The Budget Before Borrowing Act
Hey! Here’s an idea: before we borrow more money, Congress should pass a budget. It sounds pretty uncontroversial and fairly simple to achieve, until you realize it has been nearly 1,000 days since the Senate even bothered to pass a budget.
Fortunately, Washington’s inability to do the simplest of things hasn’t discouraged Congressman Doug Lamborn (R-CO). Instead of accepting the status quo, he introduced H.R.3778, the Budget Before Borrowing Act. It would amend the Congressional Budget Act of 1974 to ensure that the debt limit would not be increased unless Congress agreed to a budget, technically called “a concurrent resolution on the budget”.
His timing could not have been better. At the beginning of this year, President Obama formally asked Congress for a $1.2 trillion dollar increase to the nation’s debt ceiling as part of the Budget Control Act that was passed last August. This increase will bring our national debt limit to $16.4 trillion. At the rate we’re spending, we will hit that limit and require another increase late this year – either just before the election or immediately thereafter.
It is important to have some context.
When President Obama took office, our national debt stood at $10.626 trillion. By November of this year it is projected to be $16.4 trillion. That’s an increase of $5.774 trillion dollars – $5.774 trillion added in one Presidential term (give or take a few billion, considering the President was in office a month before he signed the $787 billion stimulus bill).
Even still, while George W. Bush was in office, $4.9 trillion was added to the national debt. People can disagree about how much of that was added due to President Clinton’s policies, and how much of President Obama’s debt was added due to President Bush’s policies, but the fact still remains that under President Obama, our national debt has grown by over $5 trillion dollars, and will be approaching $6 trillion by inauguration day in 2013. It is an astounding figure – more debt in four years than every President before Bush racked up, combined!
Most of this debt was added without a plan, and without a budget in place. Again, it’s been nearly 1000 days since the Senate has passed a budget – that’s nearly three years! This is stunningly irresponsible, and one of the reasons why Rep. Lamborn introduced the Budget Before Borrowing Act. Our government should not be borrowing money without a clear plan on how to spend that money and how to pay that back. As Rep. Lamborn explains:
“If an individual or family or small business owner were to ask the bank for a loan without presenting a plan on how they would spend that money and pay it back, no bank would even consider such a loan.”
How can our federal government get away with this? It’s time to end this destructive process. According to Rep. Lamborn:
“Economists have found that when government debt-to-GDP ratio rises above 90%, it lowers the future potential GDP of that country by more than 1%. It also locks in a slow-growth, high-unemployment economy.”
Our current debt-to-GDP ratio is 101%. Two years ago, Greece’s debt-to-GDP was 101%; it is now 183% and Greece has crumbled. We cannot wait until we face the same fate. It’s time to do something now. And the Budget Before Borrowing Act is forcing the exact conversation we need.