Congressional Record, Volume 153 Issue 145 (Thursday, September 27, 2007)

[Congressional Record Volume 153, Number 145 (Thursday, September 27, 2007)]
[Senate]
[Pages S12248-S12254]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

INCREASING THE STATUTORY LIMIT ON THE PUBLIC DEBT

The PRESIDING OFFICER. Under the previous order, the Senate will
proceed to the consideration of H.J. Res. 43, which the clerk will
report.
The legislative clerk read as follows:

A joint resolution (H.J. Res. 43) increasing the statutory
limit on the public debt.

The PRESIDING OFFICER. Under the previous order, there will now be 90
minutes of debate equally divided between the leaders or their
designees.
The Senator from Montana.
Mr. BAUCUS. Mr. President, in the play ``The Taming of the Shrew,''
Shakespeare wrote: ``There is small choice in rotten apples.''
I feel a little like that whenever we have to raise the debt
limit. It is a small choice in rotten apples. The choices are all bad.
Really, though, there is no choice.

The legislation before us would increase the limit on the debt issued
by the U.S. Government by $850 billion. The House has sent us this
legislation. Essentially, we have no choice but to approve it. If we
fail to raise the debt ceiling soon, the U.S. Treasury will default for
the first time in its history. Plainly, especially in this credit
crisis, we cannot let that happen. If we don't raise the ceiling before
Monday, Treasury Secretary Paulson will be forced to take special
measures to prevent the default from occurring. He feels those actions
would create uncertainty in the financial markets. He thinks it would
be unwise to add any uncertainty to the financial markets right now,
and I agree with that. The markets already have enough uncertainty
arising from the foreclosures on subprime mortgages. But there is no
way around this. These are some rotten apples.
This increase in the debt ceiling will be the fifth increase during
this administration. It increased by $450 billion in 2002, it increased
by $984 billion in 2003, it increased by $800 billion in 2004, and it
increased by $781 billion in 2006. Today's $850 billion increase in the
debt ceiling will be the third largest increase in our Nation's
history. The largest increase was the $984 billion hike in 2003. Once
today's $850 billion increase is enacted, the fourth largest rise will
have been the $800 billion in 2004. The fifth largest increase will
have been the $781 billion hike in 2006.

[[Page S12249]]

