Issue Position: Economy, Federal Spending & Taxes

Issue Position

In 2010, the federal government spent $1.3 trillion more than it received in revenue. When this happens, we have a budget deficit. Likewise, when the government spends less than what is received from revenue, we have a budget surplus. The Congressional Budget Office estimates the Fiscal Year (FY) 2011 budget deficit to be around $1.5 trillion. Since 2001, spending has exceeded revenues, resulting in budget deficits. In 2010, Medicare, Medicaid, and Social Security was 55.3% of total spending, annual government operations was 39% of total spending, and net interest that accrued from the national debt comprised 5.7% of total spending. The national debt is accrued over years of annual budget deficits. Congress controls how high the debt can be and therefore, how much the government can borrow. The current debt limit, set by Congress in 2010, is around $14.3 trillion. The Treasury Department announced that the debt ceiling was reached on May 16 and that Congress must raise it by August 2 to avoid defaulting on its obligations.

The simple answer to address the deficit and long-term debt is to reduce spending, reform our entitlement programs, and overhaul the tax code. A few proposals have been introduced in recent months to solve our fiscal crises, starting with the Fiscal Commission, the Budget Resolution (H. Con. Res. 34) that passed the House on April 15, 2011, and a proposal by President Obama that would amend his previously submitted Budget Request to Congress for FY12. All of the proposals have things that Senator Murkowski agrees with and things she disagrees with. However, she feels confident that the conversation has changed with both parties, both chambers of Congress and the Administration. Everyone is looking at ways to reduce the deficit, which is better than where we were just a few months ago. On April 18, 2011, Moody's Investors Service announced that recent proposals by President Obama and House Republicans "represent a significant shift in the U.S. fiscal debate, as both would result in lower deficits and debt levels than projected in the February budget."

It is unfortunate that Congress had to extend last year's budget seven times before agreeing to a deal that would fund the government through FY 2011. Yet it highlights the debate going on between chambers, parties, and the White House. When faced with voting between a budget bill (H.R. 1) that would cut spending by $60 billion from the previous year, and an alternative (S. Amt. 149) that would maintain spending from the current year, Senator Murkowski voted to cut spending. She wanted to send a message to the Congress and the President that she was serious about reducing the deficit, which will require changes to discretionary spending and especially, mandatory spending. As such, she has cosponsored S. 437 that would require the IRS to provide the amount of federal debt at the end of the year and the amount of additional borrowing by the federal government per person, on all income tax returns. Additionally, she has cosponsored a resolution in support of a balanced budget amendment to the Constitution (S. J. Res. 10). If passed, S. J. Res. 10 would prohibit the federal government from spending any more than it receives in revenue, unless a two-thirds majority in each chamber voted to authorize it, except in times of war. The legislation would also require a two-thirds majority in each chamber to raise taxes. In addition, she has cosponsored the Biennial Budgeting and Appropriations Act (S. 211), that would require Congress to pass budget bills and appropriations bills every two years, instead of one year. This would help avoid short-term spending bills and would reduce the risk of a government shutdown every year over budget negotiations.

In the coming months, Congress will debate the FY12 Budget and Senator Murkowski will look to reduce spending and keep taxes low for Alaskans and Americans. She is determined to reduce the deficit and is hopeful that everyone can come to an understanding that we'll have to do more with less. Congress will also debate how to address the debt limit. The current limit will have to be increased but the vote will also be an opportunity to influence future spending.

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