Opening Statement Of Sen. Portman at Joint Select Committee on Deficit Reduction

WASHINGTON, D.C. – U.S. Senator Rob Portman (R-Ohio) a member of the Joint Select Committee on Deficit Reduction, today made the following opening remarks, as prepared for delivery, during the Committee’s first formal meeting:

Thank you, Madame Chair and Mr. Chairman.  This extraordinary committee exists because nothing else has worked to avoid a fiscal crisis that threatens to sink an already weak economy.  The warning signs are all around us: record deficits, unsustainable debt, and our bond rating downgraded for the first time in our nation’s history.  

The faltering economy and budget problems are linked– an economy burdened by excessive government spending and borrowing does not create jobs, it creates uncertainty and caution. And an economy failing to create jobs stretches government’s resources even further and fails to create the revenue needed to close the gap. How to fix the federal budget and grow the economy are the twin challenges of our time. And both must be addressed together.

This committee has been tasked with reducing the deficit by $1.5 trillion over the decade.  It’s a significant task and reductions of this level have never before been achieved at one time, but it can and must be done.  Cutting $1.5 trillion means cutting just 3 and a half percent of the total projected federal spending over the next decade. Some have asked whether we shouldn’t be doing more. After all, as I calculate it based on the more realistic so-called current policy baseline using CBO data, over the next ten years the debt will increase by about $13 trillion – our goal of $1.5 trillion would reduce that increase by only 12%.

We should aim even higher.  We should aim to do what is necessary to bring long-term sustainability to the federal budget.  The American people want this. The financial markets and credit agencies want this. And future generations who will be inheriting our debt deserve this.

But let’s at least hit our goal of $1.5 trillion, and let’s keep in mind that long-term sustainability also means more than merely reaching a 10-year savings target.  The quality of reforms matter more than the quantity in the ten year window.  Tweaks and one-time savings could add up to $1.5 trillion over ten years.  Yet they would leave in place soaring future deficits caused by unreformed entitlements.   

There are differences over tax policy- but let’s keep in mind that the long-term deficits projected are caused by rising spending, not declining revenues.  Even if we keep tax rates where they are today – meaning the laws are changed to extend all the tax cuts, patch the A.M.T. – CBO figures show that revenues will still exceed the 18% of GDP historical average within a decade.  Spending, on the other hand, has already jumped from its historic average of about 20 % to 24% of GDP, and in future decades, without reform, is projected to soar past 30%, 40%, 50% of GDP due to runaway entitlement costs.

So we should aim for structural reforms that preserve and strengthen the important entitlement programs –ensure benefits for those in need - while reining in costs that threaten to bankrupt these programs for our children and grandchildren.

This doesn’t mean we should ignore taxes- we should try to fix our complex, anti-growth tax code.  Commonsense tax reforms can eliminate unjustified tax preferences, and apply those savings to lower, more competitive tax rates that encourage working, saving, and investing.  This will increase economic growth and create jobs.

By combining spending restraint and pro-growth tax reform, we can both create jobs and pare back the staggering deficits we otherwise face.  

I look forward to working with my colleagues on this committee on the urgent and serious task ahead of us.  The American people are counting on us to succeed and we can’t let them down.

Thank you.