Fiscal Responsibility
I believe that the federal budget should emphasize fiscal responsibility, saving the money necessary to keep Social Security and Medicare solvent and pay down the national debt.
To this end, I have led efforts in the House of Representatives to reinstate pay-as-you-go (“PAYGO”) rules and budget enforcement mechanisms, which expired in 2002. PAYGO rules require that any spending increase or tax cut legislation be offset by spending decreases or increased revenues, ensuring that whatever Congress passes does not increase our debt.
I am also an active member of the Blue Dog Coalition, a group of fiscally responsible House Democrats who stress pragmatic solutions to budgetary and economic issues. Each year, the Blue Dogs compile a realistic alternative budget that pares down the deficit, balances the budget, holds the line on spending, and better funds vital issues like veterans’ benefits, education, first responders, agriculture and health care.
Our Nation’s total outstanding debt is more than $13 trillion. With an estimated population at close to 300 million, each citizen’s share of this debt is approximately $43,000. In just the last year, the national debt has continued to increase at an average of $1.69 billion per day. The Congressional Budget Office (CBO), a non-partisan legislative branch support agency estimates that the federal deficit will reach $422 billion in fiscal year 2004 – that’s 132,000 times what the average 30-year-old will earn in his or her lifetime.
The ballooning national debt has a particularly adverse effect on young people because today’s fiscal mismanagement directly affects the quality of their lives in years to come. Large deficits drag down the economy by driving up interest rates. Higher interest rates mean higher mortgage payments or credit card bills. By 2014, it is estimated that the interest alone on the public debt will reach $343 billion, or $1,075 per person. At some point, the debt will need to be paid. When that time comes, today’s 20- and 30-somethings will be stuck with the tab.
With the money from one year of interest payments on the national debt, we could instead spend $325 million to protect vocational education funding levels; $1.9 billion to raise the maximum Pell Grant award to $4,500; $40 million to preserve child care funding for low-wage workers; $704 million to maintain funding for homeland security first responders; $38 billion to provide health insurance to all uninsured 18 to 35-year olds; and still have $142 billion left.
Our Nation’s trade deficit is also growing at close to $2 billion in foreign investment each day. The trade deficit is equal to the imbalance between national investment and national saving. In the 1990s, this imbalance was largely due to a private investment boom and decline in private savings. In the 2000s, private investment fell and private saving rose, which should have led to a smaller trade deficit. However, all else was not equal during this period, as the borrowing needs of the federal government increased and the U.S. continued to borrow abroad at a similar rate.
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