There is no way around it. This is a poor fiscal record. When you add
today's $850 billion increase to the previous increases since 2001, the
debt ceiling will have increased by almost $4 trillion during this
administration. The debt ceiling will have increased from about $6
trillion at the beginning of this administration to about $10 trillion
now--$6 trillion at the beginning of this administration, the debt
ceiling, will be increased now to about $10 trillion. That is a two-
thirds increase in the debt ceiling in 7 years.
Unfortunately, for us today, there is little choice at this moment
right now. There are other choices we should be making in this Congress
and in this country with respect to our fiscal situation, but today, at
this moment, with respect to the debt ceiling, there is little choice.
The Government has already borrowed the money that has caused its debt
to reach the current ceiling. It has already been borrowed. To keep the
Government running, the Treasury now needs to borrow more money. The
Treasury cannot do that unless we raise the debt ceiling.
Why is it unfortunate the Government has gone into so much debt? The
answer is it lowers the standard of living for future generations of
Americans. That is hardly the legacy we should want to leave for our
children and grandchildren.
If the U.S. Government borrows money, it competes for funds from the
global financial markets. Unless Americans begin to save more, these
funds will come from foreign lenders. As a result, we will owe
foreigners interest on those funds in future years. Because Americans
will have to pay that interest to foreigners, we will have less money
to spend on goods and services, and the standard of living for
Americans in the future will be lower than it otherwise would be.
It is happening already. It is happening because the dollar is
declining. It is declining quite precipitously. Why is the dollar
declining? Probably because our fiscal policy has not been very sound.
We have been borrowing so many dollars from overseas. Our current
account deficit is so large. We have been consuming at such rapid rates
that, finally, the chickens are beginning to come home to roost. The
dollar is starting to decline, and it is making it very difficult now
for Americans, on the margin, to live at the same living standard.
With the dollar declining--and, again, it is declining because
foreign investors are starting to think maybe it is wiser to invest
their dollars, on the margin, elsewhere--when the dollar declines, that
means imports are more expensive and consumers have to pay more than
they currently have been paying for those same products. It means
American companies are now able to raise their prices to the levels of
the more expensive foreign imports. It means, frankly, that average
Americans are facing more costs for the same goods.
On the other hand, the most wealthy people in America can invest in
foreign currency and take advantage of the dollar. But the average
American cannot do so. So what we are doing today, with our very high
debt, is essentially lowering our living standards.
Further, the amount of U.S. Government debt held by foreigners is
troubling. As of December, 2006, foreigners held an enormous $2.2
trillion of debt issued by the U.S. Government. For example, Japan held
$644 billion of U.S. debt, and mainland China held $350 billion.
I might add that a lot of these foreigners are starting to change
their investment patterns. They are developing sovereign wealth funds.
They are diverting some of their currency holdings. China is a good
example. They are not just buying U.S. Treasury notes, bills and bonds,
they are starting to do more direct investing around the world. That
too is starting to have, on the margin, a slightly negative effect on
the dollar.
In December, 2001, foreigners held a total of $1 trillion in U.S.
debt. Thus, foreign-held debt has increased from $1 trillion at that
time, December 2001, to about $2.2 trillion in December, 2006. That is
a 120-percent increase since 2001. Over time, the cumulative interest
payments on these holdings will be very large.
The significant foreign holdings of U.S. debt create two more serious
problems. The first problem relates to a falling dollar, as I have
mentioned. If the dollar falls, the value to foreign holders of U.S.-
issued securities falls. If the dollar continues to fall, at some
point, foreigners may become scared of further drops. To protect
themselves, they may sell their holdings of U.S.-issued securities. And
a large sell-off could happen precipitously and cause interest rates in
the United States to rise immediately. A recession would likely follow.
I am not saying that is going to happen, but I am saying the
probability of that happening is getting greater and greater and
greater with the passage of each day.
Today, the dollar is at another all-time low against the Euro, and
the Canadian dollar has reached parity with the U.S. dollar for the
first time since the 1970s. If the dollar continues to fall, we could
see foreigners selling off U.S.-issued securities at some point.
The second problem concerns our national security. Currently, almost
60 percent of U.S. debt held by foreigners is in the hands of foreign
central banks or other official foreign government institutions. That
amounts to about $1.3 trillion--clearly, an enormous figure.
So what happens if we get into a trade dispute with one of these
countries, or a military or diplomatic dispute? The government of one
of these countries could prevail upon its official institutions to
threaten to sell off some or all of its holdings of U.S.-issued debt.
If such an action occurred, it would drive up interest rates in the
United States and cause a recession. The threat of such action would
give the foreign country significant leverage in its trade or military
or diplomatic dispute with the United States, which would be very
unfortunate.
Again, I am not saying it is going to happen right away, or it is
going to happen at all. But I am saying, given the deterioration of our
fiscal situation, it is, on the margin, slowly, inevitably, irrevocably
giving these other countries more leverage over us in any policy
dispute they may have with us.
The revenue and spending laws that have helped to create the need for
this huge jump in the debt ceiling were enacted some time ago. We piled
up huge budget deficits in recent years by not having enough revenues
to pay for our spending. So the Treasury had no alternative but to
borrow funds to make up the difference, because we, obviously, had been
spending more than we were taking in. The Treasury, therefore, had to
borrow. And that is the problem; it is the added borrowing year after
year after year after year in the amounts I have already indicated.
The responsible thing to do right now is to raise the debt ceiling
because we have to. This debt ceiling is similar to a credit card. The
bill is due. You have to pay what is on the credit card. But the goal
is to make sure there aren't future increases in that credit card bill.
We have to pay what the credit card bill is. That is the legal
obligation. So there is no choice, and it is the responsible thing to
do. But it is also the responsible thing to do to reduce the need to
raise the debt ceiling again in the future.
We need to stop running annual deficits in our Federal budget. We
need to stop cutting taxes when we cannot afford to do so. We need to
stop increasing spending when we cannot afford to do so. It is easy
around here to cut taxes, it is easy around here to raise spending.
Fortunately, we have these pay-go rules now which makes it that much
more difficult to do, and we have to basically heed the basic
principles behind pay-go.
The beginning of the retirement of the baby boom generation next year
will create needs for even more spending. Our ability to achieve
balanced budgets will become more difficult. Nonetheless, we ought to
balance the budget. It is the right thing to do. It would send the
right signals in so many ways all across the country and around the
world that we are getting our act together and living within our means.
It is such a powerful force, in my judgment. We have to do it,
otherwise we are going to keep piling up more and more debt and the
dollar is going to potentially continue to fall, and living standards
will continue to fall for Americans. So let us raise the debt ceiling
now because we have no choice. But let us also work together to balance
the budget in years to come. That is the only way we can keep from

[[Page S12250]]

having to enact more increases in the debt limit in the future. When it
comes to that burden as well, there is no choice either.
I yield the floor.
The PRESIDING OFFICER. The Senator from Iowa.
Mr. GRASSLEY. Mr. President, the current law is that we have a
statutory limit on the amount of money the Federal Government can
borrow, and that has to be reconsidered from time to time. The legal
limit applies to the money borrowed from individuals, private
investors--such as banks and pension funds--as well as money borrowed
from other governmental programs that are in surplus--such as Social
Security and Medicare, or what we call intergovernmental borrowing.
Increasing the debt limit is necessary to preserve the full faith and
credit of the United States of America. Without an increase in this
limit, our Government will face a choice between breaking the law by
exceeding the legal limit or breaking faith with the investors by
defaulting on debt. Neither of those choices is acceptable, and we have
never done them.
Critics sometimes object to raising the debt limit on grounds that it
will allow the Government to borrow more money, but refusing to raise
the debt limit is akin to refusing to pay your individual credit card
bill after you have already gone shopping and bought something. We
cannot pass tax bills and spending bills and then refuse to pay our
bills. The time to control the debt is when we are voting on bills that
actually create that debt.
Raising the debt limit is about meeting the obligations we have
already incurred, it is that simple. We must meet our obligations. So I
urge my colleagues to support this increase.
I yield the floor.
The PRESIDING OFFICER. The Senator from North Dakota.
Mr. CONRAD. Mr. President, the Senate is now considering a measure to
further increase the Federal debt limit. This is further confirmation
of the Bush administration's failed fiscal record. It represents now
the fifth time the President has come to Congress asking for more debt.
We all know we have no choice in this matter. These are debts that
have already been accrued. The question before us is: Do we pay the
bills of the United States or do we fail to do so? If we failed to
cover our borrowing, if we failed to pay the bill, the creditworthiness
of the United States would be called into question and there would be a
run on the dollar. There would be economic chaos. So we have no choice,
and I hope that colleagues on both sides will take up this
responsibility.
We all remember that when the Bush administration came into office,
the President said this:

My budget pays down a record amount of national debt. We
will pay off $2 trillion of debt over the next decade. That
will be the largest debt reduction of any country, ever.
Future generations shouldn't be forced to pay back money that
we have borrowed. We owe this kind of responsibility to our
children and grandchildren.

