Speech by Senator Mike Enzi
At the Mercatus Center Luncheon
April 24, 2012
I appreciate the opportunity to join you today. I want to begin by thanking the Mercatus Center for hosting this lunch and members of the distinguished panel for making the time to be here to discuss the most important issue facing our country: what to do about our national debt, which is fast approaching $16 trillion.
I also want to thank those of you who have joined us to be a part of this discussion. Everyone in Washington should be engaged in a serious conversation about how we can get our debt and deficit in check.
There are a variety of options on the table, but one thing is clear: we are spending too much money and borrowing too much money. In fiscal year 2011, the government brought in slightly more than $2.3 trillion in revenue. At the same time we collected $2.3 trillion, we spent about $3.6 trillion. In other words, we overspent by $1.3 trillion. That’s an astonishing amount of spending, at a level that cannot be sustained.
In 1997, when I came to Washington, our national debt was $5.4 trillion. Today, it is nearly $16 trillion, which means that every man, woman, and child’s share of the debt is just under $50,000.
What will happen if we don’t act and cut spending? We won’t be able to afford the military we need. People won’t get their Social Security checks. Roads won’t be fixed. All our money will go toward paying the interest on the debt. People shouldn’t doubt this is real. There were riots in the streets in Greece when their government was forced to face the realities of debt. I have news for you; our debt per person is more than Greece’s debt per person.
I understand that today’s speakers will focus on a variety of budget options. I appreciate that there are a number of plans out there to get our country back on track financially and I applaud anyone who is willing to take a serious look at cutting spending. I want to focus for a few minutes on legislation that Congressman Mack and I have introduced to cut spending by one percent.
Our legislation, which is sometimes called the Penny Plan, would require the federal government to cut spending by 1 percent each year for five years, and then cap spending at 18 percent of the economy, which has been the average level of revenue coming into the federal coffers since World War II. These simple steps would lead to $6.1 trillion in spending cuts and a balanced budget in fiscal year 2017.
The plan doesn’t mandate any specific cuts. Congress could decide to cut one penny from every single program – to ensure that everyone has to sacrifice at some level. Conversely, Congress has the option to make larger cuts from some areas and smaller cuts from others. What’s important is that the plan puts in place a framework to cut spending and balance our budget.
The plan also doesn’t raise taxes. We can all agree that we need to have a discussion about taxes in the context of tax reform that will make America more competitive. However, when it comes to deficit reduction, the real key is a reduction in spending. We’ve got more government now than ever in our history. We can’t afford it and I would argue we don’t need a lot of it.
We are told by some naysayers that the plan would require draconian cuts. I don’t see how that is the case. Most businesses across the country could find a way to reduce spending by 1 percent if necessary. Most families could find a way to spend one penny less out of every dollar if they were facing a financial crisis. The federal government spent $3.6 trillion last year. It doesn’t make any sense to me that we can’t work together to find 1 percent of the budget to cut from when the stakes are so high and the result would improve the future outlook of the country significantly.
Once again, I thank the Mercatus Center for hosting this important event. It will provide an opportunity to debate the important budgetary challenges we face, and I thank you for attending today’s event.