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Jim DeMint on Budget & Economy

Republican Jr Senator; previously Representative (SC-4)


Sequestration is not true spending cuts, just cuts in growth

All this talk of "spending cuts" in sequestration is forgetting one important point: These aren't true spending cuts. They are reductions in the rate at which government spending is continuing to grow, said Heritage President-elect Jim DeMint on "The Kudlow Report." He told host Larry Kudlow, "You can see there's no cuts in spending. In fact, it will continue to increase at a rather dramatic pace."

While President Obama runs around warning everyone of economic devastation, it's the President's policies that are truly harmful to the economy, DeMint said. "He's tried to discredit capitalism over the last four years, and now he's trying to make a case that the only way to grow the economy is to continue to grow spending."

"We want to see the country on a 10-year path to a balanced budget that creates some financial stability," DeMint said. "We need some pro-growth policies like good, simple tax reform and entitlement reform to give some certainty out over the next 10 years."

Source: Heritage President Jim DeMint on CNBC's "The Kudlow Report" , Feb 27, 2013

Quantitative easing prints money & causes inflation

A deceptive example would be what the Fed calls "quantitative easing," in which it simply prints more money out of thin air--devaluing our dollar and damaging our country's economic health and global standing. And in its role as a supposedly independent guardian of the dollar, the Federal Reserve has embarked on policies that have undermined worldwide confidence in our currency and set the stage for massive inflation.
Source: Now Or Never, by Sen. Jim DeMint, p. 24 , Jan 10, 2012

Spending is an addiction

I am constantly amazed at how out of touch my colleagues are with the very real dangers from our reckless spending and irresponsible budget deficits. How can public officials and journalists continue to ignore such a serious and obvious threat? I asked former Federal Reserve chairman Alan Greenspan: "The people in the administration and Congress are smart people. Are they intentionally trying to collapse our economy and undermine our currency as a way to restructure our debt and redistribute wealth?"

I think Greenspan is right. Washington's determined drive toward national bankruptcy is more likely an addiction than a conspiracy. Attempting to persuade my colleagues to stop spending has been like confronting an alcoholic about his need to stop drinking, with the prevailing attitude being "Just one more and I'll quit tomorrow." The spending continues in Washington, as do many promises to cut the budget--tomorrow.

Source: Now Or Never, by Sen. Jim DeMint, p. xxiii-xiv , Jan 10, 2012

$13T in debt shows both parties are out of control

The people in Washington have clearly gotten out of control, in both parties. When you have $13 trillion in debt, you've got a big problem. I came into the Senate in the majority: 55 senators; a large majority in the House; Bush in the White House. And Republicans didn't do what we said we were going to do. We spent too much. We borrowed too much. And, frankly, if we get the majority again, even if it's just in the House and we don't do what we say, I think the Republican Party is dead.
Source: CNN "State of the Union" coverage: 2010 S.C. Senate debate , Sep 19, 2010

Congress rewarded for spending; and punished for opposition

In 2005, Treasury Secretary Paulson announced he would be asking Congress to give him a "blank check: to save Fannie Mae and Freddie Mae, the government-sponsored enterprises that had grown out of control carrying millions of dollars in debt. A month later we passed the nearly $1 trillion Wall Street bailout.

By any business standard, the federal government is already bankrupt. Cash flow is negative and expenses are projected to outpace revenues for the foreseeable future. Debt is nearly half of total sales (tax revenues) and will surpass total sales within twenty years.

A "normal" person might scream, "What are you guys thinking?" It's taken me a while to figure it out, but I now realize why presidents and Congress continue to spend in the face of financial disaster. First, presidents, congressmen, and senators are rewarded for increasing spending and punished for opposing new spending bills.

Source: Saving Freedom, by Jim DeMint, p. 96 , Jul 4, 2009

Adamantly opposed to 2008 bailout

In 2008 I was adamantly opposed to the bailout and led the opposition to the bill in the Senate. Before the vote, I said, "This is a sad and tragic time in America. As the blood of our young men and women falls on foreign soil in the defense of freedom, our own government appears to be leading our country into the pit of socialism. And now we see this Congress yielding its Constitutional obligation to a federal bureaucracy, giving it the power to control the financial system in America."