That is what the President told us then.
We are now able to look at the record. What we see is quite different
from what he asserted then. Instead of paying down the debt, the debt
has exploded on his watch. Here are the increases in the debt that have
been enacted and requested by this President.
First of all, perhaps it is instructive to go back to the period 1998
to 2001, during the previous administration, when there were no
increases in the debt. In fact, we were paying down the debt. Then, in
2002, this President asked for and got a $450 billion increase in the
debt limit; followed in 2003 by the largest increase ever, $984
billion; followed by $800 billion in 2004, $781 billion in 2006, and
now, this year, another $850 billion. This is the debt President. The
debt limit of the United States will have been increased, under his
direction, by almost $4 trillion.
This chart shows the dramatic deterioration in the budget picture
under the fiscal policies of this President. We were in surplus. In
fact, we had even stopped, under the previous administration, taking
Social Security funds to pay other bills. Under this administration,
the deficit skyrocketed and the debt has grown geometrically.
Despite all the assertions of fiscal responsibility, this President
has increased Federal spending from $1.9 trillion to $2.7 trillion a
year, an increase of nearly 50 percent.
On the war alone--and this puts in perspective the war costs--you
will recall the President told us that the war would cost $50 billion.
We are at $567 billion and counting. Now we hear of a request for
another $42 billion on top of the $147 billion that was allocated this
year.
President Bush has indicated and his administration has told us that
we should expect a ``Korea-like'' presence in Iraq. Here is what this
would mean, according to the Congressional Budget Office. So far, the
war in Iraq and Afghanistan has cost $567 billion. CBO tells us a
``Korea-like'' presence would mean an additional $1 trillion in the
period 2009 to 2017, and from 2018 to 2057, another $1 trillion, for an
addition of $2 trillion to the $567 billion already committed. So the
war that was supposed to cost $50 billion is now headed for $2.5
trillion, if we maintain a ``Korea-like'' presence, as called for by
the President.
On the revenue side of the equation, where we hear so much from our
colleagues about the dramatic improvement in revenue, what you will
notice in all of their charts is they just look at the last couple of
years. They don't look back to when this administration started. But
what you see is real revenues, adjusted for inflation, were $2.03
trillion back in 2000. This year, real revenues are $2.13 trillion.
Revenue has been basically stagnant in this country for 6 years.
So when you dramatically increase spending and revenue is stagnant,
guess what happens. The debt soars. That is precisely what has happened
under this President--from $5.8 trillion in 2001 to a now anticipated
$8.9 trillion at the end of this year. This President has run up the
debt in a record way. He truly will claim the mantle and the legacy as
the debt President.
Not only has he dramatically run up our debt domestically, he has
also dramatically increased foreign holdings of our U.S. debt. When he
came into office, there was just over $1 trillion of U.S. debt held
abroad. In other words, it took 42 Presidents 224 years to run up $1
trillion of U.S. debt held externally. This President has more than
doubled that amount in just 6 years, to almost $2.2 trillion. The
result of all of that is we now owe Japan over $600 billion, we owe
China over $400 billion, we owe the United Kingdom over $200 billion,
we owe the ``oil exporters'' over $100 billion, and on and on it goes.
We are now truly in need of the kindness of foreigners because if they
do not float this boat, if they don't provide the financing for this
debt, the United States would be in even deeper trouble. Can you
imagine if all of a sudden the Chinese, the Japanese, the British, and
the rest decided not to extend us additional credit, additional loans?
The interest rates in this country would jump. It would put us into a
recession, and we would be in deep trouble. So we are in debt and we
are beholden and we are dependent on the kindness of strangers.
Here is what the head of the Federal Reserve has warned us on the
danger of growing debt. He said this before the Senate Budget Committee
on January 18:

Ultimately this expansion of debt would spark a fiscal
crisis which could be addressed only by very sharp spending
cuts or tax increases or both . . . [T]he effects on the U.S.
economy would be severe. High rates of government borrowing
would drain funds away from private capital formation, and
thus slow the growth of real incomes and living standards
over time.

