MEMPHIS – U.S. Senator Bob Corker, R-Tenn., said today the U.S. officially hitting its $14.29 trillion borrowing limit underscores the need for Congress to put in place a fiscal straitjacket like the CAP Act.
“The U.S. has officially reached our $14.294 trillion borrowing limit, and Congress will soon be asked to raise the debt ceiling for the eleventh time in 10 years,” said Corker. “While some have suggested it will be catastrophic if Congress does not vote to increase the debt ceiling, I believe it will be more damaging if Congress allows this seminal moment to pass us by without finally getting our fiscal house in order. Before the debt ceiling is raised, Congress must put in place an enforceable mechanism like the CAP Act to slash unsustainable spending.”
The CAP Act, S. 245, would, for the first time, set an across-the-board, binding cap on all federal spending. The fiscal straitjacket created by the CAP Act would result in $7.6 trillion less spending over a 10 year period. Specifically, the bill would:
(1) Put in place a 10-year glide path to cap all spending – discretionary and mandatory – to a declining percentage of the country’s gross domestic product, eventually bringing spending down from the current level, 24.7 percent of GDP, to the 40-year historical level of 20.6 percent, and
(2) If Congress fails to meet the annual cap, require the Office of Management and Budget to make evenly distributed, simultaneous cuts throughout the federal budget to bring spending down to the pre-determined level. Only a two-thirds vote in both houses of Congress could override the binding cap, and
(3) For the first time, eliminate the deceptive “off-budget” distinction for Social Security – providing a complete and accurate assessment of all federal spending.
The growing list of Senate sponsors of the CAP Act includes Bob Corker (R-Tenn.), Claire McCaskill (D-Mo.), Lamar Alexander (R-Tenn.), Kelly Ayotte (R-N.H.), Richard Burr (R-N.C.), Saxby Chambliss (R-Ga.), Mike Crapo (R-Idaho), Jim Inhofe (R-Okla.), Johnny Isakson (R-Ga.), Ron Johnson (R-Wis.), Mark Kirk (R-Ill.), Jon Kyl (R-Ariz.), Joe Lieberman (ID-Conn.), Joe Manchin (D-W.V.) and John McCain (R-Ariz.).
Representatives Jim Cooper (D-Tenn.) and Jimmy Duncan (R-Tenn.) have introduced a companion version of the bill in the House.