My efforts to stop the bailout failed, in part because Republicans and Democrat leaders packed the bill with earmarks and targeted provisions for special interests. House and Senate leaders promised to pass a clean bill without unrelated measures and bot Obama and McCain urged swift action without add-ons. But after the House failed to pass the bailout on its first attempt, Senate leaders decided to go back to business as usual.

Source: Saving Freedom, by Jim DeMint, p.122-123 , Jul 4, 2009

Private spending multiplies; government only creates costs

When money stays in the private economy, there is an economic multiplier to every dollar spent. If you spend a dollar at the grocery store, the grocer uses it to pay an employee. That employee uses it to buy clothes at a local retailer who uses it to pay his employees...and on and on. Consumer spending strengthens our economy and creates jobs. Likewise, when money is saved or invested, it also creates jobs because savings and investments are used to finance the growth of companies with stocks or as loans to businesses or consumers.

Conversely, when money goes to the government in the form of taxes, it increases the size of government and creates a permanent cost to taxpayers. Every dollar the government spends this year becomes part of the baseline budget for next year. All new spending is added onto last year's spending. So when the government takes a dollar in taxes, it eliminates the economic multiplier in the private sector and creates a permanent cost compounded over time by bigger government.

Source: Saving Freedom, by Jim DeMint, p.125-126 , Jul 4, 2009

Bailouts & rescues of 2008 & 2009 were knee-jerk legislation

Consider the series of bailouts and rescues of 2008 and 2009. The federal government handed out money to particular businesses, bought stock in selected companies, created laws regarding salaries and benefits, and arbitrarily changed how taxpayer funds were used after legislation was passed. The justification? "Something had to be done."

The various pieces of that-didn't-work-so-let's-try-this economic rescue legislation began with sending checks to selected Americans in the spring of 2008. Then more bailout money was appropriated for foreclosed homeowners, then home builders, then mortgage lenders, then Wall Street, then the unemployed, then road construction companies, then the American auto companies, then the auto unions. It was hard to keep trac of who was benefiting from all the knee-jerk legislation. Congress was just borrowing more money, throwing it at the wall and hoping something would stick. The American people didn't know all the details, but they knew enough to be angry.

Source: Saving Freedom, by Jim DeMint, p.195 , Jul 4, 2009

Oppose $25B auto industry bailout; let the market work

In late 2008 the CEOs of the "big three" American auto companies sat in front of a congressional hearing begging for another $25 billion "bridge loan". There was no denying the fact our economy was in terrible straits and the loss of auto companies would be devastating to millions of Americans. Something had to be done. The question was whether the federal government should either borrow $25 billion more to prop up the auto companies for a few more months of force them to make the changes needed to succeed in the long term.

The real question was whether to let the market work or have the government intervene. The answer was made more difficult by the fact that the government was already so involved that the market was not operating properly. Laws allowed labor unions to dominate the manufacturing industry, while government regulations added costs and reduced the competitiveness of American products. These factors contributed significantly to the problem of the American auto industry.

Source: Saving Freedom, by Jim DeMint, p.214-215 , Jul 4, 2009

Voted NO on $192B additional anti-recession stimulus spending.

Proponent's argument to vote Yes:Rep. LEWIS (D, GA-5): This bipartisan bill will provide the necessary funds to keep important transportation projects operating in States around the country. The Highway Trust Fund will run out of funding by September. We must act, and we must act now.

Opponent's argument to vote No:Rep. CAMP (R, MI-4): [This interim spending is] needed because the Democrats' economic policy has resulted in record job loss, record deficits, and none of the job creation they promised. Democrats predicted unemployment would top out at 8% if the stimulus passed; instead, it's 9.5% and rising. In Michigan, it's above 15%. The Nation's public debt and unemployment, combined, has risen by a shocking 40% [because of] literally trillions of dollars in additional spending under the Democrats' stimulus, energy, and health plans.

We had a choice when it came to the stimulus last February. We could have chosen a better policy of stimulating private-sector growth creating twice the jobs at half the price. That was the Republican plan. Instead, Democrats insisted on their government focus plan, which has produced no jobs and a mountain of debt.

