Chairman Hensarling, Chairwoman Murray, members of the Committee, thank you for inviting us here today to discuss the recommendations of the National Commission on Fiscal Responsibility and Reform, and thank you for your continued hard work to improve our nation’s fiscal situation. We know, a little too well, how difficult your job is.
As Co-Chairmen of the National Commission on Fiscal Responsibility and Reform, we spent more than half of 2010 studying the cold, hard facts concerning our nation’s fiscal situation, which you are undoubtedly over familiar with at this point. When asked why we did it, we originally said that it was for our 15 grandkids. However, the deeper we got into the numbers, the more dire we understood our Country's financial situation to be. And we quickly realized we were not doing this for our kids, much less our grandkids, we were doing it for all of us.
We realized that the fiscal problems facing our Country were enormous, the solutions would all be painful, and there simply was no easy way out. We are all going to have to share in the sacrifice that is needed to put our fiscal house in order. Everything must be on the table, and Washington must lead. And right now, this Committee has a unique opportunity to do just that.
While we know better than most how challenging the task in front of you is, we can tell you that the American public is looking for leaders who will make tough choices, and that if the Committee puts forward a credible plan the public will support you. If you are bold, you can put forward a smart, well-formulated deficit reduction plan that not only reduces our deficit, but also maintains our economic health and restores public confidence in America’s ability to govern wisely and prudently.
Unfortunately, time is not on our side and we truly can no longer afford to wait. Washington needs to enact a fiscal plan NOW -- not next year, not after the next election, but now. Continuing to kick the can down the road by enacting short-term, temporary fixes is bad policy, and doesn’t change the fact that we will have to make these difficult choices no matter what – be it now or in the future, when our debt holders force us to take action. The longer we put these choices off, the more difficult and potentially harmful they become.
There are no other ways to say it. We simply cannot delay these difficult choices anymore. Our great Nation’s fiscal house is now made out of straw and any significant blow – an oil shock, a collapse in Europe – can blow our house down. This is certainly no way for such a great country to exist.
We all know how big and real the problem is – we heard it from countless economists and budget experts, and we know that you have too. We aren’t here to repeat those numbers for the millionth time. We’re here to share what we learned as co-chairmen of the Fiscal Commission, in the hopes that it helps all of you to reach a similar deal.
Our plan was developed following six main principles:
Fiscal Commission’s Guiding Principles
- First, we didn’t want to do anything that would disrupt what is still a fragile economic recovery. So we made smaller cuts in 2011 and 2012 and big cuts in 2013, cuts of such magnitude that we would get back to pre-crisis (2008) levels of spending in real terms by 2013. At the same time, we heeded the advice of economists who told us that putting into place a credible plan to reduce future deficits would have a positive effect on the economy by increasing market confidence and providing a more certain fiscal outlook.
- Next, we wanted to protect the truly disadvantaged. In our budget you won't see any cuts in SSI or Food Stamps or Workers Compensation. And we proposed changes to strengthen the safety net features of Social Security that cost money and made achieving our fiscal goals harder.
- We also wanted to ensure that we did nothing to jeopardize the safety and security of the country -- we could not put forward a plan that fixes the budget but leaves our nation vulnerable. We agreed with Admiral Mullen, former Chairman of the Joint Chiefs of Staff, when he said that our Nation's greatest National Security problem is this debt. Thus, while it’s clear that defense spending must be on the table, we made sure that the safety of the United States was our top priority.
- We have to protect our nation’s most important investments, like education, infrastructure, and high value-added research. We need to make these investments in a fiscally responsible manner by taking our limited resources and using them more wisely. Limited resources force you to make choices, and we must make the choices now and work carefully to prioritize our spending.
- We must reform the broken tax code in order to promote growth as well as reduce the deficit. We have the most anti-competitive, inefficient, ineffective tax code man could dream up. The tax code must be reformed to broaden the base, lower rates for individuals and employers and reduce the deficit. We also need to reform the corporate tax system, to create jobs and to make the United States the best place in the world to start and grow a business.
- We have to cut spending wherever we find it -- in the defense budget, the non-defense discretionary budget, the tax code, and in the entitlement programs. It’s simply a fact that our politicians in both parties over a long, long period of time have made promises that they can't keep.
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