As a member who served on the House Budget Committee, I am keenly aware that we cannot keep borrowing our way to a better future. We must take decisive action to reduce our federal deficit. However, we must also continue to make targeted investments to spur economic growth and combat high unemployment. Rhode Islanders are still looking for jobs, but they are also looking for a government they can trust to live within its fiscal means.
While I remain disappointed that Congress failed to reach a compromise on a comprehensive package during the fiscal cliff negotiations, I continue to work with my colleagues to achieve this goal. As a means to avert the fiscal cliff and take yet another step towards bringing our deficit under control, I supported the American Taxpayer Relief Act, which was signed into law by President Obama on January 2, 2013. The law protects Americans making less than $400,000 a year from future tax increases, providing the middle class and our nation’s small businesses the additional certainty needed to grow and prosper. While I had concerns about certain portions of the agreement, I am very pleased that the legislation included an extension of the child tax credit, the earned income tax credit, unemployment benefits, and a permanent fix of the the Alternative Minimum Tax so it will not hit middle-class families. The bill will raise $620 billion in revenue over the next ten years on top of the $1.7 trillion dollars in spending cuts the President has already signed into law since last April, including through the Budget Control Act.
Any attempts at deficit reduction should be fair, balanced and involve shared sacrifice, and I will not support a plan that unfairly burdens low and middle-income families. Economists agree that we will only achieve fiscal balance through a combination of spending cuts and revenue measures. According to the Office of Management and Budget, total tax expenditures are a little over $1 trillion a year, almost equal to total discretionary spending for FY13 ($1.1 trillion). It’s clear that we cannot fix our budget through cutting alone; we must make tough decisions on both the spending and revenue side of the ledger.
We must also honor the debts we have incurred as a result of previous spending decisions by raising the nation’s statutory debt limit. On too many occasions, lawmakers in Congress have used the threat of financial default as political leverage. In 2011, the political brinksmanship surrounding budget negotiations almost led to a default on our financial obligations, resulting in a downgrade of the U.S. debt rating for the first time in 70 years. We are a nation that pays its bills, and providing an appropriate increase in the statutory debt limit is imperative to ensure we inject certainty into global financial markets.
Finally, we should not impose fiscal austerity at the risk of our economic recovery, or cut just for the sake of cutting. We have a serious budget deficit, but we also have a significant jobs deficit. Rhode Island’s unemployment rate remains one of the highest in the nation. This is completely unacceptable and does not represent the true potential of our great state. I will continue to work diligently to ensure that the federal government funds programs that help Rhode Islanders heat their homes, put food on their tables, and send their children to college. Our budgets reflect our values and our priorities. We must continue to prioritize immediate investments in education, infrastructure, biomedical research and clean energy that will strengthen our recovery, while seeking a balanced approach to deficit reduction over the long term so we can return to a strong and prosperous economy.