Steny Hoyer Calls for a 'Grand Bargain'
House Minority Whip Steny Hoyer (D-MD) called on Congress to lay the groundwork for a budget grand bargain. Speaking this morning, Hoyer urged members of Congress to embrace common ground to achieve "a sustainable long-term budget outlook." He described the need for a comprehensive budget bargain and highlighted several specific areas where progress can be made, such as passing comprehensive immigration reform, addressing the expired tax extenders, and shoring up the highway trust fund.
We Still Need a Grand Bargain
As Hoyer correctly said, the country still requires a large deficit reduction plan to ensure long-term economic growth and stability. Currently, the national debt is on an unsustainable long-term trajectory. CBO projects that the debt will rise from 73 percent of GDP today to 100 percent of GDP by 2038, and twice the size of the economy by 2075. High and rising levels of debt will hurt our international competitiveness and act as a drag on economic growth. "A big deal is the best way for Congress to achieve a fiscally sustainable outlook that can inject certainty into our economy and help us invest in competitiveness, job growth, and opportunity."
Hoyer argued that now is the best time for a well-reasoned debate about how to achieve deficit reduction. "It’s at this moment – when we don’t have a crisis breathing down our necks – that we have the best chance to make the hard decisions that we need to make," he said in his speech at a budget discussion organized by Third Way. Reasonable and intelligent savings enacted now can lock in smart long-term deficit reduction rather than waiting to make larger changes later. Hoyer argued that enacting a plan to address our debt was not in conflict with making necessary investments for long term growth; in fact he suggested that having a long term plan for fiscal sustainability in place would make it easier to fund investments in the near term.
Currently, 70 percent of our budget goes to mandatory programs and interest payments, and this share will continue to increase. As a result, "Our current outlook leaves little room for America to lead the global economy for the next generation, where they keys to success will be innovation, a skilled workforce, and the efficient movement of goods and services across oceans and continents," he said. "And it's not a recipe for growing and strengthening our middle class either."
Opportunities for Near-Term Progress
In looking towards more short-term developments, Hoyer stressed the need for responsibly addressing the set of expired tax provisions known collectively as the "tax extenders." He said the extenders should be a part of comprehensive tax reform – as House Ways and Means Chairman Dave Camp recently proposed. "Failure to offset the cost of these provisions could add over $900 billion to deficits over the next decade, according to the Congressional Budget Office," he said, "That’s larger than the remaining sequester cuts." We have repeatedly called for responsible action on the tax extenders urging Congressional leaders to either find offsets for each provision or let the provision remain expired.
He cited comprehensive immigration reform as a means of achieving deficit reduction and called on the House to take up the bill this year. CBO has estimated the immigration reform passed by the Senate last year would achieve $158 billion in savings over ten years.
He additionally expressed the need for responsible investments in our nation's transportation infrastructure. This includes reauthorizing surface transportation programs and addressing the highway trust fund shortfall. The highway trust fund is set to go bankrupt next year. Hoyer called for a dedicated revenue stream for the highway trust fund.
Hoyer said Congress will need to reach an agreement on how to replace the sequester cuts. The Murray-Ryan deal reduced the sequester for two years, but lawmakers will need to decide where to set discretionary spending levels after that. Responsibly replacing these cuts by addressing the long-term drivers of our debt would contribute to meaningful deficit reduction.
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Rep. Hoyer made a valuable point with his speech: The need for long-term fiscal sustainability is still urgent, despite the fact that we are not facing a government shutdown or a debt limit increase. He concluded, "Moving forward, we ought to embrace and maximize every chance to set our fiscal house back in order and restore America's strength."