Ron Paul’s Statement on the Budget Control Act

From paul.house.gov

 

This evening Congress is asked to vote for a bill that claims to reduce spending in the future, thereby accepting the fiction that legislation passed today somehow can control Congress in the future. The fate of legislation like Gramm-Rudman-Hollings in 1985 and the 1997 Balanced Budget Act prove the fallacy that laws passed today somehow will restrain congressional spending in the future.

More recently, I would remind my colleagues that the legislation creating the Medicare Part D prescription drug plan contained language requesting congressional action to control Medicare costs when program expenditures reached a certain “trigger.” When this trigger was reached, Congress simply passed legislation delaying the date at which Congress would have to implement the cost controls supposedly mandated by the original bill.

The claim that spending cuts in this bill equal the amount by which it increases the debt ceiling also is mistaken. First, as explained above, it is highly unlikely that Congress will abide by these caps in the future. Second, an immediate $1 trillion increase in borrowing authority does not equal a $1 trillion cut if that cut is phased in over ten years. To pretend otherwise totally ignores the time value of money, not to mention the inevitable erosion of the purchasing power of the U.S. dollar as the Federal Reserve continues desperately to try to breathe life into the stagnating economy via QE 3,4,5,6, etc.

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