WASHINGTON – Congressman Connie Mack (FL-14), a candidate for the House Republican Policy Committee Chairmanship, will issue policy papers to his Republican colleagues every day this week about the most pressing issues facing the incoming 112th Congress. Today’s installment examines the growing federal budget deficit.

Mack said:

“An important role of the Policy Committee Chairman is to cultivate ideas within our Conference and grow them into successful policies that will lead our nation. While there are numerous issues facing our nation right now, there are five issues that merit our immediate attention in the next Congress, including reducing the ballooning federal deficit. As Republican Policy Committee Chairman, I pledge to my colleagues that I will work with them to pursue legislation that sticks to our core principles of less taxing, less spending, less government, and more freedom.”

The text of Mack’s policy paper on the budget and the deficit is below:

BIG GOVERNMENT: BIG DEFICIT

Issue: The FY2009 federal budget deficit was a staggering $1.4 trillion, dwarfing the previous year’s deficit of $455 billion. President Barack Obama and the Democratic Congress have used the recession as an excuse to fulfill a liberal wish list of wasteful spending to feed their ever-growing federal government. As a share of GDP, the FY2009 deficit was the largest since World War II. This unsustainable deficit has a negative impact on interest rates, trade deficits, and personal savings rates. This increased downward pressure on a fragile economy makes a sustained recovery that much more difficult.

What We Know:

-- Interest rates are likely to rise along with the budget deficit. For business owners, this will greatly increase the cost of financing their operations. These rising interest rates will also lead to inflation, which will decrease the dollar’s purchasing power. A combination of these two actions would be a devastating blow to our nation’s job creators.

-- The Democrats’ lack of sound budgetary policy is evidenced by the recent decision of the Federal Reserve to intervene in the private sector. Once again, the Fed has decided to buy up U.S. Treasury bonds to buoy the sagging economy – this time to the tune of $600 billion. Already, our dollar is falling out of favor in the international markets. It is no longer the accepted standard for worldwide trade – and it is considered wildly unpopular among a host of nations as we participate in the G-20 summit. If we continue this approach of quantitative easing, we risk experiencing out-of-control inflation, a steeper drop in the dollar, and the devaluation of the bond market. Moreover, we have yet to see the type of job creation promised from the first influx of money.

-- Medicaid, Medicare, and Social Security are sacking our nation’s budget year after year. These entitlement programs contributed to an unprecedented budget shortfall of $1.4 trillion in the past fiscal year. Statistics illustrate that these spending commitments will jump to 50 percent of federal spending within just two generations. There were less than four working Americans for every retiree in 2010, with another 77 million baby boomers expected to begin receiving entitlements over the next few years. Current projections show Social Security going completely bankrupt by 2035. Simply put, the programs are unsustainable under their current budgetary structure.

Conclusion: Washington’s liberal policies have crippled our economy, and promise to do even worse with the threat of tax increases at year’s end. The Democrats’ liberal spending spree has almost tripled the budget deficit in one year, with no end in sight. If elected Chairman of the Republican Policy Committee, I will work with you to produce sound budget policies that focus on eliminating wasteful spending, lowering taxes, and addressing unsustainable entitlement programs. Our children deserve a bright future, not a bill for our reckless spending.

Mack’s previous policy papers can be found at http://mack.house.gov.

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