August 2, 2011 - Issue: Vol. 157, No. 120 — Daily Edition112th Congress (2011 - 2012) - 1st Session
BUDGET CONTROL ACT; Congressional Record Vol. 157, No. 120
(Senate - August 02, 2011)
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[Pages S5230-S5233] From the Congressional Record Online through the Government Publishing Office [www.gpo.gov] BUDGET CONTROL ACT Mr. SESSIONS. Mr. President, we just passed legislation that would raise the debt ceiling. Part of that was an effort to reverse the debt trajectory we are on, but it can only be called, at best, a first step. We can all agree on that. Indeed, there is an article in the Financial Times, written by Professors Rogoff and Reinhart, who wrote a book that has gotten a great deal of attention and is widely respected, describing and analyzing sovereign debt and countries that have gone bankrupt around the world. They commented that much of what occurred in our debate occurred in those other nations. The other nations scramble around when the pressure is on with something like a debt ceiling, and they don't really change anything significantly, but they meet the crisis and tell everybody everything is OK. They say in this article in the Financial Times that everything is not OK. Indeed, the debt will increase over the [[Page S5231]] next 10 years by approximately $13 trillion, and this package would reduce the increase in our debt by $2.1 trillion to $2.4 trillion. That is not much. In addition to that, Larry Lindsey, a former economic adviser to President Bush, has done some analysis of the Congressional Budget Office score of what the budget would look like over 10 years. He points out that they were predicting nearly 3 percent growth the first and second quarter of this year. So now we have re-analyzed first quarter growth. Economic growth wasn't 3 percent, it was 2.4 percent. And the second quarter initially was scored at 1.3--not 3 percent or 2.7 but 1.3 percent. Dr. Lindsey said that loss in GDP alone will mean less economic growth, less tax revenue for the government, and over 10 years it puts the government on a trajectory to lose $750 billion--it would collect $750 billion less, which is about one-third of the savings that were to occur in the bill. Dr. Lindsey says the second, third, and fourth quarters of this year will also be well below that. We may be looking at, in this year alone, enough decline in GDP to wipe out half--maybe more--of the savings estimated in the bill we just passed. I wanted to point out that I believe many in Congress and in the Senate are in denial about how serious the debt threat is and that we are too often, as Rogoff and Reinhart noted, saying the same things other nations said before their economic crises hit. Indeed, the name of their book, ``This Time Is Different,'' refers to what government leaders said in those countries--those other countries that went into default and into debt crises--up until the last minute. They were saying: We have it under control. It is not so bad. This time, they say, it is different. Immediately, there was a crisis, which resulted in a loss of confidence, and they had a serious problem--similar to when people lost confidence in the housing market several years ago, which helped put us in this recession. This is worrisome. We are not facing a little problem; we are facing a problem that will require our steadfast attention for a decade to get this country on the right course. I note that the President had a press conference today. In a way, it rejected everything we have been talking about in this debate. It really did not talk about the nature of the crisis as Rogoff and Reinhart described. He didn't tell the American people that the real problem is spending that is surging out of control. He didn't say we can't continue, as a nation, borrowing 42 cents of every dollar we spend or that we can't continue spending $3.7 trillion when we take in $2.2 trillion. He did not talk to us honestly about that. He did not send a signal; he has not sounded the alarm. Therefore, I think a lot of people--even some in Congress and some outside of Congress--sort of think it must not be so bad. The President hasn't told us it is. More and more people are expressing concerns. There is a growing unease nationwide, as demonstrated in consumer confidence and business investment, and in some bad manufacturing numbers we received yesterday. So things are not looking good. We have to be honest with ourselves that this is a difficult time. He did, however, make repeated statements in his press conference about raising taxes. I don't think that is a good thing to do when the economy is in a fix the way it is. He flatly--and erroneously, I believe--stated that you can't balance the budget with spending cuts. Well, you certainly can. You can argue that you would rather have tax increases and fewer spending cuts, but we can and must balance our budget. It can be done with spending reductions. Quite a number of plans are out there proposing to do just that. The President continues to talk as if the problem was the debt ceiling, but the debt ceiling is really a signal that we have spent too much, and we borrowed all Congress has allowed the President to borrow, and you can't borrow any more unless Congress agrees to raise the debt ceiling. But that is not the problem. The problem, as Rogoff and Reinhart said, is our debt. That is the real problem. It is not going to be easy to fix. I wish it was. If we work together as a nation, we can do it. This country can rise to meet the challenge. I am totally convinced of that. The President said: And since you can't close the deficits with just spending cuts, we'll need a balanced approach. That means we need to balance a cut with tax increases. That is what that means. He went on to say: We can't make it tougher for young people to go to college or ask seniors to pay more for health care. But at some point, when you don't have the money, we might not be able to be as generous as we were just a few years ago when