[Congressional Record Volume 157, Number 85 (Tuesday, June 14, 2011)]
[Senate]
[Pages S3756-S3759]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
THE BUDGET
Mr. SESSIONS. Mr. President, I thank the Senator for his courtesy in
allowing us to proceed and discuss issues at this point in time and
wanted to recall for my colleagues that we are now at 776 days since
the Senate has agreed to a budget. We have not passed a budget in 776
days. This is not responsible at a time in which we are having the
largest deficits this country has ever seen.
This year it is projected our deficit, as of September 30, when the
fiscal year ends, will have been $1.5 trillion. I think this is a big
issue.
Last year the Budget Committee moved a budget out to the floor of the
Senate, and Senator Reid chose not to bring it up, the majority leader.
This year he declared that it would be foolish to bring up a budget to
the floor even though he has a majority in the Senate. We can pass a
budget with a simple majority. It is a priority item. He has apparently
asked, and the Budget Committee has not even had a markup.
The Budget Act requires a markup to begin by April 1 and a budget to
be passed by April 15 so we can go about the business of funding next
year's government. We need a budget. States have budgets, cities have
budgets, counties have budgets. No city, county, or state that I am
aware of is anything close to borrowing 40 cents of every dollar we
spend as this Congress is doing. We are spending $3.7 trillion. We are
taking in $2.2 trillion. That is a stunning number.
One reason we are so out of control is we do not have a budget. I
have been harping away at that, and I have been talking about its
impact on jobs. The Rogoff and Reinhart study makes it clear from
nations around the world they have studied that when the debt reaches
90 percent of the economy, the entire economy of the country equal to
that much debt, median growth drops 1 percent. Really the average is
above that, I believe, but at any rate, 1 percent.
We had 1.8 percent growth the first quarter. Could we have had 2.8
percent? We are talking about more than 30 percent reduction in our
growth and 1 percent in growth in our economy equals the creation of 1
million jobs. So that is the kind of thing I have been talking about
and going into some detail about and have been unhappy and disappointed
that my majority leader would have the gall to attack the House
Members.
I have a chart. We do not want to forget this number. It is a pretty
big number. It is 776. That is how long it has been since we had a
budget. So I complained about that. My friend, Senator Reid, has the
toughest job in Washington, being the majority leader in the Senate. I
do not know how he does it, but he has to lead.
As my wife says to me: Don't blame me. You asked for the job. Well,
he asked for the job to be the leader, and he announced it was foolish
for us to have a budget just a few weeks ago. When will we ever have
one presumably?
Just today, earlier this morning, I guess he got a little tired of my
harping, and he said: I heard our friend, the ranking member on the
Budget Committee--that is me--come here and talk for hours, and he
keeps talking about things that really have no bearing on what I think
is important to the country today, and that is we know that the
Republicans have put forward a budget that destroys Medicare.
Republicans did not destroy Medicare. Give me a break--and that is
not the only problem we have facing the country. Medicare is going
broke and we need to do something to save it, that is true. There are
big issues. One of them is the surging debt that Erskine Bowles,
appointed by President Obama to head the fiscal commission, testified
about before the Budget Committee just a few weeks ago. He said we are
facing the most predictable economic crisis in our Nation's history.
This has the potential to put us into another doubledip recession. The
economy is not doing well.
The things I have been talking about do have bearing on the future of
our country, and I am disappointed my good friend, the Democratic
leader, does not agree.
Housing prices continue to drop. They are expected to go down another
5 percent or 6 percent this year. We thought we had hit the bottom on
housing. Gasoline is still close to $4 a gallon. Unemployment just went
up. We had a meager increase in 54,000 jobs last month. We need to have
about 200,000 to actually reduce unemployment. As a result,
unemployment went up. It is the lowest and worst job numbers we have
had in some time.
The debt, the economy, gasoline prices, jobs--those are matters that
have no bearing on what is important to our country? I think they have
a bearing on what is important. What does the majority leader believe?
What does he think we should be doing?
