Budget for Fiscal Year 2018
House Budget Committee
July 19, 2017
Madam Chairman:
On our current trajectory, the CBO warns that just four fiscal years from now – in 2022 – our annual deficits will surpass a trillion dollars. That’s where economists warn we run the risk of damage or even loss of our access to credit – a sovereign debt crisis. Venezuela is having that now – and even within our own territory, the Commonwealth of Puerto Rico. Pension systems implode, basic services falter and the economy collapses. We will begin running that risk in four years.Two years after that – in 2024 – the CBO tells us that the annual interest cost on our debt will reach $654 billion. That’s more than we currently spend on defense.
You cannot provide for the common defense or promote the general welfare if you cannot pay for it.
We are at the upper limits of the tax revenues that our economy can generate. When tax rates rise above this natural limit, tax avoidance activity increases, capital moves offshore, the economy falters and revenues fall.
We have no choice but to change the spending trajectory and we are running out of time.
This budget barely restrains spending growth over the next decade by using reconciliation for its intended purpose.
Every year we delay, the danger gets closer and our options become more difficult.
I hope everyone will think about this carefully as we begin our work today.
Source: Congressman Tom McClintock
