Nick Smith, October 19, 2003

The preliminary estimates for the 2003 deficit are in - the fiscal year ended on September 30 - and they are terrible. The Congressional Budget Office is projecting a final deficit of $535 billion (including $162 billion borrowed out of the Social Security trust fund). This deficit now brings the debt to $6.83 trillion, or $93,571 for a family of four. Make no mistake, servicing that debt will reduce the standard of living for future generations. In response, I have joined with other budget hawks to propose a budgetary austerity plan to bring attention to the problems and hopefully bring spending back into line with revenues.

Government spending has skyrocketed since the "balanced" budget of 1998. (Balanced is in quotes because we never stopped borrowing from Social Security.) Since 2000, spending has risen from 18.4% of gross domestic product to 20.1% even as revenues fell. This explosion in spending is part of a larger trend. The federal budget has increased seven times faster than family budgets over the last two generations. The war cost is a relatively small part of that. Because of this, people see more and more of their paychecks taken by government. Doing nothing will have serious consequences for our children and grandchildren.

We have proposed a successor to the Gramm-Rudman anti-deficit legislation of the 1980s and early 1990s. It would set deficit targets to bring the deficit to zero over the next five years. Spending limits would be enforced by an automatic sequester of excessive spending at the end of any fiscal year in which the limits are breached. Caps would be placed on discretionary spending, limiting increases to the rate of inflation minus one percent. Entitlements would also be limited, and most of them, outside of Social Security and Medicare, would be subject to sunset and reauthorization.

The bill would also fix two serious weaknesses in congressional rules that make it much harder for budget hawks to control spending. Today, each appropriations bill has a target level of spending. When a bill comes to the House floor with pork spending, we can sometimes have it eliminated. However, the bill then has to go to conference committee to resolve differences with the Senate version of the bill. In the conference, they spend the money that has been cut from the bill on other things so final spending is unchanged. The result is no savings, which is frustrating. The proposal would make sure that amounts reduced from a spending bill do not get spent again.

It would also eliminate the "emergency" declarations which are widely abused to circumvent budget limits. No emergency could be declared by the appropriators alone, it would have to be declared by a two-thirds vote of the entire Congress.

It is clear that something has to be done to address out-of-control borrowing and spending. High spending and high deficits will inevitably lead to higher taxes. If we insist on continuing to spend more than we collect in revenues, we will leave future generations with higher taxes, a weaker economy and fewer jobs. That's selfish, short-sighted and unfair. We need to take the few, fairly-modest steps necessary to hold government spending to reasonable levels. We need to do it now.

Nick Smith is a Republican Member of Congress representing the Michigan's 7th Congressional district.