This bill we have been fiddling with for weeks has no monumental or
significant ability to alter the debt trajectory which is taking us on
the most predictable course to fiscal disaster, that is what we need to
be addressing. It is the most important issue facing our country. Of
that I have no doubt. I do not think anybody has any doubt.
[[Page S3757]]
Listen to the news programs. Listen to the business channels. Read
your newspaper. The debt we are facing is critical to our country.
The instability of our entitlement programs, such as Medicare, is an
issue we have to talk about. We cannot deny that. We have opposition
here to doing things that make sense, such as producing more oil and
gas. We have a permitorium, a blocking of permits on drilling for oil
and gas off our shore presumably so we can buy more oil and gas
produced offshore in Brazil or Nigeria or Venezuela but not off our
shores, transferring our wealth abroad that could be creating jobs and
tax revenue for the United States Government.
What about this Medicare problem? Let me talk about it because it is
a part of the problem. It is one of the difficulties we have to deal
with, although certainly not the only one. The biggest problem we have
now is discretionary spending that is out of control, not Medicare
right now, not Social Security right now. In the last 2 years, under
President Obama, nondefense--not defense--nondefense discretionary
spending--not Social Security, not Medicare--went up 24 percent at a
time when the deficits have been $1.2 trillion, $1.3 trillion, and this
year $1.5 trillion, perhaps. We have never had deficits that large. The
problem is, it is systemic. We have never had this kind of challenge.
I know there was a big fight in the mid-1990s, and the government was
shut down, and Newt Gingrich and his team fought and said they wanted
to balance the budget, and they balanced the budget. The country didn't
sink into the ocean as that little shutdown occurred, but they balanced
the budget. Now we are in a much deeper hole, I am telling my
colleagues. I have looked at the numbers. I am the ranking member of
the Budget Committee. It is not easy for us to get out of this fix, not
easy at all. It is going to take some real effort and leadership.
The President submitted a budget that came before the Congress and
was voted down 97 to nothing in the Senate. Not a single Member voted
for his budget, which would have doubled the debt over the next 10
years. He made it worse than the baseline we were already on, which was
utterly unsustainable.
So is Medicare something that absolutely cannot be discussed even
though it is going into default? Let me tell my colleagues what some of
our Democratic leaders have said about Medicare.
Steny Hoyer, the House whip, one of the top Democratic leaders in the
House, said this:
Do I believe that there are other things we can do related
to Medicare? The answer is I do. I am not going to get into
articulating each one, but my expectation is they will be
under discussion by the Biden group.
They have a little secret group down there meeting with the White
House--some Republicans and Democrats--and we are supposed to all relax
now because they are going to solve our problems and put it on a silver
platter for us, and we are just going to vote for it, and it will be
good for the country. Well, I am a little dubious about it, but I am
anxious to hear about what they are going to produce. The longer they
wait, the more critical our situation is.
What about the House minority leader, the former Speaker, Nancy
Pelosi? She was on Larry Kudlow, CNBC business channel. Mr. Kudlow is a
very articulate moderator, and he asked this question of former Speaker
Pelosi: Is Medicare on the table or entitlements on the table?
Answer: Yes. I think Medicare is on the table.
What about President Obama and his health care summit on February 25
of last year?
Almost all of the long-term deficit and debt that we face
relates to the exploding costs of Medicare and Medicaid.
That is his direct quote, the President of the United States.
He goes on:
Almost all of it. That is the single biggest driver of our
Federal debt, and if we don't get control over that, we can't
get control of our Federal budget.
Our former President, Bill Clinton, I guess maybe the spiritual head
of the Democratic Party, one of the most respected Democrats, said:
I am afraid that the Democrats will draw the conclusion . .
. that we shouldn't do anything. I completely disagree with
that. The Democrats may have to give up some short-term
political gain by whipping up fear, if it's a reasonable
Social Security program, if it's a reasonable Medicare
proposal. You cannot have health care devour the economy.
