[Congressional Record Volume 156, Number 53 (Thursday, April 15, 2010)]
[Senate]
[Pages S2395-S2397]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
THE FEDERAL DEBT
Mr. SESSIONS. Mr. President, I shared recently with my colleagues my
concern about the surging Federal debt and the ramifications that arise
from that, and how it has a damaging effect in ways a lot of people
have not considered on our economy and on the quality of life of the
American people.
A scholar at the Cato Institute published an excellent op ed in
yesterday's Washington Times on the impact of borrowing on the American
economy. Savings are essential, as we all know, for economic growth
because it is from those savings that people borrow, and then they are
able to invest in new factories, equipment, research, development, and
create businesses that create jobs. That is how we get economic growth.
It is part of our tradition of a free economy, and it has served us
well. Very few would deny that this is the best way to allocate wealth,
rather than trying to have a government-mandated economy.
When the government issues debt and private citizens and corporations
buy it, that, by definition, steers that money, that savings, from the
productive or private sector of the economy toward the government. If
the government wasn't issuing the debt, or borrowing the money, people
would have money that they would likely invest in private corporations
through bonds or stocks. They might place it in a bank and buy a CD,
and then the bank would loan that to a private company, or some person
who is wishing to build a home or a shopping center, creating jobs and
growth in the economy. Some of our colleagues like to think that you
can borrow money and you can increase debt and it is free money. But we
know that is not true. Nothing comes from nothing. Everything has a
cost, and it will be paid for one way or the other, at one time or
another.
The unprecedented Federal debt that we are dealing with today is
unlike anything we have seen before. I think it is fair to say that
both parties have blame to share, but I have to say we have never seen
anything like the President's 10-year budget and what impact it will
have on the debt in our country.
Our debt in 2008 was $5.8 billion. In 2012, it is projected to double
to $11.6 billion. In 2018, it will triple to 17.6 billion. That is a
tripling of the entire debt of the United States in that many years.
People would say, well, what does that mean? I say to you it means one
thing I can show you. You borrow that money--somebody loaned it to the
government. When the government took that loan and borrowed that money,
they have to pay interest on it.
Just to show what the Congressional Budget Office has told us about
what that actually means, in 2009 we paid $187 billion in interest on
our debt. That is going to go up every single year, according to them,
until 2020 when we will be paying $840 billion in 1 year in interest on
the debt.
All of us have projects in which we believe. We believe in education
or health. We believe in helping seniors or
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young people. We believe in highways and research and development,
national defense, the National Institutes of Health, science and
technology, improving our energy use, cleaning up our environment.
Those things cost money.
According to the projections of the Congressional Budget Office, $840
billion will have to be taken off the top. It will have to be paid
first. That will be larger than anything in our budget, including
defense, unless it continues to surge, and we hope it does not. It will
be larger than any other account. It will be crowding out money we
could have been spending on things that work.
Some of the money we spend does not work. Too much of it is wasteful
Washington spending. Some of this money is very productive, and we like
to think we are making the world a better place. We are going to have
less of it because of this interest.
The unprecedented Federal deficit last year of $1.4 trillion is a
stunning number, and the projected $1.5 trillion deficit this year will
be taking $3 trillion out of the economy. In fact, the CATO scholar,
Richard Rahn, compared the percentage of money the government is taking
out of the economy in this recession with how much the government took
out of the economy in previous recessions and found that the current
depletion of savings that is going to the government is unprecedented
over the last 30 years.
He says in 2009 the government took 38 percent of all the gross
savings in the country by borrowing it, money that might have been
available to a shopping center guy or a startup company or a person who
needs to buy a home. They would borrow the money. The government is
borrowing the money. The number of dollars in savings in this country
is limited. We are taking 38 percent of it.
By contrast, it did not take more than 15 percent in any other
recession in the past 30 years. The average takings have been less than
5 percent.
I will show this chart: savings taken by the government during
recessions. The average per quarter in the last 30 years is 1 or 2
percent. In the 1982-1983 recession, it hit about 12; in the 1992-1993
recession, it hit about 15 percent; in 2003-2004, about 11 or 12
percent. Look at this, 38 percent in the 2009 recession we are in.
Some say this is worse than anything we have ever seen before. It is
very bad, and it is unprecedented. If it is so easy, and if there is no
cost to borrow, why don't we borrow twice as much? We all know there is
a cost. We have to make judgments about how far we can go, how much we
can continue to borrow.
We borrowed $800 billion for the stimulus package. Now we have a $270
billion stimulus package that is proposed. Since that would not fly as
a big package, it is being broken up. We voted to have another $18
billion for a 2-month extension of unemployment insurance, the doctor
fix, and some other items. We just borrowed it.
We thought when we did the largest expenditure in the history of the
Republic, when we borrowed $800 billion for the stimulus package--I
thought that was more than we could possibly afford to borrow to try to
stimulate ourselves artificially out of this economic slowdown. It
worried me. In fact, I supported a plan that I believe would have cost
half as much and created more jobs using the studies of the President's
adviser on economics, Christina Romer. It would have been more
productive than the one Congress did.
