“The White House says that the president’s plan achieves $3.2 trillion in deficit reduction. The actual deficit reduction is only $1.4 trillion… The White House asserts $2 in cuts for every $1 in tax hikes… In reality, under the president’s plan, the net change in spending is an increase… This has become the pattern: the president understates the depth of our fiscal danger, then overstates the scope of his fiscal plans.”
WASHINGTON—U.S. Sen. Jeff Sessions (R-AL), Ranking Member of the Senate Budget Committee, delivered the following opening statement today at a Committee hearing on promoting job creation in the United States.
Sessions’ remarks, as prepared, follow:
“Thank you, Chairman Conrad, for holding this important hearing today. And thank you Dr. Rivlin, Dr. Holzer, and Dr. Foster for joining us to share your insights.
There is one thing on which all of us agree: America is suffering from unacceptably and persistently high unemployment. Millions are unable to find jobs at all, and millions of more are unable to find jobs on a full-time basis. Our economy has experienced anemic growth this year, and unemployment projections remain dismal.
Meanwhile, America’s gross debt is rising to dangerous new levels.
But I remain confident. I know that we will not only meet the challenge of our current crisis, but that we will rise out from it with a renewed vibrancy and strength. No workforce on Earth is more skilled, more productive, or more dynamic than the American workforce. No business community is more effective. There is no nation that can compete with the men and women who make up this economy. That is as true today as it ever was.
America’s private sector is just waiting to grow and expand. But unwise government policy continues to stand in the way. Unpredictable federal intervention is fostering a climate of fear and uncertainty. Businesses are threatened with a constant slew of new taxes and regulations.
And America’s gross debt—now 100 percent of GDP—hangs over the economy like a dark gray cloud. A prominent study, praised by Treasury Secretary Geithner, indicates that our debt has already cost us millions of jobs.
We need policies that create a better environment for job creation and that won’t add to that debt. That means more American energy production, the elimination of harmful and costly regulations, and growth-oriented tax reform.
All three committee witnesses last week—Democrat and Republican—agreed with the wisdom of such an approach.
Since taking office, President Obama has surged our gross federal debt nearly $5 trillion. Non-defense discretionary spending spiked 24 percent during his first two years in office. And his February budget called for further dramatic increases next year.
For instance, he’s requested a 13 percent increase in education spending—following an almost 70 percent increase in total education spending since taking office. The president routinely talks about the need to make government investments—but he forgets to mention just how much he’s already spent.
Yesterday he made his fourth attempt this year to offer a credible fiscal vision. But I was disappointed to see that the president again failed to present the honest budget plan America deserves and our economy needs.
The White House says that the president’s plan achieves $3.2 trillion in deficit reduction. The actual deficit reduction is only $1.4 trillion—less than half of what the White House states. Of note: this is $1.4 trillion in deficit reduction, not spending reduction.
This has become the pattern: the president understates the depth of our fiscal danger, then overstates the scope of his fiscal plans.
Consider the astounding disparity between the levels of taxation claimed versus those actually contained in the proposal. The White House asserts $2 in cuts for every $1 in tax hikes. The true figure is nowhere close. President Obama’s plan is comprised of tax hikes alone. There is not a single penny of net spending that is cut. Yesterday, the president said: ‘I’m proposing real serious cuts in spending. When you include the $1 trillion in cuts that I’ve already signed into law, these would be among the biggest cuts in spending in our history.’
In reality, under the president’s plan, the net change in spending is an increase. In fact, the president’s plan is to keep spending more.
Part of this is a result of the president’s new stimulus.
But there are three additional accounting tricks the White House used to get its inflated figures:
War funding: The plan shows $1.1 trillion in savings from putting a ‘cap’ on war costs, but those costs are going to decrease as the war effort unwinds—whether or not the cap is in place. They do not represent actual spending cuts or a new policy to achieve future savings. The president’s proposed caps simply manipulate baseline concepts to show the savings as a policy choice, which inflates the spending ‘cuts’ in the president’s plan. Congress rightly rejected this approach at deficit reduction during the recent debt limit debate.
Doc Fix: The administration’s baseline also assumes a Medicare ‘Doc Fix’ (physician payment freeze), an increase in spending of $293 billion over ten years compared to a current law baseline. This gimmick counts the higher spending as a given rather than as a policy choice that needs to be offset. Without this gimmick, the president’s health care savings of $320 billion become health care savings of only $27 billion.
Interest Savings: The president counts as ‘savings’ the net interest reductions that result from his proposed tax hikes.
When you’re in a crisis you must deal honestly with the American people. You must present the facts along with a credible solution. Americans are good, decent, hardworking people who will accept a difficult course of action on honest terms. But the White House is trying to be clever at the expense of being credible.
The debt is destroying jobs today—and if we are going to restore confidence and growth, credibility is one asset we cannot afford to borrow against.
America deserves an honest, fact-based response to our economic challenges—one that controls Washington spending and grows the private sector. I hope today’s hearing will help us move in that direction.”