Good morning, everyone, and thank you for joining us.
We are here today to discuss the Congressional Budget Office’s Budget and Economic Outlook. As always, the CBO has done a tremendous amount of difficult work to produce this report, and we appreciate their time, input and expertise. Additionally, I want to thank Director Elmendorf for testifying today – and for his diligent work. I know we look forward to hearing what he has to say.
In reviewing this report, one thing is abundantly clear: our nation is on an unsustainable path. That’s not just my characterization. CBO itself notes that when we look at the long-term budget outlook “…debt would still be on an upward path relative to the size of the economy in 2039, a trend that would ultimately be unsustainable.”
Deficits are historically high right now – and they’re projected to start rising again in 2017, and over the next decade, we’re going to add $9.5 trillion more to the national debt. That means debt held by the public as a percentage of the economy will grow to 79 percent by the end of the decade, and remain at these elevated levels. This is at the same time that the amount of revenue that will be coming in to the government will be above the historic average. In other words, this is not a revenue problem. It’s a spending problem, and for all that has been said about the recent decrease in annual deficits, we have not solved our nation’s fiscal challenges. In fact, under the status quo, our fiscal and economic concerns are only going to get worse.
The projected increase in debt will mean $5.6 trillion in interest payments alone over the next decade. In 2025, interest on the debt will top $800 billion — which is more than we spend right now on the Departments of Transportation, Commerce, and Health and Human Services combined. That’s just the interest. That’s just money going out the window and not being used on other national priorities.
Meanwhile, Medicare and Social Security are continuing to slide further toward insolvency. Doing nothing about that is not an option. We are talking about the health and well-being of millions of Americans who count on these vital programs – not just future generations but current beneficiaries as well.
So what does all of this fiscal turmoil mean for the future of our country? Simply put: if we stay on the current course: less opportunity for American families and job creators. Economic growth will average just 2.3 percent annually over the next decade – below the historical average of 3.3 percent. That’s unacceptable. Over the past several years, with each subsequent report, CBO has continued to lower its projection for average GDP growth. This, too, is unsustainable.
Our job as policymakers is to listen to the families and entrepreneurs across this great country and do what we can to support a positive environment for job creation and economic growth. Right now, a lot of what is coming out of Washington – higher taxes, stifling regulations, an inefficient and ineffective federal bureaucracy – is clearly not helping.
And it’s the middle class – in particular – that’s losing out. For middle class families, wages have stagnated and median income is down – under current policies. We can’t stay on this path. It’s unsustainable both for our budget and for working Americans.
To change direction we need to focus on policies that can produce real results, ideas that will save and strengthen crucial health and retirement programs, balance the budget, and empower individuals, families and Americas innovative workforce, not Washington bureaucrats. That’s how we build the foundation for a healthy economy that will benefit every single American.
In the weeks and months ahead, here in the Budget Committee we will explore how we can achieve those goals, and I know Director Elmendorf’s testimony today will be an important part of that effort.
Thank you. I now yield to the ranking member, Mr. van Hollen.