In my last newsletter, I wrote that we are facing critical issues arising from out-of-control spending, a massive federal debt and slow job growth. What has changed since that time? Nothing, except gas prices approaching $4 a gallon in Idaho.
America continues to face a major financial crisis, yet only a handful of us in the Senate view it as such. When it comes time to vote on the debt ceiling, I will refuse to increase it unless major spending cuts and a balanced budget amendment are passed. Those who predict a financial crisis if the debt ceiling is not raised are correct, but they fail to note that an even larger financial crisis will occur if the debt ceiling is raised without a massive reduction in the deficit spending that is the norm in Washington.
In this newsletter I discuss further my thoughts on these important topics and, as always, appreciate your feedback.
I want to extend my sincere gratitude for the incredible privilege of representing you in the U.S. Senate. Vicki and I often talk about the great trust you have given us. I work every day to earn and keep that trust.
Last month, the U.S. reached the debt ceiling, or in other words, the limit on how much the government can legally borrow. This is the fourth time we have reached the ceiling under President Obama and the 11th time in the last 10 years. Clearly, America has a spending problem.
To make matters worse, the federal government will spend $3.8 trillion this year. For every dollar spent, more than 40 cents of that dollar will be borrowed. To put it in perspective, the Treasury Department has to borrow more than $4 billion every day. That's more than Idaho's annual budget.
This simply can't go on.
In the coming months there will be much debate about how we confront this serious situation. Some in Congress will say we should just raise the limit and continue with business as usual. Others will admit it's a problem, but say there is no other path forward. There is, however, something we can do. It's the same thing families do - create a plan to cut spending and then actually cut spending.
As I wrote in a recent editorial, such a spending plan should be bipartisan and wide-ranging. The president should take a leadership role in this plan, something he has not done.
The reality we face is to make the tough decisions today or wait for our creditors to make them for us tomorrow. We can do this, but the time for action is now.
I am a co-sponsor of a balanced budget constitutional amendment because we must do something about our skyrocketing debt. This amendment requires the federal government to make the same difficult choices every family, business and state have to make. It astounds me that many members of Congress aggressively fight the balanced budget idea so they can continue their deficit spending.
The new balanced budget amendment takes a different approach than previous attempts by first requiring a balanced budget and second capping that budget at 18 percent of Gross Domestic Product - the historic level of tax revenue from the U.S. economy. Previous amendments focused on spending caps. This bill uses the historic level of tax revenue as a benchmark instead of the historic level of spending.
This approach to a balanced budget is more realistic to handle our problem. If we cap our spending at current or slightly reduced levels, we still would need to borrow and add to our debt. The new approach forces the federal government to do what states do - live within their means and give everyone an incentive to grow our economy. The bill does have provisions allowing for increased debt limits in times of war or emergency.
A balanced budget amendment would have to pass both houses of Congress by a 2/3 majority and be approved by 3/4 of states before being added to the Constitution. Votes on the issue are expected soon.
As I'm sure you've noticed, gas prices were near $4 a gallon in Idaho and topped that level in many parts of the country. This impacts not only transportation, but also heating costs and virtually every other aspect of our lives. The U.S. needs to control more of its energy future to lessen the volatility in this sector.
Nearly 90 percent of the world's oil is controlled by a handful of countries. Consequently, when America needs more oil, our limited options include pleading with royal families and 'petro-dictatorships' like Venezuela to increase production.
It is time we increase our domestic oil production and reduce the amount of oil we rely on from unfriendly regimes. In my work on the Energy Committee, I have questioned the Energy Secretary on this issue and joined with a bipartisan group of senators in writing the president to encourage his administration to work faster in reviewing permits for drilling in the Gulf. We're also encouraging drilling in more parts of Alaska and the outer continental shelf.
Increased gas prices are a huge burden on household budget and businesses. The White House needs to act now on increasing production instead of trying to raise taxes on oil products that are only passed on to the consumer. The domestic oil industry produces jobs in America, where I want to see them, instead of jobs in Brazil where the president recently promised to fund oil exploration.
In the meantime, the president has authorized the release of 30 million barrels of crude oil from the U.S. Strategic Petroleum Reserve. The reserve was established as an emergency supply of oil to be used during times of crisis, like when Iraq invaded Kuwait and after Hurricane Katrina. I would like to hear from you on whether the reserve should be tapped at this time. You can vote HERE on my main web page.
Despite the rumors and fear-mongering, Medicare will not disappear. In fact, recent budget proposals would change nothing for folks currently enrolled in Medicare and those shortly going into the program. The program, however, is unsustainable in its current form and must be updated and reformed to ensure younger Americans actually receive benefits when they come into the Medicare program.
If no adjustments are made, program trustees predict the Medicare trust fund accounts will be completely exhausted by 2024.
House Budget Chairman Paul Ryan should be applauded for attempting to solve the problem. While it may not be the ultimate plan adopted, it is a serious effort to lead the discussion on keeping Medicare viable for future generations.
As these discussions continue, please know that I support protecting Medicare benefits for existing and soon-to-be recipients, while making sure this program is on strong financial footing for future generations.
You may have seen in the news that states like California and Illinois, among others, are billions of dollars in debt. I recently joined several of my colleagues in introducing legislation prohibiting the federal government from bailing these states out of their financial predicaments. This legislation is a warning to them that they should not look to the federal government for a handout.
Those states put themselves in that position and I do not believe the frugal people of Idaho should have to pay for their freewheel spending. Difficult decisions were made on the state budget in Idaho and folks have determined to live within their means. Other states need to as well.
I spoke with Fox News about this issue in an interview that can be seen here.
The economy remains one of my chief concerns in my work in Congress. Recent reports on consumer confidence and job numbers are disheartening and indicate more must be done to get our economy back on track. While the government's role in this endeavor should be limited, there are some policies it can enact to encourage growth.
Trade agreements with South Korea, Panama and Colombia have been sitting on the shelf since 2006 and 2007. Estimates put the impact of these agreements at more than $10 billion in exports and nearly 400,000 jobs. What's the hold up?
Shortly after President Obama took office he went back to all three countries and raised issues on the already signed deals. Now that many of these concerns have been addressed, the White House has refused to submit the pending deals for congressional approval, despite the president promising as much in the State of the Union address. The reason is the Trade Adjustment Assistance (TAA) program.
The TAA program provides benefits and services to workers who become unemployed due to the impact of international trade. As part of the stimulus package, the administration temporarily ramped up the TAA program to more than $1 billion a year. Now that the program has reverted to its historic levels, the president is holding the trade agreements hostage unless the stimulus TAA provisions are increased and extended to unprecedented levels. This isn't right. The president needs to put politics aside and move these trade agreements forward.