In 2012 federal revenues were 24 percent higher than in 2001. Since that time spending has doubled, increasing from 18.5 percent of our GDP to 24.3 percent. If Congress would simply reduce spending to 2007 levels, it is projected there would be a surplus of $170 billion.
Republican congressional leaders emerged from a recent retreat in Williamsburg, Virginia with a plan to suspend the debt ceiling law until May 18. The strategy is to delay the fight yet again. Over the last two years there have been seven budget battles, and each time Republicans have been fearful to take a stand.
Despite the President’s alarmist rhetoric during his January 14 press conference, Republicans do not have the power to force the U.S. to default on its obligations. Yet our leaders seem unable to explain the nuances to the American people: There is plenty of revenue coming into the Treasury to pay all interest as it comes due. And if Republicans refuse to take a firm stand, Democrats will continue this game of chicken; meanwhile we face a national crisis of unsustainable debt. It is well past the time for negotiation; it is time for a line in the sand.
Meanwhile in Austin, there is good news: Texas has a budget surplus, primarily due to increased revenues from the energy sector. And while the comptroller’s numbers provide $101.4 billion to the 83rd Legislature for general purpose spending, some lawmakers believe that the term “surplus” is a misrepresentation. During the last session, budget tricks and gimmicks such as deferred spending were used to balance the budget. Several legislators including Representative Dan Branch, R-Dallas, are calling for more transparency in the budgeting process. Comptroller Susan Combs has also warned legislators that due to uncertainties in the federal government, as well as instability in Europe and China, that the revenue estimate is subject to change.
Governor Rick Perry sees the projected surplus as an opportunity to cut taxes and increase growth. Predictably, there are calls from Democrats to restore spending cuts from the last session. Americans for Prosperity issued the following statement: “The strong growth in state revenues eliminates any argument for tapping the state’s rainy day fund to cover unpaid bills in the current budget or ongoing obligations in the 2014-15 budget.”
It is obvious that our elected officials need continued encouragement to focus on cutting wasteful government spending. Contact your congressman, senators and state legislators and request that they take a firm stand for fiscal responsibility – with a focus on cutting spending.