Thank you, Dr. Elmendorf, for coming before our Committee today to talk about the CBO’s Budget and Economic Outlook.
Your testimony and this latest report remind us that, between June of 2009, when the recession technically ended, and last December, payroll employment rose by a mere 6 one hundredths of one percent (0.06 percent).
Compare that to the same period of time following past recessions. During those recoveries, employment rose by an average of 4.4 percent.
Unemployment is too high because job growth is too low. And job growth is too low because – contrary to the conventional wisdom here in Washington – we cannot tax, borrow and spend our way to a prosperous future.
One of the biggest threats to the economy is the rapid and seemingly relentless growth of government spending and debt. CBO is projecting a deficit of $1.5 trillion this year with the level of publicly-held debt rising to 69 percent of GDP by the end of the year, up from 40 percent at the end of 2008.
In a few short years, the CBO projects government spending to drive our debt to crisis levels, overwhelming the entire economy and drowning the next generation in red ink.
The President has asked us to raise the debt limit to accommodate all of this spending and borrowing. But the recent experience of Europe teaches us that we cannot keep making unaffordable promises without eventually hitting a real debt limit – a limit on our borrowing imposed by credit markets in a state of panic.
Endless borrowing is not a strategy. Spending restraint must come first. Federal Reserve Chairman Bernanke counseled us yesterday that the Congress needs to begin taking credible steps to reduce our looming longer-term structural budget deficits in order to grow the economy today.
We must restore the foundations of economic growth – low taxes, reasonable regulations, sound money, and spending restraint. We must apply our timeless principles to the challenges of the day.
If we act soon, and if we act responsibly, we can gradually phase in reforms to our major entitlement programs to save them from bankruptcy and ensure that people in and near retirement will be protected.
Federal health care spending is at the heart of our budget problems. Some have suggested that I am critical of CBO for its budget score of the new health care legislation. That is not correct.
The nonpartisan professionals at CBO must score the legislative language that is put in front of them.
This is not in any way a dispute with CBO. It is a dispute with the authors of the new health care law – and with their use of budget gimmicks, deceptive accounting, and highly dubious offsets.
We cannot begin to meet our fiscal challenges unless we have an honest debate about health care costs. As Chairman Bernanke reminded us yesterday, federal health care spending is driving our unsustainable deficits and debt, and the new law has done nothing to significantly reduce the strain that exploding health care costs are putting on the nation’s finances.
Hiding spending to justify the creation of a new unaffordable entitlement doesn’t get us any closer to solving the problem. We need to advance fiscally responsible, patient-centered reforms that actually reduce costs and expand coverage.
I look forward to your testimony today, Dr. Elmendorf. I hope we can learn more today about the budget and economic outlook and begin to put in place policies that lead to a permanent increase in jobs and put America on path of a more prosperous future.
With that, I will yield to Ranking Member Van Hollen for an opening statement.