from Senator Michael B. Enzi (R-WY)
“The FY2011 Budget”
Senate Committee on the Budget
One of the quirks about budget mark-up is the fact that members are asked to provide opening statements about a product we’ve not yet seen – the chairman’s mark. Pre-emptive criticism seems unsportsmanlike and unproductive, so grant me the opportunity to express some optimism regarding what I hope I will see in this budget.
The Congressional Budget Office took a look at the White House budget proposal last month and offered a chilling assessment of the impact of the President’s budget on federal debt. By now we’ve all seen the numbers. According to the Congressional Budget Office (CBO), publicly held debt would nearly triple – from $7.5 trillion dollars at the end of fiscal year 2009 to $20.3 trillion in 2020. Debt relative to GDP would explode from 53 to 90 percent of GDP. Net interest would more than quadruple. Clearly this path is unsustainable.
But that’s just the tip of the iceberg. In a recent report, Moody’s Credit Rating agency revealed that it looks at the proportion of federal revenues dedicated to paying interest as a key element for maintaining a triple-A rating. Moody’s expects large, creditworthy sovereign borrowers – like the United States – to devote less than 10 percent of federal revenues to paying interest. Under the president’s proposal, we’ll hit that mark this year. Lucky for us, Moody’s will grant the United States extra wiggle-room based because, in their judgment, lawmakers have the discipline and political will to right our listing ship. The upshot: no downgrade until interest gobbles 14 percent of revenues. Suddenly I don’t feel so lucky.
Mr. Chairman, like you, I supported the creation of a bipartisan commission to restore some sanity and discipline to our Federal ledger. Now that you are an official member of the President’s commission – congratulations -- I hope you will use this mark up as opportunity to lay a foundation for that effort. I know that I and my Republican colleagues on this committee are prepared to assist you in this effort by offering amendments to establish greater budget discipline.
A key to enhanced budget discipline is tax reform. When the U.S first implemented the income tax in 1913, the entire federal Internal Revenue Code could have been contained in a single 400-page textbook. The current version is now over 4,000 pages and that doesn’t count the volumes of regulations and technical advice that the IRS publishes every year to help taxpayers understand the law.
Adding insult to injury, between tax extenders, the expiring income tax cuts, and the temporarily-defunct estate tax, individuals and business have no certainty regarding our nation’s tax policy. This is our Federal tax code, not a quart of milk. Business - large and small - shouldn’t have to check the expiration date of a tax provision to see if it’s still good. Individuals and businesses cannot make hiring and investment decisions in this uncertain tax environment. The indecisive nature of current tax policy is a major impediment to economic growth and recovery. I hope this budget establishes some parameters for tax reform and prevents our entire tax code from becoming one giant annual extender.
As the ranking member on Health, Education, Labor and Pensions Committee, I am very concerned that the new health care reforms will exacerbate our debt crisis rather than heal it. We know that the new law will increase health insurance costs and raise premiums for millions of Americans. It will kill jobs and reduce wages through its new taxes on employers. And it will also raise the deficit.
I know my Democratic colleagues will point to CBO’s analysis of the health care bill to refute this statement, but we know the CBO report has a few shortcomings and omissions:
• The CBO score does not include the cost of fixing Medicare payments to physicians and Democrats have shown no stomach for offsetting the $300 billion dollar cost of a permanent fix.
• The CBO score relies on gimmicks like offsetting 4 years of spending with 8 years of revenue.
• And the new law creates a new entitlement embodied by the CLASS Act.
On the education front, I would like to again remind my colleagues that this is historically a bipartisan policy issue. Given our current economic climate, investing in knowledge and skills is a key tool to speed our recovery. The most immediate action this Congress can take is to reauthorize the Workforce Investment Act (WIA). To fill the jobs that will come on line as our economy recovers, we need to make sure that our workers have the skills they need to be successful. I will look to the budget with this priority in mind.
Being bipartisan does not mean writing a bill behind closed doors, then negotiating with a few members of the minority party to reach the 60 votes needed to clear procedural traps. That’s not bipartisanship - that’s a shotgun wedding. True bipartisanship requires real compromise during an open and fair process. My hope is that the Chairman’s mark reflects priorities common on both sides of the aisle. Otherwise, I fear this will become a party line exercise, which I don’t believe is the change Americans voted for nearly two years ago.