The Federal government currently owes over $19 trillion in debt. That number is set to increase even more thanks to last year’s budget deal, which the CBO projected would increase the deficit in relation to the size of the economy, for the first time since 2009.
Regardless of which presidential candidate you vote for in November, forecasters expect our nation’s fiscal path to be full of either reckless spending, or increasing deficits.
That is why the Coalition is proud to include Congressional candidates who are willing to commit, on the record, to responsible federal budgeting by signing the Reject the Debt pledge.
Yomi Faparusi, pledge signer and candidate in Tennessee’s 4th district’s Republican primary, knows firsthand how a nation’s middle class can be wiped out by soaring national debt. “I lived through it in Nigeria, relocated to the U.S. for the American dream, and I will do all I can to keep the debt from crushing the American Dream.”
Last year, the Coalition to Reduce Spending was proud to support H.R. 3442, the Debt Management and Fiscal Responsibility Act, introduced by Rep. Kenny Marchant (R-TX). This bill aimed to introduce accountability into the debt limit process by requiring the Treasury Secretary to outline the economic consequences of raising the debt limit, and the Administration to present deficit reduction strategies.
The CBO estimated the bill’s cost to be less than $500,000 over five years, stating that the Treasury Department “already undertakes much of the work required for such a report.” We were thrilled the House passed H.R. 3442 back in February.
Today, the Senate Finance Committee is reintroducing the bill, with an important update that strengthens it further. The new section requires Treasury to also submit information on contingency plans for a potential default. This requirement is key in light of recent news that during the last debt limit standoff, officials deliberately kept Congress and the public in the dark when it came to their plans for avoiding a default so that there would be more pressure to hike the limit. This update to the Debt Management and Fiscal Responsibility Act would prevent such trickery in the future.
The Coalition to Reduce Spending is proud to support this effort and urges all fiscal conservatives to do the same.
Yesterday, President Obama signed the Puerto Rico Oversight, Management, and Economic Stability Act into law. Puerto Rican Governor Alejandro Garcia Padilla cited the immediate stay on all litigation as a crucial first step towards answering the island’s debt obligations, while also criticizing the creation of an oversight board, which threatens to “undercut the democratic institution of the Commonwealth of Puerto Rico.” However, the Governor acknowledged that Puerto had few other avenues left to pursue.
The Institute to Reduce Spending took a look into how PROMESA impacts the U.S. federal budget, and what brought the territory to it’s current bleak financial outlook:
Significantly, the legislation does not include provisions that actually bail out Puerto Rico from their accumulated debts. The precedent set by doing so could lead to a moral hazard for other state governments in the United States to believe they too will be bailed out if spending and deficit levels are left unchecked.
In the short run, PROMESA can be marked down as a win for bipartisan cooperation; however, the root of the problem still exists. Stagnant economic growth combined with egregious federal spending proved to be a recipe for a disaster.
Check out what may have caused voters on the tropical island to support a state funded ice rink here.
Whether its a short term Continuing Resolution, or a last second Omnibus package, the federal budgeting process itself has drawn a great deal of criticism from fiscal conservatives. House leadership and Speaker Paul Ryan believe their new plan, entitled “A Better Way”, will put the power of the purse back into the hands of the people. The Institute to Reduce Spending reports:
… Members of the House introduced the fourth stage of the plan, which is based on reasserting Congress’s constitutional authority — particularly the power of the purse.
In their plan released today, House Republicans argue that over time, Congressional control over federal spending has eroded. As a result, mandatory spending has been able to grow and make up almost two-thirds of the $3 trillion annual federal budget today. When Congress fails to pass all appropriations bills in time, they cede their ability to steer the fiscal ship. Stop-gap continuing resolutions or omnibus spending bills allow inefficient or duplicative programs to survive. The proposal aims to reform the budget process with a “strategic focus” on appropriations and oversight. The goal is to produce timely bills with clear spending limits.
Part of this strategic focus involves passing all appropriations bills internally, in addition to working with the Senate to “remove impediments” to getting spending bills approved.
Read the rest here.
The June 7th primaries will ask voters across the country to choose candidates that represent their values. From California to North Carolina, New Jersey to New Mexico, and in the heartland of Iowa, these potential representatives have an opportunity to illustrate their commitment to addressing our national debt before it adversely impacts our way of life.
The pledge is the Coalition’s answer to our nation’s immense debt problem. Separated by thousands of miles, these leaders share one common goal — for Congress to make the tough choices required to reduce spending and balance the budget, just as American households do.
North Carolina’s open seat in the 13th district has been especially receptive to solving our spending problem. Dan Barrett, Andrew Brock, Kay Daly, Julia Howard, Julia Howard, Farren Schoaf, and Vernon Robinson have all committed to vote only for spending increases that are offset and only for budgets with a path to balance.
Their signatures show a willingness to put their promises onto paper and into practice. As activists, we have watched as Congress votes for billions in spending year after year. In 2016, it is time to hold Washington accountable. These candidates in North Carolina’s 13th are taking the first step toward representing this most important of constituent concerns, and ending the trend of irresponsible budgeting.