Reference: Omnibus Appropriations Act Amendment; Bill H.R. 3357 ; vote number 2009-S254 on Jul 30, 2009

Voted NO on modifying bankruptcy rules to avoid mortgage foreclosures.

Congressional Summary:Amends federal bankruptcy law to exclude debts secured by the debtor's principal residence that was either sold in foreclosure or surrendered to the creditor.

Proponent's argument to vote Yes:Rep. PETER WELCH (D, VT-0): Citigroup supports this bill. Why? They're a huge lender. They understand that we have to stabilize home values in order to begin the recovery, and they need a tool to accomplish it. Mortgages that have been sliced and diced into 50 different sections make it impossible even for a mortgage company and a borrower to come together to resolve the problem that they share together.

Sen. DICK DURBIN (D, IL): 8.1 million homes face foreclosure in America today. Last year, I offered this amendment to change the bankruptcy law, and the banking community said: Totally unnecessary. In fact, the estimates were of only 2 million homes in foreclosure last year. America is facing a crisis.

Opponent's argument to vote No:

Sen. JON KYL (R, AZ): This amendment would allow bankruptcy judges to modify home mortgages by lowering the principal and interest rate on the loan or extending the term of the loan. The concept in the trade is known as cram-down. It would apply to all borrowers who are 60 days or more delinquent. Many experts believe the cram-down provision would result in higher interest rates for all home mortgages. We could end up exacerbating this situation for all the people who would want to refinance or to take out loans in the future.

Rep. MICHELE BACHMANN (R, MN-6): Of the foundational policies of American exceptionalism, the concepts that have inspired our great Nation are the sanctity of private contracts and upholding the rule of law. This cramdown bill crassly undercuts both of these pillars of American exceptionalism. Why would a lender make a 30-year loan if they fear the powers of the Federal Government will violate the very terms of that loan?

Reference: Helping Families Save Their Homes Act; Bill HR1106&S896 ; vote number 2009-S185 on May 6, 2009

Voted NO on additional $825 billion for economic recovery package.

Congressional Summary:Supplemental appropriations for job preservation and creation, infrastructure investment, energy efficiency and science, assistance to the unemployed, and State and local fiscal stabilization, for fiscal year ending Sept. 30, 2009.

Proponent's argument to vote Yes:Rep. DAVID OBEY (D, WI-7): This country is facing what most economists consider to be the most serious and the most dangerous economic situation in our lifetimes. This package today is an $825 billion package that does a variety of things to try to reinflate the economy:

  1. creating or saving at least 4 million jobs
  2. rebuilding our basic infrastructure
  3. providing for job retraining for those workers who need to learn new skills
  4. moving toward energy independence
  5. improving our healthcare system so all Americans can have access to quality treatment
  6. providing tax cuts to lessen the impact of this crisis on America's working families.

Opponent's argument to vote No:

Rep. JERRY LEWIS (R, CA-51): Most of us would agree that the recent $700 billion Troubled Asset Relief Program (TARP) is an illustration of how good intentions don't always deliver desired results. When Congress spends too much too quickly, it doesn't think through the details and oversight becomes more difficult. The lesson learned from TARP was this: we cannot manage what we do not measure. We cannot afford to make the same mistake again.

Sen. THAD COCHRAN (R, MS): We are giving the executive branch immense latitude in the disbursement of the spending this bill contains. We are doing so without any documentation of how this spending will stimulate the economy. Normally, this kind of information would be contained in an administration budget. For items that have a short-term stimulative effect, most of us will feel comfortable debating their merits as an emergency measure. But there is a great deal of spending that is not immediately stimulative.

Reference: American Recovery and Reinvestment Act; Bill H.R.1 ; vote number 2009-S061 on Feb 10, 2009

Voted NO on $60B stimulus package for jobs, infrastructure, & energy.

