Today’s shocking jobs report represents a modern record of 29 straight months with unemployment above 8 percent, and falls on the 800th day since congressional Democrats have passed a budget. This report is more proof that job creation in America is nowhere near where it needs to be for a strong recovery to occur, and that immediate action is needed to change course. Reports recently issued by the House Budget Committee and the minority staff of the Senate Budget Committee demonstrate that the federal government’s dramatic overspending and enormous debt burden are directly hurting job creation. Employers large and small know that today’s excessive borrowing will be tomorrow’s tax hikes and interest-rate increases. This lack of confidence in the future puts a chilling effect on hiring and investment right now.
A study by University of Maryland economist Carmen Reinhart and Harvard’s Kenneth Rogoff, endorsed by Treasury Secretary Geithner, shows that when a nation’s debt-to-GDP ratio exceeds 90 percent, economic growth is reduced by one to two percentage points. The president’s Council of Economic Advisers estimates that a one percentage point loss in economic growth translates into one million jobs. Today, the U.S. debt-to-GDP ratio is 95 percent, having crossed the dangerous 90 percent threshold months ago.
While the House has passed a serious, credible budget that tackles this debt crisis head-on, 800 days — and $7.3 trillion dollars — have come and gone since the Democrat-led Senate has adopted a budget. Not only is a budget a concrete fiscal plan, but it expresses a philosophy of governing. Democrats’ refusal to pass a budget — and refusal to put their big-government economic theories on paper — is of extraordinary significance. Making matters worse, the only budget submitted by the president is a fundamentally unserious plan that doubles our debt and speeds us to economic decline.
The House-passed budget cuts $6 trillion in government spending, lifts the crushing burden of debt, strengthens the social safety net, saves Medicare from bankruptcy, and helps spur job creation with pro-growth reforms. The United States Congress has a moral — and legal — obligation to propose and pass budgets that tackle our generation’s greatest challenge. Allowing 800 days to pass since Senate Democrats even bothered to produce a budget is an egregious and inexcusable lack of leadership.
America’s job creators want certainty and confidence in the economy — which requires a credible plan to cut spending, prevent future tax hikes, and reassure our creditors that we’re restoring fiscal discipline. What is certain, is that more spending, more taxes, and more punting of responsibility will only mean more weak job reports.
— Jeff Sessions is Senate Budget Committee ranking member. Paul Ryan is House Budget Committee chairman.