Well, that is the truth. Of course we have to talk about it because
it is on an unsustainable path.
Let me talk a little bit more about that because Congressman Ryan and
I wrote a letter to the President today asking him to do his duty with
regard to Medicare on a matter that just came up.
On May 13, the Medicare trustees issued their annual report on the
financial status of the Medicare Program. Medicare has a trust fund.
They have trustees who are committed to preserving the program, trying
to make sure they can pay the recipients what they have been promised
in the years to come and make sure the money is well handled. They do
annual reports on this massive program. The Medicare Hospital Insurance
trust fund--that is the HI trust fund--ran an annual cash-flow deficit
of $32.3 billion last year, in 2010, and will continue to run deficits
throughout the decade. That is what the trustees say about Medicare.
They went on to say this: The Medicare trust fund will become
insolvent in 2024--5 years earlier than last year's date of exhaustion.
Can we imagine that? They redid the numbers and have concluded it is
going to be in default, become insolvent, 5 years sooner than they were
predicting just last year.
They went on to say: If current law remains unchanged, Medicare's
unfunded obligation is $24.4 trillion over the next 75 years. In other
words, to put this on a sound basis, investing today, you need $24.4
trillion.
Like last year, the nonpartisan Chief Actuary of the Centers for
Medicare and Medicaid Services, Richard Foster, used his statement of
actuarial opinion at the end of the report to warn that:
The financial projections shown in this report for Medicare
do not represent a reasonable expectation for actual program
operations in either the short range (as a result of the
unsustainable reductions in physician payment rates) or in
the long range (because of the strong likelihood that
statutory reductions in price updates for most categories of
Medicare provider services will not be viable).
On May 20, a week after the trustees' report was released, the Chief
Actuary, Mr. Foster, produced his ``illustrative alternative''
projections based on ``more sustainable assumptions.'' Those estimates
indicate that under a more likely scenario for future spending,
Medicare's unfunded obligations are $36.8 trillion over the next 75
years--a figure that is far larger than the official trustees' estimate
of $24.4 trillion.
Mr. Foster has been there a long time. He is a very serious person.
He understands his responsibility to tell us the truth. He understands
the responsibility to Medicare recipients. He is telling us we need to
do something about Medicare.
It goes on: The trustees projected that total Medicare spending will
draw more than 45 percent of its funding out of the Treasury's general
fund in 2011.
A lot of people think Medicare is funded by the Medicare tax
deduction we see on our paycheck, the withholding tax we pay, and that
is a significant amount of money, no doubt about it. But the Medicare
trustees just reported to us that of the total money Medicare spends,
45 percent is funded directly out of the general fund--general tax
revenues--not the payroll withholding. As a consequence, for the sixth
year in a row, they say--2006 through 2011--the trustees made an
``excess general revenue Medicare funding'' determination. Two
consecutive ``excess general revenue Medicare funding'' determinations
trigger a ``Medicare funding warning.'' This Medicare warning requires
that the President submit a legislative proposal to address this crisis
within 15 days of his next budget. So for 5 years in a row there has
been a Medicare funding warning issued. President Bush submitted a
proposal when he was President to deal with the shortfall in Medicare,
but the Democratic majority in both Houses at the time failed to act on
it, or do anything about the crisis. But now we have gone further and
deeper into debt and the trustees issued a Medicare funding warning for
the fifth consecutive time in their report this year, 2007 through
2011. But President Obama is not responding.
[[Page S3758]]
So who cares about Medicare? I think all of us do. But does anyone
dispute that the trustees, the people who are statutorily required by
law to superintend this fund, don't care about it, aren't worried about
the recipients? They have a lawful obligation to try to ensure that the
program is on a sound basis.
Under the Medicare prescription drug bill that was passed here,
Public Law 108-173, Congress established the Medicare ``trigger'' to
call attention to the program's growing fiscal imbalance. If, in their
report, the Medicare trustees project that Medicare will draw more than
45 percent of its funding out of the Treasury's general fund within a
7-year period, the trustees must make an excess general revenue
Medicare funding determination. By law, two consecutive excess general
revenue Medicare funding determinations produce a Medicare funding
warning, triggering action by the President. Under the public law, U.S.
