The College Fix

U.S. Senator Robert Corker of Tennessee has proposed a bi-partisan bill, The Cap Act, which would legislate a real binding cap on all federal spending that would be linked to a desirable percentage of GDP.

Treasury Secretary Timothy Geithner ’83 informed Congress Monday that within two weeks the public debt limit will become binding and the US Treasury will no longer be legally able to borrow additional funds to pay for our government. Congress will be asked to raise the debt ceiling for the eleventh time in the past ten years. These past ten votes have allowed our debt to double to unprecedented levels without any real plan to pay it off.

Corker’s Cap Act would provide a responsible way of incentivizing financial responsibility through controlled spending and smaller government. But more importantly, for the bureaucrats who worry about their own livelihood in a shrinking government, the solution is easy: implement policy that encourages economic growth.

At this point, it doesn’t really matter whether the left or the right got us to this tipping point of fiscal instability. Finger pointing and blaming the opposition won’t cut a single cent off our debt or our future federal spending. Instead, our leaders must work together to ensure the solvency of our nation’s finances for generations to come.

The proposed bill seeks to cut $7.6 trillion in federal spending over the next 10 years. In fiscal year 2010, total federal outlays were 23.8% of GDP. In fiscal year 2020, total federal outlays are projected to be 25.9% of GDP, according to the Congressional Budget Office (CBO). The Cap Act seeks to reduce federal spending back to its 40 year average of 20.6% of GDP, in hopes of restoring fiscal sanity in Washington. Additionally, if any Congress were to exceed the annual cap, the Office of Management and Budget (OMB) would be required to make evenly distributed cuts to bring us back to the desired level—there are no sacred cows when spending is this out of control.

With our debt ceiling about to come crashing down on us and our federal spending going through the roof, our nation needs fiscally responsible leaders. We need leaders who recognize that controlling our already wildly out of control spending is not an easy task, but a vital one. To refuse to raise the debt ceiling would have profound negative effects. But to raise the debt ceiling without a mechanism in place to control spending would be catastrophic. This crossroads is an opportunity for Americans to return to what made us the greatest country in the world in the first place: Freedom. The debtor, especially the debtor who continues to spend more than he makes, is never free.

The cost of inaction may be the greatest cost of all.

David Eads writes for The Dartmouth Review.

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