While economic indicators show we have begun to claw our way out of a devastating two-year recession, high unemployment, a continued slow-down on credit and limited access to investment capital for businesses show we are not out of the woods yet. We also have to fund our troops overseas and find a way to reduce the spiraling costs of health care.
Most of all, we have to make job creation our top economic priority.
Our ability to meet these challenges and spur economic recovery has been compromised badly by a $1.4 trillion federal deficit. It’s important to keep in mind that President Obama inherited $1.3 trillion of this deficit at a time when our economy was in free-fall. Spending to keep the economy from crashing has been necessary, but we also need to set a path for fiscal restraint.
When former Vice President Dick Cheney said “deficits don’t matter,” he was not on firm economic ground. Deficit spending kept as a manageable percentage of our economic output is one thing, but a deficit of the magnitude we have today is not sustainable.
If left unaddressed, the federal deficit could trigger a disastrous inflation in the long term and compromise America’s financial competitiveness and national security. And the bigger our deficits grow the fewer resources our children and grandchildren will have for critical infrastructure, education and other necessary investments. To put it into perspective, in 2008 the American taxpayer paid more than $250 billion to our creditors in interest payments alone. If we do nothing, by 2019 the American taxpayer will owe more than $700 billion in annual interest — more than we spent to fund two wars and finance all other defense responsibilities in fiscal year 2009.
So we have a daunting challenge: We need to spur job creation, spend wisely and also chart a course for a balanced federal budget.
I’d like to see Congress and the administration develop a plan for long-term fiscal responsibility. Unfortunately, partisan politics gets in the way of pragmatic solutions, and there has been more interest in casting blame for deficit spending than breaking the mold and trying a new approach.
Last week, I joined with several of my Senate colleagues from both sides of the aisle to introduce legislation to bridge this partisan divide. The bill we introduced would create a special bipartisan commission to review the entire federal budget and make recommendations for long-term fiscal sustainability, with specific spending cuts, program changes, and a mandate that Congress vote on those recommendations. It will be hard to swallow, but it is medicine we need to take.
I’d favor a top-to-bottom review of all federal programs, including identifying those that are not necessary, and steps to ensure the long-term solvency of Medicare and Social Security.
We’ve done this before. Beginning in 1989, Congress created a bipartisan Base Closure and Realignment Commission that has taken the thorny issue of closing defense bases and put the process above partisan politics. This process has worked well.
Right now, we are $12 trillion in debt — nearly the maximum federal debt allowable under current law. Before the end of the year, Congress must pass legislation to increase the debt limit for the ninth time since 2001, the last year we reported a budget surplus.
Congress should not increase the federal debt without establishing a specific and sure process for deficit reduction and fiscal responsibility. The creation of a special bipartisan commission will help bridge ideological and political divides and make fixing our deficit a shared priority for Democrats and Republicans alike.
Democrat Mark Udall represents Colorado in the U.S. Senate.