Code, the President is required to submit legislation--submit
legislation to whom? To the Congress, us--in response to a funding
warning within 15 days of the next budget, and the proposal would then
receive expedited consideration in Congress.
So when we have this 45-percent level breached, the President is
supposed to submit to us a plan, and we are supposed to give it
expedited attention. Why? Because Medicare is important. That is why.
And when it is not on a sound financial basis, Congress has a
responsibility to do something about it--not do nothing, not criticize
somebody such as Congressman Ryan who proposed a sound, well-thought-
out, long-term approach to Medicare. It may not be the one I would
agree with or other Members would agree with, but no one can doubt, in
my opinion, that it was a serious, thoughtful effort that would have
put Medicare on a sound footing. But if it is not the plan we want,
let's have another.
What is the President's plan? That is the one that is required by
law. The President is required to submit a plan. While a Medicare
funding warning has been issued each year since he has taken office,
President Obama has failed to submit a single proposal to Congress in
response to these warnings.
So today I joined with Congressman Paul Ryan, the young chairman of
the House Budget Committee to write a letter to the President. Nobody
has worked harder. Nobody is smarter. Nobody loves this country more.
Nobody is prepared to stand before the American people and explain what
he thinks is best for the country and be prepared to defend it with
facts, with integrity, and with responsibility. What a refreshing face
he is. I have come to have the greatest admiration for him.
So what happened to Congressman Ryan? He helped write a budget, and
in part of the budget, after 10 years, he proposed some changes to
Medicare that would put it on a sound footing over the long term. When
it came over to the Senate it was attacked by Democrats--but where is
the Senate budget? The House has produced a budget. It reduces spending
in the short run. It had a responsible approach to dealing with some of
the long-term entitlement issues that threaten us in the long term.
It was a sound program the Congressman had, and I thought--but we
could disagree. So we are looking forward to what would happen over
here. Well, the majority leader said: We think it is foolish to have a
budget. We are not having a budget. Do not let the Budget Committee
commence its hearings. We have not even begun a markup in Budget
Committee. We do not have a budget. So instead we are having secret
talks. In a committee, you have to stand up before the world, offer
amendments, debate the issues, express your views. You cannot hide. It
is on the record; they take down your words. But secret meetings with
the White House are off the record, and talk occurs behind closed
doors. So I do not know what is going to happen out of this. I am
nervous about it, frankly. I would rather do it by the regular order.
Maybe something good will come out of it. I am not going to prejudge
it. If it is good, I am going to celebrate. If it is not good, I am
going to oppose it.
We wrote to the President today, and we called on him to show some
leadership. We noted that the trustees have projected general revenues
would account for more than 45 percent of Medicare spending for the
sixth consecutive year. The Trustees have issued another funding
warning that requires the President to submit a legislative proposal to
Congress. He knew this was coming. The numbers have been there for
several years. They knew it was coming. He is supposed to submit a
legislative proposal to get Medicare on the right track. Does he plan
to raise taxes? Cut benefits? Ration care? Or is he going to create a
more competitive system that does the job with a little less money.
What are you going to do? What is your answer? We wrote: As chairman
and ranking member of the House and the Senate committees,
respectively, we are deeply disappointed that the administration
continues to ignore this legal obligation. In 2008, the previous
administration submitted a proposal to Congress that took steps to
address Medicare's fiscal imbalance. By contrast, your administration
has not provided a response to the annual Medicare trigger, ignoring
the law in each of the past 3 years. This year, your budget did not
even acknowledge the existence of the Medicare funding warning.
I have the Medicare trustees report right here. Far from saying no
changes are necessary in Medicare, the trustees have pleaded with us in
their reports. The trustees' chief actuary has noted that in his
official reports to us. He says: Do something.
