Moran's Memo: The Time is Now
May 16 2011
“We’ve come to a turning point, a moment for hard decisions. We must act now to protect future generations from government’s desire to spend its citizens’ money and tax them into servitude when the bills come due.” – President Ronald Reagan, 1985
When President Reagan delivered that call to action during his second inaugural address, our national debt stood at $1.8 trillion. Today – 26 years later – that number has soared to $14.3 trillion, and the federal government has reached its debt limit. Congress will soon vote on whether to raise the nation’s debt ceiling for the eleventh time in the last decade. Our country is at a crossroads; the time to heed Reagan’s warning and right our nation’s fiscal course is now.
President Obama has confidently stated, "We will raise the debt limit. We always have. We will do it again."
If only it was that simple. The hard truth is our country is broke; in the last two years, government spending has grown nearly 25 percent and we currently borrow 40 cents of every dollar we spend. This year alone, the federal government will spend $3.7 trillion and collect $2.2 trillion. That is a shortfall of $1.5 trillion. Common sense – Kansas common sense – tells us this pattern cannot continue.
The fact is our national debt is the responsibility of several Congresses and presidents – from both political parties – who have allowed us to live well beyond our means for far too long. And simply raising the debt limit, as President Obama has asked Congress to do, is a nod toward continued complacency.
But, complacency is no longer an option. This was made clear at the end of April when Standard and Poor’s (S&P), one of the world’s Big Three credit rating agencies, downgraded the United States’ future financial outlook from “stable” to “negative.” The announcement sent shock waves through the stock markets. S&P said the United States has “what we consider to be very large budget deficits and rising government indebtedness – and the path to addressing these is not clear.”
S&P is exactly right; it would be reckless to allow our pattern of spending and borrowing to continue without a serious plan in place to reduce the national debt. Americans are paying attention, and are looking for leadership in Washington to confront these problems.
On May 12th, I had my first meeting at the White House with President Obama since becoming a member of the U.S. Senate. The topic of discussion was deficit spending, the national debt and the pending vote on raising the debt limit. Prior to the meeting I had notified the President that I will not vote to raise the debt ceiling without a significant reduction in spending and a change in the way business is done in Washington.
This change will take the leadership of President Obama and willingness from both political parties as we work together to craft a serious plan to reduce our debt. The plan must include significant spending reductions, a balanced budget amendment to the Constitution restricting Washington’s ability to spend money it does not have, and reforms to address our long-term unfunded liabilities.
Some say we need to raise taxes to get us out of this mess. But we don’t have a revenue problem, we have a spending problem. Experience shows that more money raised by Washington, D.C., results in more spending in Washington, D.C. President Obama proved this to be true during a recent speech when he called for tax increases to pay down our debt while, in the same breath, spoke about the need for “additional investments.” Call it what you will, “investment” simply means more spending.
In addition to restraining spending, we must put in place policies that grow the economy and put Americans back to work. By saying “no” to more spending and “yes” to pro-jobs measures, we will reduce the uncertainty in the marketplace, encourage business investment, become more competitive in the global economy, and most importantly create jobs.
The consequences of failing to control our debt will be greater than failing to raise the debt ceiling. The time to correct our failures is now. This is not an academic discussion. It is not a partisan discussion. This is about the future of our country, the standard of living Kansans enjoy, and whether or not there is an American dream to be lived by our children and grandchildren.