July 21, 2011
Today it was announced that new unemployment claims increased by 10,000 last week—reaching 418,000 in the week ending July 16. We have now seen the 15th straight week with new unemployment claims above 400,000. Despite 29 months of chronically high unemployment above 8 percent—the longest streak since the Great Depression—the president and congressional Democrats are still demanding job-destroying tax increases to pay for their wasteful spending binge.
Unchecked Spending and Debt is Crushing the Economy
- Since President Obama took office on January 20, 2009, the national debt has increased by $3.7 trillion. To put that in perspective, it took the U.S. from 1776 until 1992 to accumulate the same amount of debt that President Obama has borrowed in two and a half years.
- If nothing is done to cut Washington’s profligate spending, government will grow to 34 percent of GDP and drive public debt to 187 percent of GDP by 2035. As a result, interest payments on the debt will increase from 1.4 percent of GDP in 2011 to 8.9 percent of GDP by 2035—an increase of 536 percent.
- While Democrats’ want to increase the debt without cutting spending, jobs creators know that historic debt will lead to historic, job-killing tax increases. As Home Depot co-founder Bernie Marcus said on July 20, 2011, “If we don't lower spending and if we don't deal with paying down the debt, we are going to have to raise taxes. Even brain-dead economists understand that when you raise taxes, you cost jobs.”
- According to CBO, “Growing debt also would increase the probability of a sudden fiscal crisis, during which investors would lose confidence in the government's ability to manage its budget.”
Republicans Opposed Democrats’ Unprecedented Debt
- House Republicans have fought the president and congressional Democrats at every step of their job-destroying spending spree.
- We voted against the $1.4 trillion government takeover of health care.
- We voted to put our country back on a Path to Prosperity, creating the framework to control his spending and pave the way to balance the budget.
The Republican Plan for Job Creation and Growth
Unless serious action is taken today, our country is at risk of losing its status as the most prosperous nation in the world and future generations will have fewer opportunities than their parents. In order to end this job-destroying debt and put our nation on the path to fiscal sanity and economic prosperity, House Republicans passed H.R. 2560, the Cut, Cap, and Balance Act of 2011.
- CUT: Cuts total spending in a manner consistent with the spending levels in the Path to Prosperity budget approved by House Republicans this year.
- CAP: Caps total federal spending on a glide path to 19.9% of GDP—the historic post-World War II average—by 2021.
- BALANCE: Requires the passage of a Balanced Budget Amendment before raising the nation’s debt limit.
The Cut, Cap and Balance Act is a constitutional, permanent solution to put an end to Washington’s spending-driven debt crisis and save future generations from a bankrupt future.
For additional information, contact:
The House Republican Conference Policy Office