Johnson, Banks Call on Congress to Flatten the Debt Curve

WASHINGTON – Today, in a letter to House and Senate leadership, Republican Study Committee (RSC) Chairman Mike Johnson (LA-04) and RSC Budget & Spending Task Force Chairman Jim Banks (IN-03) outlined a conservative blueprint for Congress to flatten the nation's steeply climbing debt curve while it works to provide necessary COVID-19 relief (click here to view the signed letter).

The proposal is the latest in a long line of RSC policy products aimed at eliminating debt and deficits, including "Cut, Cap, and Balance" and the annual RSC budget. It is also included as one of five pillars in RSC's 37-point Conservative Framework for Recovery, Accountability and Prosperity (click here for more information).

In the letter, the Task Forces urges careful consideration of America's dangerous level of national debt as it works to provide relief to families and businesses impacted by the COVID-19 pandemic. The Task Force warns that, without action, additional deficit spending combined with a nosedive in federal revenues due to an economic downturn will be a significant threat to the future stability and prosperity of the nation.

In an effort to offer Congress a solution to protect the physical AND fiscal health of our country simultaneously, the Task Force is issuing two critical policy recommendations:

1. Congress should offset future COVID-19-related deficits. Given the present fiscal crisis, the thought of any more debt-financed spending seems unimaginable. This is especially true considering the enormous burden our debt will already place on Americans for generations to come. For this reason, Congress should offset the debt impacts of any further COVID-19-related legislation. The RSC Budget & Spending Task Force's FY 2020 budget "Preserving American Freedom" contains more than $10 trillion in specific programmatic deficit reducing reforms. There are more than enough recommendations contained in the budget to ensure that if further COVID-19 legislation is needed, it be carried out in a way that does not jeopardize the solvency of our republic. Reforms contained in the budget range from thoughtful, long-term approaches to contain entitlement spending to those designed to eliminate irresponsible federal spending on items such as the Kennedy Center, Brand USA, the Forest Products Laboratory, the Legal Services Corporation, the Corporation for Public Broadcasting, and the Stennis Center, among many others.
2. Congress should implement a long-term spending control mechanism. The last time the Congress took deliberate action to address our national debt was nearly ten years ago when it enacted the Budget Control Act (BCA) of 2011, which sought to reduce federal spending by over $1 trillion. The BCA was enacted in the wake of the Great Recession and after two consecutive years of deficits over $1 trillion. Given the BCA's expiration at the end of next fiscal year and impending multi-trillion-dollar deficits, it is critical that Congress act to control our out-of-control spending. Any new mechanism should include restrictions on the growth of both mandatory and discretionary spending, avoid reliance on tax increases, and stabilize our nation's debt. The Task Force supports enacting a mechanism that would limit the annual growth of future spending to 60 percent of the growth in federal revenues (which would itself be capped as a percentage of GDP). Another debt-stabilization approach is a "debt brake" that ties spending to potential GDP, as the Maximizing America's Prosperity (MAP) Act, sponsored by Rep. Kevin Brady's (TX-08), would accomplish. Moreover, the RSC's budget proposes a number of tools that each would contribute to the long-term stabilization of the national debt. For instance, it recommends automatic votes to consider the deficit reductions offered in a budget resolution, expanding the reconciliation process to include on and off-budget items and discretionary spending, requiring super-majority votes for emergency spending, and expanding mandatory sequestration.
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STATEMENTS

"Protecting the physical health of Americans doesn't have to jeopardize the fiscal health of our nation. As RSC's Budget & Spending Task Force has shown, with the right mix of offsets and spending controls, we can do both," said Johnson. "Americans are a resilient people. The question isn't if our economy will recover from this pandemic, it's when. The sooner Congress finds the resolve to deal with the $24 trillion national debt weighing us down, the sooner we'll return to prosperity."

"Congress must offset debt impacts of COVID-19 legislation by passing a new, fiscally responsible budget that shrinks government to a more proper size," said Banks. "The good news is we have one we could pass right now. My colleagues and I on the Republican Study Committee introduced a budget last year that'd balance the budget in six years, rein in federal spending and cut waste. Our children and grandchildren shouldn't be stuck with this burden."