No On Budget Act of 2018
H.R. 1892 – Bipartisan Budget Act of 2018: NO. This measure abandons any pretense of fiscal responsibility and increases federal spending caps by nearly $300 billion ($2,400 per household) over the next two years. It sets up a structure that will allow Congress to bypass its own budget rules and extends a laundry list of subsidies and special-interest tax breaks. It also suspends the debt limit for a year, for obvious reasons. It has a few silver linings: it repeals IPAB (Obamacare’s rationing board), gives the Pentagon predictable funding for the next two years and provides disaster relief.
Congress approved a massive tax reduction with my support in December. It is essential for economic growth and is already having a dramatic positive effect on wages and business expansion. However, having cut taxes, Congress has a keen responsibility to restrain spending growth – a responsibility it repudiates with this measure.
Taxes and debt are both driven by spending. Indeed, they are the same thing. Once we have spent a dollar, we’ve already decided to tax it: the only question is whether we tax it now, or borrow it now and tax it in the future. But borrowing also has serious implications for the present: government borrows from the same capital pool that would otherwise be available to loan for consumer and home purchases and business expansion. A lack of fiscal restraint now undermines the economic growth we have achieved with the tax cuts.
Interest rates are already rising, and economists warn that a sharp increase in deficits could cause markets to charge even higher rates for federal borrowing. A one percent increase in interest rates would add $200 billion to our ANNUAL borrowing costs, dwarfing the few cost-savings reforms we’ve managed to enact and threatening a debt spiral that would end in a sovereign debt crisis.