U.S. Congressman Paul Ryan Serving Wisconsin's 1st District

U.S. Congressman Paul Ryan Serving Wisconsin's 1st District

U.S. House of Representatives

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Southern Wisconsin’s families continue to work hard to make ends meet in an uncertain economy. The unemployment rate in Wisconsin is high at 5 percent as of January 2015, while the national unemployment rate stands at 5.5 percent.  Also telling, is that the labor force participation rate stands at 62.8 percent. The participation rate refers to the number of people who are either employed or are actively looking for work. The number of people who are no longer actively searching for work would not be included in the participation rate.  Therefore, during an economic recession, many workers often get discouraged and stop looking for employment, as a result, the participation rate decreases.  Another way of looking at this is the U-6 unemployment rate, which is a comprehensive measure of labor underutilization that takes into account persons marginally attached to the labor force as well as persons who would like to be employed full time but can only find part-time work – in other words, the unemployed, the underemployed and the discouraged who have given up on finding work.  The U-6 unemployment rate stands at 11.0 percent.

As the economy struggles, much focus has been on increasing taxes to address our deficit and our debt.  These tax increases would hit job creators, like those small manufacturers located in industrial parks in our communities, and hard-working families.  Our local manufacturers and families are already forced to live under the strains of the current difficult economy.  Asking them to pay more will hurt our local communities.  What the federal government needs to do is stop spending too much.  It simply can no longer afford to spend money that it doesn’t have and take out more loans to pay for that spending.

Economic growth comes when American families and small businesses work, save, and invest. Congress needs to prioritize legislation that encourages job creation by keeping taxes low, controlling government spending, and addressing the severe problems ahead if we do not reform critical government programs that are driving up our national debt. Left unchanged, these programs will continue to take up a larger portion of our budget each year, crowd out other government spending, and hurt our economy. As the Chairman of the House Budget Committee, I take seriously my responsibility to help improve accountability, monitor federal spending, and prevent government waste and abuse, while putting forward long-term solutions to our debt crisis.

The Bipartisan Budget Act

The federal government, like any other business or household, must each year have a budget. In the absence of a year-long budget, the House and Senate must approve short-term spending bills known as "continuing resolutions" to keep the federal government operational.  On October 15, 2013, Senator Patty Murray and I stood up in our respective chambers to offer a motion to create a bicameral conference committee to negotiate a federal budget by December 13, 2013.  Rather than continuing the trend of budgeting by brinkmanship with short-term spending bills, Senator Murray and I recognized the need for long-term bipartisan solutions to our nation’s most pressing fiscal problems.  On October 16, 2013, the motion to go to conference was adopted by unanimous consent in the House and Senate.

When entering the negotiations, there were three criteria I used to evaluate all provisions of the deal.  First and foremost, the deal must not raise taxes.  The last thing already financially-strapped individuals and families need is another tax increase.  Second, the deal must not increase the deficit.  At a time when our national debt is greater than $17 trillion, Congress should not appropriate one dollar without vigorous and diligent oversight.  Third, the deal must stop Washington from lurching crisis to crisis.  Our economy needs stability that will build confidence, and that confidence will help spur job creation.

After nearly two months of deliberations among the members of the bicameral conference committee, Senator Patty Murray and I introduced the Bipartisan Budget Act of 2013 on December 10, 2013.  This is the first time since 1986 that a divided Congress has produced a bipartisan budget resolution.  The Bipartisan Budget Act will provide $63 billion in sequester relief — split evenly between defense programs and other domestic priorities — in exchange for over $80 billion in savings elsewhere in the budget, resulting in over $20 billion in deficit reduction, all without raising taxes.  Additionally, it preserves 92 percent of the Budget Control Act’s (BCA) sequester cuts, or approximately $770 billion of the original BCA sequester savings, but does so by cutting spending in a smarter way.  It eliminates waste by ending the distribution of government checks to criminals and the deceased, puts an end to favoritism by cutting corporate welfare, and it makes real reforms to some of the true problems of autopilot spending.  And, it will also prevent another government shutdown this year.

The Bipartisan Budget Act came before the House for a vote on December 12, 2013, and was passed by a vote of 332 to 94.  I was encouraged that my colleagues from both parties voted in favor of this budget agreement instead of continuing down the same unsustainable path and risking another federal government shutdown.

