Balancing the Federal Budget
This week, the House of Representatives considered H.J.Res. 2 to amend the U.S. Constitution to require a balanced federal budget. This would be an important first step toward rectifying our financial situation because we have a long road ahead if we intend to pay back the more than $21 trillion in debt we currently owe.
I was frustrated to see this measure fall short of the two-thirds majority required for passage. A constitutional mandate would legally bind both the president and Congress to produce annual budgets which spend no more than the government receives in revenues. It would ensure spending restraints are not negotiable, unlike what we experienced with the recent Bipartisan Budget Agreement and subsequent $1.3 trillion omnibus spending bill.
In 1995, a balanced budget amendment passed the House and came within one vote of passing the Senate. At the time, our national debt was $4.9 trillion, which is less than a quarter of today’s total. I can only imagine how much better off we would be if this measure had passed and been ratified. While I am disappointed the balanced budget amendment failed once again, I remain committed to policies which would eliminate our deficit in the short-term and pay down our debt in the long-term including entitlement reform, encouraging workforce participation, and stimulating economic growth.
Congressional outlays can be classified in two ways: mandatory and discretionary spending. Mandatory spending is a way of saying Congress does not have to approve it on an annual basis, rather it can be thought of as being on auto-pilot. This represents about 62 percent of federal spending, which is mostly due to Social Security and Medicare. When you hear Congress debating the latest budget or spending bill, there is almost never mention of these programs which consume the largest portion of federal spending and continue to grow virtually unabated. It is vitally important we start the reform conversation now in order to preserve these programs for future generations.
Tax reform is a big step toward growing our economy, but we need to find ways to bring more Americans back into the workforce in order to take full advantage of the economic growth it will generate. Approximately six million jobs are going unfilled in our country. This is particularly concerning given five million young adults ages 16 to 24 are still not working or in school.
We must pursue creative solutions which pair people who are capable of succeeding in the workforce with employers who understand their needs and have the capacity to train them for jobs they desperately need filled. This week the Ways and Means Human Resources Subcommittee, which I chair, held the first in a series of hearings on ways to address this challenge, and I look forward to continuing the conversation.
Tax reform, greater workforce participation, entitlement reform, and reductions in spending would go a long way to reduce our deficit and eventually begin to reverse it. As late as a year ago, tax reform was a dream most people believed we would never accomplish, yet we did. It is time to build on this success and guarantee a better future for Americans.