The recklessness of this administration in managing the fiscal
affairs of this Nation is clear and compelling. It could not be more
apparent.
Tonight is one more confirmation of the disastrous consequences of
the fiscal policy of this President. He is the debt President. With the
action that will be required to be taken tonight, he will have added
nearly $4 trillion to the debt position of our Nation. That is a sad
legacy, and future generations are going to pay an enormous price for
this profligacy--spending without a willingness to pay for it, simply
putting it on the charge card, shoving the debt off to future
generations, and all the time claiming to be fiscally responsible.
The actions of Congress tonight, responding to the request of the
President to once again expand the debt limit by hundreds of billions
of dollars--in fact, tonight, by $850 billion in

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one fell swoop--should tell us all we must have a new direction for the
fiscal course of this country.
I yield the floor and suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. COBURN. 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. COBURN. Mr. President, this evening we have a choice to make that
is a true reflection of whether this body has been listening to the
American public. We are about to increase the amount of money we can
borrow against our children's future by $850 billion. That is almost $1
trillion. What does that say about us? That we can't do what we ask
every other American family to do, which is live within our means. It
is not about parties. Both parties are guilty. But it is about
priorities, and it is about choices.
Many of us know that our approval rating is at an alltime low--11
percent. We have a chance tonight to change that. We have a chance
tonight to raise that. We have a chance tonight to prove to the
American people that we are listening.
A new Gallup Poll put it this way:

Americans now express less trust in the Federal Government
than at any time in the past decade and trust in many Federal
Government institutions is now lower than it was during the
Watergate era, generally recognized as the low point in
American history for trust in the Federal Government.

Think about that. How is it that we got ourselves to that position?
How did we slip to a level below the Watergate era?
Mr. SANDERS. Will my friend yield?
Mr. COBURN. I would like to finish my statement, and then I am be
happy to yield to the Senator from Vermont.
One reason is Americans believe we are totally out of touch with the
realities they live with every day in terms of budgeting and spending.
What I often hear in this body, both by statement and by action, is
that we really do not have to choose between two priorities because we
can do both. The American people can't do both, but we can do both. How
can we do both? What we do is we ignore the choices we have and lay our
responsibility on generations to come. That is how we do both. We do
not do what is required of us in terms of oversight, eliminating fraud,
eliminating duplicative programs, eliminating programs that do not
work, that have no metrics. That, by the way, comes to $200 billion
worth of fraud, waste, and abuse which has been documented, every year,
that we spend, that we are not working on, we are not trying to
eliminate. But what we are about to do, because we failed to do that,
we are about to increase the amount which our children and
grandchildren are going to have to repay.
The problem is there is nobody outside this body who thinks that
way--only inside. In the real world, people have budgets they have to
live within. Their choices have consequences, and we choose to make the
consequences happen to our children and grandchildren rather than
accept the consequences. What has made this country great has been the
heritage of sacrifice we have seen by multiple generations that have
come before us. We are now denying that heritage, as we in this body
refuse to accept the responsibility placed on us to make hard choices.
Tonight, we are going to have a vote and we are going to raise the
debt limit and we are going to really say: Children, we don't have the
courage to do what we need to do, whether it is raise taxes or cut
spending or both. We don't have the courage to do that. But we are
cowardly enough to shift it off onto you.
That is what it really is. We don't want to go against interest
groups that are invested in something that isn't working. We don't want
to eliminate the $53 billion a year that is estimated to be fraud in
Medicare and Medicaid. We don't want to do anything with the excess
41,000 properties the Federal Government owns that cost us $18 billion
a year but we won't do anything with them. We will not do what is
necessary and sacrifice so that we can secure the future.
We are going to raise the debt limit because both parties, mine and
the leadership party, have refused to restrain spending.
This will be the sixth time since 1997 that the debt limit has been
raised. At the same time, earmark spending has skyrocketed. It is over
half a trillion dollars in the last 10 years. There are no competitive
bids on earmarks, no accountability, no followup, just gifts. Some are
great priorities, but there is no system of economic controls.
My own party did a lot to create this mess. In 2005, 82 of my
colleagues said building a bridge in Alaska was more important than
repairing the bridges in Louisiana.
We said that. This body said that. Last week I asked my colleagues to
make a number of choices. I offered an amendment that said until we fix
our at-risk bridges and our high-risk highways that will account for
13,000 deaths a year, we ought to delay earmarks until we make that a
priority. We lost that vote 82 to 14.
I offered an amendment to prohibit funding on bike paths and horse
trails until we have done the same thing. We lost that amendment 80 to
18. I also attempted to strike funding for a peace garden, construction
of a new baseball stadium, and a visitor's center, bipartisan
amendments. We chose to say, no, we can do that rather than build and
restore our highways and bridges.
What is as bad as the choices we make are the choices we ignore. And
that is the very real need to do extremely heavyhanded oversight on the
waste, fraud, and abuse that occurs every day within the Government
that we supposedly have our hands on.
I know we could cut discretionary spending by at least 10 percent.
Okay? That is $100 billion a year if we got together and said we are
going to work on these programs together. But we are not going to do
that. What we are going to do is keep pointing fingers at one another
rather than at ourselves and raise the debt limit.
We are not going to do that hard work. I believe the American people
are sick of it. Families across America do not have the luxury of
loaning themselves new money when they have maxed out their credit. But
that is what we are going to do. There is no credit limit for us. One
is coming. It is coming as we have seen the price of the dollar fall
recently. We will certainly see it fall further in the future. There is
going to be a cost.
What this vote means is, instead of using this year's appropriations
cycle to trim waste, to decrease spending, reduce the national debt,
all we have done is made the problem worse.
First, we have not passed any bills through Congress. The bills that
are in conference, with the exception of one, are at 5 to 6 to 7
percent above last year's spending level. So we have admitted we cannot
do it. Only weeks after passing a brandnew ethics law, the Senate has
now decided it is okay to add new earmarks in authorizing bills. We
have also decided that instead of making sure we know the identity of
earmarks, how much money it is, what is it going for, and who is going
to get it, we only say: I am offering it, and I do not have any
pecuniary interest in it. What we told the American people was a sham.
We are not doing what we said we were going to do.
Instead of spending our time trying to figure out how to continue to
raid the Federal Treasury without getting caught, I believe we ought to
be doing our job. Congress should pass individual appropriations bills
at a level less than last year, with the waste, the fraud, abuse, and
duplication out of them. But we are not going to do that.
The vote on the debt limit gives Congress another opportunity to
demonstrate to the American public that we do have the courage and the
ability to fix what is wrong with this ship. By voting for this debt
limit, what you are telling the American people is, you do not have the
courage to fix what is wrong here. We do not have the courage to do the
oversight that is necessary.
Whether it is the $40 billion worth of waste, at least, a year in the
Pentagon, or the $43 billion a year wasted on Medicare and Medicaid
through fraud, or the $18 billion we are spending on buildings that we
do not want, we do not have the courage to do that.
What we should be doing is tearing up the credit card and, through
not passing an expansion or extension of the debt limit, start acting
like every other American family has to do and start making the hard
choices even if it offends some of our constituents, because the
constituents who matter the most, as we continue the heritage of this
country of creating opportunity, are our children and grandchildren.
My real hope is this debt limit expansion does not pass tonight, that
we all get to reflect on that; we come together, Democrat and
Republican, and say: We have not done a good job. Let's

