WASHINGTON, D.C. – Today, U.S. Senator Rand Paul, chairman of the Federal Spending Oversight Subcommittee for the Homeland Security and Governmental Affairs Committee (HSGAC), held a hearing entitled, “The Effect of Borrowing on Federal Spending.”
The hearing looked at the extent to which debt is already affecting the federal budget, as well as how its current trajectory will impact what we can do in the future. Additionally, the hearing examined the effectiveness of the debt limit as an action-forcing mechanism for fiscal and budgetary reform, along with the consequences and strategies (such as prioritization) involved with not further raising the limit.
“Congress rarely makes simple, unpleasant choices, which means we end up facing difficult and unavoidable, catastrophic problems,” Dr. Paul said in his opening statement. “We only act when circumstances force us to. This is why the debt limit is important. It’s our internal credit limit, not that of our creditors. It’s an opportunity to reassess our spending and ask, ‘How did we get here, and how do we get out of this mess?'”
David Walker, former Comptroller General of the United States, noted in his testimony that, “Excessive levels of debt as a percentage of the economy can serve to reduce economic growth and job opportunities. It can also cause a ‘crisis of confidence’ in the U.S. dollar and much higher interest rates if the market ever decides that the federal government has lost control of its finances and is not willing to regain control over them.”
You can watch the full hearing HERE.
You can click HERE or below to watch Dr. Paul’s opening statement.
CLICK HERE TO WATCH DR. PAUL’S OPENING STATEMENT
Senior Strategic Advisor with PricewaterhouseCoopers, Former Comptroller General of the United States, featured in the movie I.O.U.S.A.
Veronique de Rugy
Senior Research Fellow at the Mercatus Center at George Mason University and nationally syndicated columnist
Chief Economist for Moody’s Analytics