Congress is once
again engaging in fiscal irresponsibility and endangering the American economy
by raising the debt ceiling, this time by $800 billion dollars. One particularly
troubling aspect of today's debate is how many members who won their seats in
part by pledging never to raise taxes, will now vote for this tax increase on
future generations without so much as a second thought. Congress has become
like the drunk who promises to sober up tomorrow, if only he can keep drinking
today. Does anyone really believe this will be the last time, that Congress
will tighten its belt if we just grant it one last loan? What a joke! There
is only one approach to dealing with an incorrigible spendthrift: cut him off.
The term "national debt" really is a misnomer. It is not the nation's
debt. Instead, it is the federal government's debt. The American people
did not spend the money, but they will have to pay it back.
Most Americans do not spend much time worrying about the national debt, which
now totals more than $8 trillion. The number is so staggering that it hardly
seems real, even when economists issue bleak warnings about how much every American
owes – currently about $25,000. Of course, Congress never hands each taxpayer
a bill for that amount. Instead, the federal government uses your hard-earned
money to pay interest on this debt, which is like making minimum payments on
a credit card. Notice that the principal never goes down. In fact, it is rising
The problem is very simple: Congress almost always spends more each year than
the IRS collects in revenues. Federal spending always goes up, but revenues
are not so dependable, especially since raising income taxes to sufficiently
fund the government would be highly unpopular. So long as Congress spends more
than the government takes via taxes, the federal government must raise taxes,
print more dollars, or borrow money.
Over the last three years, we have witnessed an unprecedented explosion in
federal spending. The national debt has actually increased an average of $1.6
billion a day since Sept. 30, 2003!
Federal law limits the total amount of debt the Treasury can carry. Despite
a historic increase in the debt limit in 2002 and another increase in 2003,
the current limit of $7.38 trillion was reached last month. So Congress must
once again vote to raise the limit. Hard as it may be for the American people
to believe, many experts expect government spending will exceed this new limit
Increasing the national debt sends a signal to investors that the government
is not serious about reining in spending. This increases the risks that investors
will be reluctant to buy government debt instruments. The effects on the American
economy could be devastating. The only reason why we have been able to endure
such large deficits without skyrocketing interest rates is the willingness of
foreign nations to buy the federal government's debt instruments. However, the
recent fall in the value of the dollar and rise in the price of gold indicate
that investors may be unwilling to continue to prop up our debt-ridden economy.
Furthermore, increasing the national debt will provide more incentive for foreign
investors to stop buying federal debt instruments at the current interest rates.
Mr. Speaker, what will happen to our already fragile economy if the Federal
Reserve must raise interest rates to levels unseen since the '70s to persuade
foreigners to buy government debt instruments?
The whole point of the debt ceiling law was to limit borrowing by forcing Congress
into an open and presumably somewhat shameful vote when it wants to borrow more
than a preset amount of money. Yet, since there have been no political consequences
for members who vote to raise the debt limit and support the outrageous spending
bills in the first place, the debt limit has become merely another technicality
on the road to bankruptcy.
The only way to control federal spending is to take away the government's credit
card. Therefore, I call upon my colleagues to reject S. 2986 and, instead, to
reduce government spending. It is time Congress forces the federal government
to live within its constitutional means. Congress should end the immoral practice
of excessive spending and passing the bill to the next generation.