[Congressional Record Volume 157, Number 44 (Wednesday, March 30, 2011)]
[Senate]
[Pages S1947-S1949]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
BUDGET ANALYSIS
Mr. SESSIONS. Madam President, I want to share some thoughts this
morning and to report to our colleagues on the analysis done by the
Congressional Budget Office of the President's budget he has submitted
to us and asked that we adopt.
The budget has been roundly criticized as in no way getting us off
this unsustainable path, and allowing the country to continue to head
toward a financial abyss. Expert after expert, witness after witness
before the Budget Committee--on which I am the ranking Republican
Member--has testified to the danger we face and the need for us to take
action. The Congressional Budget Office, in sum, concludes that the
very insufficient reforms contained in the President's budget are more
insufficient than the President has said, when properly analyzed. It is
a very firm and severe rebuke to the President and his team of analysts
who presented it to us. It is not good.
I believe it is probably the most erroneous budget ever submitted to
Congress, in changing the numbers by $2.3 trillion in debt. In other
words, the Congressional Budget Office says the budget submitted by the
President, which was supposed to add to the debt some $13 trillion or
so, is actually going to add $2 trillion more to the debt over 10
years, more than doubling the national debt. This is a very serious
matter.
The budget presentation to the Congress continues a policy by this
administration to minimize the danger of the debt crisis we face. It
has been a sophisticated, long-term, continuous effort to not only say
that cuts are too severe, too extreme--as the talking points go--and
that, indeed, this President has things under control; that the debt
crisis is not real, and we don't have to take firm action. The
President does not look people in the eye and explain the true
situation we are facing.
Indeed, this is the rhetoric they have used. The President has used
this language; Jack Lew, his Director of the Office of Management and
Budget, has used this language. They claim the budget they submitted
calls on us to ``live within our means.'' His budget causes us to live
within our means. They also have used this phrase, more than once: ``It
only spends money that we have each year.'' Also they say that their
budget ``does not add more to the debt.'' At a press conference about
this, the press secretary to the White House was asked: Do you stand by
these statements? What did he say? Absolutely. And when Budget Director
Lew came before the Budget Committee, and I asked him about it, he
stands by these statements. He didn't acknowledge they are in any way
in error.
If we are going to have reform in America, if we are going to do
something about the debt crisis this Nation faces, we have to be honest
with one another. We have to deal honestly with the grave challenges we
face. We can't be in denial. We can't continue to say we are living
within our means and that we are not going to add more to our debt.
Why do I say that? Well, the President's own budget said the deficits
would surge, would continue to be out there every single year, with the
lowest single deficit in 10 years, according to his budget, to be $600
billion and going up in the outyears to almost $800 billion.
What does CBO say about all of this? This is what they told us after
they analyzed the President's budget. Let me explain what happens. The
President submits a budget to the Congress. We have our own
Congressional Budget Office, and they analyze what the President
proposes. They then give us a report on it and say what it means, if
adopted; how it would impact our economy, how it would impact our debt,
how it would impact the financing of our government. So what does CBO
say? It says the President's debt-doubling budget adds more to the debt
than the President claims. The score reveals the President's budget
never once produces a deficit of less than $748 billion, and climbs to
a deficit in the tenth year of $1.2 trillion--one thousand two hundred
billion dollars.
I have been saying the lowest budget was $600 billion because that is
what the President's own numbers said in the document he sent to us,
but CBO says no. The CBO Director and his team, for the most part, were
in place when the Democrats controlled both Houses of Congress. They
are a nonpartisan group that tries to give honest numbers and do honest
work. They are certainly not a Republican organization. They say the
actual number was not going to be a $600 billion low annual deficit but
that the lowest deficit would be $748 billion, increasing to $1.2
trillion.
You see, this is why the experts say we are on an unsustainable path.
We cannot continue. How much is $1.2 trillion? Well, the highest
deficit President Bush ever had was $450 billion, I believe, give or
take. That was way too high, and he was roundly criticized for that.
But this is three times that in the tenth year. This year, we are going
to have a $1.6 trillion, $1.5 trillion deficit. In this fiscal year we
will have, for the third consecutive time, a trillion dollar deficit.
