The 'Cut, Cap, and Balance' Fraud
by Ron Paul: Secretive
Banking Cartels Enslave Us
US House of Representatives, Statement on the Cut, Cap, and Balance
Act, July 19, 2011
I rise to speak against HR 2560, the Cut, Cap, and Balance Act.
This bill only serves to sanction the status quo by putting forth
a $1 trillion budget deficit and authorizing a $2.4 trillion increase
in the debt limit.
When I say
this bill sanctions the status quo, I mean it quite literally.
First, it purports
to eventually balance the budget without cutting military spending,
Social Security, or Medicare. This is impossible. These three budget
items already cost nearly $1 trillion apiece annually. This means
we can cut every other area of federal spending to zero and still
have a $3 trillion budget. Since annual federal tax revenues almost
certainly will not exceed $2.5 trillion for several years, this
Act cannot balance the budget under any plausible scenario.
further entrenches the ludicrous beltway concept of discretionary
vs. nondiscretionary spending. America faces a fiscal crisis, and
we must seize the opportunity once and for all to slay Washington's
sacred cows including defense contractors and entitlements. All
spending must be deemed discretionary and reexamined by Congress
each year. To allow otherwise is pure cowardice.
Act applies the nonsensical narrative about a "Global War on
Terror" to justify exceptions to its spending caps. Since this
war is undeclared, has no definite enemies, no clear objectives,
and no metric to determine victory, it is by definition endless.
Congress will never balance the budget until we reject the concept
of endless wars.
most egregiously, this Act ignores the real issue: total spending
by government. As Milton Friedman famously argued, what we really
need is a constitutional amendment to limit taxes and spending,
not simply to balance the budget. What we need is a dramatically
smaller federal government; if we achieve this a balanced budget
will take care of itself.
We do need
to cut spending, and by a significant amount. Going back to 2008
levels of spending is not enough. We need to cut back at least to
where spending was a decade ago. A recent news article stated that
we pay 35 percent more for our military today than we did 10 years
ago, for the exact same capabilities. The same could be said for
the rest of the government. Why has our budget doubled in 10 years?
This country doesn't have double the population, or double the land
area, or double anything that would require the federal government
to grow by such an obscene amount.
We need to
cap spending, and then continue decreasing that cap so that the
federal government grows smaller and smaller. Allowing government
to spend up to a certain percentage of GDP is insufficient. It doesn't
matter that the recent historical average of government outlays
is 18 percent of GDP, because in recent history the government has
way overstepped its constitutional mandates. All we need to know
about spending caps is that they need to decrease year after year.
We need to
balance the budget, but a balanced budget amendment by itself will
not do the trick. A $4 trillion balanced budget is most certainly
worse than a $2 trillion unbalanced budget. Again, we should focus
on the total size of the budget more than outlays vs. revenues.
What we have
been asked to do here is support a budget that only cuts relative
to the President's proposed budget. It still maintains a $1 trillion
budget deficit for FY 2012, and spends even more money over the
next 10 years than the Paul Ryan budget which already passed the
spending at a certain constant percentage of GDP, it allows for
federal spending to continue to grow. Tying spending to GDP creates
an incentive to manipulate the GDP figure, especially since the
bill delegates the calculation of this figure to the Office of Management
and Budget, an agency which is responsible to the President and
not to Congress. In the worst case, it would even reward further
inflation of the money supply, as increases in nominal GDP through
pure inflation would allow for larger federal budgets.
bill authorizes a $2.4 trillion rise in the debt limit. I have never
voted for a debt ceiling increase and I never will. Increasing the
debt ceiling is an endorsement of business as usual in Washington.
It delays the inevitable, the day that one day will come when we
cannot continue to run up enormous deficits and will be forced to
pay our bills.
Mr. Speaker, while I sympathize with the aims of this bill's sponsors,
I must vote against HR 2560. It is my hope, however, that the looming
debt ceiling deadline and the discussion surrounding the budget
will further motivate us to consider legislation in the near future
that will make meaningful cuts and long-lasting reforms.
the Ron Paul File
Paul is a Republican member of Congress from Texas.
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