Senator David Perdue: We Are In The Midst Of A Full-Blown Financial Crisis
WASHINGTON, D.C. – U.S. Senator David Perdue (R-GA), a member of the Senate Budget Committee, today discussed our full-blown financial crisis, and what we must do to get our country back on track. In a Senate Budget Committee hearing, Senator Perdue called on Congress to balance the budget, pay down our debt, and grow the economy, before the consequences destroy our way of life.
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Thank you, Mr. Chairman. I appreciate your leadership and perseverance in this budget process. I would also like to commend the committee staff for bringing this budget resolution in on time and for their tireless efforts.
Being new to the Senate, I have an outside perspective, and it allows me to see our current financial situation the way every working family in America sees it. Back home in Georgia, people are outraged – I am outraged – by the financial irresponsibility of Washington. But there are no innocent players up here in this drama.
My take is very simple: we are in the midst a full-blown financial crisis of our own making. It’s real, it’s serious, and it’s happening right now.
Today in this crisis, we have reached the financial tipping point in three critical areas:
First, today we have over $18 trillion in debt. If interest rates rise to their 30-year average, just over five and a half percent, we would be paying almost $1 trillion in interest alone. That’s just not possible. In 2016, interest expense increases by $50 billion. Imagine, in one year, what we could do to support our troops or pay down our debt with that money. But the problem gets worse.
While current annual budget deficits are down a bit, they are projected to turn around and rise again in the next few years. In the President’s own budget, debt is projected to rise to $26 trillion by 2025. As a business guy, this level of debt is just totally unsustainable.
The second tipping point relates to our future unfunded liabilities estimated in excess of $100 trillion. To put that in perspective, this liability, combined with our current debt, amounts to almost $1 million per household.
The final tipping point involves the Social Security Trust Fund, which is not within the scope of the Budget Committee today. A few weeks ago, the head of the Social Security Administration testified before this committee that the retirement portion of Social Security would be exhausted by 2034 and Social Security Disability would not be able to meet its obligations as early as 2017. Even if we borrow from the retirement side and move funds to the disability side, both will be exhausted by 2033. And this administration has no plan for those people who need it past 2033.
This is what drives my constituents back home in Georgia absolutely crazy. As bad as that is, the worst is yet to come. Over the next 20 years, demands on the trust fund driven by baby boom retirees will cause these costs to rise dramatically. Without changes, Medicare will also be exhausted around 2030.
Over the next year, we’ve got to work together to save Social Security and Medicare and ensure our current seniors and those who need help most in these safety net programs. They’re the most at risk here by our fiscal irresponsibility.
For too long, Washington dysfunction has created gridlock. One side wants tax increases and the other side wants spending cuts. In my experience, neither one will solve the equation in its entirety. We cannot tax our way out of this mess, and we sure can’t cut our way out of it, alone. To break the gridlock and start solving the debt crisis, we simply have to get our economy growing again. One point in GDP growth means over $3 trillion in federal tax revenues over the next 10 years.
The challenge to growing our economy, however, is the fact that current economic policies of the past six years have failed working families who have seen their incomes decline dramatically. We have fewer people working as a percentage of the workforce than any time since 1978. In addition, over the past six years, we’ve allowed four million women to fall into poverty under these policies. Almost two-thirds of small businesses have stopped hiring or have cut back employment because of the Affordable Care Act. Most new jobs being created today are part-time jobs, and the 30-hour rule of the Affordable Care Act is devastating many working families.
In the midst of all that, we now see the Obama Administration again turn its back on working Americans by vetoing the Keystone Pipeline, simply put, a jobs bill.
Exacerbating the problem is the fact that we have more than $2 trillion trapped overseas because of our archaic repatriation tax code. If we could get Washington out of the way, imagine this capital roaring back into our economy, creating jobs, and spurring incredible economic growth. In addition, comprehensive tax reform, which we’ve talked about today on both sides is needed, along with reducing abusive regulations, and unleashing our energy potential here in North America. Doing those three things alone could jump start this economy in a way that we haven’t seen for decades.
This current budget resolution calls for a balanced budget within 10 years, but that is just the first step, in my opinion. Over the next year, this committee has to commit to work every day to find a way to grow this economy, allowing us to balance our budget sooner. Merely balancing the budget is not good enough, however. We need to develop a long-term plan to develop a surplus budget so we can begin to pay this debt down eventually to some more reasonable level over the long term.
To avoid financial calamity, it is time we work in a non-partisan way to break this gridlock. With a crisis of this magnitude, there are no innocent parties here in Washington. Both sides are guilty – even today.
This is really about our commitment to fulfill our oath of office to “protect and defend the Constitution of the United States” by solving this financial crisis right now. We simply have to work together on this budget resolution, both sides, and then commit to developing a surplus plan over the long term to pay down this debt, to save Social Security, and to provide for Medicare in the long term and make sure these safety net programs that we all want are indeed solvent and can be sustained indefinitely.
Winston Churchill once said, “Americans always do the right thing, after they have tried everything else.” Well, it’s high time for us to do the right thing – both sides – right now. God knows we’ve tried everything else.
Thank you, Mr. Chairman.
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