we were in better financial condition. Isn't that common sense? What do you mean you can't make any changes in how we do business? We are going to have to make changes in how we do business. He goes on to talk about investments, as he has often done. This is a quote from the press conference: Yet, it also allows us to keep making key investments in things like education and research. . . . Continuing to make investments in education? Does that mean we will continue our current level in education and that we will try not to cut it if we have to make reductions in spending? Is that what the President means? No. Just last week we saw the spectacle of the Secretary of Education appearing before the Senate Appropriations Committee asking for a 13.5- percent increase in education funding. Also last week, the President talked about investments--more, more, more--including 13.5 percent more for education. You know, 90 percent of education is funded by States, cities, and counties anyway. It is not the Federal Government. It is not our primary role and never has been. We only provide approximately 10 percent of the money that gets spent on education in America. We can't have double-digit increases when we are borrowing 42 cents of every dollar. Every penny of that increase will be borrowed money-- every penny. Doesn't common sense tell us we might not be able to increase spending this year even if we would like to? I point out that before the Budget Committee, on which I am the ranking Republican, we had the Secretary of Energy testify that he wanted a 9.5-percent increase for the Department of Energy--the Department that does more to block energy than create energy. The State Department was asking for 10.5 percent increase in the President's budget, the President's request to us. The Department of Transportation was to get a 60-percent increase in spending in the President's Budget. Last year, it was about $40 billion. I note that this year, interest on our debt will be $240 billion. I say to my colleagues that we are not dealing with reality. Americans know--maybe they are lucky enough to have two wage earners in the family when one loses their job, but do they not change the way they do business? Do they just think they can continue to spend twice as much as their income as if they were both still working? People don't do that. All over, Americans are making tough decisions. No wonder they are upset at us for pursuing this idea that we don't have to make any changes in what we do. It is very, very distressing to me. The President said this about employment: That's part of the reason that people are so frustrated with what's been going on in this town. In the last few months, the economy has already had to absorb an earthquake in Japan, the economic headwinds coming from Europe, the Arab spring, and the [increases] in oil prices, all of which have been very challenging to the recovery. But these are things we couldn't control. I don't know that those are the big problems here. Rising oil prices are. Today, oil prices are just about double--a little more--than what they were when President Obama took office. We have shut down new exploration in the gulf, and we are blocking the production of natural gas and shale formations, which has so much promise for us. We are doing a lot of things to drive up the cost of energy. Then he goes on to say this, which is surprising. He is the one who said the crisis was so large, it was a national problem. Our economy didn't need Washington to come along with a manufactured crisis to make things worse. We had a serious debate over what to do about the debt ceiling that we have [[Page S5232]] reached, and Congress--the Republican House--yielded from $6 trillion in cuts over 10 years, as they proposed in their budget, to taking $1 trillion in cuts up front as part of this debt deal. The President wanted less cuts than that, apparently, and that is not enough. Of course, it could be $2.4 trillion, if the committee functions correctly, and we hope it will. The PRESIDING OFFICER. Under the order, Senators are limited to 10 minutes. Mr. SESSIONS. Mr. President, I ask unanimous consent to speak for an additional 5 minutes. The PRESIDING OFFICER. Without objection, it is so ordered. Mr. SESSIONS. What I wanted to point out is in this chart. It gives some indication of how we are operating in the Senate and the Congress, driven in substantial part by the President's desires. It is a chart showing the growth in certain programs that are exempt from the automatic cuts that would occur if a budget agreement is not reached as part of the legislation we just passed. These are all programs that we like and wish we could continue to allow to grow every year. Unfortunately, we are not going to have the money to do that. We are going to have to deal with these programs and all spending--Defense and non-Defense programs, no doubt about it. We have first over here the Civil Service Retirement and Disability Fund. The average annual percentage increase of that fund's cost has been 4.9 percent. The average annual increase in that fund each year-- 2005 through 2010--was 4.9 percent. The average inflation rate during this time was 2.5 percent. So that is about twice the inflation rate. The next fund here--a fund all of us value--is the Military Retirement Fund. It has increased at the average annual rate of 5.4 percent. Inflation is 2.5. Medicaid--a program that is administered by States but has recently been as much as 66 percent funded by the Federal Government--has been increasing at 8.5 percent each year. I think most of us know the rule of seven, where if you have money in the bank and it draws 7 percent interest, that money will double in 10 years. So this means in about 8 or 9 years the entire Medicaid Program will double at that kind of rate of increase. And, remember, inflation is 2.5 percent. The Children's Health Insurance Program--the CHIP program--has been increasing at 9 percent a year, and the SNAP program--the food stamp program--has