WASHINGTON, D.C. – Republican members of the House Budget Committee have sent a letter to Congressional leaders urging the inclusion of spending restraints and controls to combat rising inflation as part of any discussion over the upcoming debt limit expiration.
Over the past two years, the federal government has recorded its highest budget deficits in history and largest yearly expenditures that have led to historic levels of inflation. The current debt limit suspension, set to expire on July 31st, provides a critical opportunity for Congress to institute responsible restraints over government spending and set America’s finances on a more sustainable path.
“Congress cannot steer this country out of a fiscal crisis with a penny-wise and pound-foolish approach that ignores the unsustainable fiscal trajectory we are currently on. Already we are witnessing the effects of unchecked government spending on our economy with record inflation that is driving up the cost of food, clothing, and energy for American workers and families. Over the next ten years we are projected to spend $5.4 trillion on interest on our national debt alone – a direct result of the explosive government spending spree Congress will set in motion if it fails to implement proper fiscal guardrails. With the debt limit expiring this month, Congress should take this opportunity – as it has numerous times in the past – to seriously consider and implement deficit reduction policies that will protect the economic health of our nation and taxpayers’ pocketbooks,” said House Budget Committee Republican Leader Jason Smith.
The Congressional Budget Office (CBO) projects the fiscal year 2021 deficit to be $3 trillion, which marks the second highest in American history under current projections – last year’s deficit was the highest. According to CBO, spending is projected to total $6.8 trillion in 2021 and $63.4 trillion over 2022-2031. Additionally, net interest spending is projected to total $5.4 trillion over the next ten years, more than all income taxes paid by the bottom 90 percent of earners. The high costs of these payments to service the debt will also lead to an untenable future for America’s finances.
“These latest CBO projections do not even account for the Democrats’ new spending agenda. President Biden and Congressional Democrats are attempting to enact at least a $3.5 trillion spending plan and potentially trillions of dollars more which includes policies that will harm working Americans,” wrote House Budget Committee Republicans. “This harmful spending agenda, coupled with CBO’s current projections, demonstrates that Congress must take action to rein in out-of-control spending and enact policies that foster fiscal responsibility.”
Historically, the debt limit debate has been tied to deficit reduction policies ranging as far back as 1985. Based on historic precedents and the fiscal challenges facing the federal government as a result of runaway spending, House Budget Committee Republicans in their letter suggest a number of potential budgetary and fiscal policies for Congressional leaders to consider as part of the upcoming debt limit debate and legislative activity.
Read the House Budget Committee Republicans letter to Congressional leaders here.