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make a pact that we are going to do the oversight, that we are going to
cut the programs, that we are going to lower spending. It does not
matter what President Bush wanted. We have the power of the purse. We
can decrease spending.
Will we do that? Unfortunately, my belief is we will not because,
quite frankly, we are interested in the next election more than we are
interested in the next generation, and to that, shame on us.
I yield the floor.
The PRESIDING OFFICER (Mr. Sanders.) The Senator from North Dakota.
Mr. DORGAN. Mr. President, let me make a couple of comments. I will
not take a long time.
I have to observe that there was a time when there was substantial
courage in this Chamber. I recall we had some very large budget
deficits growing over a long period of time, and we passed a new fiscal
policy. I was here then some long while ago. It passed by one vote in
the Senate and one vote in the House. That took some courage. Some
people who cast those votes did not come back here, because they were
very controversial votes.
But we turned our fiscal policy around in this country by making
tough choices. We turned the Federal budget deficit into a Federal
budget surplus and began paying down the Federal debt. In 2001, on this
floor, in this Chamber, we had a debate about fiscal policy again. A
new President came to the White House. President Bush said he was a
conservative.
He said: Well, now, we have all of these surpluses. He and his
friend, Alan Greenspan, were worried that the biggest problem facing
America was that we were going to pay down our debt too rapidly. The
President and the White House said: We have got all of these surpluses.
Let's decide to give the wealthiest Americans some large tax cuts
because I believe in trickledown economics. Put a lot in the top, and
see if some will drain down a bit.
Some of us stood on the floor of the Senate and said, you know what,
we have just finally turned this economy around, turned these huge
budget deficits around. The plan under the Clinton administration
worked, and we turned big deficits into big surpluses and began to pay
down the Federal indebtedness.

