Rep. Allyson Schwartz called for ‘balanced approach’ to reducing the federal debt in response to CBO’s long-term economic outlook

WTF Allyson Schwartz CBO debt 6.23.11

Rep. Allyson Schwartz (D-PA) said a “balanced approach” combining spending cuts and eliminating wasteful tax breaks is needed to reduce federal debt while protecting the delicate economic recovery. 

Rep. Allyson Schwartz, vice ranking member of the House Budget Committee. PHOTO SOURCE: cspan.org

TRANSCRIPT (6/23/11):

“The federal budget is a statement of our priorities and our values as a nation. It’s about three things: It’s about being fiscally responsible and reducing our debt; meeting our obligations to our seniors, our families and our future; and making targeted investments to grow our economy.

“To put our country back on a strong financial footing, we need a balanced approach. That includes spending cuts in every aspect of the budget, smart investments to assure our economic competitiveness, and fair tax reforms that will increase revenue.

“We do not need just political rhetoric or strict ideology. Everything must be on the table and compromise is critical. Finding that common ground is very important.

“Democrats are committed to deficit reduction. I feel like I should repeat that. Democrats are committed to deficit reduction.

“The CBO’s fiscal outlook reinforces the need for action. The question is not if we reduce the deficit because we must; it’s how. We need to reduce the deficit, reach primary balance, and begin to repay our debt. We must do so in a way that does not endanger our current fragile economic recovery.

“The consequences of inaction are clear: higher levels of debt, higher interest payments on that debt, drastic tax increases, severe reductions in spending, and economic stagnation or worse.

“CBO forecasts a surge in public debt this year that will rise to 69% of GDP by the end of fiscal 2011. The short-term deficit was made worse by the deep economic recession we’ve just been through and our necessary response to it as well as reduced revenues from the Bush tax cuts and increased costs of two un-financed wars and unpaid for spending in Medicare Part D.

“In the long-term, the deficit is made worse by dramatic changes in the demographics in this country. I believe the CBO is going to point this out in particular. Our population is aging. Fifty million more Americans will be over 65 in the next decade. The ratio of workers to retirees move from 3 to 1 to 2 to 1 in the next four years, meaning fewer wage earners to support the cost of government and the cost of retirees. Debt is projected by CBO to rise to by 84% or as much as 187% of GDP by 2035. This is simply unsustainable.

“A long-term balanced deficit reduction plan is absolutely necessary. The president’s fiscal commission – the Erskine Bowles and Alan Simpson commission as referred to – and the Bipartisan Policy Center both strongly acknowledged the need to do both cutting spending and raising revenue.

“The Democrat’s proposed budget for fiscal 2012 tackles the deficit responsibly by both spending cuts and revenue increases. These include reductions from eliminations of duplicative spending, fraud, waste and abuse, streamlining government to make it more efficient, and eliminating or reducing programs that don’t work while protecting those that are vital to the nation. It includes the implementation of health care reform to save $1.2 trillion in health costs over 20 years. It increases revenues by ending tax cuts for the very wealthiest Americans saving $800 billion over the years and ending corporate tax breaks saving billions more.

“The Democratic budget makes smart, strategic investments in education, innovation, infrastructure, and research and development, which will strengthen our economic competitiveness, promote private sector job growth and expand our economy. This is a balanced, fair, and responsible approach. It is a clear contrast to the Republican budget.

“The Republican budget takes a sledgehammer to non-defense discretionary spending with careless cuts that don’t acknowledge the impact on Americans or our recovering economy.

“The Republican budget jeopardizes food safety, highway expansion, undermines education and scientific research, reduces our best hopes for future prosperity.

“Second, the Republican budget ignores defense spending. It’s imperative that we meet our commitment to our troops, our military preparedness, and our security as a nation. But the growth in DOD spending has got to be taken into account. It is, after all, 20% of our spending. In the years between FY08 and FY12, we will spend more on defense than in any period in the last 60 years. This includes the Reagan Cold War build-up in the 1980s, Vietnam and Korean wars. As we ask our government agencies to become more efficient, so must the department of defense.

“Third, the Republican budget undermines our promise to America’s seniors. Make no mistake: The Republican budget will end Medicare for seniors. It will not reduce cost by turning Medicare into a voucher program. It will simply shift that burden to our seniors. I believe we will talk more about that as we go along. The fact is the Republican plan will actually increase the cost of seniors’ health care and that increase will be an increase borne by individual seniors not by all of us. CBO estimates the Republican budget will cost a 65-year-old an additional $6,000 in out-of-pocket costs and by 2030 it will be as high as $12,000.

“If Republicans continue their assault on health reform, the cost burden for seniors will not only increase but it will also reduce coverage and benefits. Going back on the promise made to our seniors and disabled in America is wrong. It’s not only morally reprehensible, it’s fiscally irresponsible.

“Finally, our Republican colleagues refuse to address the need to raise revenue, which is essential to balancing our budget. Just as we cut unnecessary federal spending, we must also cut special tax provisions that add to our deficit.

“Tax expenditures add over $1 trillion to our deficit annually. Yet Republicans continue to protect tax breaks for the few. I’ll just mention two.

“The big five oil and gas companies made $1 trillion in profits in the past 10 years. They’re on pace in 2011 to have their most profit year ever even as the price of gas at the pump goes up for all of us. Yet the Republican budget continues to protect billions of dollars in tax breaks every year for the big five oil and gas companies. We should stop this and save taxpayers billions.

“We cannot afford another 10 years of the deficit-financed Bush tax cuts and expect our fiscal outlook to change for the better. Revenues must be a part of the solution plain and simple.

“We need sensible, reasonable, strategic solutions to our nation’s budget challenges. It’s clear that the Republican budget takes one-sided approach. We need a balanced approach that meets the commitments of our nation as fiscally responsible and strengthens our economy in the short and long-term.

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3 Comments on “Rep. Allyson Schwartz called for ‘balanced approach’ to reducing the federal debt in response to CBO’s long-term economic outlook

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