been increasing at 16.6 percent a year for the last 5 years. It has been increasing at 16.6 percent. So I ask, is this sustainable? We are borrowing 42 cents out of every dollar. The economy is not growing as much as we hoped and expected, and it is not going to bail us out of this so we can sustain these kinds of spending levels. We look at all these programs we value--and we hate to talk about it; we don't want to mention it--and the odd thing about the agreement that was passed earlier today, at the insistence of our Democratic colleagues, is that these programs would receive no reductions if an agreement to cut spending is not reached by the committee. Under the rule, if the committee can't reach an agreement, there will be automatic across the board cuts, except it is not evenly cut across the board because these programs are untouched. They are untouchable because our Democratic colleagues say we can't deal with them. Well, it is time for us to look under the hood of the food stamps program, I have to tell you. How could it be increasing at 16.6 percent a year for 5 years? How could that happen? Don't we need to examine it, take a good look at it? We have had no hearings. We have done nothing this year to confront the surging cost. And what about Medicaid and CHIP? Those are also surging. Maybe we could even save a little on some of those programs that are growing faster than inflation. I would point out that the military is in line, under the bill that passed, if an agreement isn't reached, to take a 10-percent cut. That is from the baseline military budget. It does not include Iraq and Afghanistan, which are coming down and projected to come down dramatically. Forgive me if I am a little bit taken aback here about our priorities and about the unwillingness of Congress to deal with out-of-control spending. That is a good deal of money we are talking about--the Medicaid Program at $270 billion a year. Food stamps have more than doubled. It is now $78 billion a year. By comparison, Alabama's general fund budget is about $2 billion. The PRESIDING OFFICER. The Senator's time has expired. Mr. SESSIONS. I thank the Chair. I ask unanimous consent for 1 additional minute. The PRESIDING OFFICER. Without objection, it is so ordered. Mr. SESSIONS. As I notice no one else is here. The PRESIDING OFFICER. The Senator from Florida is here. Mr. SESSIONS. Oh, I am sorry. I didn't see that. Well, I should long ago have yielded the floor, because he has something worthwhile to say, I am sure. I close by saying we are not dealing honestly with the crisis we are in. The President is in denial. He is not looking the American people in the eye and telling us what a serious fix we are in, or challenging us all to deal with the reality that we are going to have to change the way we do business. I hate to say it, but I believe that it is true. We have to do better. I thank the Chair and I would be pleased to yield the floor to one of our more talented, insightful new Members, Senator Rubio of Florida. The PRESIDING OFFICER. The Senator from Florida. SPENDING AND DEFICITS Mr. RUBIO. I thank my colleague from Alabama. He does a phenomenal job always in outlining the economic realities. I enjoyed listening, and I could have sat here longer. According to some, I may be one of the last speakers today, so I don't want to keep the Senate open any longer than it should be. We have done a lot of work here over the last few days. I went back and forth over whether I wanted to speak, because I think almost everything that can be said has been said regarding the events of the last few days. But I did ultimately want to share my thoughts for a moment as we head into the August recess, as they call it here in Washington, and many of us here in the Senate will be returning to our home States to explain to the people we represent what we did or did not do in the last few days. I will start by pointing out that our Republic is an amazing thing. As heated as the rhetoric may have been over the last few days, I think all of us should stop for a moment and understand that all around the world there are countries that solve the problems we solved through debate with civil war and conflict, armed and otherwise. Our Republic is amazing. It isn't always pretty. Quite frankly, more often than not, it is very messy. But it has withstood 230-some-odd years of pressures and choices, and it continues to do so. Even if ultimately what it gives us is not always solutions to our problems, we are blessed to have it. I would remind many, such as like myself, who were elected in the last election cycle, tightly embracing the principles of our Constitution, that our Constitution is not just a set of words that outline our principles. It gives us a system of government. It gives us this Republic. This Republic is valid, and it matters even when the people who are running it may not be people with whom you agree. We should always remember that. What we have here is special and unique, and we should embrace it and be thankful to our God each night that we have the opportunity and the blessing of living in a nation such as this. Moving aside from that, however, the facts still remain that this coming month, and every month to come, more or less, this government will spend $300 billion a month. That is a lot of money. It is more than any government has ever spent in the history of man. And $180 billion of that $300 billion is money we collect from the people of our country through taxes and fees and other ways. But we borrow $120 billion a month to pay our $300 billion a month bill. That is too much money. That is too much money for Republicans, it is too much money for Democrats. It is too much money. Although we should be happy that tomorrow and in the days to come, we are not facing a default and an inability to meet our bills, the truth is--an undeniable one that I [[Page S5233]] don't think anyone here would disagree with me when I say it--we can't keep borrowing $120 billion every month or more, because