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Press Release

Letter Sent to the House Stressing Spending Restraints


Dear Congressman:

The annual House Republican Conference retreat offers Members an excellent opportunity to identify the key issues facing the American public and develop strategies to address them during the second session of the 107th Congress. On behalf of the nearly 300,000 members of Citizens for a Sound Economy (CSE), I wanted to take this opportunity to inform you of our legislative priorities and to pledge the assistance of our network of dedicated activists to fight for lower taxes, less government, and more freedom.

CSE is very concerned about the potential for unsustainable government growth in the coming years and months as the nation responds to the realities of the post-September 11th world. In the State of the Union address, President Bush signaled his willingness to increase funding for homeland defense and the United States Military. In addition, President Bush called for over $55 billion in new domestic spending to expand existing programs and create new entitlements. Taken in whole, the new spending would threaten to dislocate a record amount of capital from the private sector at a time when our economy can simply not afford it.

There is a better way. As Director of the Congressional Budget Office (CBO) Dan Crippen made clear in his testimony before the Senate Budget Committee, the recession is the cause for 70 percent of $300 billion decline in estimated FY 2002 revenue. In many ways, this is no different from the hundreds of corporations that have revised earning estimates, or reported negative quarters due to the slowdown in economic activity. Yet, while these private sector entities cuts costs, reduce budgets, and expect their staff to do more with less, the government takes the opposite approach.

While some cyclical spending, like unemployment benefits, will rise as the unemployment rate ebbs upward, discretionary federal spending only increases when Congress authorizes the appropriation of additional funds. With federal revenues lagging, now is the time to stand up to calls for increases discretionary spending and to force federal agencies to enact the same sort of accountability measures and cost containment as the private sector.

Containing government spending is also important for Social Security, the future of which is certain to be an important topic in the fall. For at least the past 18 years, economists, statisticians, and federal actuaries have warned of the impending collapse of Social Security. With the start of the baby boomer retirement now on the immediate horizon, reforming Social Security is no longer a political issue, it is a lawmaking imperative. The Congress must act now to bring about wholesale improvements in the program.

You should begin by giving Americans the opportunity to invest a portion of their payroll taxes in equities, bonds, mutual funds, interest-bearing deposit accounts, or whatever private accounts they desire so that they can take ownership of their future. Each time that adjustments to Social Security have been made in the past, benefits have been reduced and taxes have increased. Not only is this course of action unsustainable given the size of the baby boom generation and the shrinking worker-to-beneficiary ratio, but also a mistake when Personal Retirement Accounts offer the potential for genuine wealth creation. 2002 is the year to force a vote on reform so that its opponents can explain how they would address this crisis.

In addition, CSE asks that you make the tax cuts signed into law last June permanent. Under current law, all of the tax cuts would expire in 2011. The economic consequences of this automatic repeal are profound: consumption, investment, and estate planning decisions have all been negatively impacted. Making the tax cuts permanent would increase certainty and promote consumer and investor confidence.

There are many issues with which you will be faced during the next year, but these three have the potential to shape the direction of public policy for years to come. I hope that you will join with CSE to promote these important issues during the second session and work to defend economic liberty wherever and whenever it is under assault.


Paul Beckner,
President and CEO

To read the letter sent to the senate click here.