U.S. Representative Todd Rokita · PDF fileNew Debt on the Credit Card: $6,800 Annual Family...
Transcript of U.S. Representative Todd Rokita · PDF fileNew Debt on the Credit Card: $6,800 Annual Family...
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U.S. Representative Todd Rokita
Your Freedom, Your Family, Your Future
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Our national debt as of this moment is:
Usdebtclock.org 4-14-14 2:32 pm
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Budget Deficits as a Percentage of GDP, by Administration
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THE FEDERAL GOVERNMENT IS BORROWING MORE THAN 19 CENTS OF EVERY DOLLAR IT SPENDS
Source: CBO
Money We Have $2.8 Trillion
Money We Don't $680 Billion
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We’ve borrowed and have held debt in the past…..why is it a problem now???
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America’s Foreign Debt Reality WHO OWNS OUR DEBT?
(DEBT HELD BY PUBLIC, 1970 -2013)
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With the interest we pay to China on our debt, China can afford to buy
3 new Joint Strike Fighters every week.
Source: U.S. Department of Treasury, Government Accountability Office
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The US has borrowed from its citizens for one-time expenditures
World War II cost the US $296 billion. The war effort was funded with approximately $186 billion in war bonds Now we are financing our operating budget with debt.
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Example of the Problem: Medicare Paid In vs. Paid Out for Average Couple
Couple making combined $89,600/year on average over a lifetime
Source: The Urban Institute: Social Security and Medicare Taxes and Benefits Over a Lifetime 2013 Update
Pay in is 32% of payout
Pay in is 28% of payout
0
100000
200000
300000
400000
500000
600000
700000
$123,000 $181,000
$385,000
$638,000
Paid In
Paid Out
Retire Today Retire in 2030
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If Your Family Spent Like the Federal Government, What Would It Look Like?
Drop 8 zeroes off the federal budget or divide federal spending by 100 million American households:
Annual Family Income: $27,700
New Debt on the Credit Card: $6,800
Annual Family Spending: $34,500
Outstanding Credit Card: $175,000 Future Purchases on Card: $2,000,000 Total Annual Budget Cuts: $214
Source: Congressional Budget Office
If your family was DROWNING in debt, would reducing spending by $214 actually make a
difference?
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Source: Congressional Budget Office, Office of Management and Budget
Tidal Wave of Debt U.S. Debt Held by Public as Share of the Economy
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FALSE SOLUTION #1
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FALSE SOLUTION # 2
Total Spending
FY13 $3.5 trillion
Foreign Aid Spending
FY13 $46 billion
What If We Cut All Foreign Aid?
Source: CBO
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FALSE SOLUTION # 3
Total Spending
FY13 $3.5 Trillion
Defense Spending
FY13 $625 Billion
What If We Cut All Defense Spending?
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Solution #1 Reform Medicare
Transition from a defined benefit, fee-for-service structure to a defined contribution structure, and require an aggressive means test.
Use Free Market principles to lower costs by:
Choice and Competition
Increased Patient Control
NO CHANGES FOR CURRENT BENEFICIARIES
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Solution #2 Reform Medicaid
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Solution #3 Reform Social Security
Index the normal retirement age(NRA) to longevity standards
Require an aggressive means test.
This is a commonsense, gradual approach that will eliminate a long-term shortfall
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Solution #4 Reform the Budget Process
The federal budget process is broken, oversight is inadequate, transparency is lacking and the rules favor more spending.
1. Make the budget legally binding and automatically cut spending that grows faster than inflation
2. Eliminate automatic spending increases year-to-year
3. Move to biennial budgets and require Congress to review long-term budget implications every five years
4. Study the effect of budgets beyond ten years and account for the total liabilities of our nation in the future
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Solution #5 Grow the Economy
• Tax reform • Deregulation • Abundant, affordable energy
• Get government out of the way of
free markets and the American people!
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Why isn’t the Economy Growing?
Measuring Economic Liberty Rule of Law (property rights, freedom from corruption) Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom).
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Best Solution A Balanced Budget Amendment
A balanced budget amendment would force us to live within our means and make tough decisions including the entitlement reforms I have discussed.
As a nation, we would be forced to have a tough conversation about how much to spend, how much to tax and what kind of government we want. That way, we can’t hand down the cost of our government to our children and grandchildren.
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Additional Slides
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Learn more about House GOP Solutions for Spending and Debt at
Rokita.House.Gov
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Why Medicare and Medicaid Need Reform
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Most efficient and cost-effective health care flow chart
You Your
Doctor
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A CHOICE OF TWO FUTURES (DEBT AS A SHARE OF ECONOMY)
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THE COST OF WAITING – THE FISCAL GAP UNFUNDED PROMISES IN TRILLIONS OF DOLLARS
0
10
20
30
40
50
60
70
80
90
2009 2010 2011
$62.9 TRILLION
$76.4 TRILLION
$99.6 TRILLION
IN T
RIL
LIO
NS
OF
DO
LLA
RS
SOURCE: GAO
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“Debt Day”
Source: Office of Management and Budget, President’s Budget FY 2012
All spending after August 25 of this year is borrowed spending.