have it? It is easy to understand
how we deal with a surplus. We spend the money that we got and,
hopefully, save up a little bit for the next year, just like any
family, any business.
[[Page H5740]]
What do we do about deficits? We will borrow that money, and we
mostly borrow it by issuing government bonds to people around the
country and world who want to invest in our government bonds, believing
that the United States is the most secure investment in the entire
world, but we also borrow intergovernment or, more accurately,
intragovernment.
We are busy borrowing, for example, from the Social Security trust
fund, which is building up a surplus toward a time when it needs it far
more to pay Social Security benefits, and that money is due and owing
to the Social Security trust fund.
It creates extra pressure on the Social Security trust fund that
money is not being used for Social Security. It is being used for
everything but Social Security.
Those borrowings in a family or business setting start to overwhelm
you. We, of course, like anybody else, pay interest on what we have
borrowed. Our total borrowings at any one time, which are essentially
the accumulation of our deficits over time, are our total government
debt.
Just like any family or business, it would be nice to have no deficit
or debt, but that is not most of us. It is fine to run some debt if
that debt is not chronic, if that debt is not just an excuse to be
irresponsible and avoid fiscally responsible behavior, and that debt is
not too high in relationship to our overall budget or economy.
We measure this many times by reference to our gross domestic
product, how much our economy is producing. We calculate a debt-to-GDP
ratio, which, if it is too high, starts to overwhelm the economy just
like any family or business budget, or if the interest on the debt is
not too high in relation to our total budget.
{time} 2100
Bottom line, we can afford some debt but not if it starts to get away
from us. This is, again, no different in concept than a family or
business budget with one exception, and that is we can go on borrowing
as long as we want, even irresponsible borrowing, whereas in a family
and a business budget, that is going to catch up with you sooner or
later.
Now, what exactly is going wrong, and why is it going wrong?
Well, the last year that we had a surplus in our Federal budget was
2001, 23 years ago. We have run deficits every year since then.
This illustrates our deficit track since 2001 down on this side, and
you can see that it increased in the middle part of 2008, 2009, 2010,
and 2011, during the Great Recession when we had higher expenditures
for recovery and lower revenues because we were in a recession.
Then, of course, this big bump right here is COVID when we had to
borrow a lot of money, when we had to run deficits in order to bail our
country out of a tremendous problem. These 2 years were deficits.
Then we recovered in the post-COVID environment, but now we see it
going up again for no real good reason other than that we are running
deficits.
We are now at $1.9 trillion per year, and if we carry that out over
time, we will see deficits grow to about $2.9 trillion by 2034, not too
many years away.
How about our debt?
This is our total debt, and it starts over on the left side back in
1990. We had a pretty level debt increase until the early part of the
2000s.
The last time we had a surplus, we were managing debt. Then it
started to take off with that recession. It started to take off more
with irresponsible budgetary decisions on revenues and expenses.
The scariest part is the acceleration of this curve right here, which
takes us only to about 2022. Our debt was $7 trillion in 2004, $18
trillion in 2014, $23 trillion in 2019, and now, as was already noted,
it is up to $35 trillion--23 trillion to 35 trillion in 5 years.
How about the measure of debt to GDP?
As was discussed earlier, that is a really good indication of what is
actually happening in our economy. This is our debt to GDP.
Now, you can see this big bulge right here was the highest debt to
GDP we have had to date. That was World War II when we had to borrow to
win a war. We had to do that.
Of course, the war, aside from being tragic, was not very good for
the world economy. We had a real issue, as we always do in a war. This
happens from a budget perspective.
Here we see a rapid escalation in debt to GDP in the last 5 to 7
years. This number right here is about 125 percent or 124 percent,
which is our highest level of debt to GDP since World War II. Unless
corrected, this is what is going to happen. It will shoot up over the
next 10 years.
Reference was made by my colleagues earlier to interest that we pay
every year on our current national debt. Our annual interest on debt
now is up to $892 billion, and as was mentioned by reference, that is
more today than we spend on defense or Medicare.
