NCPA Senior Fellow Also Cites Lack of Control Over Unfunded Government Liabilities
DALLAS (Feb. 14, 2002) — NCPA Senior Fellow Bruce Bartlett told the Senate Finance Committee this morning to abolish the debt limit, arguing that it is an ineffective tool for controlling the growth of federal indebtedness.
The reason, Bartlett said, is that what is considered national debt is actually a small and declining share of total government indebtedness. "I think that the time spent debating the debt limit would be better spent in oversight and reform of unfunded government liabilities of pension and health commitments."
"I believe that the appropriate measurement is debt as a share of the gross domestic product," Bartlett continued. "Efforts to raise GDP will do more to make current and future debts bearable than anything Congress does to pay down the debt by cutting appropriations or keeping current tax revenues above current outlays. In other words, economic growth is more important to reducing the burden of debt than explicit debt repayment."
Bartlett's remarks were made to the Senate Finance Committee. Treasury Security Paul O'Neill and Bob Bixby, executive director of the Concord Coalition also testified.
Some of Bartlett's other remarks included:
- Unfunded Liabilities-Social Security."Taking into account future retirees and putting all the Social Security system's debts into present value terms, there is an unfunded liability of $3.8 trillion for Social Security, $2.7 trillion for Medicare Part A and another $6.5 trillion for Medicare Part B. In other words, the federal government would need to have $13 trillion in the bank today, earning interest, to pay all of the Social Security commitments that have been made, over and above future revenues under current law."
- The Level of National Debt."In worrying about whether our national debt is excessive, therefore, I would urge this Committee to give more attention to those provisions of our tax system that are hindering growth than to the nominal size of the debt."