Restoring Fiscal Sanity

July 13, 2022

 Americans just experienced the most expensive Fourth of July in recent memory. The cost of a cookout increased nearly 17% in just the last year alone. From fuel to food to housing, Americans are suffering at the hands of the not-so-hidden inflation tax. In fact, brand-new inflation figures show that prices rose 9.1% in June to their highest level in forty years.

Rising prices don’t just mean Americans are scaling back on non-essential purchases. 2 in 3 Americans report dipping into their savings to afford basic goods. It’s impacting our nation’s ability to plan financially: rising costs mean that we can afford to contribute less to our savings, retirement funds, and investments. High inflation means a more uncertain and less prosperous future.

One of the major drivers of the inflation we see today: federal spending. Economists of all political stripes agree that the high inflation Americans are now experiencing can be directly attributed to the $1.9 trillion American Rescue Plan. While the vast majority of COVID relief was adopted in a bipartisan manner during the height of the pandemic, the American Rescue Plan was passed in a completely partisan fashion, injecting nearly $2 trillion in new federal spending while hundreds of billions of dollars in previously allocated COVID relief remained unspent. Jason Furman, who served as the chairman of the Council of Economic Advisers under former President Obama, said that the American Rescue Plan can be blamed for between one and four percentage points of inflation. Even Secretary of the Treasury Janet Yellen urged President Biden to significantly scale back the spending plan over concerns about its impact on prices.

Our current fiscal trajectory as a nation is unsustainable and threatens the future of our children and grandchildren. We can dig ourselves out from underneath crushing inflation, but only by restoring fiscal sanity. Recently, Senator Mike Braun (R-IN) and I introduced legislation to rein in out-of-control government spending.

The Responsible Budget Targets Act offers a practical solution to slow our nation’s spending. If followed, the plan outlined in the bill will balance our budget in just fifteen years without causing major disruptions to government services. Importantly, this bill supports a flexible budget accountability model that allows spending to expand and contract with the size of our economy, all while allowing for emergency spending as needed.

The American people need relief from crushing prices—and that starts with a strict spending diet for our federal government. We must have airtight oversight on Congressional spending to make sure every dollar is accounted for. We must also return control back to the hands of small businesses on Main Street so they can do what they do best: create jobs and drive our economy forward. And Congress must depart from the mindset of “We can fix any problem if we threw enough money at it.”