After it was suspended for more than a year, the debt ceiling went back into effect on Sunday, leaving leaders in Washington scrambling to ensure America can meet her most basic financial obligations. The Department of the Treasury has now promised to take “extraordinary measures” to avoid default, but these are only expected to delay the problem until later this year.
This means that Congress will soon be asked once again to raise the debt limit, and President Obama and congressional Democrats will once again resist Republican efforts to reduce spending. They will send the American people the same message they have sent for the past six years: that our rate of debt accrual is harmless and necessary.
In reality, it is neither. Washington’s addiction to irresponsible spending is the result not of necessity but of a stubborn resistance to reform. And our $18.1 trillion debt is not just a problem for government; it is a problem for the American people. It will encumber our economy today and shackle future generations tomorrow.
Our $18 trillion debt amounts to almost $150,000 per household. Our families and our children are on the hook for this. The bill might not come in the mail, but if we do nothing to change course, it will come in the form of higher taxes, cuts to our safety net, fewer jobs, and fewer opportunities to achieve the American Dream.
Perhaps most frightening of all, it will cost us in safety and national security. As former secretary of defense Robert Gates said: “At some point, financial insolvency at home will turn into strategic insolvency abroad.” And as former chairman of the Joint Chiefs of Staff Mike Mullen warned: “The single biggest threat to our national security is our debt.”
With these risks in mind, how should we pay down our national debt? Some will tell you the answer is to hike taxes, particularly on the rich. History has taught us two things about this approach: One, it will not even come close to yielding enough revenue to put a dent in the debt, and two, it will kill job creation and economic growth.
Our answer, instead, should be twofold.
First, we need to reduce spending. This begins by reforming the two biggest drivers of our debt, which are a pair of vitally important programs: Social Security and Medicare. If left unreformed, these programs will be bankrupt by the time my generation retires, and they will bankrupt our nation in the process. We need to reform Social Security and Medicare to save them for future seniors, and we need to do so without affecting the benefits of current seniors or those nearing retirement.
To reduce spending, we’ll also need a balanced-budget amendment to compel Washington to live within its means, as well as smaller-scale solutions such as the REFUND Act, a bill I am reintroducing today that will give states the ability to return unused federal funds for the specific purpose of paying down the debt.
The second solution to our national debt is vibrant economic growth. A growing economy will create more jobs, more taxpayers, and more prosperity. It is the only way to get the tax revenue we need to begin chipping away at the $18.1 trillion we owe.
I have proposed a number of reforms to create growth. The most recent is a comprehensive tax-reform plan in partnership with Senator Mike Lee. The Tax Foundation found that our plan, over the next decade, would increase GDP by 15 percent, boost wages by 12.5 percent, and create almost 2.7 million full-time jobs. One expert wrote that it would do “more to encourage growth than any [tax code] the U.S. has had since the 1920s.”
These twin goals — a responsible reduction in federal spending and a massive increase in economic growth — are not just the best path toward financial stability; they are the only path. If we do not pursue these objectives, the promise of this century will pass us by. Bit by bit, billion by billion, our debt will halt private-sector investment, kill job creation, and hamper any prospect of economic growth. If you don’t believe me, look at Greece.
Alternatively, if Washington starts living by the same common sense that American families live by, we can lower the debt limit rather than raise it, and we can reclaim the American Dream and bring it into reach of more people than ever before. Our children are counting on us to reverse course before it is too late.
— Marco Rubio is a Republican U.S. senator from Florida.