Friday, November 25, 2011

Lungren Disappointed in Failure of Deficit Reduction Committee

Congressman Dan Lungren (R-Gold River, CA) reacted to news that the Joint Select Committee on Deficit Reduction (the “Super Committee”) failed to reach an agreement to reduce the deficit by at least $1.2 trillion over 10 years:
“With the failure of the Super Committee, Congress once again has neglected to face head on a long-foreseen and fast-approaching crisis.  The resulting sequestration – or across-the-board cuts – resulting in blind, indiscriminate spending reductions is a shoddy way to ensure the long-term vitality of our nation.  Particularly troublesome are the cuts to our defense which, as Secretary of Defense Leon Panetta stated, would be ‘devastating,’ ‘seriously damage readiness,’ and require ‘a new security strategy that accepted substantial risk of not meeting our defense needs.’

“While gridlock may seem unavoidable, I believe that we can – and must – address our debt crisis in a purposeful, intelligent way.
“Efforts to balance the budget by spending cuts that significantly outweigh revenue increases have proven successful for others.  I believe they would be successful for us – if we had the wherewithal to act now rather than expecting our children and grandchildren to pay for our largesse.
“In 1993, Canada’s debt consumed 70 percent of its Gross Domestic Product (GDP); much like the reality we face today, with our debt at 74 percent of GDP.  Canada’s debt rating had been downgraded from AAA status.
“In response, the Canadian government implemented a deficit-cutting budget in which spending cuts outweighed tax increases by seven to one.  With both Canada’s Liberal Party and the Reform Party backing the cuts, by 1998 Canada posted a budget surplus.  Last year their debt-to-GDP ratio was at 34 percent and their unemployment rate is now about two points below ours.
“With similar action by our Congress, I believe we can expect the same results.”

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