The president recently announced he would freeze certain types of federal spending in an effort to save approximately $250 billion over the next 10 years. Over that period, deficits are projected to accumulate to $9 trillion. So, with this “spending freeze” in place, we will only spend $8.75 trillion that we don’t have.
Adding $9 trillion more in debt isn’t sustainable, and neither is adding $8.75 billion.
While the president likes to say that he inherited the nation’s debt from his predecessor, the fact is, from the day President Obama took office until the last day of fiscal year 2010, the debt held by the public will grow by $2.3 trillion, according to the White House’s Office of Management and Budget. You can’t blame that on the previous president. President Bush added approximately $3 trillion to the debt during the entire eight years he was in office. So, in just 20 months, President Obama will have added about as much debt as President Bush ran up in his entire presidency.
For the first year of the Obama administration, the numbers are eye-popping. The president’s budget doubles the debt in five years and triples it in 10. There was the wasteful $1.2 trillion stimulus bill that was a failure, according to the administration’s own yardstick. There was the $410 billion omnibus spending bill that increased non-defense spending by 10 percent. And there is the looming $2.5 trillion government takeover of health care that the Senate passed on Christmas Eve. We have had three huge increases in the debt ceiling — the third, for $1.9 trillion, was passed last week, only weeks after the previous increase.
Americans are rightly concerned about the amount of money we are borrowing from other nations such as China to help finance the exploding debt. They’re also concerned about taxes. They know these levels of spending are not sustainable and that a proposal to freeze spending for a small piece of the budget won’t cut it. Americans look ahead and see new taxes on the horizon.
Unless Congress takes action this year, taxes are set to go up by $2 trillion over the next decade, starting in 2011. The child tax credit will be cut in half. Marginal tax rates will go up. Dividends and capital gains taxes will increase. It is no wonder that businesses are timid about hiring and investing, and consumers are more cautious than ever about their own spending. Even if economists say we are technically out of the recession, dollars have not begun to flow because people and businesses are uncertain about what their tax burden will be in the coming years. They are very nervous that it will be higher.
We can eliminate some of that uncertainty and instill some much-needed confidence in the economy by extending current tax law. If the president is looking for a job stimulator, he should call on Congress to keep taxes right where they are — in fact, if we can cut them in some areas, that would be even better. I think businesses would react immediately and positively to the news and start hiring again.
Americans have had it with the soaring level of spending and debt. They know that enormous spending and skyrocketing deficits take a bite out of the economy, dragging down our gross domestic product and standard of living, and making investors and job creators very nervous.
Americans know you can’t spend what you don’t have; but the message Washington has been sending to them is that even though they are bound by limits, Washington is not. It’s time to listen to the American people and follow their instructions: stop spending, keep taxes where they are, reduce them where we can, and stop running up deficits.
Sen. Jon Kyl is the Senate Republican Whip and serves on the Senate Finance and Judiciary committees. Visit his Web site at www.kyl.senate.gov or his YouTube channel at www.youtube.com/senjonkyl.