In the past, I have introduced budgets that reform the tax code and help pay off the debt.  While I will continue to support these reforms, the fact is, we have divided government.  And in divided government, no one will get precisely what they want.  Although this agreement does not go far enough, it does represent a firm step in the right direction.  The Bipartisan Budget Agreement embraces the common ground shared between the budgets passed in the House and Senate.  This agreement implements commonsense ideas that both parties can support.  It cuts spending in smarter ways than the across-the-board approach.  It also makes clear that tax hikes are not an option.  Most importantly, it shows how Washington can live within its means and make divided government work.

Responsible Budgeting and A Down Payment on the Nation’s Debt

Nearly five years after the financial crisis, many families still haven’t recovered. The typical household’s income, when adjusted for inflation, is lower now than it was in 2007.1 Over 46 million people live in poverty today, and over 90 million are out of the workforce altogether.

Every year since the recession hit, Washington has all too often turned to the old standbys: more taxes, more spending, and more regulation. The federal government rushed through a series of costly remedies: the stimulus package, the Dodd---Frank law, Obamacare. Washington keeps stepping on the gas, and the engine keeps on flooding.

President Obama and his party promised if Washington took a firmer hold of the economy, working families would be better off. But in the first few years of his administration, the economy grew at less than half the average of all other recoveries since World War II. Economic growth has moved in fits and starts since then and, in recent months, has slowed considerably.

Meanwhile, the national debt has skyrocketed and continues to climb — well after the recession. In May 2013, the Congressional Budget Office (CBO) projected the federal government would add $6.3 trillion to the national debt from 2014 to 2023. But in February 2014 — not even a year later — CBO revised its forecast to $7.3 trillion — a $1 trillion increase. It attributed most of the hike to a drop in revenue, the inevitable result of a lackluster economy.

 The budget and the economy are closely linked. Just as a weak economy can drag the budget into the red, a responsible budget can help propel the economy forward. So if Washington is serious about helping working families, then it needs to get serious about the national debt.

And Washington needs to act fast — because the economy is losing steam. Last year, CBO predicted the economy would grow, on average, by 2.9 percent each year over the next decade.  This year, it predicts the economy will grow by only 2.5 percent — a deceptively small change with big, long-term consequences.

One major problem is that people are leaving the labor market. Today, only 63 percent of the population has a job or is looking for one — the lowest level since 1978. And CBO predicts it will continue to decline. That’s partly because the baby-boom generation is retiring, and the population as a whole is getting older. But it’s also because fewer people are joining the workforce.  And the administration’s policies have made things worse.

Take Obamacare. CBO says the law will discourage work. People will receive smaller health-insurance subsidies as they make more money. So for many families, it just will not pay to work. As a result, people will put in fewer hours, and the effect will be huge — as if 2.5 million people had stopped working full time by 2024.

The administration has tried to spin this as good news and argued that work was just getting in the way. But the problem isn’t that too many people are working. The problem is not enough people can find work. And if more people leave the workforce, the economy will shrink. There will be less opportunity, not more.

And the national debt will only get bigger. In the past few years, Congress has achieved some modest spending restraint, primarily by reducing discretionary spending. But Washington hasn’t done nearly enough to make a serious dent in the debt. Under current law, the deficit will start growing in just two years. By 2022, the U.S. will be running trillion-dollar deficits again — even though the federal government will be taking in a historically large share of revenue. That’s because spending will be growing twice as fast as revenue. So over the next ten years, the national debt will grow by $10 trillion — for a grand total of $27 trillion.

Yet the President wants to double down. In his latest budget request, he wants to increase spending by $791 billion through 2024. He wants to undo the recent bipartisan budget agreement and increase spending by $56 billion in 2015 alone. He’s abandoned the one significant reform he’s embraced — what his own administration has called a ‘‘more accurate’’ measure of inflation. And he wants to raise taxes on families and job creators by $1.8 trillion — though that’s on top of the $1.7 trillion he’s already imposed. In short, the President wants families to pay more so Washington can spend more.

And even with those extra tax hikes, the deficit will still be back above $1 trillion by 2022. The President’s budget never balances — ever. Instead, it allows our debt to spiral out of control. If the last five years are any indication, that simply won’t work. And if we don’t change course soon, both the budget and the economy will continue to decline. What the country really needs is an alternative. The administration has bottled up the forces of innovation and free enterprise; we need to invigorate them. We need a plan that will provide for the nation’s needs, that will allow families and job creators to rebuild the economy, and that will finally balance the budget.

