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Rep. Raúl Labrador: Why a balanced budget amendment is necessary to save our nation

Congressman Rep. Raúl Labrador is the U.S. Representative for Idaho's 1st congressional district.

As a Congressman, I witness a seemingly endless stream of special interest groups seeking funding for their pet programs and I listen to testimony from countless bureaucrats whose only goal seems to be seeking a larger budget.  Spending by the federal government is absolutely out of control, and it has been for a long time.  I have arrived at the same conclusion that the majority of Americans have: the time for a balanced budget amendment to the Constitution is now. 

Congress and the federal bureaucracy cannot be trusted to show fiscal restraint on their own and say no to reckless spending of taxpayer dollars. A balanced budget amendment to the Constitution would legally force the federal government to spend no more than the amount of money that it brings in. 

Forty-nine states abide by a balanced budget requirement – including Idaho- and many families balance their checkbooks regularly. As individuals, we understand that we have a limited ability to borrow and spend money, it's time the federal government followed suit.  While any bills this Congress passes which cut spending can be changed by this or future Congresses, a constitutional amendment is permanent.

Our country currently owes $14.3 trillion in debt and borrows roughly 40 cents of every dollar we spend.  Admiral Mike Mullen—the Chairman of the Joint Chiefs of Staff—has called our debt “the single greatest threat to national security.”

Our government simply cannot control itself when it comes to spending. Members of both political parties have a history of not being able to say no. Since President Obama took office in January of 2009, the national debt has increased by $3.7 trillion. For reference, it took the United States from its founding in 1776 to 1992 to accumulate the same amount of debt that this administration has accumulated in only two and a half years. And previous Congresses and Presidents have not been much better.  Under President George W. Bush spending increased by nearly 33% - adding nearly $5 trillion in debt.

Raising taxes is not the solution -particularly at a time with such high unemployment. Higher taxes on anyone would simply damage the economy more and hurt individuals and employers and wouldn’t balance the budget at all.  In order to balance the budget, the Congressional Budget Office estimates that tax rates would have to more than double and some estimate that a 60-percent across-the-board tax increase would be necessary. I do not believe many families or business could endure a 60-percent increase. Even if you taxed the top 10-percent of income earners at 100-percent, you could not come close to balancing the budget. Spending is the problem.

This past November, voters made it clear that they were tired of business as usual in Washington and voted for a change in direction. They elected folks like me who ran on a mantle of reform and they expect us to fulfill those promises.  They wanted their voices to be heard. I came here to change the way Washington works and I won’t back down from that challenge.

I believe failing to raise the debt ceiling carries consequences, but I believe that failing to permanently change the structure of the way the government budgets and spends taxpayer money carries much more dire consequences.  Credit rating agency Moody’s has stated that even if the debt ceiling is raised, it could lower the U.S. credit rating if we do not find a way to improve our overall debt situation. 

A balanced budget amendment is neither a gimmick nor a new concept. Congress nearly passed one in the 1990s with then-Senator Joe Biden supporting it as well as Democrat Whip Steny Hoyer. In 1982 Ronald Reagan also called for one, “most Americans understand the need for a balanced budget, and most Americans have seen how difficult it is for the Congress to withstand the pressures for more spending. This amendment will force government to stay within the limit of its revenues. Government will have to do what each of us does with our own family budgets – spend no more than we can afford.”

I understand there are concerns with both the procedural hurdles to passing a balanced budget amendment and the impact of such a move on our fiscal outlook, but I wholeheartedly reject the notion of the passage of a balanced budget amendment as a gimmick.  In fact, it may be the only way to save our Country from fiscal ruin.

 

Rep. Ed Royce: Now is the time for Washington to pass a balanced budget amendment

Congressman Ed Royce is serving his tenth term in Congress representing Southern California's 40th District, based in Orange County.

Thomas Jefferson, an influential figure in drafting the Constitution and co-founder of what is today's Republican Party once wrote: “I wish it were possible to obtain a single amendment to our Constitution. I would be willing to depend on that alone for the reduction of the administration of our government; I mean an additional article taking from the Federal Government to the power of borrowing.” 

Andrew Jackson, whose devoted base formed the present day Democrat Party, entered his presidency focused on debt - to him a "national curse." Determined to "pay the national debt, to prevent a monied aristocracy from growing up around our administration that must bend to its views, and ultimately destroy the liberty of our country."

