Sen. Toomey Unveils FY 2012 Budget
"The time to choose is now. And the time is running out."
WASHINGTON, D.C. - Today, U.S. Senator Pat Toomey (R-Pa.) unveiled his fiscal year 2012 budget that balances the budget in nine years.
Cosponsored by Sens. Jim DeMint (R-S.C.), David Vitter (R-La.), Tom Coburn (R-Okla.), Richard Burr (R-N.C.), James Risch (R-Idaho), Marco Rubio (R-Fla.), Ron Johnson (R-Wisc.) and Mike Lee (R-Utah), Sen. Toomey's budget will put the country on a fiscally sustainable path that will increase economic growth and job creation for all Americans.
Below is a transcript of Sen. Toomey's comments at today's press conference:
Senator Pat Toomey:
Good afternoon everyone and thanks for coming, and I want to thank my colleagues and all of our staff for all of the hard work that they have been and are continuing to put into this idea of a budget resolution. Today we wanted to announce our intention to introduce a budget and to share with you an overview of some of the features that this budget will contain.
Let me start if I could and remind everyone that government spending this year reaches 24 percent of GDP. This is twice the level that the government reached, as a percentage of GDP, during the huge expansion that occurred during the New Deal. If you look at nominal terms, federal spending has doubled since just the year 2000. This, of course, has led to ever increasing annual budget deficits.
In 2006, our budget deficit was about 1.9 percent of GDP; in 2007, it was only 1.2 percent of GDP. But last year, our deficit was fully 10 percent of the size of our total economic output. This year, it's over 9 percent, and this government is borrowing 40 cents of every dollar that we're spending. Annual deficits, of course, become the accumulated debt as bonds are issued to cover them. Interestingly, for decades, our debt was relatively stable as a percentage of GDP - around 40 percent in 1988; 41 percent of GDP in 2008. But at the end of this fiscal year, our debt will be 69 percent of GDP, and we are on a trajectory to soon reach debt of 100 percent of GDP - a level that is enormously problematic.
And let me touch on some of the perils of this kind of deficit and debt accumulation. The fact is the persistence of these deficits and the recent dramatic increase in their size - these are simply indications that we are currently on an unsustainable fiscal path. And I say unsustainable because absent the kind of fundamental reforms and discipline on spending that we need, these deficits will only grow - both in absolute terms and as a percentage of GDP. In addition to that, the debt that results from these annual deficits will increasingly cause slower economic growth, higher taxes and less security. Increased government spending means a reduction in the amount of private investment; it means higher taxes on the American people; it means less economic growth, fewer opportunities and less quality of life.
The good news is that these deficits represent a political problem - a political challenge. They are not themselves caused by an economic challenge. They're political in nature, so there's a political solution. Simply put, deficits are not inevitable; they can be stopped if we in Congress have the will to stop them. I think we were sent here by our constituents to exercise leadership and to demonstrate a willingness to solve the problems we have been asked to solve. And this is one of them.
So we set out a goal for this budget, and the goal was to demonstrate that it is in fact possible to balance the budget within 10 years without raising taxes. And in fact, we could do this by, in part, adopting pro-growth tax policies that will accelerate the recovery, create job growth and create the broad base on which the revenue will be raised to balance the budget.
I will share with you a few of the highlights. This budget that we will be introducing soon will balance in 2020 and demonstrate a modest surplus in 2021. It will reduce the publicly held debt to about 52 percent of GDP by 2021 down from level that is already nearly 70 percent of GDP. It does this, in part, by lowering spending to 18.5 percent of GDP - which is the level at which historical revenue has come into the government, and I think it's just very important that we get started.
Let me just mention one other thing. It's my view that a permanent solution to the fiscal challenges that we face will require broader reforms than what we have in this budget. For instance, ultimately, we need to reform the Social Security program; we need to reform Medicare. But this budget represents what we think of as a necessary first step. It reaches balance. It does so within the foreseeable future, within 10 years in fact, and in the process, I hope that it will demonstrate and earn for us a restored trust in our ability to grapple with the big problems that we face. This in turn, will buy us the time we need for the long-term reforms for our federal budget.
I'm not aware of any country that has ever dramatically grown its government, generated massive spending beyond its means, run up huge deficits, accumulated massive debt, monetized part of it and then lived happily ever after. We won't be the first. We're either going to stay on this current path and suffer the consequences that will come from this very irresponsible spending - the consequences of diminished opportunity at best - or we're going to depart from this path and adopt the fiscal discipline that our constituents expect of us and adopt the pro-growth reforms that will allow our economy to recover and allow us to enjoy another great American century.
The time to choose is now. And the time is running out.