Some of us stood on the floor of the Senate and said: Mr. President--
to President Bush--maybe we ought to be a bit conservative. What if
something happens? These big surpluses for the next 10 years do not yet
exist. Yes, there is a surplus now, but we do not have a 10-year
surplus that exists. That is the projection. What if something happens?
Why do we not be a bit more conservative in how we deal with this?
The President and his supporters said: No. No. No. What we are going
to do is we are going to give very large tax cuts to the wealthiest
Americans. We want to do it right now. They won. They had the votes to
win, and they turned this economy around, all right. They turned budget
surpluses, in a period where we were actually paying down the Federal
debt, into some of the largest Federal deficits in this country's
history--once again, unbelievable.
So when I hear people talking about courage, let me say we had some
courage on the floor of the Senate. I am proud to have been one of them
who cast a vote that passed by one vote, that turned around this
country's fiscal policy. And now we leave an example of a fiscal policy
that was reckless, one of the most reckless fiscal policies I can ever
imagine, given to us in 2001 by a new President who said he was
conservative but who was not.
In fact, my colleague just described what we are spending and not
paying for. Yesterday in the Senate Appropriations Committee, President
Bush sent his Defense Secretary, he sent the Assistant Secretary of
State, he sent the Chairman of the Joint Chiefs of Staff, to ask us for
another $189 billion to prosecute the war in Iraq and Afghanistan. And,
oh, by the way, the President said: I do not intend that we pay for any
of that; put that right on top of the debt. We are going to charge it
all.
That is the direction this White House is leading. That is what
brings us to the floor of the Senate tonight, with a fiscal policy that
has rung up an enormous amount of additional debt; the worst possible
fiscal policy you can imagine.
You know what happened? Some of us said, maybe we ought to be a
little bit conservative, a little bit careful. The President said: No.
No. No. We are not going to do that. We are going to take these 10
years of estimated surpluses and we are going to spend them with tax
cuts.
Here is what happened very quickly. We were in a recession. The
President likes to say he inherited the recession. He did not. But very
shortly after he took office, we experienced a recession. Then we
experienced the terrorist attack of 9/11, and then a war in
Afghanistan, then a war in Iraq, then an economic slowdown.
Would not it have been smarter to have a fiscal policy that was a bit
more careful, one that would have given a bit more thought about how to
best care for this country's finances? I know it is easy to blame. I
watched today as we had people come to the floor of the Senate blaming
this, that, and the other thing. It is easy to take the negative. I
understand that. Mark Twain was once asked if he would engage in a
debate. And he said: Oh, sure, as long as I can take the negative side.
Somebody said: We have not told you the subject. He said: Doesn't
matter. If I take the negative side, it will take no preparation.
So I understand those who come to the floor of the Senate and tell us
what is wrong. But I can tell you about a fiscal policy that was right,
because I supported it and am proud to have done it some years ago,
that turned big deficits into budget surpluses and began paying down
the Federal debt. That is the kind of fiscal policy we need. It is the
kind of fiscal policy we had, and this administration and those who
supported it in this Chamber turned their back on it 6 years ago. Now
we have paid the price for those votes.
I hope those who describe these issues remember, remember what a good
fiscal policy was and how to recapture it once again. Yes, it take a
little political courage. Those of us who supported a fiscal policy
that works understand how it worked when it happened.
We have a lot to be thankful for, living in this great country of
ours; only one spot like it on the planet. We have responsibilities
that are very significant here in this Chamber. There is plenty wrong
with this country, plenty of things that need fixing. But it is a
wonderful place that requires our stewardship to do the right thing. I
only came to the floor as I listened this evening to point out that we
have seen good fiscal policy and bad fiscal policy. I, and I think many
others, recognize the difference. If all of my colleagues will
recognize that difference, we can put this country back on track once
again. That is what the American people deserve and expect from us.
I yield the floor, and I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. BAUCUS. I ask unanimous consent that the order for the quorum
call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. REID. Mr. President, before I discuss this legislation, I want to
express my thanks to the distinguished minority leader, Senator
McConnell, as well as the chairman and ranking member of the Finance
Committee, Senators Baucus and Grassley, for their cooperation in
facilitating consideration of this legislation. I also want to thank
Treasury Secretary Paulson for his leadership.
We are taking up this legislation at the request of the Bush
administration so that the Federal Government can meet its obligations
and pay its bills. Secretary Paulson, in a letter to me earlier this
month, indicated that it was essential that the Senate pass this
legislation as soon as possible. This will be the fifth increase in the
debt limit since President Bush came to office.
I find it distasteful and disturbing to increase the debt limit yet
again, but the alternative is simply unthinkable. Eventually, some
Social Security checks could not be sent. Government offices could
close. Interest rates could rise. And the economic impact on our

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country could be profound. As a practical matter, therefore, we have no
choice.
Having said that, President Bush's failed policies put us in this
box, and as we consider the pending bill, I hope my colleagues will
focus on the importance of changing those policies. Over the past
several years, the administration has completely abandoned fiscal
discipline and dramatically increased our debt. Until we change the
policies that led down this path, we will be back year after year,
digging the hole ever deeper.
Let's review some history. When President Bush came to office, our
Nation was running record budget surpluses and our debt was on the
decline. In 2000, we ran a surplus of $236 billion, and the outlook was
for continued surpluses for years to come. In fact, the Chairman of the
Federal Reserve at the time, Alan Greenspan, was so optimistic about
our fiscal condition that he thought we might quickly eliminate our
debt altogether.
Unfortunately, once President Bush took office, our fiscal situation
rapidly collapsed. In 2001, our debt was $5.8 trillion. Today, it's $9
trillion, an increase of more than $3 trillion. Compounding matters,
all this new borrowing has come at the worst possible time, just as the
baby boom generation is about to retire.
Not only has our debt exploded, but increasingly we are borrowing
from foreigners. In fact, since President Bush took office, our debt to
foreigners has more than doubled. Many of our creditors are in places
like China and Japan. And as we borrow more and more from those abroad,
we also become more dependent on them. It is a trend that cannot and
must not be allowed to continue.
It's no mystery why debt has exploded. President Bush abandoned the
pay-as-you-go rules that proved so effective in promoting fiscal
discipline. He increased spending by 50 percent. And he approved
massive tax breaks, disproportionately for multimillionaires and
special interests.
Much of the spending has been for our disastrous occupation of Iraq.
The war has already cost the lives of almost 4,000 Americans. But while
our brave men and women in uniform bear, by far, the greatest burden,
all American taxpayers are paying a price. We have already spent
roughly half a trillion dollars on President Bush's failed policy. Now
the President is asking for nearly $200 billion more.
How does the President propose to pay for all this new spending in
Iraq? He doesn't. He just wants to keep putting it on the national
credit card.
The same is true of the President's massive tax breaks for
multimillionaires. Next year, President Bush wants to spend nearly $50
billion just to hand out tax breaks for those fortunate enough to earn
more than $1 million a year. These lucky few will get a windfall worth
an average of $130,000 each. Most hard-working, middle-class families
would be grateful for a fraction of that.

