The economic outlook of the United States is clouded with uncertainties that must be addressed immediately to curb the massive budget deficit, said William H. Gray III, majority whip of the U.S. House of Representatives.
Speaking to law students at the University of Utah, Gray, who hails from Pennsylvania, said the U.S. government must begin to solve the national economic crisis and change the fiscal policies that have created "a sea of red ink.""If we don't correct the problem, we'll have a society with less opportunity, less economic growth, less ability to compete because capital flows will go out and capital formation will take place elsewhere in the world."
In 1980, the entire national debt totaled $914 billion, but during the 1980s that amount increased to more than $3 trillion and continues to grow rapidly, he said.
Gray, who helps the Speaker of the House and Majority Leader set legislative priorities, said the budget summit held last week between the White House and members of Congress at Andrews Air Force Base was like political hide-and-seek, with each party trying to avoid blame for the tough choices that must be made to help the United States become a economically sound.
He said federal officials are trying to come up with a deficit reduction package of about $50 billion in the first year and $500 billion over the next five years.
"We ended the summit deadlocked because we were stuck around the issue of revenues, progressivity and fairness, and what we defined as economic growth . . . If we don't address this deficit question strongly, fairly and quickly, then we will not be able to compete in that new emerging world of the 1990 and the 21st century."
He then suggested the only way to reduce the deficit was by cutting and reducing spending since economic growth alone will not allow the federal government to survive its giant debts.
"George Bush raised taxes because he understood that unless we reduce this deficit we could not, through cuts in spending alone, achieve the deficit reduction needed over a five year period and at the same time provide for national security and for the minimal kinds of investments over the next five years."
The problem faced by Congress is the problem of how much to spend in defense and whether that level of spending should be the same as the Cold War era. Some analysts say the budget should be cut by 25 percent over five to 10 years.
A couple of weeks ago, the Pentagon estimated that by the end of this month the United State's operations in the Persian Gulf will amount to $2.5 billion above budgeted expenditures. The United States sent forces to Saudi Arabia after Iraq invaded Kuwait Aug. 2.
"The real question for us is can we increase the strength of the economic engine of America?" Gray asked. "Can we provide greater opportunity for the next generation?"