These are deficits the likes of which the Nation has never seen before
and cannot sustain. It puts us on a path to financial instability and
danger. It is a path we must get off. We can do so, but it is going to
take some will. We are going to have to do some of the same things our
cities and counties are doing.
Also, the CBO said that, using gimmicks, the President's budget
concealed a total of $2.3 trillion in deficit spending and $1.7
trillion in increases of gross debt for the country. The debt to GDP
reaches 116 percent in the 10th year.
Let's talk about that. Why is that important? Professors Rogoff and
Reinhart, who testified before our committee, have written a very
significant and highly regarded book. Their book, ``This Time It's
Different,'' says that from a study of sovereign nations all over the
world, when their debt reaches 100 percent of GDP, the economy is
pulled down. It has a depressing effect on their economy. The economy
will grow on average about 1 percent less than it would have grown
otherwise, which is huge.
When you are talking about economic growth of 2, 3, 4 percent, to
have a 1-percent reduction is a major drain on our economic growth, and
growth is so critical for job creation and actually tax revenue to fund
our government and get us out of the debt we are in. You cannot borrow
your way out of debt. The deeper you get into debt, the more it pulls
down the vitality and growth potential of your economy. We have to get
off this path.
CBO says in the 10th year it will be 116. Senator Conrad, the
Democratic chairman of the Budget Committee, is very worried about this
number. He
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had a chart about it at our hearing recently. He showed that this year
for the first time we will go over 100 percent of GDP in national debt.
It is about 5 percent now, and we will go over 100 percent and will
stay over it under the President's budget. Experts tell me this is
unsustainable. Something bad will happen to us.
In addition, when Secretary of Treasury Geithner appeared before our
committee, he acknowledged the Rogoff and Reinhart analysis. He
acknowledged that this high level of debt will weaken the growth in our
economy, and he added this: This level of debt creates a greater
potential for an economic kickback, an economic catastrophe; another
recession could occur as a result of these high debts.
CBO analysis reveals a number of other things that are disturbing
because they are so plainly false, so plainly gimmicky, and so plainly
designed to mislead the American people about the true nature of this
budget that it, again, raises credibility questions about the White
House and how they are explaining the situation we are in to the
American people. They seem to be denying we are in a crisis.
For example, this budget submitted by the White House assumes there
will be $315 billion for what we refer to as the doc fix in the final 8
years of this 10-year budget. But there is no source of income for
that. They do not propose a tax increase. They do not propose any
income that would be there. The CBO says: You cannot just assume money
is going to appear when there is no source for this money. It is a
manipulation of the numbers to try to hide the fact that there are no
moneys available to pay the doctors the kind of income they need to
continue to treat Medicare patients. If we do not do something,
physicians will have their pay cut 20-percent-plus for treating
Medicare patients. That is not healthy. It cannot be sustained.
Physicians will not work with another 20 percent cut. They get paid
less for Medicare than any other source of work they do unless it is
the Federal Medicaid Program. CBO called them on it and said: No, you
cannot score income when you show no source of that income.
What about transportation? There is a major increase proposed for
spending on transportation next year, and their budget just assumes
there will be a $328 billion income surge for transportation. It is
called a transportation tax, but we are told it will not be a gas tax.
I have referred to it as the ``not-gas-tax tax'' because all we know
about this tax is they say it will not be a gas tax. They are talking
about a $328 billion tax increase of some kind but no proposal where it
would be, how it would be imposed, whether Congress would ever vote for
it or not. They are not likely to vote for it, I have to tell you. CBO
says that is phantom money. You need a better plan than that because
otherwise your budget is just smoke and mirrors on that subject.
Remember, when we borrow money, we pay interest. The interest we paid
last year was $200 billion. As the debt goes up and increases, although
interest rates are very low now, they are going to increase some.
According to CBO's analysis, with the debt more than doubling in the
next 10 years under the budget the President has submitted to us, the
annual interest is over $900 billion. That is about one-fourth of what
the entire government spends today. We spend about $3.8 trillion. This
is almost $1 trillion in interest in 1 year. Frankly, I think CBO's
estimate of what the interest rates are going to be on our debt are
probably low.
It is this kind of debt, where your debt is over 100 percent GDP,
that puts you in a position where you could have a debt crisis kicking
us back into another recession.
What we have to have--from the President and from our Democratic
leadership here in the Senate--is an honest evaluation of where we are.
