In February, the government reported the largest single month deficit in our history - $223 billion. To put that number in perspective, the deficit for the entire 2007 Fiscal Year was $161 billion. This marks the 29th straight month our government has spent more money than it’s taken in. With the deficit growing from out of control spending our nation must confront this issue head on. Families do not have the luxury of printing money or continually increasing their credit card limits. They must make budgets and stick to them.
Right now nearly 9 percent of Ohioans and in some areas of the Third Congressional District over 13 percent of our neighbors are unemployed. This looming debt makes it more difficult to grow our economy and to create the jobs we need to get people back to work. According to a study conducted by economists Carmen Reinhart and Kenneth Rogoff, countries whose debt as a percentage of Gross Domestic Product (GDP) exceeds 90 percent, grow their economies slower than less debt ridden nations. Our percentage of debt to GDP is approaching 94 percent. This debt is holding us back against our competitors around the world.
In Washington D.C., Members of Congress have been debating how to fund the government for the 2012 Fiscal Year set to begin October 1st. There has been a great deal of talk surrounding cuts and efficiencies as we lead up to an agreement. I joined the House this past month in voting for over $39 billion in cuts to take effect immediately. This cut is but a small portion of the budget and only minimally trims our deficit for 2011, which is predicted to exceed $1.2 trillion.
The nonpartisan Government Accountability Office, the President’s Office of Management and Budget, and the nonpartisan Congressional Budget Office have all anticipated that the payments owed to entitlement programs such as Social Security, Medicare and Medicaid, as well as the interest payments we owe on debt will exceed the total revenue we take in each year by 2040. That means we can’t employ a single soldier, man a single border checkpoint, or fulfill any other basic government service or responsibility as mandated by the Constitution without borrowing the money to pay for it.
If Congress and the President do not work together to stunt the unsustainable growth of our debt, the consequences will be grave. In order just to keep the government operating at our current spending level, it requires $4 billion a day in newly borrowed money. Our creditors, many of them foreign nations, have grown tired of purchasing our IOU’s. In fact, in March, the world's largest bond mutual fund sold all of its U.S. Treasury bills and notes. The fund’s management had lost confidence in our leaders to stem the rising tide of debt.
While I joined the House in voting for a solution to this impending issue, the President has been using it as a wedge in his reelection bid for 2012. His tone is not helpful in addressing and resolving the matter at hand. America can’t afford to wait until 2012 for action. We’re ready now. Failure to act on what Erskine Bowles, the Democrat co-chairman of the President’s own National Commission on Fiscal Responsibility and Reform, has called the most predictable crisis in our history is unacceptable. Our economic recovery and position as a world leader depends on our immediate action.