Addressing the spending problem now is the key to restoring prosperity. Right now, businesses are holding back on hiring and investment, partly because they are worried that we are headed for a future of large tax hikes and interest-rate spikes. Washington's spending spree has fueled this uncertainty.
Federal Reserve Chairman Ben Bernanke testified before the House Budget Committee this week that one of the best things Congress can do to get businesses hiring and the economy growing again is to demonstrate that we have a serious plan for tackling our fiscal problems.
Since being entrusted with the Majority only a month ago, we have been taking steps to do just that. One of our first official acts was to cut Congress's own budget by five percent. Next, we voted to cut trillions in future government spending by repealing the irresponsible new health care law. And when it comes to funding the government for the rest of this year, we are engaged in a debate that is refreshingly different by Washington standards. We are debating, not whether to cut spending, but how much spending to cut.
In these debates, we started with a simple goal: reduce the budgets for most government agencies back to where they were before the bailouts, before the stimulus package, and before the spending binge. Over the last two years, many federal bureaucracies received budget increases of 30 percent, 40 percent, or - in one case -100 percent. The numbers grow even larger when the failed stimulus is added in.
Our spending cuts are critical first steps to earn back the trust of a skeptical public - a skepticism that is surely justified. More must be done to restore confidence to a private sector that will remain cautious until it is convinced that we are serious about controlling spending. As House Budget Committee chairman, it will be my job to help chart a new course: a path to prosperity.
Our forthcoming budget is our obligation to you - to show you how we intend to do things differently. We're going to cut spending to get the debt down, help create jobs and prosperity, and reform government programs. We owe you an honest debate about our biggest fiscal challenges. If we act soon, and if we act responsibly, we can gradually phase in reforms to our major entitlement programs to save them from bankruptcy and ensure that people in and near retirement will be protected.
It appears President Obama will present a very different vision in the coming days - and in my view, one that takes the nation even further in the wrong direction. And he recently asked Congress to raise the debt limit to accommodate all of the spending and borrowing that he and his party have already committed us to. But the debt crisis that is currently crippling Europe teaches us that we cannot keep making unaffordable promises without eventually hitting a real debt limit - a limit on our borrowing imposed by credit markets in a state of panic.
We must act responsibly and send a clear message: Endless borrowing is not a strategy. Spending restraint must come first. It won't be easy, but America is an exceptional nation, and Americans have risen to greater challenges and prevailed in the past. To restore prosperity today, leaders must rise to the occasion and demonstrate to families and entrepreneurs that they need no longer fear for tomorrow. Until we accomplish that, our work will not be done.