Congressional Summary:
    Supplemental appropriations for:
  1. Infrastructure Investments: Transportation: DOT, FAA, AMTRAK, and FTA
  2. Clean Water (EPA)
  3. Flood Control and Water Resources (ACE)
  4. 21st Century Green High-Performing Public School Facilities (ED)
  5. Energy Development (DOE)
  6. Extension of Unemployment Compensation and Job Training
  7. Temporary Increase in Medicaid Matching Rate
  8. Temporary Increase in Food Assistance

Proponent's argument to vote Yes:Rep. DAVID OBEY (D, WI-7): Congress has tried to do a number of things that would alleviate the squeeze on the middle class. Meanwhile, this economy is sagging. Jobs, income, sales, and industrial production have all gone down. We have lost 600,000 jobs. We are trying to provide a major increase in investments to modernize our infrastructure and to provide well-paying construction jobs at the same time.

Opponent's argument to vote No:Rep. JERRY LEWIS (R, CA-41): Just 2 days ago we were debating an $800 billion continuing resolution. Now in addition to being asked to pay for a bailout for Wall Street, taxpayers are being asked to swallow an additional $60 billion on a laundry list of items I saw for the first time just a few hours ago. The Democratic majority is describing this legislation as a "stimulus package" to help our national economy. But let's not fool ourselves. This is a political document pure and simple. If these priorities are so important, why hasn't this bill gone through the normal legislative process? We should have debated each of the items included in this package.

It doesn't take an economist to tell you that the economy needs our help. But what does this Congress do? It proposes to spend billions more without any offsets in spending. The failure to adhere to PAYGO means that this new spending will be financed through additional borrowing, which will prove a further drag on our struggling economy.

Reference: Job Creation and Unemployment Relief Act; Bill S.3604&HR7110 ; vote number 2008-S206 on Sep 26, 2008

Voted YES on paying down federal debt by rating programs' effectiveness.

Amendment intends to pay down the Federal debt and eliminate government waste by reducing spending on programs rated ineffective by the Program Assessment Rating Tool (PART).

Proponents recommend voting YES because:

My amendment says we are going to take about $18 billion as a strong signal from the Congress that we want to support effective programs and we want the taxpayer dollars spent in a responsible way. My amendment doesn't take all of the $88 billion for the programs found by PART, realizing there may be points in time when another program is not meeting its goals and needs more money. So that flexibility is allowed in this particular amendment. It doesn't target any specific program. Almost worse than being rated ineffective, we have programs out there that have made absolutely no effort at all to measure their results. I believe these are the worst offenders. In the following years, I hope Congress will look at those programs to create accountability.

Opponents recommend voting NO because:

The effect of this amendment will simply be to cut domestic discretionary spending $18 billion. Understand the programs that have been identified in the PART program are results not proven. Here are programs affected: Border Patrol, Coast Guard search and rescue, high-intensity drug trafficking areas, LIHEAP, rural education, child abuse prevention, and treatment. If there is a problem in those programs, they ought to be fixed. We ought not to be cutting Border Patrol, Coast Guard search and rescue, high-intensity drug trafficking areas, LIHEAP, rural education, and the rest. I urge a "no" vote.

Reference: Allard Amendment; Bill S.Amdt.491 on S.Con.Res.21 ; vote number 2007-090 on Mar 22, 2007

Voted YES on $40B in reduced federal overall spending.

Vote to pass a bill that reduces federal spending by $40 billion over five years by decreasing the amount of funds spent on Medicaid, Medicare, agriculture, employee pensions, conservation, and student loans. The bill also provides a down-payment toward hurricane recovery and reconstruction costs.
Reference: Work, Marriage, and Family Promotion Reconciliation Act; Bill S. 1932 ; vote number 2005-363 on Dec 21, 2005

Voted YES on restricting bankruptcy rules.

Vote to pass the bill that would require debtors who are able to pay back $10,000 or 25 percent of their debts over five years to file under Chapter 13, rather then seeking to discharge their debts under Chapter 7. Chapter 13, calls for a reorganization of debts under a repayment plan. A Debtor would be restricted, in this bill, to a total exemption of $125,000 in home equity for residences bought within 40 months of a bankruptcy filing. The bill also would establish permanent and retroactive Chapter 12 bankruptcy relief for farmers.
Reference: Bankruptcy Abuse Prevention and Consumer Protection Act; Bill S 1920 ; vote number 2004-10 on Jan 28, 2004

Allow $3 on 1040 form to pay off National Debt.