Jefferson's desire for a borrowing limit amendment has failed to materialize on multiple occasions over the decades. Given Jackson’s discomfort with national debt, he would surely be troubled to learn that it now stands over $14 trillion. The Cut, Cap, Balance Act, passed last night in the House, will address both outstanding issues of Jefferson and Jackson and bring us back on a path of fiscal sanity. 

Given the current path, drastic change is needed. This year the size of our national debt will surpass the size of our economy; a profound threshold and one not lost on the markets. Just this week, a rating agency (Egan-Jones) downgraded the U.S. debt rating because of the out of hand debt to GDP ratio. Further, PIMCO – the world’s largest bond fund – announced a net short position on U.S. debt. Both are glaring warning signs that the financial market may soon lose faith in our ability to pay our creditors.
The government's spending level is now at 24 percent of our gross domestic product. Unaddressed, this number will climb to 27 percent within the next seven years. With the post-WWII average at 19 percent, history and basic math indicate these spending levels cannot be sustained.

The Cut, Cap, Balance legislation is a much needed life preserver in our sea of debt. The “Cut” consists of drastically cutting our federal spending by $111 billion in Fiscal Year 2012. The “Cap” entails scaling back total federal spending and putting it on a glide path back to sustainability. The “Balance” consists of what Jefferson had imagined, a balanced budget amendment to the Constitution to ensure we never again find our nation drowning in debt.

A few years ago, we came within one vote of passing a balanced budget amendment through the Senate. The year was 1995 and we had passed it through the House by a vote of 300 to 132. Back then the deficits were nowhere near as dire as they are today. Now is the time for Senators and Representatives to hear from their constituents and pass a balanced budget amendment.

Rep. Geoff Davis: We cannot continue to rob our children and grandchildren through endless borrowing

Congressman Geoff Davis represents Kentucky’s Fourth District.

Our country is facing a debt crisis.  The federal government currently borrows 40 cents of every dollar it spends.  This year the government will spend $1.5 trillion more than it takes in, adding to a national debt that is already more than $14.3 trillion, two and a half times the size it was just a decade ago in 2001.

The economic uncertainty created by years of reckless spending and accumulated debt is holding back job creation and growth in the near and long term.  Unless we find ways to handle this massive debt, our children, grandchildren and future generations of Americans will be saddled with the crushing burden of paying our bills.

Out of control spending and debt at this level is not only irresponsible, it is a threat to our national security and economic well-being as a nation.  In order to get the federal government back on the path to fiscal sanity, we have to stop spending money that we do not have.

One of the best ways to do this is to force fiscal responsibility through a constitutional amendment requiring a balanced budget.  This is not a new idea.  President Ronald Reagan stated in 1982, “We’ve tried the carrot, and it failed.  With the stick of a balanced budget amendment, we can stop government squandering, overtaxing ways, and save our economy.”

Families, businesses, local governments and 49 State governments, including Kentucky, are forced to balance their budgets.  Why should the federal government be any different?  We cannot continue to rob our children and grandchildren through endless borrowing. 

A balanced budget amendment would force future Congresses and presidents of both parties to live within our means and prioritize the projects and programs that Americans truly need instead of the annual unchecked growth that has occurred for too long.

In 1995, Congress came within one vote of passing a balanced budget amendment.  Sixteen years later, we will have another chance to get it right when we vote this week on H.J.Res. 1, a constitutional amendment mandating a balanced budget.  I have co-sponsored the balanced budget amendment since my first term in Congress and look forward to voting for this important measure.

In addition to the standalone vote on a balanced budget amendment, the House will also consider the Cut, Cap, and Balance Act of 2011.  I am an original co-sponsor of this bill that would significantly cut spending immediately, cap future spending on a sliding scale that reduces over time as a percentage of Gross Domestic Product (GDP), and provide for the President’s request for a debt ceiling increase once a balanced budget amendment has passed Congress and been sent to the States for ratification.  

Amending the Constitution requires a two-thirds majority vote in both the House and Senate and then it must be ratified by three-fourths of the States before it can take effect.

The time has come for this commonsense reform and I call on all my colleagues and all Americans to join me in supporting a balanced budget amendment to the Constitution.  

Reps. Eric Cantor and Bob Goodlatte: The choice is ours. The stakes are high. Failure is not an option.

Eric Cantor represents Virginia's 7th District in the U.S. House of Representatives and is House majority leader; Bob Goodlatte represents Virginia's 6th District.

Imagine if your government were as focused on saving money as it is on spending money.

Flash back to March 2, 1995. On that day, the U.S. Senate failed — by one vote — to send a balanced budget amendment to the states for ratification. The amendment had previously passed the House by the required two-thirds majorit, and the Senate vote was the last legislative hurdle before ratification by the states.

