[Congressional Record Volume 150, Number 104 (Tuesday, September 7, 2004)]
[Senate]
[Pages S8828-S8829]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              THE DEFICIT

  Mr. CONRAD. Mr. President, the new deficit numbers came out today 
from the Congressional Budget Office. They show that we will now run 
the largest deficit in the history of the country--some $422 billion. 
That is nearly $50 billion more than last year, and it should alarm 
every Member of this body and certainly every Member of the Congress. 
We are headed in a direction that is utterly unsustainable.
  When the President was asked about this in a recent interview on NBC, 
the questioner said this to him:

       Let me ask you about deficits. This year, $445 billion, 
     ballpark. Do you think that's pretty good?

  The President said:

       Yes. I do. I do.

  When you are running the worst deficits in the history of the 
country, to think that is good news I find unusual. This is not good 
news. It reminds me a little of the captain of the Titanic when the 
ship is going down saying: Well, there is good news here because the 
ship is not sinking as fast as I thought it would.
  We can't continue with deficits of this magnitude. This President ran 
on the promise that he was going to be fiscally responsible. But look 
at his record compared to the previous three Presidents: President 
Reagan ran a large deficit; President Bush 1 ran large deficits--in 
fact, the largest deficit in history in his final year; under President 
Clinton, we had deficit improvement each and every year. We climbed up 
out of the red ink, and for several years--in fact, 4 years--we were 
deficit free. Now President Bush took over, and each and every year the 
deficits have gotten worse. In fact, we can all recall that he 
inherited a substantial budget surplus--$127 billion. Then each and 
every year the deficits have gotten much worse.
  One of the things that is most alarming and ought to concern people 
the most is that the amount of deficit this year--$422 billion--is not 
the amount by which the debt will increase. I think there is a lot of 
confusion.
  I taught economics classes at the universities in my State during the 
break. I find there is a lot of confusion between the deficit and the 
debt. The deficit, of course, is the annual difference between what we 
raise and what we spend. That is the annual difference. The debt is the 
accumulation of all the deficits over time. But it is also true that 
the deficits printed in the newspapers badly understate how much the 
debt is increased. The biggest reason for that is they leave Social 
Security in the calculation. Of course, Social Security is supposed to 
be separate, it is supposed to be apart, and even by law Social 
Security is supposed to be separate. But that is not the way we have it 
treated in the newspaper. They put everything into one pot. When you do 
that, you hide the fact that they are going to borrow this year nearly 
$150 billion from Social Security. That gets added onto the debt, but 
it doesn't count as deficit.
  It is kind of a bizarre way we do accounting here in Washington. 
There is no other institution in the country that would be able to do 
what we do

[[Page S8829]]

