[Congressional Record Volume 157, Number 13 (Monday, January 31, 2011)]
[Senate]
[Pages S353-S354]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         FAILURE OF LEADERSHIP

  Mr. SESSIONS. Mr. President, first, I thank my colleague, Senator 
Kyl, who is this body's premier student of the nuclear strategic 
posture of the United States. I served and have served as chairman of 
that subcommittee of Armed Services. I share his concern. I am thankful 
that he is here and is keeping up with these matters year after year. 
Most of us would rather not talk about them, but they represent the 
serious responsibilities of a great nation that must be able to defend 
itself, to be able to live freely and prosperously. So I thank the 
Senator for his remarks, and I value his friendship and enjoy following 
his leadership.
  Last week, the Congressional Budget Office issued a report that--our 
Congressional Budget Office's leadership is selected by the majority in 
the Congress, the Democratic majority--that report showed our deficit 
for this year, which will end September 30, will be $1.5 trillion. That 
is the largest deficit the Nation has ever had. The last 2 years have 
been $1.3 trillion and $1.4 trillion. This year's deficit is projected 
to come in at $1.5 trillion. We complained--I have--that President Bush 
spent more money than he should have, but his highest deficit was one-
third of that, or $460 billion. So we are at unprecedented levels of 
annual deficit and debt. Our gross debt, the total United States debt, 
internal and external, will equal, by the end of the year, 100 percent 
of GDP. Annual interest payments--we borrow money; people loan us their 
money, and we give them Treasury bills and bonds in exchange, and we 
pay them interest on the debt. The amount of interest we pay will rise 
to $750 billion by the end of this decade. That means a 1-year interest 
payment will cost us nearly as much as 20 years of current highway 
construction spending. We spend about $40 billion a year, for example, 
on Federal highway expenditures. We are talking about interest payments 
going from $180 billion or so a couple of years ago to $750 billion, 
and our debt will triple in that time--from $5 trillion to over $15 
trillion.
  The total amount of interest we expect to pay between now and the end 
of the decade is $5.5 trillion in interest, which is enough money to 
fund our entire government for 18 months.
  The situation is so serious that former Federal Reserve Chairman Alan 
Greenspan warned very recently that we may face a bond market crisis in 
the next 2 to 3 years. He said it is a little better than a 50-50 
chance that it won't happen, but not much better. That was his comment.
  CBO Director Doug Elmendorf testified last week before the Budget 
Committee, where I am ranking member, that we were entering 
``unfamiliar territory for all developed nations over the last several 
decades.'' He is talking about financially, debt.
  Analysts for Standard and Poors stated that ``absent a credible plan, 
the rating on the U.S. Federal Government will come under pressure''--
in other words, the rating on our debt, which is AAA. If that happens, 
our interest rate, as I have been suggesting, will go up, because if 
our ratings go down, people will demand higher interest before loaning 
us money. The International Monetary Fund urged the United States to 
take much stronger action. This is on the Washington Post business page 
of a few days ago:

       U.S. Must Reduce Deficit, IMF Warns.

  They are not perfect, but they claim to be the conscience of the 
world and warn profligate nations to get their houses in order before 
it creates systemic problems for other nations. It says:

       European countries have begun a pointed dialog with their 
     residents about what government can and cannot afford. Moves 
     to cut public salaries, trim services, and curb public 
     pensions have touched off strikes and protests, but also puts 
     the deficits of those countries on what seems to be a 
     ``securely downward path,'' the IMF said. Those are the 
     choices the United States has been hesitant to make.

  Two prominent economists, Carmen Reinhart, who testified before our 
committee, and Dr. Kenneth Rogoff, issued a paper explaining the 
negative impact of excessive debt on economic growth. He actually wrote 
a book. They have studied countries in the last 200 years that have had 
their economies collapse as a result of debt--a lot of South American 
countries at various times, such as Argentina and others. They caution 
that there is a point beyond which you do not want to go. That point is 
when your debt equals 90 percent of your economy, 90 percent of GDP. 
That is a very respected study--the first time anybody ever studied the 
economies that have had economic collapse. This is a key factor in 
that. We are now at 94 percent of GDP, and by the end of the year, the 
CBO projects we will be at 100 percent. Our debt will equal 100 percent 
of the entire goods and services produced in this economy.
  Our Nation is on a dangerous--as everybody we have had testify before 
the committee and virtually anybody who has expressed themselves calls 
it--unsustainable path. The President said we are on an unsustainable 
path. We need strong leadership from our President. The day before his 
State of the Union, I wrote an op-ed that was published in the 
Washington Post. I called on him to present a broad vision for reducing 
spending. I said, ``his proposals cannot be timid'' and that this was 
``a defining moment for his Presidency.''
  I have to say that he did not rise to that occasion. Instead of a 
bold vision, he put forward a meek plan to continue spending at current 
levels for 5 more years, calling that a freeze. But we have had a surge 
in spending in the last 2 years. Freezing at that level cannot be 
acceptable. These are the levels that produced the $1.5 trillion 
deficit.
  The President's speech, I must say, was disconnected from reality. 
Nowhere in that speech did he enter into a dialog with the American 
people about the severity of the crisis we face, or make any attempt to 
call on them in a serious way to understand why it is that we can't 
continue at this level of spending. He failed to present a credible 
plan.
  This is what the Washington Post said in an editorial yesterday. They 
weren't mean spirited about it, but you could tell they were 
disappointed:

