[Congressional Record Volume 151, Number 138 (Wednesday, October 26, 2005)]
[Senate]
[Pages S11855-S11857]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         BUDGET RECONCILIATION

  Mr. CRAIG. Mr. President, I come this morning to speak about a need 
for fiscal responsibility. Over 200 years ago, George Washington warned 
that ``Government is not reason. It is not eloquence. It is force. Like 
fire, it can be a dangerous servant or a fearful master.'' Even when 
government functions properly as a servant, Washington observed, it is 
dangerous.
  Mr. President, I rise today to talk about--and to urge a need for 
something to happen in this Senate and in this Congress--fiscal 
responsibility. While Congress has been talking about spending measure 
after spending measure over the past several weeks, Americans have been 
talking about Congress' loose spending of their tax dollars. What many 
lawmakers have referred to as the fiscal policy of the Government has 
come to mean nothing more than the Government's dangerous tendency 
toward fiscal recklessness.
  Fiscal responsibility is premised on the simple concept that less is 
more. Less government spending means more freedom for individual 
Americans and increased levels of economic activity and rates of 
economic growth for the country. Several studies confirm this.

       A Public Finance Review study indicated that: ``Higher 
     total government expenditure, no matter how financed, is 
     associated with a lower growth rate of real per capita gross 
     state product.''
       A study by the Journal of Monetary Economics found that: 
     ``There is substantial crowding out of private spending by 
     government spending. Permanent changes in government spending 
     lead to a negative wealth effect.''
       And an International Monetary Fund study showed that: 
     ``Average growth for the preceding 5-year period was higher 
     in countries with small governments both periods.''

  The cumulative evidence in these studies suggests one important 
thing--government spending hampers the economic growth of our country. 
Even more than this, the growth of government spending is economically 
destructive.
  Every dollar the government spends is one taken from an American, and 
is one less dollar in the productive, private sector economy.
  Every dollar the government spends to fund agencies imposes large 
costs on the economy's productive sector, no matter how small the 
agency.
  Every dollar the government spends on programs such as welfare and 
unemployment insurance encourages bad behavior by providing incentives 
for Americans to remain unemployed and choose leisure over work. Every 
dollar the government spends this way goes to making Americans passive 
supplicants rather than active citizens, particularly at a time when 
the number of those dependent on the government is growing and the 
number supporting it is shrinking.
  We have been seeing those numbers talked about over the last good 
number of years--who is taxed and who is not, who is paying in to the 
Government versus who is not. We are now edging toward 50 percent of 
the American people not paying taxes, and yet we still hear this great 
debate in the Senate about, well, the tax cuts are only for the 
wealthy. The tax cuts are for people who pay taxes versus those who do 
not pay taxes. There is a very important reality check that has to 
occur out there.
  When I am home visiting with folks at our town meetings and I say a 
family of four making $27,000 to $30,000 a year does not pay Federal 
taxes anymore, that is a fact. Yet somehow we get this rich versus poor 
debate in this Chamber. It is really those who pay taxes versus those 
who do not pay taxes and become the recipients of the largesse of 
Government.
  Every dollar the Government spends to subsidize both health care and 
education distorts competitive processes in the marketplace and makes 
States increasingly more dependent, and their budgets become distorted 
because they are the ones that have had that historic Government 
responsibility. Every

[[Page S11856]]