This line is interest, this red line right here. This line is defense
extrapolated at the current levels out to 2034 from today, which is
right over here. By the way, we all know that we need a very robust
defense expenditure to handle the geopolitical challenges that we face.
The green line is Medicare.
The point here is unless we get interest under control, it will
essentially surpass defense and continue at an increasing gap. Medicare
is going up because it is costing more. It is staying up with Medicare,
and it is essentially overwhelming our ability to pay for defense and
Medicare, crowding out our national budget.
Now, what are the consequences of carrying a very high deficit and a
very high debt load? Why does debt matter, in so many words?
Well, I am going to go through this pretty fast. Number one, I
already said it. It crowds out other needed spending, defense and
nondefense. It reduces fiscal flexibility, especially in crises.
What if we did have another COVID today or tomorrow? What if we had a
major expense that we didn't anticipate?
Our debt and deficits would jack up, just as happened during COVID,
just as we saw during the Second World War.
The interest rates would jack up essentially exactly when we need to
have a fiscally solvent and responsible base to build on. In other
words, you have to prepare for crises. When you are not in a crisis,
that is the time to get your thoughts in order, and when you go there,
that is when you want the flexibility.
It slows economic growth. It creates inflation pressure. It creates
interest rate pressure. We have already talked about national security
risks, especially with adversaries such as the People's Republic of
China, who invest in our bonds.
China owns a tremendous amount of our bonds. That gives China
leverage over us. I don't want to be a borrower from China. It
disincentivizes responsible budgeting internationally.
Many countries around the world are facing budgetary pressures. If we
can't run our own show, how can we ask them to run their own show
responsibly?
Finally, it feeds directly into arguments by the PRC and others that
are seeking to replace our dollar as the world's reserve currency.
Essentially, what they are saying is the dollar is not a stable, not
a responsible, not a secure currency, so let's try our own. We are
begging all of these questions right now.
What do we do about all of this?
There are a couple of things we can do. First of all, we can
acknowledge the issue, and we can acknowledge the crisis, and we can
acknowledge that we have something that we must work on.
Number one, stop looking for marginal, illusory, magic solutions. For
those that say we can grow our way out of this, no, we can't.
We would have to have an annual growth rate of somewhere around the
range of 10 percent a year, which is absolutely unrealistic for the
foreseeable future, for us to solve this simply by growing this
economy. Any economist would say that we are doing incredibly well to
come even close to 10 percent a year.
We can also stop the bleeding and reduce annual deficits through
mechanisms such as paygo, which is a responsible process that we have
followed sometimes, and lately not followed, under which whenever we
reduce revenues through tax reductions, we have to offset them with
expenses or revenue somewhere else or vice versa. Whenever we increase
a program cost,
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we have to pay for it or else reduce another program cost so that it is
budget neutral.
We obviously need to rebalance revenue and expense over time in our
tax and spending policies with major decisions coming up.
Finally, as was mentioned, we probably need some major help with a
fiscal commission. A fiscal commission can help us to sort through this
in a nonpartisan, apolitical way to provide the expertise necessary to
make recommendations that we must take a look at.
To those that criticize fiscal commissions, I would pose the
question, well, what is your solution, then? Is there a solution that
you have that you think would help us to solve this incredible crisis?
In conclusion, for the Bipartisan Fiscal Forum, my 87 colleagues and
others who believe that this is, indeed, a crisis, we have a couple of
steps that we have to go through.
The first step is to stop the denial, which is where we are right
now, for this to be an issue in our campaigns, in our elections, for
this to be front and center in our public discourse scores.
Then we have to ask, what can we do?
There is plenty we can do.
First of all, we can get through denial and get firmly into step
number two, which is to do something about it. Then next, of course,
acknowledge that the solutions are hard, but the alternative of doing
nothing is and will be far, far harder.
We urge acknowledgment and action both within our colleagues in
Congress and especially with the American people as we consider this
crisis.
Mr. Speaker, I yield back the balance of my time.
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