Averting a Default
On Monday, I reluctantly supported the debt ceiling compromise for several important reasons. First, America will run out of money in early August, putting us at risk of a default. The ratings agencies have threatened to downgrade our AAA credit rating, which would drive up interest rates, shrink our GDP, and collapse our economy. For every 1% increase in interest rates, we lose a trillion dollars worth of spending cuts we enact.
There is a particularly well researched explanation of the debt ceiling problem at www.bipartisanpolicy.org. Click on the debt limit analysis, and pay particular attention to the Bloomberg.gov debt bubble link.
Recognizing the very real threat of default and downgrade, we had to find a way to avoid this disaster while preserving our core principles. Constitutional conservatives only control one half of one third of the government, and the federal government has been hardwired for decades to spend ever increasing amounts of our tax dollars, so we were facing very long odds in the fight to control spending.
Despite these daunting obstacles, Speaker John Boehner managed to forge a solution that preserved our core principles.
First, this agreement prohibits any new tax increases. Second, it enacts enforceable spending caps for the next decade that will restrain future spending. It cuts more than one dollar of spending for each dollar the debt limit is increased, with spending cuts totaling $2.1 trillion over 10 years. Finally, this legislation guarantees a vote on the Balanced Budget Amendment by requiring each chamber of Congress to vote on the amendment before the end of the year.
I have co-authored the Balanced Budget Amendment every year since 2001, and I am an original cosponsor of the Cut, Cap and Balance Act. I am fiercely committed to balancing Washington’s checkbook the same way that most states and American families do.
You can always count on me to do the right thing for the right reasons and to approach every vote as a free market, constitutional conservative. While Speaker Boehner was accurate in saying this plan is far from perfect, he deserves credit for the extraordinary job he did negotiating the largest possible package of cuts that could pass the Democrat Senate and the White House.
We have much more work ahead of us to balance the budget and improve our economy. We need to get the federal government out of our way and let Americans save, invest, and create jobs. Texas is proof that tax cuts, deregulation, and tort reform are the best ways to create jobs and grow the economy. I am committed to these goals, but it will take a conservative majority in the Senate and a conservative in the White House to work alongside our conservative majority in the House.
This battle was the first in a much longer fight to restore the constitutional limits on the federal government and eliminate the roadblocks to job growth created by decades of unrestrained spending, taxation, and over regulation. This agreement moves America in the right direction, and you can count on me doing my part to keep us moving in the right direction.