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House Passes Budget Control Act to Prevent Default

U.S. House has debated and passed two plans – still no plan passed in Senate or proposal by President

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Washington, July 29, 2011 | comments
U.S. House has debated and passed two plans – still no plan passed in Senate or proposal by President
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 Idaho Congressman Mike Simpson, a senior Member on the House Budget Committee, joined his Republican colleagues in passing the Budget Control Act.  The bill passed in the House 218-210.

The proposal, which cuts $917 billion in spending and raises the debt ceiling by $900 billion, would require further enactment of a $1.8 trillion deficit-reduction package before any additional increase in the debt limit.  It also requires a balanced budget amendment be sent to the states for ratification and does not raise taxes. The balanced budget amendment vote is scheduled to be considered by the House as early as this weekend.

“This bill puts us on a path to solving our debt crisis and boosts our economy by preventing the possibility of a default and ensuring Social Security checks, military active duty paychecks and veterans’ benefits go out on time,” said Simpson.

Credit rating agencies like Standard & Poor’s have said that the long-term debt of the United States is the greatest threat to its credit rating but that the possibility of a default would undoubtedly throw the economy into turmoil.  S&P has stated repeatedly that a major debt-reduction plan is needed to protect the United States’ credit rating and prevent interest rate increases.

“The Budget Control Act is a serious but practical bill that cuts government spending by more than it raises the debt ceiling and requires Congress to act in the near future to make significant reforms and continue to bring our spending and debt under control,” Simpson added. “It also compels Congress to pass a budget balanced amendment.”

Congressman Simpson last week supported passage of the “Cut, Cap and Balance” legislation and has long been a cosponsor of a balanced budget amendment to the Constitution.

The Budget Control Act is supported by the U.S. Chamber of Commerce, Americans for Tax Reform, and the National Federation of Independent Businesses (NFIB).  Dan Danner, President and CEO of the NFIB today said, “Small-business owners know they will go out of business if they spend more than they take in, and expect the government to operate by the same common-sense principle. Washington has a spending problem, not a revenue problem. We at NFIB thank Congressman Simpson for helping make the cuts necessary to start us on a path to get our fiscal house in order without raising taxes on America’s job-creators.”

The bill now moves to the Senate for consideration.

 

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