The U.S. Treasury Department reported that the federal government took in a record $3.249 trillion in receipts for fiscal year 2015. Despite taking more in taxes, the federal government still spent $439 billion more than it received—adding again to the still growing nearly $19 trillion national debt. Comprehensive fiscal reform that reduces spending, reforms our tax code, stabilizes entitlement programs and strengthens spending controls must be enacted to control this alarming debt and grow our economy.
The Treasury’s report shows again the government cannot tax and spend its way out of this problem. The first month of this new fiscal year alone, the federal government increased its deficit spending $14 billion more than it spent in the first month of the last fiscal year. In fact, despite my opposition, the President recently signed into law legislation to break the statutory spending caps by $80 billion over the next two years. The national debt the federal government has amassed amounts to more than $57,000 owed per U.S. citizen. This recklessness cannot be maintained.
As this unsustainable debt outpaces American productivity, growing out of this enormous hole is increasingly difficult, and revenue alone cannot solve the problem. In its latest baseline report, the Congressional Budget Office (CBO) projects revenues in 2016 are expected to reach 18.9 percent of our gross domestic product (GDP) while spending will be 21.1 percent of GDP next year. Of the five times in the last 50 years that the annual budget has been balanced or in surplus, annual spending never exceeded 18.7 percent of GDP. In fact, the last time the budget was in balance, annual spending was only 17.6 percent of GDP. Again, this shows that revenue is not the problem.
Even as our economy continues to struggle with insufficient levels of growth, it is generating more than enough revenue to balance the budget. But, that cannot be achieved if we do not control spending. While the post-WWII budget has never been balanced with annual government spending above 18.7 percent of GDP, the CBO projects spending will average 21.3 percent of GDP per year for the next decade. The government has never generated annual revenues higher than 20 percent of GDP, even when the top tax bracket was 90 percent. And, that one year it hit 20 percent was during the peak of the Dot Com bubble. Other than that one year, annual revenues have never exceeded 19.2 percent of GDP, further evidence that we cannot tax our way to a balanced budget at our current levels of spending.
The enactment of tax increases on Americans is the main reason for the all-time high federal taxes. Obamacare alone raised taxes on middle and upper income Americans by more than $1 trillion over the 2013-2022 period. Yet, dangerous levels of debt remain.
There is a course of action far better than overtaxing and overspending that will actually correct the problem. We must fix our broken, overly burdensome and complex tax code by simplifying it and lowering rates for all individuals, families and businesses. We must reduce federal spending and enact strong budget controls that prevent Congress and the President from spending beyond our means. We must stabilize our entitlement programs to maintain promises to protect current recipients, while strengthening the systems to guarantee benefits for future recipients. Comprehensive fiscal reform that accomplishes these priorities will result in the economic and job growth necessary to help make American businesses more competitive, increase revenue through growth and improve our economy. An improved economic position will better enable our nation to respond well to the challenges ahead.