Today is my first day in the U.S. Senate. With this honor comes a tremendous responsibility to accomplish much for our nation.
My top priority is turning our economy around. In Congress, we had a vigorous debate about the trillion-dollar stimulus. Most Americans agree this policy has failed. Unemployment in Illinois is stuck above 9 percent with more than 640,000 of our citizens out of work. Policies of the past caused our state to fall behind. Ten years ago, Illinois had at least 150,000 more jobs than today.
Many in Washington want to continue the spend/borrow policy of the past. They ignore the warning signs of more debt, taxes and inflation. Americans already pay some of the highest corporate taxes in the world. We cannot attract new jobs if employers are moving abroad to avoid higher taxes. By taxing more to fuel spending, we threaten a double-dip recession, pushing millions of Americans out of work.
Our mounting debts pose a clear and present danger to our future. Among bad "sovereign debtors" (i.e., governments), the Illinois ranks in the top 12, sharing infamy with the likes ofVenezuela's Hugo Chavez. Under the respected Forbes Debt Scorecard, Illinois ranks 50 out of 50 in bad debts.
The picture for the federal government is not better. As a nation we hold incredibly valuable assets — a 200-year-old constitutional democracy with continuous rule, the largest economy and the dollar's status as the world's reserve currency. These strengths can add to our growth or delay a debt crisis. Consider this—Morgan Stanley reports the Greek government is now in crisis having descended to a debt-to-revenue ratio of 312 percent. Meanwhile, the U.S. government suffers no such immediate crisis even though our debt-to-revenue ratio is worse than Greece—at 358 percent.
How do we get out of this mess? First, we cast aside the partisan differences and work across the aisle to solve this problem. Second, Congress sets an example by ending earmarks and cutting its budget. Third, we build bipartisan majorities for President Barack Obama's hoped-for line-item veto and the late Sen. Paul Simon's Balanced Budget Amendment.
Then the hard work begins. While the chairmen of the president's bipartisan deficit reduction commission put forward a serious proposal, the commission's final report appears likely to be far less impressive. Spending controls are not enough. We need procedures to ensure spending reductions actually happen.
The first Senate bill I will introduce will be the Spending Control Act. This bill builds on two recent successful examples of our democracy making the right decisions for our long-term future. First, in the 1980s, the bipartisan Grace Commission set the standard for serious oversight by identifying federal spending that would add little to our nation's growth, but much to its debt. Second, the three military base closing commissions showed that bipartisan dignitaries, once given the authority to submit a proposal to Congress for a straight up or down vote, actually cut spending where others failed.
The Spending Control Act will marry these two proposals — a new Grace Commission with a mandate to realign federal spending against its actual income, and "base closing" procedural powers to submit its proposals for simple "yes" or "no" votes in Congress. Given the successful record of all three base closing commissions to implement their reductions, despite a great hue and cry, prospects would be good under this proposal for our greatest of all democracies to depart its current course toward national bankruptcy and crushing future debt.
Harvard economic historian Niall Ferguson warned that the decline of a great power is clear when it pays its money lenders more than its army. We may face that year when interest payments on our debt top our defense budget as soon as 2016. Ferguson goes on to warn that China's current economic trajectory will make it the world's largest economy by 2027 — a status America has held since the 1870s.
Ferguson's China projection is not set in stone. He highlights our great strengths of competition, science, law, medicine, consumers and the work ethic that built American incomes by the 1960s to a level 33 times per capita better than China. To recover, we must re-emphasize those core strengths. If we correct our economic policy by focusing on growth and spending discipline, the sky will once again be the limit for young Americans.
It's time to go to work.
Mark Kirk will be sworn in today as the junior U.S. senator from Illinois.