As far as Rep. Tom Price is concerned, it’s not that “the age of austerity is over,” as President Obama proclaimed earlier this year. It’s hard to claim it ever began.
“It’s a frightening thought that the president considers federal government spending of nearly $3.5 trillion last year to be austere,” said Price, a Republican from Georgia and vice chairman of the House Budget Committee. “Washington continues to spend like today’s bills don’t matter and tomorrow’s will never come.”
“Washington continues to spend like today’s bills don’t matter and tomorrow’s will never come.”
In a speech yesterday at The Heritage Foundation, Price made the point that austerity doesn’t mean what Obama seems to think it does. It means cutting spending and reducing the size and scope of government, he said, not increasing taxes to close budget deficits.
Price cited a new report from Heritage’s Institute for Economic Freedom that examined how 12 European countries—Greece, Germany, Spain and the UK among them—approached the European fiscal crisis. The study found spending cuts were less harmful to these economies than tax increases in reducing deficits and that countries that practiced fiscal discipline before the recession had greater flexibility and firmer recoveries.
“America must pay attention,” he said. “As our nation approaches a similar fiscal crisis, perhaps we should take lessons from our friends in Europe.”
That means working to balance the budget, he said, as well as reforming Medicare, Medicaid and Social Security to ensure long-term viability. It also means tax reform that simplifies the code and reduces rates and “fundamentally” changing the way Congress spends money.
“All of the inertia in Washington is to spend more money—regardless of whether or not Congress acts,” he said.
He pointed to the United States’ own history with this debate—that when both President Kennedy, a Democrat, and President Reagan, a Republican, cut taxes, revenue grew for the government.
“We believe economic growth happens when the American people keep more of their own money to save, spend and invest as they see fit,” Price said.
This comment shows the congressman gets it, according to Salim Furth, senior policy analyst at The Heritage Foundation and editor of the European fiscal crisis report.
“Dr. Price showed that he understands the magnitude of the budget gap facing the U.S. in the next few decades and understands that it can’t be fixed without reforming Social Security, Medicare, and Medicaid,” Furth said. “It’s a really good sign when congressional leaders are willing to get into the weeds, study the numbers and the history, and make policy based on the evidence.”
>>> Watch the full speech: