So how should we tackle the deficit? First, we can’t forget that overreacting, at a time of high unemployment, will send our economy back into a tailspin, lead to the loss of even more jobs, and ultimately result in even higher deficits. It’s the mistake the Roosevelt Administration made in 1937, and we must not repeat it. Congress still needs to put job creation first. But we can build support for that job creation by making a credible and detailed plan to tackle the long-term debt. Now is the time to start talking about a solution to put place once our economy is fully recovered, and we are doing that by developing a budget enforcement resolution that will set limits on spending.
Democrats have set the stage for a budget enforcement resolution by taking action throughout this Congress that demonstrates our commitment to fiscal discipline. We have re-established the pay-as-you-go law, which requires that Congress pay for what it buys. PAYGO means hard choices, as we saw when we worked hard to find budget offsets for many of the items in the American Jobs, Closing Tax Loopholes, and Preventing Outsourcing Act. The House has also passed two important bills to save money by reforming defense procurement: one to cut unnecessary spending from weapons acquisition, which President Obama has signed, and one to cut it from contracting, which is awaiting action in the Senate. The President created a bipartisan fiscal commission to develop recommendations to lay out a long-term path to fiscal balance, and Speaker Pelosi and I have committed to bringing the commission’s recommendations up for a vote. I’m hopeful that Republicans will stop playing partisan games with the debt, and join us in supporting the commission’s efforts that could lead to a bipartisan compromise to address this critical challenge.
Congress will see what recommendations the commission will make in December, and have the opportunity to debate them. Until we’ve acted on the commission’s deficit-reduction plan, it is premature to consider a long-term budget. But we can take fiscally responsible steps in the meantime, including a budget enforcement resolution.
The budget enforcement resolution reduces spending, reinforces PAYGO and makes House PAYGO rules consistent with the statutory PAYGO law, and reiterates our commitment to vote on the fiscal commission’s plan. And it calls for a reduction and possible early termination of TARP authority, devoting the money repaid to TARP to debt reduction. In fact, Treasury Secretary Geithner reported that TARP, the economic rescue plan implemented in 2008, will cost “a small fraction” of what was initially projected.
The budget enforcement resolution forces Congress to make tough choices and eliminate inefficiencies. All of our spending needs strong scrutiny, including defense spending. Our top military leaders agree; last month, Defense Secretary Gates gave an important speech pointing out that “the United States…could only be as militarily strong as it was economically dynamic and fiscally sound.”
The solutions to our debt danger are clear; the only thing that can stop us from solving the problem is fear of hard choices, or demagoguery that exploits that fear. I recommend this antidote: don’t pay attention to words—pay attention to actions. Who’s putting forward specific, politically-viable ideas to get us out of debt? And when it’s time for the hard, responsible votes, who’s willing to take them?