here--take retirement funds of employees and use it to pay the 
operating expenses of the Federal Government--but that is what we are 
doing under the President's plan. That is what we will do every year 
for the next 10 years under the President's plan. In fact, we will not 
just borrow $149 billion from Social Security; over the next 10 years 
under the President's plan, $2.4 trillion will be borrowed from Social 
Security with no plan to pay it back.
  If you look at just this year, the official deficit now they are 
estimating at $422 billion, but what will be added to the debt will be 
well over $630 billion. I hope someone is listening out there. The debt 
of the United States in 1 year is going to increase by over $630 
billion, $422 billion of deficits plus $149 billion borrowed from the 
Social Security trust fund, every penny of which has to be paid back.
  The President has no plan to do it.
  On top of that, another $60 billion from other trust funds the 
President is borrowing. That is not the only place the President is 
borrowing. He has borrowed over $600 billion from Japan, over $150 
billion from China. He has even borrowed tens of billions of dollars 
from South Korea.
  This is a course that is utterly unsustainable.
  If we look to the future, the President is telling the American 
people he has a plan to cut the deficit in half over the next 5 years. 
My advice to the American people is, do not believe it, because it will 
not happen. The only way the President comes up with that calculation 
is he leaves big chunks of spending out of the calculation. He leaves 
out the war cost beyond another $25 billion. We all know it will be 
much more than that. On top of that, he leaves out the necessity of 
fixing the alternate minimum tax which right now affects 3 million 
people. By 2010, the Congressional Budget Office says it will affect 30 
million people. Boy, are they in for a big surprise. They thought they 
would get a tax cut, but they have coming at them a big tax increase. 
It costs over $600 billion to fix it. The President does not have any 
money in his budget beyond next year to deal with it.
  If we put back in all these things the President is leaving out, here 
is what we see is the long-term outlook for the deficit. We do not see 
it being cut in half because we put back the need to fix the 
alternative minimum tax, the war costs, the President's proposal for 
more and more tax cuts. What we see by 2014 is the operating deficit of 
this country will be approaching $800 billion. That is an utterly 
unsustainable course.
  There was an item in this morning's Washington Post that I thought 
was a bit of a warning shot across the bow. This was a report from the 
U.S. Navy that says they plan to buy fewer ships. In fact, many fewer 
ships because of the budget pressure.
  It is time to connect the dots. It is time to recognize these large 
budget deficits that are mushrooming as we look ahead to future years 
under the President's plan, because the President says spend more on 
defense, spend more on homeland security, both of which, undoubtedly, 
are necessary, but he couples with that massive additional tax cuts 
when we already have record deficits. How is it possible for any of 
this to add up? It does not add up, and it threatens fiscally our long-
term economic security.
  The Navy is planning to buy fewer ships. That is only the Navy. We 
will find the Air Force will be under pressure, the Army will be under 
pressure. In fact, every element of Federal operations will be under 
pressure because fundamentally we cannot be strong if we are 
financially weak.
  This country now is running such massive deficits and adding such 
enormous sums to the debt--the biggest numbers we have ever seen in the 
history of the country--that it fundamentally threatens the long-term 
economic security of this country.
  I submit to my colleagues and the American people that the President 
has us on the wrong course. It is time for everyone, on a bipartisan 
basis, to get together, to come up with a plan to get us back on fiscal 
track, a fiscal track that will ultimately lead to balanced budgets. 
There is no time to spare because the baby boom generation will start 
to retire in 2008. It is hard to believe, but those baby boomers who 
were born after World War II are getting ready to retire. They will 
dramatically increase the number of people eligible for Social Security 
and Medicare. That is one reason Chairman Greenspan has urged us to cut 
Social Security and Medicare.
  Is that the course we want to go down? That is where the President's 
budget plan is taking us. He has run up the biggest deficits in the 
history of the country and there is no end in sight. All of this at the 
worst possible time, right before the baby boomers retire. What are the 
results? What are the implications of this plan and policy?

  In the warning of Chairman Greenspan we see the implication that the 
natural conclusion, the natural result of the President's policies is 
to force cuts in Social Security and Medicare and much of the rest of 
the Government as we know it. That is because the President's plan is 
so badly out of balance. The difference between revenue and expenditure 
is so big--and that is before the baby boomers retire; that is before 
the number of people eligible for Social Security and Medicare double--
this is a course that cannot be sustained.
  The quicker we deal with it, the better. Everyone knows when you have 
a problem, the faster you deal with it, the easier it is to solve. The 
more time you delay, the more time you wait, the bigger the problem 
becomes.
  I am here in the Senate to say the Congressional Budget Office has 
sent us a very clear signal. We have the biggest deficit this year we 
have ever seen in the country's history. And we can see for the future, 
if the President's plan is followed, these deficits can only grow as 
the baby boomers retire.
  This President may have left town by that time. But the rest of us 
who are here--maybe some of us will be gone, as well--but those who are 
here are going to inherit an extraordinary problem. It is our 
obligation now to begin to address it. That is the right thing to do 
for the country. It is the honorable thing to inform the country of how 
big this challenge is, how deep this deficit chasm has become, and how 
threatening it is for our future economic security.
  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. LIEBERMAN. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. LIEBERMAN. Mr. President, I ask unanimous consent that I be 
allowed to proceed as in morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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