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Hello, this is Congressman Wally Herger. Thank you for visiting my website for the first
of a series of presentations about our nation’s debt crisis. We will begin with an honest
discussion of the serious challenge our nation is facing.
As this graph shows, the crisis is driven by massive federal spending that is set to
reach levels we’ve never seen. If Congress fails to take action to reduce spending, our
national debt will reach an unbearable level and our economy will be destined for ruin.
Take a look at federal revenues. In sharp contrast to spending, revenues are set to
remain at about their historic average. It is clear that our escalating debt crisis requires
spending cuts, not higher taxes.
Now let’s take a look at this year’s deficit. The federal government will spend $3.8 trillion
this year. This charts shows that spending will far exceed revenues. It shows that the
federal government borrows more than 42 cents out of every dollar it spends. This is outrageous
and unacceptable. American families have made tough choices to get their budgets into balance.
I believe Washington should be expected to do nothing less.
One of the most disturbing results of our escalating crisis is that our nation is increasingly
dependent on foreign creditors to service our debt. As you can see here, in 1970, 5%
of our public debt was owned by foreign sources. Today, almost half of our public debt is owned
by foreign sources. Our nation’s top military leader, Admiral Mike Mullen, recently said
that “the biggest threat to our national security is our debt.” He also pointed out
that our ability to keep our nation’s military the best in the world is related to the health
of our economy. An America in debt to foreign nations is an America that is no longer in
control of its own destiny.
Which nation holds the largest amount of this debt? You guessed it--China. China owns 29.2%
of our public debt, which is considerably more than any other single nation. The interest
China receives from their investments in our bonds is effectively a cash cow, providing
them enormous money to build up their military and grow their economy.
I believe it’s critical to arm you with information about the main sources of the
debt crisis. Some are under the impression that we could balance the budget if Congress
simply eliminated earmarks and foreign aid. I strongly support the ban on earmarks that
is now in effect, and I support significant cuts to foreign aid. But this graph shows
that spending on earmarks and foreign aid represented only 2% of all federal spending
last year. Unfortunately, Congress will need to cut far more than just these programs to
truly tackle the debt crisis before us.
Here we clearly see that our spending on entitlement programs is the main driver of the debt crisis.
Spending on Medicare, Social Security, and Medicaid already consume more than half of
federal revenues. As Baby Boomers retire and health care costs continue to skyrocket, funding
on these programs will grow even more and reach unsustainable levels. By the time today’s
college graduate retires, spending on Medicare, Social Security, and Medicaid will consume
every single taxpayer dollar, leaving nothing else for national defense and other priorities.
Even worse, our economy would collapse long before then. We cannot confront our debt crisis
unless we have a fact-based discussion about the need to modify these programs for the
21st Century. Our future prosperity depends on taking responsible action now.