       In his State of the Union Address Tuesday night, President 
     Obama failed to present a credible plan for a long-term debt 
     reduction. It's no secret that we think he made a big 
     mistake. If America can't get a handle on its finances, 
     everything else is at risk.

  But not only has the President failed to lead with ideas, he has set 
about to thwart, to block others from taking action. This is concerning 
to me. This

[[Page S354]]

Sunday, on one of the big news programs, his new Chief of Staff, Bill 
Daley, balked at a Republican plan to cut spending for the rest of the 
year. He said any budget cuts must be paired with new spending--
``investments,'' as he and the President called them. He taunted the 
Republicans, I think, with, ``Where's the beef? Let's see the cuts 
they're talking about.''
  The President refuses to lead and then sends his emissaries to attack 
any Republican who makes a serious proposal and, I assume, as being 
heartless and wanting to throw children in the streets, and so forth. 
For instance, the President's chief economic adviser, Austan Goolsbee, 
lashed out at Republicans for wanting to reduce discretionary spending 
before we raise the debt ceiling. We have to have some sort of 
bipartisan agreement before we agree to raise this debt ceiling that we 
are going to reduce some of the spending, clip back on the credit card 
a little bit, something significant.
  The President's own Secretary of the Treasury, Tim Geithner, recently 
argued that it was too early to begin cutting the deficit. So it is 
unsustainable, but it is too early to start cutting it now--maybe in 
2012, or after that, maybe. Geithner's comments ring all too similar to 
those of his predecessor, Hank Paulson, Secretary of the Treasury under 
President Bush, who said the housing downturn was under control, before 
the Wall Street firms began falling like dominoes.

  But ignoring the reality of our situation does not change it. The 
money simply isn't there to support the President's spending agenda 
that he announced at the State of the Union Address. We don't have the 
money. Our Nation cannot afford another era of big government.
  In 2 weeks, on February 14--just 2 weeks from now--the President will 
submit a new budget to Congress. He will go to our Budget Committee. 
This may be--and I say this seriously--his last chance to get it right, 
for the President to be a credible voice in this debate. He must put 
forward a budget that significantly lowers spending levels. He cannot 
present Congress with the same unserious plan he presented last Tuesday 
night.
  Three years into his turn, I think this budget he will be submitting 
is a defining act of what he views and how he views the debt we face. I 
think if this budget fails to meet the necessary demands for curtailing 
spending, we will know pretty conclusively where the President is.
  Numbers count. You can have rhetoric and we can disagree, but at some 
point you have to put out your budget that says what you are going to 
do, how much you are going to spend, and where you are going to get the 
money--in this case, how much we are going to borrow to carry on the 
government at that time. So we are going to see whether the President 
is moving with the American people to fiscal and economic sanity or 
whether he will continue his ideological commitment to big government. 
I think that is it. I think we will know in 2 weeks. It is a serious 
matter.
  So I think we need to turn back from the cliff toward which we are 
heading and get on a new road. We need to reduce both the size of the 
deficit, and we will have to reduce the size of the government 
somewhat. We are not going to sink into the ocean. If we go back to 
2008, 2006 levels of Federal spending, will the country collapse? Give 
me a break. Certainly, it is not going to collapse, but it will put us 
on a road to fiscal sanity. It will restore not only public confidence 
in our economy, but it will restore the foundations of American 
prosperity.
  I truly believe one of the clouds over the American economy is the 
perception--unfortunately, too true--that we are spending at a reckless 
rate, that we are irresponsibly running up the debt, and that could 
cause us to inflate the value of our currency, that could cause a debt 
crisis, which Mr. Greenspan said was almost a 50-50 chance in the next 
2 to 3 years. If you have money to invest, what does that say to you? 
Maybe you better sit back and see a little more until we get this 
debt--that is spiraling out of control--under control. Until we are 
headed on a downward path toward a balanced budget, we are not going to 
see the economic growth that is possible. I think that is where we 
should be heading.
  So strong, sustained reductions in spending will not be easy. It will 
take us down a tough road, but it is the only road, the only course 
that will lead to a better financial future for ourselves and our 
children and preserving the integrity of the U.S. economy in a way that 
is necessary for growth to occur.
  I thank the Chair, I yield the floor, and I suggest the absence of a 
quorum.
  The PRESIDING OFFICER (Mr. Coons). The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. AKAKA. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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