By Congressman Kevin Brady
Texas Insider Report: WASHINGTON D.C. We come to proclaim an end to the petty grievances and false promises the recriminations and worn-out dogmas that for far too long have strangled our politics.
President Obamas Inaugural Address Jan. 20 2009
President Barack Obama has yet to deliver on his promise to change the way Washington works. His steadfast refusal to move past his partys worn-out spending dogmas and preference for economic redistribution is putting America on a fiscal path toward Greece.
On the issue posing the greatest risk to our current and future prosperity
trillion-dollar budget deficits
the president has been all talk and no action. Still he has one last opportunity in the budget that he will unveil on Feb. 13 to move us toward sounder fiscal footing. If he does that he will find many Republicans prepared to work with him.
Relying on meat-cleaver sequesters such as those contained in the Budget Control Act isnt a smart way forward. Such an approach only touches surface-level discretionary spending while leaving the greater threat mandatory spending unchecked. This is akin to putting a Band-Aid on a patients paper cut and declaring him successfully treated while a severed artery is ignored.
Washington knows how to spend money. If Washington were a factory it would manufacture spending. To achieve responsible budget savings government must be retooled with an effective spending-control system.
The good news is that such a proposal already exists. Republicans and Democrats can find common ground in this system without ceding ground on philosophical differences regarding taxes and other important policies.
That new system
the metrics of which have been praised by economists such as John Taylor of Stanford and Simon Johnson of MIT
is embodied in the Maximizing Americas Prosperity (MAP) Act which I introduced last year.
MAP incorporates lessons from our global competitors and U.S. states to put guardrails around future spending. It would return federal noninterest spending to the levels achieved during the
budget years of the 1990s when a Democrat president and a Republican Congress worked together to balance the budget. Such an approach can work again.
Unlike other proposals MAP focuses on the spending Congress truly controls discretionary and mandatory. This noninterest spending is rightly recognized as the problem and is capped as a percentage of Americas potential gross domestic product.
Capping noninterest spending is a superior approach because Congress cannot control interest spending on the debt. This approach discourages politicians from applying pressure on the Federal Reserve to keep interest rates artificially low masking the true cost of deficits and leading to harmful inflation. Using potential GDP which is what the economy would produce at full employment without inflation is a smarter measurement as well allowing for a more predictable budget path and eliminating the effect of cyclical swings in GDP.
MAP would be enforced by a modest yet meaningful sequester. This is necessary because time and again we have learned that Congress doesnt have the willpower to implement an all-or-nothing sequester. MAP provides a new middle way forward
one that wont simply be ignored by a Congress squirming to avoid politically difficult spending reductions.
MAP also introduces:
- Powerful budget reforms including a Sunset Commission
- Prefunding national emergencies through the regular budget
- Insisting on an annual White House budget that stays within the budget caps; and
- Requiring the Congressional Budget Office to assess legislations impact on interest outlays and the federal debt.
If President Obama is unable to accept some of these proposals let us negotiate our points of disagreement. If the president has additional ideas to add fiscal restraint to the spending caps we want to hear them. The point is that both sides must begin somewhere.
Make no mistake; the most pressing issue of our day which we must tackle to ensure the future prosperity of all Americans is government overspending and debt. The harsh reality is that we simply cannot tax our way out of our overspending and debt problem.
We need a balanced approach that includes both a stronger economy to generate new tax revenues and bipartisan guardrails which will help ensure that future presidents and congresses spend within our means.
Congressman Kevin Brady represents the 8th District of Texas. He is vice chair of the Joint Economic Committee and a senior member of the House Ways & Means Committee.