DeMint co-sponsored allowing $3 on 1040 form to pay off National Debt

OFFICIAL CONGRESSIONAL SUMMARY: Amends the Internal Revenue Code to permit an individual to designate three dollars on his or her income tax return (six dollars on a joint return) to be used to reduce the public debt of the United States.

SPONSOR'S INTRODUCTORY STATEMENT: Pres. Eisenhower apparently once said that he believed that there could be no surplus as long as our Nation was in debt. I come from that school of thought, and yet that is not exactly where we are right now in Washington.

Where we are right now is debating whether or not 90 percent or 50 percent, or some number in between, of these projected future surpluses should be allocated to the debt. What struck me is the fact that really more than just the Congress should be involved in that debate. It is for that reason that I introduce today the Taxpayers' Choice Debt Reduction Act.

What this bill would do would be to simply take the 1040, the tax return as we now know it. And right now, we can send $3 to the presidential campaign. This would create another box wherein we could send 3 bucks to debt reduction. That is not enough money to change our national debt, but it is enough money to make a small step in an important debate that we all ought to be a part of.

LEGISLATIVE OUTCOME: Referred to the House Committee on Ways and Means; never called for a House vote.

Source: Taxpayers' Choice Debt Reduction Act (H.R.5349) 00-HR5349 on Sep 29, 2000

Sponsored Balanced Budget Constitutional Amendment.

DeMint sponsored H.J.RES.1& S.J.RES.22

Constitutional Amendment to prohibit outlays for a fiscal year (except those for repayment of debt principal) from exceeding total receipts for that fiscal year (except those derived from borrowing) unless Congress, by a three-fifths rollcall vote of each chamber, authorizes a specific excess of outlays over receipts.

Source: Joint Resolution for Amendment to the Constitution 09-HJR1 on Jan 6, 2009

Demand a Balanced Budget amendment.

DeMint signed the Contract From America

The Contract from America, clause 3. Demand a Balanced Budget:

Begin the Constitutional amendment process to require a balanced budget with a two-thirds majority needed for any tax hike.

Source: The Contract From America 10-CFA03 on Jul 8, 2010

Limit federal spending growth to per-capita inflation rate.

DeMint signed the Contract From America

The Contract from America, clause 6. End Runaway Government Spending:

Impose a statutory cap limiting the annual growth in total federal spending to the sum of the inflation rate plus the percentage of population growth.

Source: The Contract From America 10-CFA06 on Jul 8, 2010

Supports the Cut-Cap-and-Balance Pledge.

DeMint signed the Cut-Cap-and-Balance Pledge to limit government

[The Cut-Cap-and-Balance Pledge is sponsored by a coalition of several hundred Tea Party, limited-government, and conservative organizations].

Despite our nation's staggering $14.4 trillion debt, there are many Members of the U.S. House and Senate who want to raise our nation's debt limit without making permanent reforms in our fiscal policies. We believe that this is a fiscally irresponsible position that would place America on the Road to Ruin. At the same time, we believe that the current debate over raising the debt limit provides a historic opportunity to focus public attention, and then public policy, on a path to a balanced budget and paying down our debt.

We believe that the "Cut, Cap, Balance" plan for substantial spending cuts in FY 2012, a statutory spending cap, and Congressional passage of a Balanced Budget Amendment to the Constitution is the minimum necessary precondition to raising the debt limit. The ultimate goal is to get us back to a point where increases in the debt limit are no longer necessary. If you agree, take the Cut, Cap, Balance Pledge!

    I pledge to urge my Senators and Member of the House of Representatives to oppose any debt limit increase unless all three of the following conditions have been met:
  1. Cut: Substantial cuts in spending that will reduce the deficit next year and thereafter.
  2. Cap: Enforceable spending caps that will put federal spending on a path to a balanced budget.
  3. Balance: Congressional passage of a Balanced Budget Amendment to the U.S. Constitution -- but only if it includes both a spending limitation and a super-majority for raising taxes, in addition to balancing revenues and expenses.
Source: Cut-Cap-and-Balance Pledge 12-CCB on Jan 1, 2012

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Page last updated: Dec 23, 2013