Sen. Bob Corker, R-Tenn.
Member, House Banking Committee
We face many challenges as a country, but after four years in Washington and a lifetime in business, I believe unsustainable spending habits and fiscal insolvency pose the greatest threat to our economic stability, freedom, way of life and future as a nation.
We are in real danger of becoming the first generation of Americans to leave our country in worse shape than we found it.
This year, the federal government will spend $1.5 trillion more than it will take in, borrowing 40 cents of every dollar. To put that in perspective, the average Tennessee household earned $43,000 in 2008.
If that family applied Washington logic to its budgeting, the family would spend $71,500, in other words, $28,500 more than it earned.
The gap between spending and revenue is almost four times the historical average. Even when we reach historical revenue levels, we are still projected to be spending nearly six percent more of our gross domestic product than we take in, and the gap will continue to widen.
By 2035, on our current trajectory, our debt will reach 185 percent of GDP, a situation that economists and analysts of every persuasion deem as disastrous. If this occurs, interest payments on our debt, half of which goes to foreign countries, will reach nearly nine percent of GDP – as much as we currently spend on national defense, education, roads, and all government agencies combined.
In 43 presentations throughout Tennessee during the fall, I presented this information and shared my plans to introduce legislation to cap spending at a sustainable level, force Congress to make tough choices and incentivize economic growth.
The result is the Commitment to American Prosperity Act, S. 245.
The CAP Act, cosponsored by Senators Claire McCaskill, D-Mo.; Lamar Alexander, R-Tenn.; Richard Burr, R-N.C.; Saxby Chambliss, R-Ga.; Mike Crapo, R-Idaho; Jim Inhofe, R-Okla.; Johnny Isakson, R-Ga.; Mark Kirk, R-Ill.; Jon Kyl, R-Ariz.; and John McCain, R-Ariz., would, for the first time, set an across-the-board, binding cap on all federal spending.
The fiscal straitjacket created by the CAP Act would result in $7.6 trillion less spending over a 10-year period than projected current policy, and it would change the way Washington does business.
The beauty of the CAP Act is that it imposes fiscal discipline and smaller government, while incentivizing lawmakers to pass policies that promote economic growth.
Specifically, the CAP Act would:
Put in place a 10-year glide path to cap all spending – discretionary and mandatory – to a declining percentage of the country’s gross domestic product, eventually bringing spending down from the current level, 24.7 percent of GDP, to the 40-year historical level of 20.6 percent, and
If Congress fails to meet the annual cap, require the Office of Management and Budget to make evenly distributed, simultaneous cuts throughout the federal budget to bring spending down to the pre-determined level. Only a two-thirds vote in both houses of Congress could override the binding cap, and
For the first time, eliminate the deceptive "off-budget" distinction for Social Security – providing a complete and accurate assessment of all federal spending.
Washington continues to borrow and spend, and despite the pleas of the American people, there is no end in sight. As we approach our debt limit of $14.29 trillion and more and more Americans – Republicans, Democrats and Independents – call on Washington to get spending under control and reduce our deficit, I see no better time to change course.
Cutting trillions of dollars from the federal budget in the coming years won’t be easy or painless; it will require backbone and discipline on the part of policy makers and shared sacrifice for the country.
But I believe in American "exceptionalism." The American people, when they understand the stakes, have always risen to the occasion.
I believe Americans are signaling a willingness to make short-term sacrifices for the long-term good of our country and a demand for commensurate actions from their elected officials.