Republicans acted on the message voters sent in the 2010 congressional elections when they elected more than enough members of the House to control that body; they tackled the scandal of out-of-control spending and the voters responded.
So far they have shoved a poison pill down the throats of spending-happy House Democrats, chopping a cool $38 billion from the 2011 federal budget. They now face a new challenge in enacting a budget for 2012 by passing the one introduced by Rep. Paul Ryan, R-Wis., which begins to put the nation’s fiscal house in order.
That should be job one for Congress. According to the International Monetary Fund (IMF), the U.S. is set to run up the largest budget deficit of all major developed economies this year. The IMF recommended that the nation needs to tighten its belt now rather than face tough adjustments in the next two years.
In a new report, the IMF warned that the U.S. shortfall will reach 10.8 percent of its gross domestic product this year, putting it ahead of Japan and the United Kingdom. The IMF has estimated that President Barack Obama will have to cut the deficit by 5 percentage points of GDP in the next two fiscal years, making it the largest adjustment in “at least half a century,” to meet his pledge of halving it by the end of his four-year term.
“Market concerns about sustainability remain subdued in the U.S., but a further delay of action could be fiscally costly, with deficit increases exacerbated by rising yields,” the IMF wrote in its Fiscal Monitor report, published several times a year to analyze public finance development.
The IMF recommended “a down payment” in the form of deficit reduction this year that would make the government goal “compatible with a less abrupt withdrawal of stimulus later.”
These are somber warnings which should alert the Obama administration -- and both the House and Senate -- that they must put the brakes on spending money the U.S. doesn’t have, rather than forcing us to either print more paper dollars or borrow more money from China.
The House must pass Rep. Ryan’s proposed budget promptly and send it over to the Senate to pass and send it to the White House for the president’s signature.