the point and the day will come when the people who lend us that money will stop lending us that money. If we keep doing this for long, we will one day reach a day in this country where we will face a debt crisis, but it won't be because of the debt limit or because of gridlock in Washington. It will be because folks are no longer willing to buy America's debt because they seriously doubt our ability to pay it back. That is not hyperbole. It is not an exaggeration. It is a mathematical, indisputable fact that no Member of either party would dispute. There is general agreement on this. And there is general agreement the only way to solve this problem is a combination of two things: No. 1, this government needs to generate more revenue; and No. 2, this government needs to restrict its growth and spending. Because as bad as the $300 billion a month looks, it only gets worse from here on out, in ways I don't have time to explain in the next 10 minutes. Suffice it to say our economy isn't growing. It is not producing enough revenue moving forward. Meanwhile, all the programs we fund are about to explode in their growth because more people than ever are going to retire, they will live longer than they have ever lived, and the math doesn't add up. These are facts. No one disputes that. The debate in Washington is not about that fact but about how do we solve it. How do we generate more money and reduce the spending at the same time? I will tell you this is not a debate we will solve in the month of August. In fact, I believe it will characterize the rest of this Congress, the 2012 elections, and the years that lie ahead. The division on how to solve it goes to the root of the dispute we face in America between two very different visions of America's future--by the way, one not more or less patriotic than the other. Patriotic, country- loving Americans can disagree on their future vision of what kind of country we should be. But this division--this difference of opinion--is the reason why even though this bill passed, this debate we have had is going to move forward for some time to come. On the one hand, there are those who believe the job of government is to deliver us economic justice--which basically means an economy where everyone does well or as well as possibly can be done. There is another group who believes in the concept of economic opportunity--where it is not the government's job to guarantee an outcome but to guarantee the opportunity to fulfill your dreams and hopes. One is not more moral than the other. They are two very different visions of the role of government in America. But it lies at the heart of the debate we are having as a nation. Washington is divided because America is divided on this point, so we have to decide what every generation of America before us has decided, and that is what kind of government do we want and what role do we want it to have in America's future. The fault lines emerge from that. The solutions emerge from those two visions. For those who want to see economic justice, their solution is to raise more taxes. They believe there are some in America who make too much money and should pay more in taxes. They believe our government programs can stimulate economic growth. They believe that perhaps America no longer needs to fund or can no longer afford to fund our national defense and our military at certain levels. Another group believes that, in fact, our revenues should come not from more taxes but from more taxpayers; that what we need is more people being employed, more businesses being created that will pursue tax reform, that will pursue regulatory reform. But, ultimately, we look for more revenue for government from economic growth, not from growth in taxes. We believe the private sector creates these jobs, not government and not politicians; that jobs in America are created when everyday people from all walks of life start a business or expand an existing business. I believe and we believe in a safety net program, programs that exist to help those who cannot help themselves, and to help those who have tried but failed to stand up and try again but not safety net programs that function as a way of life, and believe that America's national defense and our role in the world with the strongest military that man has ever known is still indispensable. These are two very different visions of America and two very different types of solutions. Ultimately, we may find that between these two points there may not be a middle ground; that, in fact, as a nation and as a people we must decide what we want the role of government to be in America moving forward. Let me close by saying this has been a unique week for me in a couple ways. One has been, of course, the debate that has happened. The other is my family has been here for the better part of a week, young children. We had an opportunity today after the vote to walk around a little bit and look at all the statues and the monuments that pay tribute to our heritage as a people. It reminds us that we are not the first Americans who have been asked to choose what kind of country we want or what role of government we want in our country. It is a choice every generation before us has had to make. Even in this Chamber, as I stand here, you can sit back and absorb the history of some of the extraordinary debates that took place on this very floor, debates that went to the core and to the heart of what kind of country we wanted to be moving forward. The voices of those ancients call to us even now to remind us that every generation of America has been called to choose clearly what kind of country they want moving forward. And that debate will continue. It will define the service of this Congress and for most of us who are here now. I pray we choose wisely. I look forward to the months that lie ahead that we will choose and make the right choice for our future and for our people. I yield the floor. The PRESIDING OFFICER. The Senator from New Hampshire. ____________________