[Congressional Record Volume 141, Number 40 (Friday, March 3, 1995)]
[House]
[Page H2644]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


            BALANCED BUDGET AMENDMENT SHOULD LIMIT SPENDING

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Michigan [Mr. Smith] is recognized for 5 minutes.
  Mr. SMITH of Michigan. Mr. Speaker, yesterday, the Senate failed to 
muster the courage to join us in passing the balanced budget amendment. 
Thomas Jefferson once called public debt ``the greatest of dangers to 
be feared.'' Borrowing and spending is addictive for politicians, 
Thomas Jefferson, in a letter to Elbridge Gerry in 1799, wrote:

       I am for a government rigorously frugal and simple, 
     applying all the possible savings of the public revenue to 
     the discharge of the national debt; and not for a 
     multiplication of officers and salaries merely to make 
     partisans, and not for increasing by every device, the public 
     debt, on the principle of it's being a public blessing.

  I agree with Mr. Jefferson wholeheartedly, and I suspect that most 
other Americans do as well.
  Today, I am introducing a constitutional amendment that would attack 
the root cause of our budget deficit, that is Government spending. My 
amendment would limit the growth of Federal spending to the rate of 
economic growth as measured by gross domestic product. This would 
freeze the growth of Government as a percentage of the U.S. economy. 
The language of the amendment is an adaptation of a spending control 
proposal in Milton Friedman's book, ``Free to Choose.'' Professor 
Walter Williams, Chairman of the Economics Department at George Mason 
University, and the National Taxpayers' Union have endorsed this 
concept. The CATO Institute has given their enthusiastic support and 
suggested that this might be an acceptable compromise position to the 
balanced budget amendment.
  Today, the Federal debt is in excess of $4.7 trillion and growing at 
a rate of $200 to $300 billion per year. This is both an economic and a 
moral problem. The economic problem is that deficit financing is the 
ultimate form of hidden taxation. Federal borrowing injects a huge pro-
spending bias into the budget process by allowing politicians to hand 
out a dollar of Government spending to voters, while only imposing 80 
cents of taxes.
  Unbridled Federal spending will eventually lead to what economists 
call monetizing of the debt, which in plain English means that the 
government pays for its debt by increasing the money supply, thereby 
causing inflation. This hidden tax, which Adam Smith called the worst 
form of taxation, strikes most heavily on those who save. As every 
senior citizen knows, their security can be wiped out in short order by 
even moderate inflation. At 8 percent inflation, the Government can 
effectively take away half of the money one has saved over a lifetime 
of work in about 9 years.
  The moral argument for a balanced budget is that Federal borrowing is 
taxation without representation. Recall the words of the Declaration of 
Independence which refers to the repeated injuries and usurpations of 
King George because he imposed taxes on us without our consent. Can't 
our children make this same claim against a Congress that saddles them 
with debt interest payments that are already at $339 billion annually? 
None of our children and grandchildren currently have a say in the 
political process. Federal deficits may almost be thought of as a form 
of fiscal child abuse.
  I call on my colleagues to stop deficit spending, and I call on all 
citizens to commit themselves to do their part, to sacrifice some of 
the many things they get from Government, so we can cut spending, look 
our kids in the eye, and tell them that we will no longer force them to 
pay future taxes to enhance our current standard of living.
  As a nation of people who look to the future, and care about our 
children as much as we care about ourselves, we can make the commitment 
to limit spending, and keep that commitment.


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