[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
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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
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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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