Senator David Perdue: The Debt Threatens Our Republic
WASHINGTON, D.C. – U.S. Senator David Perdue (R-GA), a member of the Senate Budget Committee, today asked Office of Management and Budget Director Mick Mulvaney about the impact Congress’ broken budget process has on Washington’s ability to tackle our country’s fiscal catastrophe.
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Budget Is All Borrowed Money
Senator Perdue: Thank you for addressing the debt. It's the dirtiest four letter word in our English language today. It threatens our republic…In the last 16 years, under one Republican president and one Democratic president, this federal government has grown in constant dollars from $2.4 trillion to $3.9 trillion. I know it's a philosophical debate up here between parties about big government but let’s just look at results…Big government has failed…In the last eight years, as a federal government, we borrowed about 35% of what we spend, and right now, in the 2016 budget that goes through 2025, CBO projected that we would borrow another 30% per year on average over that period of time. Discretionary spending is directionally $1 trillion on a $4 trillion budget and we are spending less than 30 percent on discretionary, the rest of it is mandatory. That means, by definition, every dollar we spend—every dollar we are debating here today—is borrowed money.
Headed For Train Wreck Again
Senator Perdue: The budget process itself is absolutely broken. It has only worked four times in 43 years...As a matter of fact, over the last 43 years, we have averaged two and half appropriations bills being passed on average during that period of time. We have to pass 12 to fund the federal government. That means we are headed for a train wreck again this year. We will go to September 30th, we will not have the government funded, we will do a continuing resolution, or we will have to have an omnibus where six people get in a room and the rest of us get an up-or-down vote about how we spend a trillion dollars—and that doesn’t even address the $3 trillion of mandatory expenditures.
Accounting For All Government Expenditures
Senator Perdue: Would you support a budget process eventually that would include all expenditures of the federal government?
Director Mulvaney: Senator, yes…I think it’s something we should start discussing.
Senator Perdue: Well, as we know, to get at debt we’re not going to do it by working on the $1 trillion.
Director Mulvaney: No, you can’t. You can’t balance the budget within the non-defense discretionary portion of the budget at all. You simply cannot do it.
Freeing Up Capital To Increase Investment
Senator Perdue: Politicians think that if you want to stimulate economic growth, you need more capital from the federal government. That’s the last thing we need, frankly. I believe that right now we need to do whatever we can to free up the $6 trillion not at work in our economy. The $2 trillion on the Russell 1000 balance sheet because of government policy, not just over the last 8 years, but possibly over the last 20 years. The second is our small banks and regional banks have about $2 trillion on their balance sheets because we’ve taken that capital reserve from 3% to 6% to 7.5% unilaterally. Lastly, the repatriation tax has $2 trillion or more stuffed overseas. My question is, are those things you’re going to focus on not just in this budget, but over the next few years to continue to develop a consistent 3% growth in this economy?
Director Mulvaney: Senator, I think you heard that in part of my exchange with Mr. Warner. You must have more capital investment to get the productivity up.
Senator Perdue: But is that capital from the federal government more productive, or from the private sector?
Director Mulvaney: That’s the point, and what this budget does is tries to focus on private capital investment and not public.
Senator Perdue is the only Fortune 500 CEO in Congress and is serving his first term in the United States Senate, where he represents Georgia on the Armed Services, Banking, Budget, and Agriculture Committees.
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