WASHINGTON—U.S. Sen. Jeff Sessions (R-AL), Ranking Member of the Senate Budget Committee, delivered remarks today at a Budget Committee hearing scheduled by the majority to make the case for additional federal “investments.”
Sessions’ remarks, as prepared, follow:
“Thank you, Chairman Murray. This hearing deals with an important subject: Government spending and long term economic growth. It provides an important opportunity to address the economic harm caused by excessive federal spending and debt. We will examine studies showing that the expansion of the federal government actually depresses economic growth, hurting all Americans—especially those who work their way out of poverty. The truth is— growth and prosperity is furthered by a lean, responsive, and limited government that can sustain itself, not an ever growing, debt incurring, amorphous entity.
Tomorrow will mark the 1,400th day since Senate Democrats have passed a budget.
Today we will hear from two witnesses who will explain the human consequences of large government and surging deficits. David Malpass, a writer for Forbes and the Wall Street Journal and a former staffer on this committee, will review the growing body of data about how excessive spending and large debt suppresses growth, job creation and higher wages. Steve Ferguson, Chairman of the Cook Group, will talk about how the President’s health care law and its new taxes is hampering the medical innovations and research that could save countless lives.
We remain on an unsustainable debt course. One major reason for that is the lack of honesty in evaluating the cost of new spending programs and the benefits which are exaggerated. Invariably, the projected costs are underestimated. Good politics maybe, but not good policy. A new government report dramatically proves that the promises made assuring the nation that the largest new entitlement program, the President’s health care plan, since Medicare, would not add a dime to the long or short term debt of America were false.
Just this morning, the nonpartisan Government Accountability Office released a report I requested regarding the deficit impact of the President’s healthcare law. The results of this brand new report confirms everything critics and Republicans were saying about the costs of this bill and reveal the dramatic falsehoods that were used to push it to passage.
At the signing ceremony for Patient Protection and Affordable Care Act, President Obama claimed that his law would “lower costs for families and for businesses and for the federal government.” The President went on to say, “It is paid for… It is fiscally responsible.”
On her website today, then-Speaker Pelosi says the bill is “the greatest deficit reduction effort in two decades.”
Speaking before a joint session of Congress in 2009, the President had this to say: “And here's what you need to know. First, I will not sign a plan that adds one dime to our deficits-either now or in the future. I will not sign it if it adds one dime to the deficit, now or in the future, period.”
GAO’s investigation reveals all of these claims to be completely false.
According to GAO, under a realistic set of assumptions, the health care law will increase the deficit by .7% of GDP or roughly $6.2 trillion over the next 75 years.
In other words, GAO reveals that the big tax increases in the bill come nowhere close to covering the even more massive spending. Again: $6.2 trillion is only a fraction of what we will spend on this bill. That number is how much new deficit spending – excluding interest costs – will result despite trillions in new taxes.
The big government crowd in Washington manipulated the numbers in order to get the financial score they wanted in order to get their bill passed and to increase their power and influence. The goal was not truth or financial responsibility, but to pass the bill.
This is a how a country goes broke.
It is also how the economy and jobs are destroyed. Economic research, by a wide spectrum of organizations, has discovered harmful economic impacts from excessive levels of government debt. When total government debt rises near or above 90 percent of GDP, the economy slows – resulting in fewer jobs and smaller paychecks for working Americans. Using this research, Dr. Salim Furth from Heritage estimated that even “…a .2 percentage point drop in the annual GDP growth over the next ten years would cost Americans $1.9 trillion in income.” Furth also estimates that:
• Debt added from 2009 to 2011, 3 years, has already cost American $200 billion in foregone growth, which is nearly a full year of normal GDP growth;
• Higher debt will reduce American growth $2.4 trillion over the next five years;
• And, $9 trillion over the next ten years.
At this point in history, the key to producing greater economic growth is returning government spending to responsible levels. Attempting to combat the debt drag through higher taxes won’t work for two reasons: first, federal debt is projected to grow by $9 trillion over the next decade – there is no tax hike large enough to stem that tide. Second, raising taxes would produce the same economic harms as high debt: it drains wealth and weakens the private job creating sector. The problem is spending is growing faster than the economy. There is no free lunch. Nothing comes from nothing. Everything consumed will be paid for – sooner or later.
Reforming and making more productive failing government programs is not only an economic necessity but a moral necessity. Raising taxes instead of reforming government means turning a blind eye to the colossal waste of taxpayer dollars. I am not aware of any serious leadership effort from the President or his top officials to systematically reduce waste and abuse to save money—as we have seen from governors and mayors and families all over America that continues daily.
How can anyone content that eliminating waste, fraud, duplication, and abuse is bad for America? A leaner, more productive, more competitive American government is certainly good for America and American workers. It almost seems the President believes all spending is stimulating the economy and no spending, even wasteful spending, should be cut. Raising taxes, instead of reforming government, means hurting the very people who need help the most.
For too long, Washington has defended the bureaucracy at the expense of the American people. Until this national government gets serious about containing runaway costs and establishing efficient management programs, the American people should not even consider sending one more dime to this government.
The budget process provides us with an opportunity to right that wrong, and to restore growth and opportunity to the nation. And we do believe in infrastructure, but I would just note that in the stimulus bill that spent over $800 billion, only four percent went to roads and bridges, and less than one percent of our total spending each year goes to roads and bridges. So when we talk about spending, we are not talking about cutting only highway funds, many of which are productive and help us make our nation healthier. So thank you Madam Chairman for your leadership, I look forward to working with you throughout this budget process.”