As previously reported, Congress is tackling the nation’s spending and debt through various measures and legislation. The fiscal issues are far from over as future votes loom.
In a news release, Rep. Todd Young, R-9th District, detailed the problems facing Congress and outlined his points of concern regarding these issues.
The Debt Ceiling
The problem according to Young: “Congress sets a limit on the amount of debt that the executive branch — specifically through the U.S. Department of the Treasury — can issue. This debt is typically issued in the form of bonds, which are bought by private investors, our government and foreign governments. The money we make from selling the bonds goes toward paying the bills that have already been authorized by Congress, and we pay interest to the bondholders over the life of the bond. When Treasury has issued bonds and accrued interest that equals the amount of the debt ceiling, it can only issue more if Congress raises the debt ceiling.
...For the past month the U.S. Department of the Treasury has been operating under ‘extraordinary measures’ that give it additional, but limited, means to manage funds.”
Young’s take: “There are legitimate concerns about possible consequences of not raising the debt ceiling. While it may or may not result in economic collapse, it would likely cause our bondholders to lose faith in our credit and cause an increase in the interest rates we pay to bondholders.
... We cannot continue to keep raising the debt ceiling without seriously addressing how quickly we are adding to the debt. For years, we have been spending $1 trillion or more than we take in annually.
This is unsustainable and why we have seen the national debt skyrocket from $10 trillion to $16 trillion in the last four years. If we don’t address our spending now, then our bondholders will lose faith and interest rates will go up whether we raise the debt limit or not.
However, it is important to remember with any budget proposal, the debt ceiling would still have to go up as we get our debt under control.”
The problem according to Young: “Congress passed the Budget Control Act to deal with the debt limit in August 2011. That bill requires at least $1.2 trillion in spending reductions over the next ten years, either through specific deficit reduction steps or an across-the-board reduction known as sequestration. Because the Super Committee tasked with identifying the specific steps failed, sequestration is set to take effect on March 1. Specifically, the sequester will require approximately $492 billion in cuts from the Department of Defense, and an eight percent reduction in non-defense discretionary spending and programs.”
Young’s take: “Last Congress, I worked with the House Budget Committee to come up with a plan to replace the sequester with targeted spending reductions. I voted on these proposals several times, both in that committee and on the floor of the House.
Unfortunately, the Senate never acted. This Congress, I will serve on the House Committee on Ways and Means, where I will continue to work towards reining in our federal spending and debt.
My hope, however, is that we can do so in a specific manner, and not one that blindly cuts everything across the board.“
Continuing Resolution (C.R.) for Fiscal Year 2013
The problem according to Young: “Ideally, each year Congress passes a budget that sets spending priorities and funding levels for every area of the federal government. The
Appropriations Committees in the House and Senate then write bills that direct where that money goes within those limits. These are the bills that actually fund the government. When Congress fails to pass appropriations bills, the government is funded through Continuing Resolutions (C.R.), which typically provide six months of funding at the previous year rate, plus an increase for inflation. When Congress fails to pass either appropriations bills or a continuing resolutions, the government is shut down.”
Young’s take: “The Senate has not passed a budget in four years, and so this normal process has not been completed. Instead, we’ve been funding the government with continuing resolutions.
The C.R. that we are currently operating on extends funding levels for all appropriations from Fiscal Year 2012 until March 1st, 2013, at which point Congress must either come to an agreement on these appropriation bills or continue the current funding levels through another CR.”
The problem according to Young: “The solution to addressing our spending and debt on each of these issues comes through a return to regular order: Congress passes a budget that sets spending priorities and outlines a clear debt reduction process, and then we pass appropriations bills in line with that budget. We cannot continue to run up against our debt limit, deal with indiscriminate spending cuts, and fund the government through continuing resolutions.
That’s why on Jan. 23, 2013, the House passed H.R. 325, the No Budget No Pay Act. This legislation would temporarily suspend the debt ceiling to permit the Treasury to pay obligations due before May 19, 2013. It gives us time to deal with the other issues, which focus more on our spending habits. More importantly, it would require the passage of a Fiscal Year 2014 Budget resolution by both the House and Senate. If a budget is not submitted by the Senate by April 15, 2013, the salaries of the
Members of the chamber failing to agree to a budget resolution will be suspended.”
Young’s take: “In essence, it would force the Senate to finally pass a budget so that we can seriously address our spending and debt. Such a budget should identify
targeted cuts to replace the sequester, establish priorities for funding the government through appropriations bills, and outline a plan to balance the budget and reduce our debt. Once we have done all of that, then we can revisit the debt limit issue in May.
Right now our nation’s debt is larger than the size of our entire economy. Within three years, the interest on our debt will cost our country $1 billion each day. While there are numerous negative impacts from such a debt problem, above all it creates anxiety for all Americans, and the resulting uncertainty threatens our economic security. Rest assured, I remain dedicated to solving this issue and pushing for bipartisan legislation that will reduce spending and get our country on the right fiscal path. Time is running out.”
— Anu Kumar