Mr. CRAIG. Mr. President, over two hundred years ago, George Washington warned that "Government is not reason. It is not eloquence. It is force. Like fire, it can be a dangerous servant or a fearful master." Even when Government functions properly as a servant, Washington observed, it is dangerous.
Mr. President, I rise today to talk about - and to urge - fiscal responsibility. While Congress has been talking about spending measure after spending measure over the past several weeks, Americans have been talking about Congress' loose spending of their tax dollars. What many lawmakers have referred to as the fiscal policy of the Government has come to mean nothing more than the Government's dangerous tendency toward fiscal recklessness.
Fiscal responsibility is premised on the simple concept that less is more. Less government spending means more freedom for individual Americans and increased levels of economic activity and rates of economic growth for the country. Several studies confirm this.
A Public Finance Review study indicated that: "Higher total government expenditure, no matter how financed, is associated with a lower growth rate of real per capita gross state product."
A study by the Journal of Monetary Economics found that: "There is substantial crowding out of private spending by government spending. Permanent changes in government spending lead to a negative wealth effect."
And an International Monetary Fund study showed that: "Average growth for the preceding 5-year period was higher in countries with small governments both periods."
The cumulative evidence in these studies suggests one important thing - government spending hampers the economic growth of our country. Even more than this, the growth of government spending is economically destructive.
Every dollar the government spends is one taken from an American, and is one less dollar in the productive, private sector economy.
Every dollar the government spends to fund agencies imposes large costs on the economy's productive sector, no matter how small the agency.
Every dollar the government spends on programs such as welfare and unemployment insurance encourages bad behavior by providing incentives for Americans to remain unemployed and choose leisure over work. Every dollar the government spends this way goes to making Americans passive supplicants rather than active citizens, particularly at a time when the number of those dependent on the government is growing and the number supporting it is shrinking.
Every dollar the government spends to subsidize both health care and education distorts the competitive process in the market that ensures the most efficient allocation of resources.
Every dollar the government spends to deliver services is one that could be used by the private sector to provide services more effectively at higher quality and lower costs.
And there is no doubt about the growth of federal spending, for the numbers do not lie.
In 2005, Washington spent $2.470 trillion, raised $2.154 trillion, and ran a $317 billion budget deficit. This deficit is 2.6% of Gross Domestic Product.
Spending increased by 8% in 2005 and is up 33% overall since 2001.
In 2005, inflation-adjusted federal spending neared $22,000 per household, the highest level since World War II.
Federal spending has increased by 33% since 2001, from $1.863 trillion to $2.470 trillion. Defense and 9/11-related costs have only accounted for a smaller-than-expected portion of this:
From 2001 to 2003, spending expanded by $296 billion, 45% of which went to defense and 9/11-related costs, and 55% of which went to new federal spending unrelated to defense and 9/11. This is an 11% jump in federal spending, the fastest growth in a decade.
From 2001 to 2005, discretionary spending surged 48%, from $649 billion to $969 billion.
Current spending on entitlement consumes nearly 60% of all program spending, a record 10.8% of Gross Domestic Product, and is projected to nearly double over the next decade.
Long-term trends project the cost of Social Security, Medicare, and Medicaid to jump from 8.4% GDP in 2005 to 18.9% GDP by 2050. Federal program spending is projected to reach 27.6% GDP by 2050.
By 2050, our children and our children's children will be footing the bill for our current fiscal irresponsibility.
Nearly two hundred years ago, Thomas Jefferson said that "although a republican government is slow to move, yet once in motion, its momentum becomes irresistible." There was a time not too long ago when Republicans stood up, made the case for smaller government, and made it happen. From 1998 to 2001, we did this by enjoying record budget surpluses.
The time for action is upon us once again.
The federal government's spending momentum, however, makes tax cuts, reductions in pork, and slashes in subsidies only first steps toward a real solution. The only long-term, fundamental, permanent reform that would effectively dispel the danger of current fiscal recklessness and restore fiscal responsibility is a Balanced Budget Amendment to the Constitution like the one I re-introduced earlier this year.
Jefferson once said, "with respect to future debt; would it not be wise and just for that nation to declare in the constitution they are forming that neither the legislature, nor the nation itself can validly contract more debt than they may pay?" I think he's right and urge my colleagues to join me in supporting a Balanced Budget Amendment to our Constitution to restore the past principles of fiscal responsibility envisioned by the Founding Fathers and to safeguard the future by providing a Bill of Economic Rights for our children.
Mr. President, I yield the floor.