"I am honored to be with this distinguished group. In this room are seated some of the most knowledgeable people in our nation on budget, debt, and economic growth.
The purpose of a budget is to develop a financial plan for the future of America. It is not easy and our differences are real and difficult to bridge, but there are actions on which we can agree that will improve the financial standing of America and economic growth.
Our colleague, Ron Johnson, is a very successful businessman. As he has correctly told us, if you want to develop a strategic plan, the first thing you do is get in touch with reality. For the past five years, we have had record deficits. This was the Democratic vision for restoring vigorous growth and lasting prosperity. We’ve seen it play out: more spending, more taxes, more borrowing, more regulation in every aspect of Americans’ lives. We have added $6.9 trillion to our debt. It has not worked. Never has so great a sum been spent for so little in return.
Tax, spend, regulate, and debt will never work. It’s a plan guaranteed to fail:
- Take-home pay has fallen for each of the last five years
- Median household income is lower today than at any time since 1995
- The labor force dropout rate is the highest it’s been since 1945
- We have the lowest labor force participation rate in 35 years
- We have 12 million more residents than we did in 2007 but 2 million fewer workers
What we should do is create a growth-oriented tax system that makes America more competitive, eliminate unnecessary regulations, produce more American energy, ensure fair trade so our workers can fairly compete, enforce an immigration policy that serves our national interest, reject large government programs that kill jobs, and balance the budget to restore confidence in the future of America.
These are common-sense proposals that will work. These ideas are consistent with the American ideals that have served us so well.
The Budget Control Act reduced the growth in federal spending by $2.1 trillion. This is an important first step. That bipartisan agreement is in law and must be maintained. Congress and the White House must keep their promises to the American people. If we violate this solemn promise and this plain law, how can we expect the American people to believe us when new promises are made in the future?
No honest evaluation of the nation’s finances can ignore the impact of the Affordable Care Act. At my request, GAO has concluded that the legislation is not paid for as promised, but will likely add $6.2 trillion to the deficit over the 75-year window. We need to be shoring up Social Security, not adding another huge unfunded liability. Medicare has a far worse debt course—adding $36.2 trillion in unfunded liabilities to the nation over this period. Medicaid, the free health program for low-income Americans, has no trust fund and is on a particularly unsustainable course. Outlays for this program will total $4.3 trillion over the next decade alone.
The Budget Control Act made spending progress, but it still leaves our budget on a path to grow 69 percent over the next decade. That’s largely because, while it imposed controls on certain discretionary programs, many mandatory and welfare expenses were left untouched. CBO says this path is unsustainable, creating trillion-dollar deficits in 10 years. Yet the Senate Majority’s budget voids even the modest reductions in the BCA. It proposes to spend nearly $1 trillion over Budget Control Act levels and would raise taxes by $1 trillion.
The truth is that we must recognize that the BCA was only the beginning. Hopefully we can work together to begin reversing these trends. Americans deserve a sound, secure financial future."