[Congressional Record Volume 154, Number 39 (Friday, March 7, 2008)]
[Senate]
[Pages S1733-S1734]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           THE FEDERAL BUDGET

  Mr. CORNYN. I thank the majority leader.
  Mr. President, I wish to now transition to talk about the issue that 
will be in front of the Senate next week, and this has to do with the 
Federal budget.
  This is so important across so many areas because not only does this 
budget talk about what the tax burden of hard-working Americans will be 
in the coming year, it also has an impact on energy costs, on health 
insurance costs, on the ability of Americans to buy homes. How do we 
create better schools for better jobs? How do we deal with the issue of 
runaway lawsuits that threaten the business environment and have a 
dampening effect on job creation? How do we revive capital markets, 
rebuild our roads, bridges, railroads and airports? How do we provide a 
simpler, fairer tax system than we have now? And How do we make sure 
Americans retain the right to work in the job of their choosing without 
having to become part of a union when they don't want to?
  The part of this budget that concerns me the most is not the proposed 
$1.2 trillion tax hike that is contemplated under this budget that 
passed strictly along party lines in the Budget Committee yesterday 
afternoon, although that is bad enough. It will hit family budgets 
hard. Mr. President, 43 million families will owe an average of $2,300 
more in 2009 in taxes as a result of this budget if it is adopted on 
the Senate floor. I am also concerned about the spending increase under 
this budget, some $211 billion in additional spending that is part of 
this budget proposed from the Budget Committee that will be before the 
Senate this next week. That means, in fiscal year 2009, if adopted, a 
9-percent increase over what the Federal Government spent in fiscal 
year 2008. Now, as bad as the higher taxes and higher spending is, I 
wish I could say that was the end of the story, but it goes on from 
there and it doesn't get any better.

  As a result of the increased spending and the increased taxes 
contemplated under this budget, America will find itself $2 trillion 
deeper in debt by the year 2013 if this budget is adopted. That is more 
than $6,000 in extra debt for every American.
  And I would say this budget also fails in another important respect. 
It fails to deal with the impending crisis in entitlement spending and 
the future insolvency of both Medicare and Social Security, two 
important safety net programs, and ones we have made a promise to fund 
and to make sure is there for not only present beneficiaries of these 
programs but for our children and grandchildren as well. We know that 
unless something dramatic happens, we will not be able to keep that 
commitment.
  As a matter of fact, unless this Congress acts, there is $66 trillion 
in unfunded responsibilities under the current entitlement programs we 
need to fix; that we need to take into account.
  Now, there is an important piece of legislation I think we ought to 
take up and that is the Conrad-Gregg task force to deal with this 
gathering storm of an entitlement crisis. It is a bipartisan bill by 
the chairman and the ranking member of the Budget Committee. But we are 
not taking that up, as we should, as part of dealing with the Federal 
budget. Because we know that if we don't do anything, there is going to 
be a terrible financial catastrophe, and the people who will ultimately 
suffer as a result of our failure to act will be future beneficiaries 
under Social Security and Medicare--our children, our grandchildren, 
and future generations.
  The last thing I wish to mention with regard to the budget is what 
the Wall Street Journal has called the pay-go farce. You will recall 
that pay-go was the name given to pay-as-you-go requirements under the 
budget. Sounds good. That is what the family budget has to do. If there 
is no money coming in the front door, then you are not going to be able 
to spend yourself into debt. You pay as you go. That is the way most 
businesses operate but not the Federal Government. The Federal 
Government can continue to print money and spend money it doesn't have 
and pass the debt down to our children and grandchildren.
  If you take into account this unfunded liability of $66 trillion 
because of the entitlement crisis--the gathering storm I mentioned a 
moment ago--that boils down to about $175,000 per person--every man, 
woman, and child--that we owe now for those unfunded liabilities unless 
we take action now. But the pay-go farce the Wall Street Journal 
article mentions--and the date of this article is December 10, 2007--
quotes Speaker  Nancy Pelosi in remarks she made on December 12, 2006. 
She said:

       Democrats are committed to ending years of irresponsible 
     budget policies that have produced historic deficits. Instead 
     of compiling trillions of dollars of debt onto our children 
     and grandchildren, we will restore pay-as-you-go budget 
     discipline.