If that amendment had passed, then we would not be facing the fiscal crisis we now face. If that amendment had passed, then balancing the budget would have been the rule rather than the exception, and we wouldn't be facing the annual deficits and skyrocketing debt that we must address today.

Once again we are standing at a crossroads. The decisions we make today will determine the direction of our country for years to come. We can take action now to ensure that our children will face a much brighter fiscal future. We must not allow ourselves to miss this opportunity.

Keep reading at the Richmond Times-Dispatch...

Sen. Jim DeMint: A debt crisis is coming, and simply raising the country's legal borrowing authority isn't going to stop it

South Carolina Senator Jim DeMint is a co-sponsor of the Cut, Cap and Balance Act.

Moody's and S&P have sent us a stark warning: They are likely to downgrade the nation's credit rating if the debt limit is increased without taking serious action to reduce the nation's long-term debt burden.

There is only one plan that can pass the House of Representatives and will avoid default by enacting real reforms to maintain our AAA credit rating. It's called Cut, Cap and Balance. This plan gives the president his debt limit increase, but only on three conditions:

• Significantly cut spending next year.
• Cap spending over the next decade at historical averages.Most editorials are accompanied by an opposing view — a unique USA TODAY feature that allows readers to reach conclusions based on both sides of an argument rather than just the Editorial Board's point of view.
• Send a constitutional amendment to the states to force Washington to finally balance the budget.

Cut, Cap and Balance is the only plan that reins in spending immediately and permanently, making this the last debt limit increase we may ever need.

Keep reading at USA Today...

Negroponte, McLarty, Jones and Mosbacher Jr.: Approve the free-trade agreements

John D. Negroponte, a deputy secretary of state and director of national intelligence in the George W. Bush administration, is chairman of the Council of the Americas. Mack McLarty, a former special envoy for the Americas and White House chief of staff in the Clinton administration, is president of McLarty Associates. Jim Jones, a Democratic former U.S. representative from Oklahoma, was White House appointments secretary in the Johnson administration. Rob Mosbacher Jr., the president of Mosbacher Energy, was president of the Overseas Private Investment Corporation during the George W. Bush administration. All are members of the Council of the Americas’ trade advisory group.

The U.S. economy needs swift approval of the pending free-trade agreements with Colombia, Panama and South Korea. Yet a week after the release of a disappointing employment report, procedural disagreement over a program that has provided benefits to American workers for almost 50 years is stalling the entire trade agenda.

Deficit reduction is an urgent task requiring intense scrutiny of spending measures. But it is counterproductive to delay long-overdue trade agreements that finally have a chance of passing over a relatively inexpensive assistance program designed to smooth out the rougher edges of the global economy.

 Republicans have argued in the debt-ceiling negotiations that economic growth, rather than higher taxes, is key to raising revenue. At the same time, they understand that the United States will not achieve such growth without the benefits of international trade. Given political realities, the cost-benefit analysis should be clear: better to incur the fiscal cost of renewing the Trade Adjustment Assistance program than to lose the much greater benefits of free trade with three important trading partners.

Keep reading at the Washington Post...

Senators Orrin Hatch and Mike Lee: We know what needs to be done; we just need the will to act

Orrin Hatch and Mike Lee, both Republicans, are Utah’s two U.S. senators.

It’s been called the most preventable disaster in American history.

The coming debt crisis is so predictable it’s difficult to find a single economist, expert, politician or American taxpayer who doesn’t warn of the consequences of spending and borrowing ourselves into oblivion.

A recent publication from the nonpartisan Congressional Budget Office called America’s debt problem “daunting.” The ratio of debt to gross domestic product has just crossed 90 percent, a threshold linked to lower-than-average economic growth. If left unchecked, our ballooning debt will almost certainly lead to the country’s long-term economic decline.

Fortunately, the solution is basic and one that is followed by most responsible state and local governments, families and business owners. When faced with tough times they know they must eliminate spending on the things that aren’t absolutely essential. Then they make a budget for the things they need and have the discipline to stay within that budget. Finally, they stop borrowing and spend no more than they take in.

Keep reading at The Salt Lake Tribune...

Reps. Kevin McCarthy and Peter Roskam: It’s time for Washington to get serious about a balanced-budget amendment

Congressman Kevin McCarthy is House majority whip, and Congressman Peter Roskam is House chief deputy whip.