The President needs to look the American people in the eye and say: We
are not on a course that we can sustain. Federal Reserve Chairman
Bernanke told us in January that we are on an unsustainable path. We
have to get off it. About these numbers that project out here for 10
years, the doubling of the debt, Mr. Bernanke said: We are not going to
get there because we will have a debt crisis before we get there, and
there will be much, much harder times getting our finances in order
than if we act today to get them in order. He said we wouldn't get
there with these projections; they are too severe, too damaging to our
economy.
Madam President, what time is left on this side?
The ACTING PRESIDENT pro tempore. The Republican side has 15 minutes.
Mr. SESSIONS. If some of my colleagues appear, I will be glad to
yield the floor, but I will share a few more thoughts.
The President's budget does some other gimmicky things. He claims he
has a 5-year freeze on nondefense discretionary spending. He told the
American people that in the State of the Union Address. We have looked
at those numbers, and it appears pretty clear that there is a 5-percent
increase in the discretionary spending next year. How do they
accomplish that? They reclassify all discretionary transportation
funding as mandatory spending and say it is not discretionary. They
just declare it is mandatory spending, and they say they have reduced
discretionary spending by $7 billion. What kind of hokum is that? This
is not worthy of the President of the United States and the Office of
Management and Budget, coming here with a gimmick like that--just
redefine discretionary spending and say it is there and say: I have a
freeze in discretionary spending.
What else did they do? They hide another $9 billion in the reverse of
that, in one-time mandatory savings. Actually, they use it in the
discretionary account, but they do not count it as increased spending.
That is $9 billion. And the President's proposed spending levels for
next year will be even further out of whack as a freeze because this
Congress is going to reduce the spending this year, hopefully by the
full $61 billion the House has asked that we reduce it.
You say: Mr. Sessions, this is all partisan bickering. But it is not
partisan bickering. We have bipartisan recognition in this Senate from
Senator after Senator, Democrats as well as Republicans, who understand
we are on an unsustainable course, and they know we need to get off
this course. But I have to be critical about the President because he
is not telling the American people the severity of the challenge we
have and he is not proposing a plan that will actually fix it, but
actually he is proposing a plan that will make it worse. This is a
crisis. We have to confront this problem.
The President is going to have to move from denial to reality, to the
real world, and help us develop a plan that contains spending in
America just like is happening all over this country. Governor Cuomo is
talking about substantial reductions in spending in New York, as is
Governor Christie in New Jersey and Governor Brown in California.
I just saw my friend John McMillan, the head of agriculture and
industry in the State of Alabama. He has 200 employees. He said they
are going to have to reduce 60. That is almost one-third of the
employees of his department. Do you think the department of agriculture
and the industries of Alabama will cease to exist? I don't think so. I
bet Mr. McMillan will figure out some way to perform most of the duties
in his office. But he doesn't have the money, and when you don't have
the money, you have to make tough decisions.
The American people understand this. When they don't have money, they
don't spend. If they spend when they don't have money, they know they
are taking a risk and they know it can't continue long. But this
Congress does not get it. We are in a denial mode. We think we can just
continue to spend forever, and we have the majority leader in the
Senate whining about losing money for a cowboy poetry festival in
Nevada. Give me a break. When you don't have money, you have to make
decisions. That is just the plain fact.
What about next year's budget that the President proposes? The
education budget next year is proposed to get an 11-percent increase
over the past 2 years, which have had surging increases. Indeed, most
Americans probably do not know that in this time of record deficits,
over $1 trillion deficits, the last 3 years, the discretionary
accounts--nondefense discretionary spending--increased 24 percent. And
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next year? They want another 11 percent for education, another 9.5
percent for the Energy Department, another huge increase for
transportation--the base, I believe, is over 10 percent but, including
the phantom revenue, they will see around a 60 percent increase.
Under the President's request, the State Department is demanding and
expecting to get over a 10-percent increase in spending. And inflation
is 2 percent or less? How can we do this? The American people know this
is not realistic. They know it is dangerous, and they want us to do
something about it.
Frankly, I think that had something to do with the elections last
fall. I think the American people were sending a message to a blind
Congress that they expected us to do better on spending. Are we getting
the message? We are proposing huge increases in spending next year,
five times the rate of inflation in America, and we claim that is
somehow frugal and living within our means. When the lowest single
deficit over the next 10 years is projected to be $740-plus billion,
that is unacceptable.
