Take a moment to tally up all your household expenses and income from October 1st to September 30th. Will your income pay for your expenses past today, April 26? If so, you’re in better financial shape than the federal government.
For most Americans, today feels like just another Sunday in April. Spring has arrived, baseball season is hitting its stride, and summer is right around the corner. But today is also the day the federal government’s spending exceeds its revenues for the fiscal year. Today is Debt Day. Every dollar spent from now to October 1 is a dollar we cannot afford. Every dollar spent from now to October 1 is a dollar our children will eventually have to find a way to pay back with interest.
While the federal government running a deficit is, unfortunately, nothing new, the sheer enormity of this year’s red ink is astounding. At $1.8 trillion, the federal deficit will be almost four times larger than the previous record of $458 billion. Every Debt Day since the 2002 fiscal year has occurred at least three months later than it does this year. And during the four years from 1998-2002, the Republican-controlled Congress ran a surplus.
Why is Debt Day here so soon? Unbridled, irresponsible spending in the form of $700 billion for TARP, $787 billion in a so-called stimulus package, and $410 billion bill to fund the government with an eight percent average increase over last year.
TARP has proven both controversial and a miserable failure since its inception last fall. Proposed amongst a rash of Chicken Little rhetoric, the program was rushed through Congress with much fanfare but little foresight. The plan lacked taxpayer protections and, as we are experiencing, an exit strategy to get bailouts funds back. Seven months in, the private sector is wary of getting burned by the shifting political whims of Congress, and Treasury Secretary Geithner refuses to allow recipients of TARP funds to repay the money. Despite it all, consumer lending continues to decline.
Continuing this now well-established practice of government intervention, Congress next attempted to “stimulate” the economy with a $787 billion smorgasbord of borrowing. Packed with money for long-time liberal spending priorities that have little, if any, relation to economic recovery, the spending spree that Congress passed last February did not receive a single Republican vote in the House of Representatives.With our opposition to the bill, conservatives offered positive solutions to the challenges facing America. The package offered by the Republican Study Committee (RSC), which I am privileged to Chair, would provide real economic relief to families and businesses through tax relief while moving toward spending restraint with a one percent reduction in discretionary spending.
Not content with the billions of dollars of new spending in the non-stimulus package, the majority continued its recklessness with a bloated, earmark rich $410 spending bill to fund most of the government through the remainder of the fiscal year. The extra spending increases it contained are simply unjustifiable. At a time when Americans have trimmed back their own household budgets, the package included an eight percent bump in federal spending over last year (I’m certain most families didn’t see an 8% increase in their family budgets in that time). So once again Republicans offered a more prudent solution, this time by proposing a spending-freeze to fund the government at 2008 levels. Yet, the majority party predictably rejected common sense.
Democrats in Washington have routinely pushed a falsehood that they “inherited” this $1.8 trillion deficit. The claim is absurd. All of the big-ticket spending items that contribute to this deficit – TARP, the “stimulus,” the omnibus, were passed with Democrat votes. President Obama even supported all of this spending either as a member of the Senate or a resident of the White House. The voting record clearly demonstrates the false self-righteousness coming from across the aisle.
Most recently, President Obama presented his budget plan for the next decade. If his proposals are enacted, his own projections say they will produce $9.3 trillion in deficits over the next ten years. Each and every single-year deficit in his plan would be greater than the previous record of $458 billion. By 2012, American taxpayers would pay $1 billion per day in interest alone. And a number of economists argue that the President’s revenue projections for the next ten years are overly optimistic, so the real deficits will likely be even higher.
A long-term budget offered by the RSC makes these hard choices today. It would have cut the national debt by more than $6 trillion compared to the President’s budget and improve the budget outlook every year, achieving a budget surplus by 2019. The RSC budget would begin to address entitlements by trimming the growth of Medicare to the projected rate of economic growth. It would also rescind much of the new spending from this year’s “stimulus” and bailout failures. Our budget made the tough choices that are needed to get our fiscal house in order. Not a single Democrat voted for it.
President Obama won the White House last November by promising change, but his policies threaten to leave Americans with little else in their pockets. Without urgent action, Debt Day will continue its march up the calendar.