Letter to the Hon. Nancy Pelosi, Speaker of the House, the Hon. Kevin McCarthy, Minority Leader of the House, the Hon. Mitch McConnell, Majority Leader of the Senate, and the Hon. Charles Schumer, Minority Leader of the Senate - Reps. Banks, Johnson Call on Congress to Flatten the Debt Curve

Letter

The Republican Study Committee's (RSC) Budget & Spending Task Force writes to express our deeply held conviction that as part of the overall effort of Congress to address the present COVID-19 pandemic, there is an urgent need for us to also address the inextricably related emergency that is our dangerous level of national debt.

In the wake of unprecedented government action to stop the spread of this virus and protect the lives of our people, Congress enacted the CARES Act to defray the cost those actions impose on hard-working Americans. Moving forward, it is equally important to limit the debt those extraordinary actions will occasion. Annual deficits were already expected to surpass $1 trillion for FY 2020 and only grow in perpetuity. Recent COVID-19 legislation will now add trillions more debt in the next several years while federal revenues will nosedive in the midst of an economic downturn.

For these reasons, the RSC's Budget & Spending Task Force urges Congress to undertake two critical efforts to protect the fiscal health of our nation while it protects the physical health of its citizens:

1. Congress should offset future COVID-19-related deficits. Given the present fiscal crisis, the thought of any more debt-financed spending seems unimaginable. This is especially true considering the enormous burden our debt will already place on Americans for generations to come. For this reason, Congress should offset the debt impacts of any further COVID-19-related legislation. The RSC Budget & Spending Task Force's FY 2020 budget "Preserving American Freedom" contains more than $10 trillion in specific programmatic deficit reducing reforms. There are more than enough recommendations contained in the budget to ensure that if further COVID-19 legislation is needed, it be carried out in a way that does not jeopardize the solvency of our republic. Reforms contained in the budget range from thoughtful, long-term approaches to contain entitlement spending to those designed to eliminate irresponsible federal spending on items such as the Kennedy Center, Brand USA, the Forest Products Laboratory, the Legal Services Corporation, the Corporation for Public Broadcasting, and the Stennis Center, among many others.

2. Congress should implement a long-term spending control mechanism. The last time the Congress took deliberate action to address our national debt was nearly ten years ago when it enacted the Budget Control Act (BCA) of 2011, which sought to reduce federal spending by over $1 trillion. The BCA was enacted in the wake
RSC Budget and Spending Task Force of the Great Recession and after two consecutive years of deficits over $1 trillion. Given the BCA's expiration at the end of next fiscal year and impending multi-trillion-dollar deficits, it is critical that Congress act to control our out-of-control spending. Any new mechanism should include restrictions on the growth of both mandatory and discretionary spending, avoid reliance on tax increases, and stabilize our nation's debt. The Task Force supports enacting a mechanism that would limit the annual growth of future spending to 60 percent of the growth in federal revenues (which would itself be capped as a percentage of GDP). Another debt-stabilization approach is a "debt brake" that ties spending to potential GDP, as the Maximizing America's Prosperity (MAP) Act, sponsored by Rep. Kevin Brady's (TX-08), would accomplish.

Moreover, the RSC's budget proposes a number of tools that each would contribute to the long-term stabilization of the national debt. For instance, it recommends automatic votes to consider the deficit reductions offered in a budget resolution, expanding the reconciliation process to include on and off-budget items and discretionary spending, requiring super-majority votes for emergency spending, and expanding mandatory sequestration.

To rebound from the COVID-19 pandemic, it will take the collective strength and effort of our entire nation. That same resolve will be needed to overcome the threat posed by our seemingly insurmountable debt. It is not too late for us to take the actions necessary to secure the future of America and our posterity--but that work must begin now.

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