One of the great tragedies of this whole process is how little
stimulus we got out of the $800 billion. As Gary Becker, the Nobel
Prize winner, said, it was not a stimulus package. It was not written
to create jobs and growth. He predicted it would not create jobs, and
he, unfortunately, has turned out to be correct.
Senator Coburn and several of us and others opposed this bill because
it ought to have been paid for. It should have been paid for out of the
stimulus package. Unemployment compensation is certainly one of the
items that was in the stimulus package. The doctor fix--what about
that? We have to do that, don't we? Yes, we do. We really do. From
where should that money come?
The failure of compensation to our physicians--please understand--is
a result of a law we passed that we now cannot adhere to that if it is
in effect would cut physicians' pay for Medicare patients 21 percent.
Many physicians are already quitting taking Medicare patients. If this
were to pass, we would have very few continuing to take Medicare
patients. The whole system would collapse. They are not getting paid
enough now. Private insurance pays them much more than the government
does. How should we pay the doctors? Don't we have to borrow the money?
One of the great flaws in the health care bill was the failure to fix
the Medicare doctor payment. That was the crisis always in Medicare.
The proposal that passed on a partisan vote in the Senate, the proposal
to have a new health care program to raise taxes for Medicare, bringing
in more money for Medicare, cut benefits from Medicare.
Did they fix the crisis, the doctor payment first, like what had been
said had to be done from the beginning? One of the reasons we needed
health care reform is because we needed to have a permanent solution to
the doctor payments shortfall. Did we use the money for that? No. We
took the money and created an entirely new spending program, a new
health care program.
Our colleagues are proposing that we just borrow the money, the $371
billion it is going to take over 10 years to fix the doctor payments.
This is why the American people instinctively understand that we are
not in control. We are out of control. We are in denial about how
serious our situation is. I think the American people instinctively are
right.
People say: Oh, the townhall meetings are angry. Some of them are
angry. I sense they are just deeply concerned about the country they
love, and they have a sense--and it is correct--that we are
irresponsibly managing our duties here. As a result, we are saddling
them and their children with the largest increase in debt the Nation
has ever seen. It has the potential to put a cloud over the long-term
growth in our economy.
I do believe we are going to get some economic strength from this
stimulus package. It is impossible to spend $800 billion and not get
some economic growth from it in the short term. In 1 more year it will
almost all be spent. I guess before the election we will have a lot of
money being spent, and we are going to get some benefit from that, and
I hope we will have a long-term positive benefit.
The Congressional Budget Office, our group that we ask to analyze
spending and score the cost of legislation, analyzed the $800 billion
stimulus package and this is what they said. I think it makes sense and
I am afraid it is true. For the first 2 or 3 years, we are going to
have an economic lift from this flood of money into the economy. But
over 10 years, the Congressional Budget Office has concluded that the
$800 billion in spending will not improve the economy. Their score was
that the economy would grow less in 10 years having passed the stimulus
package than if we passed nothing--if we didn't spend anything. Why is
that? Mr. Elmendorf said the reason is that when you borrow $800
billion, you crowd out borrowing from the private sector, which is
where our economic growth is. You take available money that the private
sector could have borrowed to run their businesses and factories and
the government spends it on pork programs and social programs. This
chart shows exactly that. I didn't know that 38 percent of the money
that is being saved in this country would be gobbled up by Federal
Government borrowing to keep our ship afloat so we can still try to buy
our way out of this recession.
The experts say recessions are cyclical. If you don't do anything,
you will come out of it. We hoped some sort of stimulus package could
help us come out of it faster, with less pain, and I was prepared to
vote for and I did vote for several packages that would be more job
oriented and more targeted to growth. But we didn't pass that kind of
bill. We passed a big governmental spending bill. It was predicted not
to be growth oriented, it was predicted not to be job creating, and
apparently, unfortunately, that has been basically true.
So I am hoping we will have some growth for a few years here, but I
am confident, and logic tells me, that in the outyears that growth will
not be as vigorous as it would otherwise have been because we are going
to be carrying an unprecedented amount of debt
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and we are going to be paying an unprecedented amount of interest every
year, and this will crowd out private borrowing and cost the government
a stunning amount of interest. That means the government will not be
able to do anything to improve the lives of the American people because
that money first has to go to pay the interest.
I wanted to share that, because there are some people who are saying
that those of us who objected to this bill--this small $18 billion debt
expansion that passed today--somehow we don't love America and we don't
love people in need. We believe and we offered legislation that would
have paid for these expenses by taking it from unobligated funds and
programs that don't work effectively in our country. So we would have
been able to fill this $18 billion need without increasing the debt.
But instead of doing that, the majority of the Senate, or Democratic
leadership, pushed through legislation that would borrow it.
I guess that is the path we are on, to have an $800 billion stimulus,
a $270 billion stimulus II, to start a new $2.5 trillion health care
bill--with these kinds of bills, more and more spending each year, and
more and more debt. But we have got to stop. I know it is hard to say
no and hard to make the tough choices, but that is what we have been
elected to do.
I think we have to get serious about it. I am getting serious about
it. I don't intend to continue to vote willy-nilly for these debt-
increasing bills. I believe this Congress has got to get serious about
our financial future and take some commonsense steps that can lead us
into a better future.
I thank the Chair, and I yield the floor.
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