[Congressional Record Volume 155, Number 3 (Thursday, January 8, 2009)]
[House]
[Pages H83-H84]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
FEDERAL BUDGET DEFICIT
The SPEAKER pro tempore. Under a previous order of the House, the
gentleman from Virginia (Mr. Wolf) is recognized for 5 minutes.
Mr. WOLF. Madam Speaker, we saw yesterday the CBO projection that the
Federal budget deficit for this fiscal year, which started in October,
will balloon to $1.2 trillion. A member of the Senate Budget Committee,
Kent Conrad, called it ``jaw-dropping.'' And our budget chairman, John
Spratt, said he got ``sticker shock.''
President-elect Obama has predicted that ``potentially we've got
trillion dollar deficits for years to come.'' President-elect Obama
then said, ``if we do nothing, then we will continue to see red ink as
far as the eye can see.''
Most Members know that our country is facing a critical crisis, and
if we fail to find solutions that will halt a mortgaging of our
children and grandchildren's future, I seriously consider and believe
the 111th Congress will really go down as a failed Congress.
We have an opportunity at hand to deal with this issue, and we need
to do it in a bipartisan way. There's a bipartisan plan on the table
that Congressman Cooper of Tennessee and I have, called the Cooper-Wolf
SAFE Commission, that sets up a bipartisan panel to put every spending
program and tax policy on the table and require this institution that
has avoided its responsibility to vote it on up or down.
Today's Washington Post, in this editorial which I will submit for
the Record, talked about our effort and the tough decisions that
Congress faces. The editorial said, ``Ideally, Congress could make the
necessary hard choices through the normal legislative process. Its
repeated failure to do so, however, may necessitate a commission to
recommend reforms for the House and Senate to accept or reject.''
Amen. The Post is right. Unless we do the Cooper-Wolf concept of a
commission, this Congress will not deal with the issue. And if we don't
do it now, both parties, the Democratic Party and the Republican Party,
will have failed the American people, and both parties will have to
explain to the American people their failure to act in the best
interest of future generations.
Others have spoken out. Ben Bernanke, Fed Chairman said, ``The
quality of the future that we will endow to our children and our
grandchildren will depend in important measure on how we rise to the
occasion.''
David Broder, a respected columnist for The Washington Post said,
``The need for such a bipartisan approach (to examine the future of
entitlement programs) is evident.''
Robert Samuelson, Washington Post columnist, Newsweek said, ``What
would distinguish this commission from its many predecessors is that
Congress would have to vote on its recommendations.''
David Brooks, from the New York Times, said ``The Commission would
come up with a plan to restore fiscal balance, and the plan would
immediately go to Congress for an up-or-down vote.''
John Snow, the 73rd Treasury Secretary, said, ``I agree that because
of the huge debt overhang we face a looming financial crisis and I know
of no better approach than the SAFE Commission idea.''
Editorials from the Richmond Times Dispatch said, ``The Cooper-Wolf
bill would give the commission some teeth by requiring Congress to take
an up-or-down vote on the recommendations of the 16-member bipartisan
panel.''
The Washington Times said, ``Two rays of bipartisan sunlight appear
to be trying to shine through the clouds casting dark shadows on the
Nation's long-term fiscal horizon. The two rays of bipartisanship
sunshine take the form of legislative proposals working their way
through the House and the Senate.''
And there were many others. Policy groups across the political
spectrum,
[[Page H84]]
including the Heritage Foundation, the Brookings Institution, the
Concord Coalition and the Committee for a Responsible Federal Budget
also have embraced the SAFE Commission.
Make no mistake. This could well be the hardest economic issue our
Nation will ever be faced with, but we cannot afford to wait.
I will end with a statement by Dietrich Bonhoeffer, who was a
Lutheran pastor who stood up to the Nazis and was executed, hung in
Flossenberg Prison when the artillery was coming, the western ally
artillery was coming to liberate Germany. He was hung by the Nazis.
Here's what Dietrich Bonhoeffer said, and I think he was exactly right
when he said, ``The ultimate test of a moral society is the kind of
world that it leaves to its children.''
Will this Congress, will this 111th Congress meet the Dietrich
Bonhoeffer test? I don't know. But I'm going to do everything I can,
offer amendments on the floor, amendments in committee, to see that
this Congress is forced to deal with this issue so that we can honestly
say to Dietrich Bonhoeffer, we have tried and done whereby we, however,
are a moral society, and we have left a good environment and society
for our children.
[From the The Washington Post, Jan. 8, 2009]
Years To Come
``FISCAL SPACE'' is an economist's term for a country's
capacity to borrow and spend its way out of recession without
risking exorbitant interest rates and inflation later on.
Generally speaking, the more public debt a country already
has as a share of its economy, the less new debt it can take
on.
As President-elect Barack Obama and Congress contemplate a
fiscal stimulus package that could total hundreds of billions
of dollars, they still have some fiscal space to work with.
At $6.3 trillion, the publicly held national debt is about 45
percent of the $14 trillion economy--not much above the post-
World War II average debt-to-GDP ratio of 43 percent. But the
space is shrinking rapidly. According to new figures from the
Congressional Budget Office, federal debt is rising at the
fastest rate since World War II. It is estimated at $1.2
trillion in fiscal 2009, or 8 percent of gross domestic
product. This stunning number reflects both the direct effect
of the recession on tax revenue and spending and the high
cost of measures taken to combat the downturn, such as the
financial sector bailout. And it is likely to be matched or
exceeded when the Obama stimulus plan kicks in.
Mr. Obama was just leveling with the American people when
he noted yesterday that the country faces `` trillion-dollar
deficits for years to come'' unless policymakers ``make a
change in the way that Washington does business.'' The
question, of course, is how to change. Though Mr. Obama's
appointment of an efficiency-minded chief performance officer
sent a useful signal, the real answers are legislative. The
stimulus package must not bloat the government's permanent
financial commitments. According to a recently published
International Monetary Fund paper, appropriate measures
include increased transfers or temporary tax cuts to
consumers at the bottom and middle of the income scale; aid
to state and local governments; and repairs and improvements
(especially energy-saving ones) to existing infrastructure.
The IMF recommends against increasing the federal payroll,
cutting corporate tax rates or letting companies deduct their
recent losses against past years' profits. The stimulus plan
should include a plan for offsetting spending cuts and
revenue increases once the economy recovers.
Over the long run, investors will finance the U.S.
government at reasonable rates only if it tackles its huge
unfunded health-care and pension commitments. Unchecked, the
cost of providing Social Security, Medicare and Medicaid to
77 million retiring baby boomers could push the debt-to-GDP
ratio up to nearly 300 percent by 2005, according to a
December 2007 CBO report.
Ideally, Congress would make the necessary hard choices
through the normal legislative process. Its repeated failure
to do so, however, may necessitate a commission to recommend
reforms for the House and Senate to accept or reject. Reps.
Jim Cooper (D-Tenn.) and Frank R. Wolf (R-Va.) and Sens. Kent
Conrad (D-N.D.) and Judd Gregg (R-N.H.) have offered
proposals for such a panel. Hard as it is, jumpstarting the
U.S. economy will be easy compared with securing its
financial future. But Mr. Obama and the Congress must do
both.
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