dollar the Government spends to deliver services is one that should be 
in the private sector allowing the marketplace to choose its efficiency 
and its effectiveness.
  There are some interesting figures. In 2005, Washington spent $2.470 
trillion, raised $2.154 trillion, and ran a $317 billion budget 
deficit. This deficit is 2.5 percent of gross domestic product. Some 
will say that is the lowest ever; it doesn't mean anything. $317 
billion is a lot of money.
  Spending increased by 8 percent in 2005 and is up 33 percent overall 
since 2001.
  In 2005, inflation-adjusted federal spending neared $22,000 per 
household, the highest level since World War II.
  Federal spending has increased by 33 percent since 2001, from $1.863 
trillion to $2.470 trillion. Defense and 9/11-related costs have only 
accounted for a smaller-than-expected portion of this:
  From 2001 to 2003, spending expanded by $296 billion, 45 percent of 
which went to defense and 9/11-related costs, and 55 percent of which 
went to new Federal spending unrelated to defense and 9/11. This is an 
11 percent jump in Federal spending, the fastest growth in a decade.
  From 2001 to 2005, discretionary spending surged 48 percent, from 
$649 billion to $969 billion.
  Current spending on entitlement consumes nearly 60 percent of all 
program spending, a record 10.8 percent of gross domestic product, and 
is projected to nearly double over the next decade.
  Long-term trends project the cost of Social Security, Medicare, and 
Medicaid to jump from 8.4 percent of GDP in 2005 to 18.9 percent of GDP 
by 2050. Federal program spending is projected to reach 27.6 percent of 
GDP by 2050.
  By 2050, our children and our children's children will be footing the 
bill for our current fiscal irresponsibility.
  Nearly 200 hundred years ago, Thomas Jefferson said that ``although a 
republican government is slow to move, yet once in motion, its momentum 
becomes irresistible.'' There was a time not too long ago when 
Republicans stood up, made the case for smaller government, and made it 
happen. From 1998 to 2001, we did this by enjoying record budget 
surpluses.
  The time for action is upon us once again.
  The Federal Government's spending momentum, however, makes tax cuts, 
reductions in pork, and slashes in subsidies only first steps toward a 
real solution. The only long-term, fundamental, permanent reform that 
would effectively dispel the danger of current fiscal recklessness and 
restore fiscal responsibility is a balanced budget amendment to the 
Constitution like the one I reintroduced earlier this year.
  Jefferson once said, ``with respect to future debt; would it not be 
wise and just for that nation to declare in the constitution they are 
forming that neither the legislature, nor the nation itself can validly 
contract more debt than they may pay?'' I think he's right and urge my 
colleagues to join me in supporting a balanced budget amendment to our 
Constitution to restore the past principles of fiscal responsibility 
envisioned by the Founding Fathers and to safeguard the future by 
providing a bill of economic rights for our children.
  It is important we understand the impact that Federal spending has, 
and it is clearly time some of us come to the floor and challenge all 
of us to recognize what we are doing, where we are going, and the 
amount of money being spent. Now we recognize more than ever before, 
with the natural disasters hitting our country that are unprecedented 
in their impact on human lives, that we have a new responsibility to 
help those citizens who have lost everything gain a little back. 
Somehow we think we can go on doing that at our current level of 
spending, but it is time we get a little realistic about some belt 
tightening around here, even if it is at last year's rate of spending 
versus an increased level of spending for the next budget.
  I think Americans want us to wake up, realize what we are doing, and 
the impact this kind of spending has both in the short term on our 
economy and in the long term on our economy both for us, our children, 
and our grandchildren.
  I thank the Senator from Colorado for yielding.
  The PRESIDING OFFICER (Mr. Sununu). The Senator from Colorado is 
recognized.
  Mr. ALLARD. Mr. President, we are moving into an important part of 
our budget plan for the year. Ideally, for the Congress to operate, we 
need to reach an agreement between the House and the Senate. We did 
that this year. In the past years we have not been able to do it. It is 
called the budget. As a member of the Budget Committee, I was delighted 
to see that happen. We laid out spending parameters for all of the 
various agencies, and then we also laid out a plan as to how we were 
going to control spending. We are going to do more things to reduce the 
deficit.
  The Budget Committee is going to be meeting this afternoon to put 
together the final steps of what we call reconciliation. We look at 
what we can do to reduce spending. It is called the Deficit Reduction 
Omnibus Reconciliation Act. The most important two words in that 
particular piece of legislation are ``deficit reduction.''
  In the budget, we had laid out a plan to reduce the deficit by $34.7 
billion. That is net now, and so we need to keep that process moving. 
This is going to move us into an important aspect of our debate next 
week where we are going to begin debating on the floor of the Senate 
the Deficit Reduction Act. It is important we work hard to reduce the 
deficit. Why is it important? Because we do not want to be passing on 
today's obligations to future generations and robbing their futures 
because of the spending.
  If we look at what has been happening with deficit spending in recent 
years, it has been growing, and I think it concerns a lot of Members of 
the Senate. It is easy to express concerns, but it is difficult 
sometimes to get the votes we need in order to hold down deficit 
spending. So the Members of the Senate are going to have an opportunity 
to see how committed they are to reducing the deficit. This only 
applies to spending as was outlined in the budget resolution that we 
passed earlier this year.

