House Budget Committee Chairman Paul Ryan blamed growing deficit on ‘explosive government spending’ not insufficient revenue
House Budget Committee Chairman Paul Ryan (R-WI) blamed the growing U.S. deficit exclusively on “exploding government spending” and attacked President Barack Obama for not submitting a “credible” budget plan to address the impending debt crisis.
“Yesterday, the CBO released its long-term budget outlook. This report throws harsh light on the challenges we face, and it sounds an alarm that too many in Washington have been ignoring for far too long.
“The federal government will race across a dangerous tipping point this year. According to CBO, total U.S. debt will reach 100% of GDP. Our debt will have eclipsed the size of our entire economy. Economists who have studied sovereign debt tell us that letting total debt rise above 90% of GDP creates a drag on economic growth and intensifies the risk of a debt-fueled economic crisis.
“The CBO is candid about the increasing likelihood of this crisis, and the report states “Such a crisis would confront policymakers with extremely difficult choices and probably have a very significant negative impact on the country.”
“This quote demonstrates the CBO’s flair for the understatement. A sudden fiscal crisis will be a complete catastrophe for this country. Families and businesses will bear the full brunt of the consequences.
“If the nation ultimately experienced a panicked run on its debt, policymakers will be forced to make immediate and painful fiscal adjustments, like the austerity programs that have stoked the riots in Greece. This would mean massive tax increases on working families and steep benefit cuts that hit our most vulnerable citizens the hardest.
“The CBO is a non-partisan agency so it does not take a position on what would be required to prevent this crisis, but we can draw our own conclusions from the evidence in this report. For one thing, this report makes clear that exploding government spending – not insufficient revenue – is driving us towards this crisis point. If we simply keep revenues at the historical average as a share of GDP, then government spending – driven by an aging population and rising health care costs – will cause federal debt to grow to unsustainable levels.
“Yet again, CBO makes clear that Medicare and government health care programs are driving the debt and driving these programs themselves into bankruptcy. Attacking solutions to save these programs threatens both the health security and economic security of the American people.
“If we try to chase ever higher spending with ever higher taxes, the CBO is very clear about the consequences. It estimates that GNP will be 2% lower in 2035 than would be otherwise. That number represents hundreds of billions in dollars of lost income for American families and businesses on top of much higher taxes they would have to pay.
“The House Republicans have passed a budget, the Path to Prosperity, which answers CBO’s warnings and averts the crisis before us. The House-passed budget tackles the explosive growth in spending, it saves critical programs like Medicare, and puts our budget on a path to balance without resorting to job-destroying tax hikes. Meanwhile, the president has not put forward a credible plan, a credible budget. It’s been 785 days. Let me say that again. It’s been 785 days since the Senate passed any budget at all.
“We have a leadership deficit in Washington, and our window for solutions is closing quickly. Instead of tuning out CBO and others who are working to inform us of this danger, let’s work together now before it’s too late to put America’s budget on a sustainable path, grow the economy, and leave the next generation with a better country than the one we inherited.
- WhatTheFolly.com: CBO Director Doug Elmendorf: U.S. debt to reach 85% to 190% of total GDP by 2035
- WhatTheFolly.com: Rep. Allyson Schwartz called for balanced approach to reducing the federal budget in response to CBO’s long-term economic outlook
- CSPAN.org: CBO director testifies on long-term budget outlook
- Congressional Budget Office: CBO’s 2011 Long-Term Budget Outlook (PDF)
- Congressional Budget Office: CBO’s 2011 Long-Term Budget Outlook Summary (PDF)
- House Budget Committee: CBO: Debt to overtake entire economy
- Rep. Paul Ryan’s website
Category: Congress, Current Events, Economy, Government, News, Politics, Tax Dollars at Work, Tax Policies, Transcripts, U.S., Wasteful Spending · Tags: aging population, Allyson Schwartz, bankruptcy, CBO, Congress, Congressional Budget Office, Democrats, Doug Elmendorf, drastic budget cuts, economic recovery, economy, federal debt, federal deficit, financial crisis, Fiscal Conservative, Fiscal Responsibility, GDP, GOP, government funding, Greece, health care, health insurance, long-term, Medicaid, Medicare, national debt, Paul Ryan, public debt, recession, Republican Party, seniors, Social Security, subsidies, tax cuts, taxes, taxpayers, U.S., United States, US Senate