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Cut spending to grow the economy
The anemic 18,000 payroll jobs the United States gained last month clearly shows America’s job creators are on strike against President Obama’s failed big government policies. If we want to spur business investment that will create new jobs we must change our fiscal course.
In his 1981 inaugural address, President Reagan said, “government is not the solution to our problem; government is the problem.” Reagan began to reduce the size and scope of the federal government and produced spectacular growth dividends. Over the next two decades, federal spending shrank from 22 percent to 18 percent of our economy, and the United States created 37 million private payroll jobs.
Since 2001, Congress has allowed federal spending to expand once again to 24 percent of our economy. Not surprisingly, the United States has lost 2.7 million private payroll jobs since then. Since 2009, when the Obama stimulus was enacted, the United States lost 1.3 million private payroll jobs. The lesson is clear: we must shrink Washington to create jobs on Main Streets around America.
When I became vice chairman of the Joint Economic Committee, I asked my staff to study what our foreign competitors, who found themselves in fiscal trouble, did to right their situation. The findings were unambiguous: Successful countries cut government spending as a share of their economies. The countries which failed to improve their financial fortunes tried a mixture of tax increases and spending cuts. Moreover, successful countries had a strong and immediate rebound in economic growth.
Applying these lessons, I introduced H.R. 2319, the Maximizing America’s Prosperity (MAP) Act to cap non-interest spending on all federal agencies and programs, and then reduce spending as a share of our economy over the next decade. A family cannot control credit card interest payments on previous debts, but a family can reduce future purchases. Similarly, Congress cannot control interest payments, but Congress can control and must be held accountable for spending on discretionary and entitlement programs. MAP Act will cut spending and reduce federal programs with a level of certainty never seen before.
MAP constructs durable guardrails that will keep Washington on the path to a smaller government that fosters business investment and job creation. For the first time, MAP transforms the President’s Budget from a political wish list into a real management tool that prioritizes all non-interest spending into 5 categories from most to least essential, and proposes plans to make both Social Security and Medicare sustainable for future generations.
MAP sunsets obsolete agencies and programs, would create the constitutional equivalent of an item-reduction veto, and end forever the threat of government shutdowns by allowing government operations to continue after a 10 percent cut when new spending bills are not enacted on time. This provision alone will prevent the political brinksmanship that we have seen as of late.
Jim Miller observed of the MAP Act, “As Director of the Office of Management and Budget for President Ronald Reagan, I applaud Rep. Brady for introducing the MAP Act. MAP’s smart spending caps and innovative guardrails would keep Congress on the path of reducing federal spending as a percent of GDP back down to its level during the late 1990s.”
MAP’s cap and guardrails will reduce federal spending and create an environment conducive to job growth. In a time where Americans and our small businesses are hurting, it is our duty to do all that we can to put Americans back to work and restore confidence in our economy.
Rep. Kevin Brady (R-Texas) is a senior member of the House Ways and Means Committee and vice chairman of the Joint Economic Committee.
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