Runaway budget deficits and a ballooning national debt could be avoided by capping federal spending at 2007 levels, says U.S. Sen. George LeMieux, who is proposing just such a resolution.
“The effects of having to make some priority decisions in Congress are dramatic,” the Florida Republican tells Newsmax. “We would balance the budget by 2013, and we would reduce our national debt from $13 trillion, which is it is right now, to just $6 trillion.”
The debt is estimated to be $22 trillion by 2020, so the saving would be even greater, he says. “If we do these things, we can really put our country on a strong financial footing and save America.”
The federal government spent $2.7 trillion in the 2007 fiscal year, compared with about $3.5 trillion slated for this fiscal year.
LeMieux’s projection of balancing the budget in 2013 contrasts with the nearly $800 billion deficit the Congressional Budget Office (CBO) projects for that year under President Obama’s latest budget proposal.
The senator, who says his plan uses more conservative numbers than the White House’s, explains that he picked 2007 as a baseline year because that was the last year of economic growth before the recession.
LeMieux’s proposal also would repeal the stimulus, which he says “really blows the spending out of control.”
At the same time, the Bush tax cuts would be renewed under LeMieux’s plan. “If you look at Florida families and in terms of families across this country, they would be happy to have what they made in 2007,” LeMieux says. “It was the last year of the decade with bigger and bigger economies, and to me it makes sense.”
He has received a positive reception from many of his Republican Senate colleagues, LeMieux tells Newsmax.
So far, Sens. Jim DeMint , R-S.C.; Roger Wicker,R-Miss.; and James Risch, R-Idaho, have signed on as co-sponsors. He also hopes to garner support from moderate Democrats.
“It’s a political risk, I guess, to say if you are going to stop spending at 2007 levels, you would mean that we actually have to govern,” he says. “We have to make difficult decisions about cuts. And a lot of my colleagues don’t want be on the record for a plan that’s actually going to cut governmental programs.”
Were Congress to enact LeMieux’s plan, it would take 60 votes in the Senate and 261 votes in the House to spend beyond the 2007 levels. Both houses would be required to look for a way to cut spending to 2007 levels each year under the senator’s plan.
Current debt projections endanger the United States’ triple-A bond rating and jeopardizes its international standing, LeMieux says. “Money that should be used in America is being deterred from America,” he says. “We are becoming less and less of a good bet.”
Driving home that point was a May 10 letter from Weiss Ratings, an independent ratings agency, pressuring Moody’s, Standard & Poor’s, and Fitch to downgrade the country’s bond rating.
"The U.S. government's triple-A rating is an anachronism," said Martin D. Weiss, chairman of Weiss Ratings. "Given the rapid deterioration in our nation's finances and the spreading threat to sovereign debt overseas, the downgrade is long overdue." Losing the triple-A rating would mean higher interest rates.
The senator describes the fiscal path now as “unsustainable” because the federal government will be able to pay only for its social programs, and necessities such as transportation and national defense could suffer.
“Every dollar we take in goes to entitlements,” LeMieux tells Newsmax. “Right now, we are spending $200 billion to suspend debt service, and that number is expected to go to $900 billion by 2020. That’s more than we spend on the Department of Defense.”
Continuing this pattern would place the federal government in the same dire straits as Greece, which has required a bailout from the European Union, Lemieux warns.
“I believe that, if we cut government spending and we allow for the free market to fire up as much as it possibly can, I think you would increase revenues anyway,” LeMieux says. “I think our numbers are a bit conservative and that you would get better numbers than I am suggesting.
“The more fiscally sound the United States government is, the stronger the United States economy is going to be.”
Former Virginia Gov. Jim Gilmore, who now is president and CEO of the Free Congress Foundation, says Lemieux’s plan is a good first step but says more needs to be done to keep the federal government from going bankrupt.
Lemieux’s plan does not go far enough to curtail spending because it defers some of the more difficult decisions, such as what kind of a country we will have and how to pay for it, Gilmore says. This is especially true when it comes to Obama’s healthcare plan and other existing entitlements.
“The problem we have is we are moving in the wrong direction, and I appreciate the fact the senator is trying to fix the problem, and the problem is spending,” Gilmore says.
The Senate Budget Committee’s Democratic staff could not be reached for comment.
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