Wednesday, March 30, 2011

Our Government's Impending Budget Crisis

I try not to get carried away when it comes to politics, but after receiving this "Situation Report" from my local Congressman, Richard Nugent, I felt I needed to share it with you. I have copied his report below.

Dear Friends,
Last week, I held a number of emergency meetings around the 5th District.  The subject was our impending budget crisis.  Like most people, I knew that our nation’s spending habits would inevitably result in a crisis, but the experts all said that crisis was twenty or thirty years off. 

It isn’t.

On one of my first days in Washington, I attended a “members only” briefing held by my colleague Paul Ryan, the Chairman of the House Budget Committee.   I walked out of that first meeting with my jaw on the floor.  The danger stemming from our fiscal situation is far more immediate and far more severe than the experts had predicted.  There are many reasons why that happened,  but for now, let’s just say the recession and a few trillion dollars worth of “stimulus” and “bailouts” didn’t help. 

I try to keep these things short, so let me give you just one key point to think about in terms of the immediacy of this crisis:  Annual Social Security spending – our single biggest budget line item by far – is roughly $700 billion per year.  Annual interest payments are currently $200 billion per year, but in the next three years that $200 billion will grow to $550 and by 2018 it will be over $800 billion per year in annual interest payments

We’re already borrowing forty cents on every dollar the federal government spends.  How can we possibly afford another trillion-dollar line item?  The simple answer is, we can’t.  If we do nothing to stop this train, America will default and the world will see a far worse financial crisis than the one we are going through right now.  It will take years to undo this problem and we don’t have many years left.

That’s the “emergency” part of the meetings.

This week, House and Senate negotiators are continuing to work toward reaching an agreement on spending cuts for the remainder of this year.  Some say, “shut the government down.  Don’t negotiate with the Democrats.”  To put it mildly, I share their enthusiasm for reducing the deficit, but based on what I’ve seen, we need to be fighting for much more than spending cuts for the remainder of the year.  We need to be figuring out how we are going to get this President and the Democrat-controlled Senate to cooperate on reducing our structural deficits over the short, medium, and long term.  That’s what we should be fighting for. 

We will push hard for every dollar of savings we can get before the end of this fiscal year, but in this fight, we cannot miss the forest for the trees.  

I’d like to hear your thoughts on this.  As always, please forward this along to others and ask them to drop me a line as well. 

Congressman Richard Nugent

Member of Congress

If you would like to check out his web page, click below.....

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