Sequester refers to ten years of automatic, across-the-board cuts to the federal government’s budget. The Budget Control Act of 2011 required Congress to achieve $1.2 trillion in deficit reduction through 2021 or face a sequester. Because no agreement was reached between Congress and the Administration, the across-the-board sequester was automatically triggered.
In households and neighborhoods throughout our area, we know that we have a long way to go before we make up the nearly nine million jobs destroyed in our country by the financial crisis and recession. Even with the creation of more than 5.2 million private sector jobs since the recovery began, and the resurgence in the auto industry that added 250,000 new jobs, the recovery is too important for government to sit on the sidelines. We simply must do more to accelerate economic growth and job creation.
The Currency Reform for Fair Trade Act
As Ranking Member of the House Ways & Means Committee I have proposed a number of additional ideas to boost job creation as part of a Make It in America Agenda, including proposals to encourage investment in advanced energy manufacturing and to end currency manipulation.
Debt Limit and Deficit Reduction
The ongoing debate over raising the debt limit and the across-the-board spending cuts under the Sequester has needlessly hindered our economic recovery. The debt limit serves as an overall limit on the amount of money the federal government can borrow to pay its outstanding bills – bills Congress has already approved. On May 17, 2013, the U.S. had reached the statutory debt limit. Since then the Treasury has enacted extraordinary measures to continue funding the government. However, should Congress fail to raise the debt ceiling, Treasury will soon exhaust these extraordinary measures and Treasury will have no choice but to default on many of our outstanding obligations. For instance, payments for veterans and social security benefits and tax refunds could go unpaid should Congress not raise the debt limit. Treasury Secretary Jack Lew recently sent a letter notifying Congress that it will have exhausted its extraordinary measures by mid-October.
Unfortunately, some in Congress believe that the debt limit should be used as a bargaining chip to demand further cuts in federal spending. While I support efforts to reduce the deficit, threatening to default on our country’s obligations is not the right path forward and would have severe financial and economic impacts that would threaten our nation’s recovery. In 2011, Congress nearly failed to raise the debt limit, which resulted in the first downgrade of our nation’s credit rating, and a severe drop in the stock market. The non-partisan Government Accounting Office estimated that the effect of the near default in 2011 resulted in an increase in Treasury’s borrowing costs by more than $1.3 billion in fiscal year 2011.
As we work to revitalize Michigan’s economy, it’s critical that we do everything we can to help Michigan’s workers and families weather the current economic storm. Michigan is currently experiencing one of the most severe economic crises our state has seen with an unemployment rate of 8.8% and a deficit of 418,100 jobs. I hear from people in Michigan every day about the importance of unemployment insurance in helping them bridge this economic crisis.
Unemployment insurance ensures that workers who are jobless through no fault of their own will have support while they look for work. Unemployment insurance lifts families out of poverty - it is a lifeline for these families that keeps food on the table and a roof over their heads.
Congress has recently passed legislation that would extend Emergency Unemployment Compensation (EUC) through the end of 2013. EUC is essential for those who have exhausted their state benefits but cannot yet find work in this tough economic climate. The non-partisan Congressional Budget Office concluded that the extension of EUC will create 300,000 jobs this year.
After months of difficult restructuring, our auto industry is firmly on the road to recovery. While the last four years have been painful for our families and communities in the wake of plant closings and jobs losses, all three domestic auto companies have returned to profitability and are expanding again.
The positive news is that after months in 2009 of countering the arguments of those who felt the companies should just be allowed to fail, the federal government made an unprecedented commitment to the domestic auto industry, including $80 billion in direct support to GM and Chrysler. This assistance has worked. Both companies have exited bankruptcy and have returned to profitability through a renewed focus on building the best cars and trucks in the world. General Motors has repaid its loans to the federal government, and is again a public company following a successful IPO in which the federal government reduced its ownership stake in GM to 32 percent. Likewise, Chrysler has repaid its federal loans, and Fiat has purchased the federal government’s stake in the company.
I also believe it is critical that the federal government do everything it can to support the manufacturing base of our economy. Our industrial sector has traditionally been a source of well paid jobs that helped create the middle class. Manufacturing is also at the heart of our economic competitiveness and national security though the creation of advanced technology. Manufacturing companies do about 70% of the private sector R&D in the United States. That’s why I am a strong supporter of funding for programs to support America’s manufacturers. I also believe it is critical that the federal government do everything it can to support the manufacturing base of our economy. Our industrial sector has traditionally been a source of well paid jobs that helped create the middle class. Manufacturing is also at the heart of our economic competitiveness and national security though the creation of advanced technology.
Congressional action was needed in 2008 to stabilize credit markets that were thrown into turmoil by the global financial crisis. What might have started as a Wall Street problem quickly became a full scale problem on Main Street -- for families, state and local governments, the auto industry and many types of small businesses. While some progress has been made I will continue to press for additional steps to ensure that Michigan families and business are able to access credit on reasonable terms. Today, neraly 93% of TARP funding has been repaid, and the Treasury Department projects that the final cost of the program will be less than $38 billion.
I have talked with families who have lost their homes to foreclosure and seen the consequences first hand in our communities. Addressing the foreclosure crisis that is devastating our neighborhoods goes hand-in-hand with restoring stability to the financial system and jumpstarting our economy.
(Updated January 4, 2013)