One of the biggest threats to our country’s economic growth now and in the future, is our mounting debt.  Our debt is the product of massive spending increases that occurred under many presidents and many Congresses over many years, but we are reaching a tipping point and can no longer afford to kick the can down the road and expect that we can solve our fiscal problems in the future.

A balanced budget is a reasonable goal because it returns government to its proper limits and focus.  By curbing government’s overreach, our budget will give families the space they need to thrive.  Yet the most important question isn’t how we balance the budget – it’s why.  A budget is a means to an end, and the end isn’t a neat and tidy spreadsheet.  It’s the well-being of all Americans.  Washington’s reckless spending drives the debt and this debt is hurting the economy today.  We’ll never get our debt under control unless we tackle its main driver:  spending money we don’t have.  Unless we get at the heart of the problem, Americans will face a debt crisis – one that will threaten our most vulnerable in particular – and it is our responsibility to prevent such a crisis.  By giving families stability and protecting them from tax hikes, our budget will promote a healthier economy and help create jobs.

A Responsible, Balanced Budget to Grow the Economy and Create Jobs:  My House colleagues and I passed our budget resolution for FY2015, “The Path to Prosperity” which calls for a number of reforms that will improve the lives of all Americans.  This budget provides an exit ramp from the current unsustainable path – and an entry ramp to a better future. 

By balancing the budget, the Path to Prosperity will promote economic growth. Over the next ten years, it will cut $5.1 trillion in spending, and CBO has said that such a plan would help the economy.  By paying down the debt, the federal government will help keep interest rates low, which will spur greater investment and productivity. And by giving job creators some certainty and workers some relief, the Path to Prosperity will give free enterprise some much-needed help.

The Path to Prosperity balances the budget by tackling the drivers of our debt: autopilot spending and interest payments. It strengthens critical programs like Medicare by giving seniors more control over their health-care. CBO has said that such a reform would not only help the federal government save money but help seniors save money as well. It is the ultimate win-win.

But the Path to Prosperity is not just a budget — it is a blueprint for the country’s future. It calls for fundamental reforms in key areas like the tax code, energy, welfare, and health care.

Reform the Tax Code:  Today, taxpayers spend $168 billion and 6.1 billion hours per year trying to file their tax returns.  And what’s worse, the tax code stifles economic growth.  Our corporate tax rate is the highest in the industrialized world, and the tax code is full of loopholes and deductions that serve only the well-connected.  Independent economists agree that a plan to lower rates and broaden the base would spur economic growth.  There are a number of good tax-reform proposals.  Although the Path to Prosperity does not embrace any particular proposal, it calls for a tax code that is simpler, fairer, and more competitive.

Energy Development:  The Path to Prosperity also calls for greater energy development.  It’s not surprising that the state with the lowest unemployment rate — 2.6 percent — is North Dakota, where an energy boom has lifted the state economy.  Today, a reinvigorated oil and gas industry is creating many new jobs — and they are good-paying jobs.  The average wage in the oil and gas sector is over $92,000 a year.  The Path to Prosperity builds on this success by opening more federal lands to energy development, so more families can share in this opportunity. 

Welfare Reform:  The Path to Prosperity also recognizes that we owe families in need much better than the status quo.  Rather than provide a roadmap out of poverty, Washington has created a complex web of programs that are often difficult to navigate. Some programs provide critical aid. Others discourage families from getting ahead. This budget takes some initial steps in the right direction by rethinking our job-training programs, reforming Medicaid, and encouraging work. It also creates the space for greater reform. Both sides of the political spectrum agree that poverty is a problem and should work together to expand opportunity for all Americans.

Health Care Reform:  The Path to Prosperity also will strengthen our health-care system by repealing Obamacare.  The health care law has been a costly mistake, so this plan calls for a full replacement.  It clears the way for patient-centered reforms that will help increase access, improve quality, and lower costs. 

The status quo means weak economic growth and invites a fiscal crisis. The Path to Prosperity is the alternative the country needs. It expands opportunity by growing the economy. It strengthens the safety net by retooling federal aid. It secures seniors’ retirement by reforming entitlements. It restores fair play to the marketplace by ending cronyism. It keeps our country safe by rebuilding our military. It ends Washington’s culture of reckless spending. And it will help to build an America that works.