And how will we finance all these lavish tax breaks for
multimillionaires? Again, by putting them on the national credit card.
In other words, our children will pay.
If only the President were as willing to provide kids with health
care as he is willing to load them with debt.
As you know, the administration claims to have seen the light on
fiscal responsibility, and has cited the need for discipline to justify
their opposition to the children's health bill. But how much would the
legislation add to the debt? $200 billion? $20 billion? No. The answer
is: zero. Nothing. It is fully paid for.
In other words, the President is willing to borrow half a trillion
dollars and more for Iraq. But he is opposing a children's health bill
that won't add anything to the debt.
To put it mildly, those priorities are wrong. The American people
know it. And most of my colleagues do, as well.
Clearly, we need to change course. And this debt limit bill is just
another reminder of that.
Fortunately, the new Congress already has made real progress in the
effort to provide a new direction. Earlier this year, we passed a
budget resolution that balanced the budget without raising a penny of
taxes. The budget put the middle class first and focused on America's
needs here at home. All in a responsible way, while reestablishing
strong pay-as-you-go rules to enforce fiscal discipline.
Our new budget was an important first step. But we have a long way to
go to change fiscal policy to where it needs to be. Ultimately, it is
going to take bipartisan effort, and I look forward to working with
colleagues on both sides of the aisle to make it happen. Meanwhile,
while it is not a pleasant task, we have no choice but to pay our
bills.
Mrs. FEINSTEIN. Mr. President, I rise today to express my
disappointment for having to vote yet again to increase the national
debt limit. The Senate has been forced to take this vote on five
occasions under this administration. In the intervening 6 years, the
national debt has exploded by almost $3.4 trillion, or 61 percent.
The national debt now stands at $9 trillion.
To put this in terms that most of us can understand, this amounts to
roughly $30,000 owed by every American.
Unfortunately, the debt forecast shows no signs of improving.
Over the next 5 years, the debt is projected to reach $11.3 trillion.
By 2017, the Congressional Budget Office projects this figure will
hover around $13 trillion. In this year alone, our national debt is
slated to increase by almost $600 billion.
Maintaining this debt is not free. The interest charged on the amount
we have borrowed grows each and every day. And, the more we borrow, the
more we pay in interest.
Over the next 10 years, the interest payments on the national debt
are projected to total $2.8 trillion. This year, interest payments on
the debt will reach $235 billion.
This means less money for the programs that matter most for working
Americans.
Congressional Democrats have demonstrated a commitment to fiscal
responsibility by passing pay-as-you-go budget rules that require
Congress to offset new spending.
This Congress has worked to find ways to pay for major priorities--
such as the extension of the Children's Health Insurance Program, which
I hope will pass today in the Senate with a bipartisan, veto-proof
majority.
The fact that the Senate must vote, yet again, to increase the
national borrowing limit begs the question: Why are we here?
Misguided tax policies are one of the reasons we are considering this
measure today.
The President has presided over the greatest fiscal reversal in our
Nation's history. He inherited a budget surplus of $236 billion from
President Clinton, the largest surplus in American history.

He took that surplus and sunk it into expensive tax cuts at a cost of
more than $1.3 trillion to date and $3 trillion over the next decade.
But what I find most frustrating, is that these tax cuts have come in
the midst of significant military campaigns in Iraq and Afghanistan.
Never in the history of this Nation have we enacted significant tax
cuts during a time of war.
We have dipped into the pockets of our children and grandchildren and
``charged'' the costs of these wars to a National credit card.
When you combine the cost of the debt-financed tax cuts with spending
for the military operations in Afghanistan, Iraq, and the global war on
terror--currently approaching $610 billion--the inevitable result is
that our Federal budget is squeezed, while our crushing debt continues
to grow.
The reality is, even under a best-case scenario, we are years and
hundreds of billions of dollars away from a full redeployment of
American troops from Iraq.
The President will soon request another $190 billion in supplemental
funding for operations in Iraq and Afghanistan. And it is no longer
unrealistic to suggest that operations there might cost upwards of $1
trillion before all is said and done.
Year after year, supplemental after supplemental, we continue
borrowing to pay for these wars.
In real terms, the cost is over $350 million per day. Almost $15
million per hour; $250,000 per minute; or $4,000 every second.
We must recognize the mistakes of the past few years and understand
that

[[Page S12254]]