  Now, I have to tell you, just taken at face value, that sounds pretty 
good. We do need to take responsibility. We do need to do that on a 
bipartisan basis. But the pay-go promise made by this Congress looks 
like Swiss cheese. There are so many holes in it that you could drive--
not to mix my metaphors--but you could drive a truck through it. And 
let me explain why.
  First of all, these pay-go rules that promise financial discipline do 
not apply to discretionary spending. That is about $1 trillion a year. 
And it doesn't restrain spending increases under current law in 
entitlements,

[[Page S1734]]

such as Medicare or Medicaid, the programs I mentioned a moment ago. 
The main goal, and this is a problem, is that it is designed to make 
tax relief for working families and small businesses almost impossible.
  Now, we ran into this pay-go requirement when it came to relieving 
middle-class taxpayers from the alternative minimum tax this last 
December. And I agree in that instance it was important to waive the 
pay-go requirement. Because, frankly, if you will recall, the 
alternative minimum tax was never designed to hit the middle class. But 
because it was not indexed for inflation this last year, it covered 6 
million taxpayers. If we hadn't acted, it would have hit 23 million 
middle-class taxpayers. So I agree it was appropriate not to require 
pay-as-you-go principles for that alternative minimum tax that Congress 
never intended the middle class to have to pay.
  As a matter of fact, back in the 1960s, the alternative minimum tax 
was adopted, as a result of a report issued by the Department of 
Treasury that said that 155 high-income taxpayers did not pay Federal 
income tax because of other deductions. But as is typical in schemes 
designed to ``tax the rich,''--we have heard that before--eventually it 
grows and grows and grows to cover the middle class. So be wary when 
Congress says: We are only going to tax the rich. That means we all 
need to put our hand on our wallet because it eventually grows into a 
middle-class tax.
  Another time Congress used the pay-go gimmick, which gives rise to 
the title of this article called ``The Pay-go Farce,'' was on SCHIP. 
Now, you will recall that is the State Children's Health Insurance 
Plan, something we all support on a bipartisan basis. But the way it 
was proposed by the leadership last year, to fund the 140-percent 
increase in this program, was a joke. The SCHIP bill included a 
spending cliff that disguised its actual cost. It assumed spending 
would rise to $14 billion by 2012, but then pretended the costs would 
fall to less than half in 2013, which just so happens to fall outside 
the 5-year budget scoring window. Some $60 billion in spending over the 
next 10 years were hidden through this ploy of creating a cliff in 
spending, suggesting that somehow Congress would cut this program in 
half and deny children access to health insurance, something we all 
know would not happen.

  So that is why the pay-go requirement has been called a farce and why 
I likened it to Swiss cheese. It has so many holes in it, it doesn't do 
what it has promised to do, which is to restore budget discipline; and 
it unfairly impacts the ability to provide tax relief to working 
families in a way that can grow the economy and allow people to keep 
more of what they earn--money they can use to pay for things like 
education, health care, and transportation.
  As a matter of fact, as a result of the 2001-2003 tax relief that 
this Congress voted on and passed in the wake of 9/11, in the wake of 
the stock market scandals, and with the recession at the beginning of 
that decade, we saw more than 50 months of uninterrupted job growth in 
the country, with 9 million new jobs being created. It should not be 
surprising that tax relief ends up being one of the best stimulae we 
could possibly give the economy. We saw Federal revenues at historic 
highs and that is because more people working means more people paying 
taxes and more revenue to the Federal Government; and thus the budget 
deficit reduced from roughly 1.9 percent of the gross domestic product 
to about 1.2 last year.
  So, in closing, I would say this debate we are going to have next 
week is vitally important, and the question is: Are we going to wreck 
the Federal budget or will we find ways to help families balance their 
budget, especially with the economic challenges that they face? It is 
all about taxing, it is all about spending, it is all about whether we 
are going to increase the Federal debt, it is all about whether we are 
going to meet our responsibilities as elected officials to deal with 
the impending entitlement crisis which threatens to act similar to a 
tsunami and engulf us in a huge wave of red ink.
  Mr. President, I appreciate the courtesy of the majority leader, and 
I yield the floor.
  The PRESIDING OFFICER. The majority leader is recognized.

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