Congressional leaders led a national debate in July 2011 about the problems of federal overspending and overborrowing. Unfortunately, at the end of the debate, Congress enacted a so-called Budget Control Act that did little to control overspending and vastly increased borrowing. Congress then scooted out of town for the month of August.
Congress left behind a new Joint Select Committee on Deficit Reduction, which some call a super-committee, to make recommendations on getting spending and borrowing under control, with a statutory goal of reducing the deficit by “at least” $1.5 trillion over fiscal years 2012 to 2021. The new Committee should take seriously the words “at least” and produce comprehensive recommendations with real substance that will both get federal spending and borrowing under control and encourage savings, investment, economic growth, and creation of jobs.
The American people should demand recommendations from the new Committee that are equal to the great economic challenges our nation faces. Congress must drive federal spending down — including by fixing ever-expanding entitlement programs — toward a balanced budget, while preserving our capability to protect America, and without raising taxes. Congress should also get the federal government out of the way of the private sector, to encourage the saving and investment that generates economic growth and the jobs that millions of Americans need. It can be done. The Heritage Foundation has shown how, with Saving the American Dream: The Heritage Plan to Fix the Debt, Cut Spending, and Restore Prosperity.
Heritage delivered Saving the American Dream today to every Senator and Representative on the new Joint Select Committee on Deficit Reduction. As the Heritage letter to the Committee explained, Heritage’s plan balances the federal budget permanently, within ten years, at no more than 18.5 percent of the economy; moves Social Security, Medicare, Medicaid, and welfare programs from a governing principle of entitlement to one of insurance, thereby preserving the programs for future generations at an affordable cost; moves to a pro-growth, job-creating single unified tax system; and maintains a strong national defense. Heritage tailored its plan for Saving the American Dream closely to the five principles that guide Heritage in formulating and promoting conservative public policies: free enterprise, limited government, individual freedom, traditional American values, and a strong national defense.
With the annual rate of economic growth at an anemic 1.3 percent, with 9.1 percent of the American work force unemployed, and with the U.S. Federal Reserve signaling not to expect much improvement before the middle of 2013, the Joint Select Committee on Deficit Reduction should begin immediately the serious work of making recommendations to Congress to get federal spending and borrowing under control and to free the private sector to invest and create more jobs. That is a tall order, but nothing less will save the American dream.
Heritage has urged the Joint Select Committee on Deficit Reduction to adopt the recommendations in Saving the American Dream. The Committee should think big, really big.