With $14 trillion in debt, sustained unemployment over 9 percent and a liberal Washington orthodoxy that demands continuously higher borrowing and spending, America is on the verge of drowning in red ink. Washington’s inability to control spending creates daunting obstacles to job creation in the short term while threatening America’s very being in the long term. 

Although there is never a shortage of new and diverging opinions in Washington, sometimes the best remedy is a simple return to our basic principles. It’s time for Washington to get serious about a balanced-budget amendment. 

From George Washington to Thomas Jefferson to Ben Franklin, balancing the budget united America’s founders. Nearly 200 years later, in the 1980s, President Reagan declared his support for a balanced-budget amendment, stating “only a constitutional amendment will do the job. We’ve tried the carrot, and it failed. With the stick of a balanced-budget amendment, we can stop government’s squandering, overtaxing ways, and save our economy.” Thirteen years later, in 1995, Congress came just one vote shy of passing a constitutional amendment mandating a balanced budget.

Keep reading at The Hill...

How the Federal Reserve encourages deficit spending

Ken Silva is a ConservativeHome College Columnist winner.  He studied Economics and Politics at Kent State University.

When the Federal Reserve (the Fed) was created in 1913, it was given two mandates: keep prices stable and maximize employment. However, since its inception the Fed has unofficially taken on a third responsibility: financing the US’s national debt.

The Fed is the largest financier of US debt in the world, holding more than $1.6 trillion dollars of US Treasury bonds—nearly a half trillion dollars more than the US’s second biggest creditor, China.

The reason the Fed can buy US debt is because it has the power to regulate the money supply as a tool to fulfill its mandates, and it does so by buying and selling assets. The most common asset the Fed trades in is the US Treasury bond because it is widely considered the safest and most liquid asset in financial markets.  

The fact that an entity of the US government can buy US debt has created a “moral hazard”—the idea that certain institutions can enable and even encourage reckless and immoral behavior. This moral hazard is apparent in the actions of the US Congress—members of Congress continue to overspend because the Fed is there to purchase their excess debt.

US lawmakers look at the Fed as a free lunch—the Fed buys their debt and they do not have to borrow money from foreign governments or upset their constituents by raising taxes. However, this lunch is not free, but paid for by those who can least afford it: the US’s lower and middle class citizens.

 When the Fed buys any asset, it does so with newly created money. The newly created money then enters the economy and causes price inflation. While prices rise for everybody, people living on low and fixed incomes are hurt the most because the price inflation eats into a larger proportion of their income.

The Fed has purchased over $800 billion in Treasury bonds over the last calendar year—enough debt to make it the fourth largest budget deficit in the country’s history. This $800 billion will be felt by the American people through increased prices of food, energy, and other consumption goods.

What would happen if the Fed stopped buying government debt? The US would lose its biggest creditor, interest rates on Treasury bonds would rise, and the US government would have to live within its own means. This possibility frightens politicians who have promised their constituents jobs, healthcare, and other “free” government benefits.

While policymakers recognize the threat of inflation, they also know that the Fed discontinuing Treasury bond purchases would raise interest rates and stall the US economy’s already sluggish growth. While this would be good for the economy in the long run because government would shrink and capital could be used to fund private sector projects rather than government debt, it would slow the economy in the short run and thus seriously injure politicians’ chances of reelection. Therefore, one can expect the Fed to continue buying US debt at least until after the 2012 elections. 

“Moral hazard” is a term that was commonly heard after the 2008 financial crisis, when it was used to describe that firms made careless mistakes because they were under the assumption that the federal government would bail them out. While that form of moral hazard is now apparent and used as textbook material for economic and political classes throughout the country, the moral hazard the Fed poses is something that needs to be recognized and brought to the forefront by anyone who supports the ideas of limited government and individual liberty. 

Sen. Marco Rubio: The spending spree is over, it's time for a REFUND

Senator Marco Rubio is a Republican from Florida.

Recently, I introduced the Returned Exclusively For Unpaid National Debt (REFUND) Act, which would allow states to return unwanted federal funds to the federal Treasury in order to help pay down our staggering national debt.

The REFUND Act would end the age-old "use-it-or-lose-it" mentality that encourages states to accept money from a deeply indebted federal government for projects that are wasteful, unnecessary or that come with too many strings attached. In essence, it would empower state legislatures to help curb Washington's spending spree.

Even without this power, many fiscally responsible states have been making the tough decisions to reject federal dollars. They've done so because these funds often come with Washington-concocted strings requiring higher spending or higher taxes — or both.

Keep reading on Senator Rubio's congressional website...