REDUCING THE DEBT

The size of the national debt is a serious long-term threat to the health of the U.S. economy and to the standard of living that our children and grandchildren can expect. The national debt now stands at more than $14 trillion, which translates to a burden of some $44,000 for each American citizen. At projected spending rates,the debt could balloon to more than $20 trillion by 2020. The recent path where we have seen massive spending on the failed stimulus, a government takeover of health care, and unrestrained entitlement programs is unsustainable. The consequences for the American people will be crushing taxes, higher interest rates, fewer jobs, and more vulnerability to foreign creditors.

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Restoring fiscal responsibility will require both immediate and real spending cuts and structural budget reforms. The major entitlement programs - Medicare, Medicaid, and Social Security - must be addressed. They are on a trajectory to consume every tax dollar sent to Washington by the American people.

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The following chart on Medicare and Medicaid demonstrates the explosive growth in the cost of these programs as the baby boom generation approaches retirement and life expectancies increase. It vividly illustrates the case for reform. chart_2

In testimony to the Financial Services Committee, Federal Reserve Chairman Ben Bernanke has explained that both immediate and long-term benefits would come from putting federal entitlement programs and the deficit spending they cause on a sustainable path. The alternative is a continued weak economy, abysmal job growth, and ultimately a lower standard of living for our children and grandchildren.

The American people have sent a clear message that the time to reduce the debt is now, and Congress must act.

The following resources and websites may be helpful to you as the debate over reducing the debt continues.

Websites

February 2012 Congressional Budget Office Report on Federal Deficits

Text of Balanced Budget Amendment

Budget Control Act of 2011 (final)

Cut, Cap, and Balance Act

The Path to Prosperity (FY 2012 Budget Resolution)

Video Presentation on The Path to Prosperity

Pledge to America

House Committee on the Budget

Joint Economic Committee (Republicans)