  There is another aspect to spending, emergency spending. I happen to 
believe we need to work harder to find offsets on emergency spending. 
We have ignored that aspect. Everybody wants to push for emergency 
spending because it gets them around the budget rules, and they do not 
have to worry about the spending in their programs that perhaps they 
could not get adopted as part of the appropriations or the budget or 
both.
  We are going to be moving into a critical time next week. I think it 
is important that Members of the Senate remember we have a commitment 
to future generations. We may have to cast some tough votes next week 
to keep our plan going on reducing the deficit by $34.7 billion. I 
happen to think it may come out a little better than that. I guess I am 
an eternal optimist. But it is very important. It is a start. It is not 
as much as we should be doing, but it is a start. It addresses some 
mandatory spending programs, which seem to be the toughest for Members 
around here to address, and it addresses some discretionary spending.
  If we look out into the future, the greatest obligations that are 
affecting our budget are Social Security, Medicare, and Medicaid. It is 
difficult to make decisions to reduce those programs. It is easier to 
go to discretionary spending, but that is not where we are seeing the 
real growth in spending. We are going to have to make more difficult 
decisions beyond next week.
  Next week is going to be a test on just how determined we are and how 
committed we are to reducing deficit spending.
  What the President has done in stimulating our economy with some tax 
reductions has proved fruitful. This year, we are seeing the results of 
those tax cuts with close to $100 million in revenue that was 
unanticipated at the first of the year, which obviously could have gone 
to deficit spending, but the emergency spending and what has happened 
with Hurricane Katrina and all the emergencies that have occurred in 
September has created a problem in being able to reduce the deficit as 
much as some of us had hoped.
  Hopefully, we can hold this small amount of deficit spending that we 
are going to be bringing to the floor next week. It is important that 
we do. I urge

[[Page S11857]]

my colleagues in the Senate to join me and the other members of the 
Budget Committee when we report this bill out to hold it so at least we 
can reduce the deficit by $34.7 billion. It is important to the future 
of this country that we at least take this first step. It is something 
we need to work hard on if we expect a prosperous future for our 
children and grandchildren.
  My children are now grown and have good salaries. My grandchildren 
are now going to school. I want to see them have the same opportunities 
to grow and save their money and not have to face high tax rates 
because we exceeded spending in our generation. It is a challenge. It 
is a challenge, though, that we must meet. It is a challenge that we 
cannot put off, and the sooner we address this challenge, the sooner we 
are going to reduce deficit spending.
  Mr. President, I think my time is about ready to expire.
  The PRESIDING OFFICER. The majority has 1\1/2\ minutes remaining in 
morning business.
  Mr. ALLARD. I will use a little more of my time. This is really 
important. It is an important time. I commend the chairman of the 
Budget Committee for working hard to try and hold down our deficits. I 
know he was very frustrated when the budget resolution was before the 
Senate earlier this year. I know he had some real hope of holding down 
spending even more than what finally ended up in the budget bill. I 
have supported him in trying to hold down the deficit. We do that by 
holding down spending.
  I know he seems somewhat frustrated now because he has not been able 
to do as much as he wanted to do to eliminate the deficit. I think it 
is important that we stand behind the Budget Committee members, that we 
stand behind the chairman of the Budget Committee in trying to reduce 
the deficit.
  Spending should not be running on automatic pilot. To keep this 
economy growing and keep it strong, we are just going to have to make 
some tough decisions. So I urge my colleagues to join me in supporting 
our chairman next week in a first step towards reducing the deficit.
  I yield the floor.

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