you cannot have your cake and eat it too.
As we approach a $10 trillion debt limit, it is essential to look
forward for solutions. Where do we go from here?
We start with responsible spending. While I support targeted tax cuts
to help working families, it is time to allow the tax cuts for the
wealthiest Americans to expire.
It would be unfair and irresponsible to not do so.
We need solutions to shore up our strained entitlement programs, such
as Social Security and Medicare, as the retirement of baby boomers
looms.
We need to adequately fund children's health and education programs
and invest in the future of our young people.
We need to focus on foreign diplomacy to repair our reputation as a
global leader.
We need to invest in homeland security and other domestic programs
that will keep America safe and increase productivity.
Most importantly, we need to start planning for the future today.
Every day that we wait, hundreds of millions of dollars are spent,
the debt increases, vital programs are under funded, and the cycle
continues. We must do better.
I understand the political realities of this vote.
However, it is important to recognize the consequences of this
measure failing. Not increasing the debt limit could result in the
government defaulting on its obligations, exacerbating already shaky
credit markets across the globe.
So while I urge my colleagues to join me in supporting the measure to
once again raise the debt limit, it is also my hope that my colleagues
will join me in seeking real and permanent solutions to our Nation's
fiscal problems.
Tax cuts, ``staying the course,'' and not addressing the future of
our most critical entitlement programs are sometimes politically
appealing policies, but they are also not responsible.
Responsible policies come from making the difficult choices that put
America's future first.
This Congress must exhibit leadership in breaking with the traditions
of the last few years to put our Nation's fiscal house in order.
Mr. FEINGOLD. Mr. President, today we are again forced to consider
legislation to raise the Nation's debt limit. It is obvious to anyone
that we are here because of the grossly reckless fiscal policies that
have been advanced by the administration and Congress for nearly 6
years.
Over those 6 years we have seen a dramatic deterioration in the
Government's ability to perform one of its most fundamental jobs--
balancing the Nation's fiscal books. In January of 2001, the
Congressional Budget Office projected that in the 10 years thereafter,
the Government would run a unified budget surplus of more than $5
trillion. Nearly 6 years later, we are staring at almost a mirror image
of that 10-year, $5 trillion surplus, except that instead of healthy
surpluses, under any reasonable set of assumptions, we are now facing
immense deficits and mounting debt.
We absolutely cannot afford to continue to run up these massive
deficits. Doing so causes the Government to use the surpluses of the
Social Security trust fund for other Government purposes rather than to
pay down the debt and help our Nation prepare for the coming retirement
of the baby boom generation. Every dollar we add to the Federal debt is
another dollar that we are forcing our children to pay back in higher
taxes or fewer Government benefits.
But inside this dark cloud of dismal fiscal news there is a silver
lining; namely, the restoration of the so-called ``pay-as-you-go''
budget rule, known as pay-go, as part of the budget resolution we
adopted this year. That rule was central to the ability of the Congress
to balance the Federal budget in the 1990s, and the return of that
commonsense discipline gives us a better chance to clean up the fiscal
disaster the current administration created. Unlike the last time
Congress had to raise the debt limit for this administration, we now
have pay-go back in place.
In some ways, today's vote to raise the debt limit ratifies the
actions taken by the administration and Congress to stick future
generations with an immense credit card bill. Had we not restored the
pay-go rule recently, I may well have decided not to support this
measure.
Fortunately, pay-go has been reinstated, and we will be better able
to return to the path of fiscal responsibility we abandoned a few years
ago. And because of that, I will support this measure, made necessary
by the profligate policies of President Bush, and egregiously aided and
abetted by the last three Congresses.
Mr. BAUCUS. Mr. President, all time for debate on the debt limit has
been utilized. In the interest of giving Senators some notice to get
here in time for a vote, I alert all Senators that we will probably
begin the vote first on the children's health insurance bill and,
following that, the debt limit. That will begin sometime between 7:20
and 7:25. So within about 5 minutes we will begin voting on the
children's health insurance plan.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. REID. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.

Unanimous Consent Agreement--H.R. 1585

Mr. REID. Mr. President, I ask unanimous consent that upon
disposition of H.J. Res. 52, the Senate resume consideration of H.R.
1585 and resume amendment No. 2999; that the amendment be modified with
the changes at the desk, that there be 2 minutes of debate divided in
the usual form; that upon the use of the time, the amendment be agreed
to and the motion to reconsider be laid upon the table; that the Senate
then resume Coburn amendment No. 2196, and there be 10 minutes of
debate prior to a vote in relation to the amendment; that no amendment
be in order to the amendments in this agreement; that the time be
equally divided and controlled between Senators Levin and Coburn or
their designee; and upon the use or yielding back of time, the Senate
proceed to vote in relation to the amendment; that immediately after
disposition of the Coburn amendment, the Senate proceed to Menendez
amendment No. 2972, and that after the amendment is reported by number,
there be 6 minutes of debate equally divided and controlled between
Senators Levin and Menendez, or their designees; that upon the use or
yielding back of time, without further action, the Senate proceed to
vote with respect to the amendment; that upon disposition of the
amendment, that the managers' package which has been cleared by the
managers, be considered and agreed to; that the Senate proceed to vote
on the motion to invoke cloture on amendment No. 2011, the substitute
amendment; that Members have until 8:15 p.m. tonight to file any
germane second-degree amendments; that if cloture is invoked on the
substitute, then all time postcloture be considered expired at 5:30
p.m. this coming Monday, October 1; that upon adoption of the
substitute, the bill be read a third time, and without further action,
the Senate proceed to vote on passage of the bill; that the cloture
motion on the bill be withdrawn; that upon passage, the Senate insist
on its amendment, request a conference with the House, and the Chair be
authorized to appoint conferees.
The PRESIDING OFFICER. Is there objection?
Mr. McCONNELL. Mr. President, reserving the right to object, and I
will not be objecting, I just wanted to ask the majority leader if I am
correct in that if this is entered into, there will be no votes
tomorrow, and the next vote will be late Monday afternoon?
Mr. REID. Yes. The first vote will be Monday at approximately 5:30.
The PRESIDING OFFICER. Without objection, it is so ordered.
The question is on third reading of the joint resolution.
The joint resolution was read the third time.
The PRESIDING OFFICER. Under the previous order, the joint resolution
is set aside.

____________________