My seat on the Budget Committee gave me the opportunity to ask Ben Bernanke a few questions yesterday during his testimony on the near-term outlook of the economy. We may be starting to see signs of a recession, and the state of our nation’s economy is becoming a question on people’s minds. I know this includes South Carolina citizens who are getting more concerned with higher gas and oil prices while watching the values of their homes fall.
My concern I wanted to address during the testimony was the importance for maintaining fiscal discipline in the longer term. Therefore, I asked Mr. Bernanke about the benefits of a balanced economic stimulus package, one where we could extend tax cuts in a fiscally responsibly manner. First off, he did say that a balanced budget in the long run is positive for growth. I was encouraged by his response, because I believe that Congress must be fiscally responsible, both now and years down the road. Mr. Bernanke validated my opinions about runaway spending and lower taxes when he said that for Congress to ‘make good decisions about long-term tax policy and long-term fiscal balance, that would be a terrific thing.’ I was pleased to learn that he would be in favor of ‘a pro-growth tax code’, one that is efficiently designed and fair and simple. I firmly believe that a fiscally sound budget is vital to our economy and to our nation's financial health. The federal government cannot continue to borrow without regard for the consequences. While federal spending does fund many worthy causes, our current course of borrowing and spending is simply unsustainable and bad for our economy, and I am happy to see that Mr. Bernanke agrees.
The President identified his 2008 Economic Growth Plan today and outlined a growth package that addresses the health of our economy. Even if we are facing the onset of a recession, I still believe we must first ensure a sound fiscal policy for the future. The common denominator should always be maintaining fiscal responsibility. I am glad that Mr. Bernanke agrees that if we address the short-term issues that are affecting our economy, it would be great to address the long-term issues in the same package.