We have to be careful about what we say about our economy. We have to
keep our economy moving forward. It is struggling. It is moving. We are
having some good growth. We want to see that growth continue and
expand.
The job situation is not good. We need to have at least 150,000 to
200,000 new jobs a month to stay level. That is about where we have
been, 150,000 or 200,000 jobs. That is basically keeping us level. We
need more job growth than that. It is better having some jobs being
added than none, I acknowledge that, but it is not as strong as we need
it to be.
One reason we are not having growth, as Professors Rogoff and
Reinhart have told us, is the debt pulling down our economy. It is
putting a cloud over our economy. The whole world is watching the
United States. Are we going to go off the cliff or will this Congress
rise up and put us on a path to sound fiscal policy that creates
confidence in our financial situation; creates investment, growth, and
jobs. That is the road we need to be on. It will be a tougher road. We
will have to make some hard decisions about spending and which programs
are going to get money and which ones aren't. Maybe all of them will
have to take some sort of cut, but we can do that. We will get the
country on the right track, and America is not going to fall into the
ocean if we make some reductions in spending.
I will just point out that it is difficult to do that when we are in
a political world, according to the New York Times, where anybody who
proposes to reduce spending is called an extremist. Senator Schumer
started that. He got caught on a phone call saying we should use the
word ``extremist.'' Cut $61 billion out of $3,800 billion in
expenditures; that is what the House has sent over here to us, a
proposal that we reduce spending, under the continuing resolution, by
September 30, by $61 billion out of a total of $3,800 billion the
Federal Government spends.
This is extreme, we are told, and the government is going to sink
into the ocean, and we cannot survive with these kind of reductions. So
they had a meeting. They all were right on message, according to the
New York Times. ``We are urging Mr. Boehner to abandon the extreme
right wing,'' said Mrs. Boxer, urging the House to compromise on the
scale of spending cuts and to drop proposed amendments that would deny
funding for Planned Parenthood.
Another Senator said, referring to the House Republicans as ``right
wing extremist friends''--he is a real nice Senator. He did not want to
be too harsh, so he called them ``right wing extremist friends.'' That
is better than not calling them friends, I suppose.
Another Senator decried Mr. Boehner as ``giving in to the extremes of
his party.'' Another closed by speaking of the ``relatively small group
of ideologues who are an anchor dragging down the budget-negotiating
process.''
Give me a break. $61 billion. If we cannot do that, what does the
world think about us? Did we really get a message from this election?
Did we really understand that we are challenged now; that this is our
time in history to face up to the facts that we are on an unsustainable
fiscal course that will lead us, as Mr. Bernanke said, to economic
disaster long before these projections come to a conclusion?
We cannot continue on this course. We have to get off this course. We
owe it to every working American not to put this country back into
another recession. The truth is, we can do these reductions in
spending. This government is not going to sink into the ocean. We are
going to continue to serve the American people. If we do it, we will
get on the right path, and this economy can continue to grow knowing
that we have gotten our fiscal house in order.
It is not that hard. I urge my colleagues to do so. Let's not give up
on the $61 billion total reduction in spending the House has asked us
to meet. Let's do it, and let's be proud of it. Let's know then that we
have done something that will amount to a real change in the debt
trajectory we are on.
We have calculated it. My budget staff has looked at the numbers. A
$61 billion reduction in baseline spending--which is what they are
proposing--over 10 years will save $860 billion. It will reduce the
debt of America by almost $1 trillion. We need to do more of those
kinds of things in the months ahead. If we do so, we can change the
trajectory we are on.
So I urge my colleagues, do not leave here talking about splitting
the baby and just seeing how little we can reduce spending. Let's go on
and accept the House number. Let's embrace it. Let's make a decision to
get our finances in order just like cities and counties and families
are doing all over the country.
I yield the floor and reserve the remainder of our time.
The ACTING PRESIDENT pro tempore. The Senator from Hawaii.
(The remarks of Mr. Akaka pertaining to the introduction of S. 675
and S. 676 are printed in today's Record under ``Statements on
Introduced Bills and Joint Resolutions.'')
Mr. AKAKA. I yield the floor.
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