Republicans hit the ground running in January, voting to cut spending by $2.6 trillion by repealing the onerous ObamaCare law. In February, while the Obama administration reported a record-breaking monthly deficit of $223 billion, we simultaneously worked to reduce our massive debt by passing a budget with $60 billion in cuts, banning Congressional earmarks, and passing 1099 repeal legislation that would reduce federal spending by $20 billion over 10 years.
But more must be done. With the debt totaling more than $14 trillion (that is $45,000 per citizen), a sluggish economy and unemployment still near nine percent, large-scale reductions in government spending to reduce our deficit are imperative if we want to get this country back to work and leave a prosperous America for our children and grandchildren.
On Tuesday, the House Joint Economic Committee Republicans unveiled a study that proves what we have known for a long time—less government spending lowers the deficit, which boosts economic growth and small business job creation. The study, entitled "Spend Less, Owe Less, Grow the Economy," affirms that reducing government spending as a percentage of GDP will accelerate economic growth and create an environment for hiring. The study looks at how a number of developed countries, such as Canada, Sweden and New Zealand, have successfully reduced government spending and stabilized the level of government debt through fiscal consolidation programs. Each country achieved their goals for government deficit reduction and GDP growth rates by drastically reducing government spending. We must do the same.
The philosophy in this study is consistent with what numerous small business owners have been telling me in our hearings: cutting spending, keeping taxes low, and reducing job-crushing regulations are all needed to unleash the power of the most dynamic elements of our economy– small businesses and entrepreneurs.
President Obama’s failed $862 billion stimulus bill is the perfect example of doing just the opposite. Democrats promised that the stimulus would keep the unemployment rate below eight percent and be the answer to all our economic woes. But based on the current job and economic climate— we all know that didn’t work. Spending taxpayer dollars on more big government programs does not create private sector jobs or foster real economic growth.
The long-term solution to our unemployment problem lies in the growth of the private sector; in particular, the growth and expansion of small businesses—America’s job creators. Small firms create seven of every ten new jobs in the United States and employ half of the country’s private sector workforce. As Chairman of the House Small Business Committee, I know we have a responsibility to create an environment that allows this important sector of the American economy to prosper.
Recently, several small business owners from around the country testified before the Small Business Committee about the impact the faltering economy has had on their businesses. They expressed frustration at the levels of government spending and pointed to economic uncertainty as a major inhibitor of growth and willingness to take risks. In fact, one witness testified that she wanted to hire more employees but didn’t feel confident enough to do so. Unfortunately, this sentiment is common throughout the small business community.
House Republicans are committed to changing this economic atmosphere to restore confidence – hopefully, our President and the Senate will join us. As Congress continues to look for ways to reduce government spending, we will do so with job creation as our number one priority. Every reduction that we make will spur important growth in the private sector and further stabilize our economy. House Republicans remain committed to restoring the country’s faith in the economy and we stand ready to make responsible, needed spending cuts to reestablish fiscal stability in our nation and get Americans back to work.