Restore Fiscal Health, Grow U.S. Economy

Pat Toomey
Allentown Morning Call

As I traveled across Pennsylvania last year, I promised Pennsylvanians that I would dedicate myself to two key priorities in the U.S. Senate: restoring economic growth and private sector job creation, and putting our federal government on a sustainable fiscal path.

These two goals are inextricably connected. We cannot maximize economic growth without getting our government’s finances in order. And we can’t get our finances in order if we don’t maximize growth.

We need a federal budget that accomplishes both goals of strong, private-sector job creation and restoring fiscal discipline. I introduced just such a budget. But first, some context.

Today, we are barreling toward a fiscal crisis like a downhill freight train. In only the past decade — since 2000 — total federal spending has doubled. Last year’s level reached 24 percent of our nation’s economy — a post-World War II record and far higher than recent years have averaged. This spending surge has resulted in massive, record-breaking deficits. As recently as 2007, our deficit was only 1.2 percent of our gross domestic product. This year it is more than 9 percent, or $1.4 trillion. Our government is borrowing about 40 cents of every dollar it spends. This unsustainable behavior is already costing us jobs as employers resist hiring new workers in this worrisome, uncertain environment.

Unfortunately, President Obama and congressional Democrats have refused to show the leadership our country needs. The president’s proposed budget only exacerbates our fiscal crisis, adding $9.5 trillion to our national debt over the next 10 years and job-killing tax increases.

But at least the president proposed a budget, however inadequate. That is more than can be said for the Democratic-controlled Senate, which has announced that it has no intention of introducing a budget for the second year in a row.

This is an abdication of leadership. That is why I introduced, along with a number of my Senate Republican colleagues, a responsible and common-sense budget for fiscal year 2012 that would balance the budget in nine years and encourage economic growth and job creation immediately.

My budget reaches a $50 billion surplus in 2021. It does so, in part, by gradually reducing spending to 18 percent of our total economic output, or gross domestic product, and reducing our publicly held debt from this year’s 69 percent of GDP to 55 percent by 2021. In short, it demonstrates that it is possible to balance our budget without job-crushing tax increases.

Reducing our deficit is just one part of the plan to get our economy moving again. My budget also calls for job-creating, across-the-board tax reform that will enable us to dramatically accelerate economic growth.

My budget would dramatically simplify the tax code by eliminating special interest tax credits and carve-outs for politically chosen winners. It would consolidate the current six individual income tax brackets into three, cut the top individual and corporate tax rates to 25 percent, and index the alternative minimum tax for inflation.

Just a couple of weeks ago, the Senate voted on four budgets, including mine. While none of these budgets passed, my common-sense plan to balance the federal budget received the most votes. In contrast, President Obama’s budget received zero votes. Not a single senator from either side of the aisle supported his budget.

But these failed votes leave a lot of work for Congress as we also confront the $14.3 trillion debt ceiling this summer. The administration and some in Congress have advocated increasing the debt limit and giving Uncle Sam another credit card with no spending cuts or reforms. This is unacceptable.

As Congress and the administration tackle both the debt limit and the lack of a budget for next year, it is imperative that we take serious action now. We do not have the luxury of kicking the can down the road and passing our mounting debt on to our children.

I am not aware of any country that has ever dramatically grown its government, spent well beyond its means, ran massive deficits, accumulated huge debts, monetized large portions of its debts, and then lived happily ever after. We won’t be the first.

We will either stay on our current path and suffer the inevitable consequences of fiscal crisis and economic stagnation, or we will change course and adopt the fiscal discipline and pro-growth reforms that will enable us to have another great American century.

The time to choose is now. And time is running out.

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