Job Creation and Economic Growth

The economic growth that our country needs cannot come from Washington.  It originates from the creativity and entrepreneurial spirit of the American people.  This spirit can only thrive if the government creates an economic-friendly environment that allows businesses to grow and create jobs.  In the 112th Congress, the House Majority has pursued an agenda focused on job creation and economic growth.  As such, The House has passed 55 bills aimed at empowering small business owners and reducing regulatory burdens, fixing the tax code to help job creators, increasing competitiveness for American manufacturers, encouraging entrepreneurship and growth, maximizing domestic energy production, paying down America’s unsustainable debt burden and beginning to live within our means.  Unfortunately, 40 of these bills, despite most of them garnering bipartisan support in the House, died in the Democrat-controlled Senate.  Job creation and economic growth will remain a priority for House Republicans in the 113th Congress.

Reforming our tax code, eliminating the broken policies of the past, training workers to meet 21st century needs, and approving the Keystone XL Pipeline and expanding oil production on federal lands are all areas where both parties can find common ground and bring positive changes that will allow businesses to grow and create jobs. I will continue to work to advance policies that address our economic challenges, foster innovation and investment, and help job creators without raising taxes on working families and small business owners.

Consolidate and Strengthen Job-Training Programs:  A well-educated workforce is one of the key drivers of strong economic growth. In the face of global and technological advances that have made the modern economy more complex and dynamic, it is imperative that all Americans have the opportunity to access a high-quality education. But even though federal spending on the Department of Education and related education programs has grown significantly over the past few decades, academic achievement has not seen a commensurate improvement.

Now more than ever, the nation’s students must have the opportunity to access the high-quality education and skills-training needed to enable them to compete in the rapidly changing global economy. At the same time, Congress must make every dollar count by eliminating wasteful, duplicative, and ineffective programs. The Government Accountability Office [GAO] has identified many areas that are ripe for reform. In the area of education, their reports have identified 82 separate programs designed to improve teacher quality across ten federal agencies and dozens of overlapping job-training programs.

The Bureau of Labor Statistics reports that 10.5 million Americans are unemployed. Yet they also report 4 million job openings. This gap is due in part to the failure of the nation’s workforce-development programs to successfully match workers’ skills with employers’ needs. Federal job-training programs are balkanized, difficult to access, and lacking in accountability. In January 2011, the GAO issued a report that identified 47 federal employment and training programs that overlap with at least one other program, providing similar services to similar populations. Together, those GAO-identified programs spent $18 billion in FY2009, including stimulus dollars.  Since GAO issued that report, the Education and the Workforce Committee has conducted extensive work in this arena and added to the list, identifying more than 50 duplicative and overlapping programs. 

This bureaucratic nightmare fails workers and employers alike and wastes taxpayer dollars. Senator Coburn has presented a report highlighting the high amount of waste, fraud, and abuse that occurs in these programs. Even President Obama noted in his 2012 State of the Union address that the maze of confusing training programs must be cut through. He echoed the request in his 2014 State of the Union address, charging Vice President Biden with conducting a review of the job-training system, despite the work already done by GAO and the Education and the Workforce Committee. To that end, all congressional committees with jurisdiction over job-training programs should look to consolidate as many administrative structures as possible to eliminate duplication and maximize taxpayer funds by focusing them on the most effective means of delivering job-training activities. The Education and the Workforce Committee reported legislation to that end, which passed the House in March 2013. The SKILLS Act reforms the workforce development system and streamlines duplicative and ineffective job training programs by consolidating 35 programs. It also creates a workforce investment fund to serve as single source of federal support for employers and strengthens role of state and local officials and job creators to tailor programs to meet local needs. 

The Path to Prosperity FY2015 budget builds on these reforms.  It improves accountability by calling for the consolidation of duplicative federal job-training programs into more targeted career-scholarship programs. This budget will also improve these programs’ accountability by tracking the type of training provided, the cost per trainee, employment after training, and whether the trainee secures a job in his or her preferred field. A streamlined approach with increased oversight and accountability will not only provide administrative savings but improve access, choice, and flexibility to enable workers and job seekers to respond quickly and effectively to whatever specific career challenges they face.

Additional Information

Washington, DC Office
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