Fix the fiscal problem (Kevin McCarthy)

Advocating smaller, more focused, less costly government since 1996
SAFE Letterhead

Representative Kevin McCarthy
2468 Rayburn House Office Building
Washington, DC 20515

Dear Minority Leader McCarthy:

For information, this letter is also being sent to Rep. Nancy Pelosi and to Sens. Mitch McConnell & Charles Schumer. We would urge all of you to share it with the members of your respective caucuses.

It was once understood in Washington that deficit spending was inevitable in time of war, but that budget discipline was needed afterwards to repay (or at least reduce) the resulting debt. Thus, total debt as a percentage of Gross Domestic Product soared during World War II, hitting a historic peak of 119% in 1946. Normal budgeting resumed after the war, and – due in large part to economic growth - total debt was reduced to 37% of GDP by 1970. Things have turned around since then, however, and if things keep going as they have been the 119% record will be broken (according to a recent CBO chart) within about 20 years.

As if this outlook wasn’t bad enough, the recently passed Bipartisan Budget Act of 2019 cleared the way for more spending increases – not just for vital priorities like national defense but across the board. While appreciating the positive aspects of this legislation, notably reducing the risk of a government shutdown that would benefit no one, we think it represents one more step towards an eventual fiscal meltdown. Latest budget deal: faster process, similar results,
7/29/19.

What should be done? While appreciating efforts to upgrade the congressional budget process, including those currently being led by Sen. Mike Enzi, we don’t foresee much progress without presidential leadership. Accordingly, SAFE believes that candidates in the 2020 presidential election should be encouraged to propose and defend their plans for balancing the budget in four years (by 2025). And one of the presidential debates between the two finalists could be devoted to having them debate the merits of their respective plans, which would probably result in a more informative debate than the scattershot debate questions that are generally asked.

Please advise (contact information enclosed) if you have any questions or we can help further.

Sincerely,
SAFE


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