The Case For CARFA, Part One

Editor’s note: U.S. Representative Todd Tiahrt (R-KS) testified yesterday before the House Budget Committee on the need to restrain federal spending. The concluding portion of his testimony will be published in tomorrow’s edition of NNN.

The President’s tax cuts are to be commended for getting our economy moving in a positive direction again. However, the other half of the formula for economic success is to cut wasteful and unnecessary spending. It is certainly no secret that the federal budget is filled with examples of duplicative, inefficient, and failed Federal agencies and programs. I am here today to discuss legislation that I have introduced that I believe would eliminate much of the fraud and abuse that persists in our federal government in a politically viable manner.

When Republicans gained control of Congress in 1994, we proposed to eliminate wasteful and deficit spending. In fact, in the Contract with America, which several of us in this room signed, we pledged to (and I quote) “restor(e) fiscal responsibility to an out-of-control Congress, [by] requiring them to live under the same budget constraints as families and businesses.” For several years, we held to that promise by modestly curtailing spending growth and balancing the budget in 1998 for the first time since the 1960s. Since that time, however, federal spending has jumped drastically and we have returned to a time of massive budget deficits.

Some of this increased spending is understandable – especially in the defense budget, considering the one-two punch of being under-funded by the previous administration and the exigencies of 9/11. But these events do not justify the fact that non-defense discretionary outlays have increased by over 30 percent over the past three years. These tremendous spending increases have been a significant cause of the deficits that we now face.

This problem can also be traced to the billions of taxpayer dollars that go every year to federal programs and agencies that are redundant, wasteful, and altogether irrelevant. I certainly support a 1% cut in non-defense, non- homeland security discretionary spending as well as a cap of 1% percent on the rate of growth of mandatory spending. These are measures that we must take given our current fiscal climate. But I also think there are other meaningful ways that we can confront the deficit, including by rooting out fraud and abuse in our government.

Some say that a growing national debt will force us to curtail government growth. So far we have seen none of that. It is also commonly believed that economic growth will reverse the effects of running up the national credit card. Although the economy is perking up, we cannot become complacent. As a matter of fact, Federal Reserve Chairman Alan Greenspan warns us that “impressive gains” in our economy will not outshine the negatives of our growing budget deficits. Mr. Greenspan promised that the Fed will hold short-term interest rates; now at a 45-year low of 1%, then he warned that these rates “will not be compatible indefinitely” with the Fed’s fight against inflation.

If interest rates go up, what will happen to the stock market, the housing market and personal credit card debt? A rise in interest rates could stall economic growth by damaging fledgling business projects and cause other complications.

We now have just about $380 billion left to spend before we have to start borrowing again! We are spending a few billion dollars a day, so it won’t be long. As you know, deficits REQUIRE the Treasury to borrow money to raise cash needed to keep the Government operating. Yes, our economy is rebounding, but we are simply not keeping pace with our rate of spending — therefore the deficit is growing like a gelatinous monster from a “B-grade” movie.

Concerned grassroots conservative organizations including The Club for Growth, The Free Congress Foundation, Citizens Against Government Waste, The Heritage Foundation, The American Conservative Union, Citizens for a Sound Economy have been vocal in their criticism of the rate of growth of the deficit and the large spending increases that we have witnessed over the past few years. We can no longer ignore the fact that all this spending is endangering our economic vitality. The government cannot spend or give anything until they have collected the money to do so. Magic does not happen. Taxes and borrowing happen.

It has become increasingly clear that Congress’ normal procedures cannot address the spending and waste problems that persist within our federal government. Time and again, we see congressionally-authorized programs become institutionalized, ultimately becoming a permanent fixture at the expense of taxpayers. This ties up precious federal resources that could be used toward paying down the national debt or higher Congressional priorities. By cutting out unnecessary Federal programs and agencies, we will send a strong message that we are serious about exercising fiscal responsibility and controlling government spending. With this in mind, I have introduced a bipartisan piece of legislation that will accomplish this very purpose.

Todd Tiahrt (R) represents the 4th Congressional District of Kansas.

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