The decision to support the debt limit package, the so-called Budget Control Act, was not an easy one, but one that should be regarded as a meaningful and responsible first step on the path back to economic health.
As I’ve met with Indiana businesses this year, I’ve heard a common theme: They want to hire and grow, but there is too much uncertainty in the economy. Much of this uncertainty—uncertainty about future tax rates, interest rates and inflation—stems from the increasingly unsustainable debt Washington has racked up through over-spending.
Our work in this Congress has focused on confronting such barriers to economic growth. Many of us hoped this debate over the debt limit would finally afford us the opportunity to deal with those issues in a bold way.
Alas, the final package is not the audacious solution I was hoping for. But, in light of the composition of Congress and resistance to cuts from the White House, it was the best package fiscal hawks could accomplish under the circumstances. As a colleague of mine put it, “My wife wants me to lose 50 pounds, but I can’t do it by this weekend.”
In the final analysis, the Budget Control Act is a meaningful and important step in the right direction.
First, it avoids the prospect of a job-crushing default, and the attendant interest-rate response. For businesses already worried about access to capital and the costs of borrowing, this could have struck a serious blow. And this was the alternative fate our nation would have likely faced had the act been defeated.
Second, it enacts real spending cuts for the next two years. For the first time in history, 2012 will see discretionary spending decrease instead of increase. In 2013, the same thing will happen again.
Third, enforceable spending controls will cap the level of spending for the rest of the decade. These caps are locked into law, and we’ve effectively secured 66 percent of the cuts contained in the non-binding budget the House passed earlier this year.
Fourth, it advances the cause of a balanced budget amendment by requiring a vote on the measure. If carefully drafted, this is the best mechanism to bind the hands of future Congresses and prevent further spending binges.
Finally, it does not rely on tax increases that would stall our recovery. At a time we’re trying to ease the concerns of job creators, raising taxes would only heighten them.
We have a long way to go, to be sure. But Americans should take heart. Despite the realities of divided government, we have shifted the terms of our political debate. We have recognized that we cannot tax our way to prosperity but must find ways to spend less. And we have created the conditions for bolder measures to restore our economic health in the near future.
Moving forward, each of us must remain vigilant in the fight to rein in spending. American investors, innovators and entrepreneurs will take care of the rest.•
Young represents District 9 in the U.S. House of Representatives.