Opening Statement of U.S. Senator Chuck Grassley
Budget Conference Committee
Wednesday, October 30, 2013
I’m glad to be here to get to work with our House colleagues to reconcile our differences on the fiscal year 2014 budget resolution. This is regular order. This is how this process is meant to work.
Our country is on an unsustainable fiscal course, yet this is the first time since 2009 since we’ve worked together to reconcile a budget resolution.
This is just the first step of this conference process. I’d like to make a simple request regarding process. The people’s business ought to be public.
We’ve got important and difficult matters before us. The deliberations and deal-making shouldn’t be done in the dead of night in a backroom with only a small handful of individuals.
To regain the trust of American people, we must demonstrate that we can work together to confront our fiscal challenges. There is an enormous amount cynicism among the populace about Washington.
Part of that cynicism, I believe, comes from the fact that many of the recent budget deals have been concocted in a back office by a few leaders, and rank and file members were left to take it or leave it. They weren’t debated. There was no deliberation. And nearly no one had an opportunity beforehand to even read them.
This is a terrible way to govern. It’s part of the reason people don’t trust Washington to do what’s right. We should use this budget conference to change that perception and hold our meetings in public, in the light of day.
The President and the Senate Democratic leadership have insisted upon a balanced approach to replace the sequester cuts. This so-called balanced approach would include tax increases with some spending cuts. The problem with this logic is simple.
The fiscal problems facing the federal government are not balanced. The problem is not that we tax too little; it’s that we spend too much. The offer of a so-called balanced plan is wrongheaded. The problems we face are caused by a one-sided problem – spending.
The Congressional Budget Office projects that by 2038, federal spending will be 26 percent of GDP, compared to the 40-year average of 20.5 percent. Spending on health care entitlements and Social Security will double over the next 25 years.
As a result, deficits will continue to grow and the resulting debt will grow faster than GDP, a path which CBO says is ultimately unsustainable. CBO’s projection included revenue levels higher than the historical average. There is the root of the problem --spending growth outpaces even the higher revenue.
The President talks a great deal about growing our economy, creating jobs and growing the middle class. I don’t believe we need to grow government in order to create jobs, to grow the economy or increase the prosperity of Americans. A more prosperous America does not result from an ever larger, more intrusive government.
President Kennedy knew the virtue that wealth, left in the hands of entrepreneurial Americans, would create new jobs, spur economic growth and grow the economy.
President Kennedy stated in 1962, the tax system “exerts too heavy a drag on growth in peace time; that it siphons out of the private economy too large a share of personal and business purchasing power; that it reduces the financial incentives for personal effort, investment, and risk-taking.”
Yet, the Senate budget, which I opposed, would increase taxes by $1 trillion. President Obama got his tax increase in the fiscal cliff deal of January 2013. We increased taxes on job creating Americans by $600 billion. Now is the time to focus on the other side of the ledger—the spending side.
I remain cautious about plans to trade spending reductions that are in law as a result of the Budget Control Act, for the promise of spending cuts or entitlement reform at some point in the future.
I will not entertain a so-called balanced plan that punishes small businesses and job creators with higher taxes in exchange for minor entitlement reforms that do not change the deficit and debt trajectory of our country.
If we’re going to reform our entitlement programs to ensure their viability for future generations, we should do just that. Perhaps the proposals included in President Obama’s budget could be a starting point, and should be up for consideration.
I’m aware that there is a great deal of angst surrounding the impending sequester cuts, particularly those to the Department of Defense. The defense of our nation is one of the primary constitutional responsibilities of the federal government and we should not take it lightly.
However, there should be no illusion that the Department of Defense is immune from wasteful spending, fraud and mismanagement that costs taxpayer millions and billions of dollars.
I’ve spent a great deal of time and effort on oversight of DoD’s accounting and audit practices. I can tell you from experience that there is absolutely no basis for anyone to believe that the Pentagon is spending every taxpayer dollar wisely without a penny to spare. With DoD lacking even the most basic audit controls to detect and root out waste and fraud, opportunities for significant savings abound without even cutting a single program.
So, while I recognize the concerns about these Defense cuts, and I wish we had gone about it in a more thoughtful way. We should seriously consider giving agency heads more flexibility in managing the sequester cuts. But, I know firsthand that billions of dollars of taxpayer money at the Pentagon is lost to waste, mismanagement and negligence.
Again, I’m glad that we’re finally engaged in this process. It’s time to get to work to find sound fiscal solutions to our nations’ challenges.