This cannot continue. So here we are. We are going down the road with
debt the likes of which this Nation has never seen before. At the end
of last fiscal year, the gross debt of our country was 93 percent of
GDP. By the end of this fiscal year it will be over 100 percent of GDP.
I mentioned when you get to that level of debt, your growth goes down,
and lower growth means a loss of jobs, and that you are not creating
the jobs you should have.
How serious is our debt situation? Well, look at the chart for those
around the world. Greece in this critical crisis is above 100 percent.
They are at 142 percent. Their debt equals 142 percent of their
economy, and they are in a state of virtual collapse. Expert after
expert says they will default on their debt. They are not going to be
able to work their way out of it. I hope that is not true, but that is
what they are saying.
What about Ireland? You have heard Ireland. The ``PIGS'' as they call
them, these countries and others in debt, what is theirs? It is now 96
percent, 2 or 3 percent higher than ours--only. They are second in the
European Union. We are next at 93. Portugal is next. You have heard
about Portugal being in financial trouble. Their debt to GDP is 83
percent. Spain, you have heard them talked about as being in trouble
financially. Their debt to GDP--gross debt is 60 percent. So we are
well above that. I am worried about the country. What is critical is we
need a budget that contains spending now. We need to demonstrate a
commitment to reform the unsustainable path of entitlement spending,
and we need to do it in a way that focuses on creating economic growth
and jobs in this country.
Growth and jobs, that is what our future should be focused on. I am
confident this country has not seen its best days, but we are on a path
of decline now. I truly believe it. I hate to say it. But our policies,
if they are not changed, will lead inevitably to economic decline as
witness after witness has told us in testimony.
How do we get out of it? We send a message through ourselves and the
world: We have got the message. We are reducing spending. We are
putting ourselves on a path to a balanced budget. We also know that it
is not just the short term, it is long term. Many of these
unsustainable programs need to be changed and strengthened, and the way
to do that is to make the changes now, and you will have massive
impacts in the years to come. Modest changes now will be good.
Those are the things that I think are important. Those are the things
I think should be talked about. Those are the things I think my good
friend Mr. Reid apparently thinks are not important. Because he said--
he has come down here and talked for hours, and he keeps talking about
things that have no bearing on what I think is important for our
country today.
I submit to my colleagues and to the American people, are the things
I am talking about important, or are they
[[Page S3759]]
not? He wanted to talk about how the Republicans have put forth a plan
that he says will destroy Medicare. That is what the majority leader
wants to talk about. He wants to change the subject. Well, I wish it
were not so. I wish Medicare were healthy. I wish it had the money to
continue to honor the commitments we have made in the years to come.
But it does not. It is just does not. We do not have the money to
continue at this rate. It is not impossible, though, to fix it and it
is even more possible to fix Social Security. Medicare is a little
harder than Social Security. But both of these can be fixed and made
permanent and sound. We need to talk to the Medicare trustees. We need
to be honest with one another and see how we can make those plans
solvent.
But that is just one part of the problem. In the immediate time, we
have got to reduce discretionary spending, across the board. I think we
have to. I wish that were not so, but it is. Countries around the world
are doing it. Cities are doing it. Governors are doing it. This
Congress has done nothing of the sort. Indeed, as I mentioned, last
year--the last 2 years--discretionary spending--nondefense--has gone up
24 percent. Defense went up. We hear a lot of complaints about defense.
It was up 2 or 3 percent a year for the last 2 years. Other nondefense
went up 24 percent.
I cannot tell you how deeply I believe our Nation is on a perilous
course that needs to change. I want to say again, I have great
affection for my friend Senator Reid. He has got a tough job. But he
asked for it. He asked for it. And when the country is in financial
crisis, we expect the majority leader of the Senate to effectively
lead, and not to attack people who are trying to do the right thing,
and to bring this country onto a sound path.
To say it is foolish to have a budget, what he meant was, it is
foolish politically, of course. He was saying it is foolish politically
to have a budget. It is not foolish for America to have a budget. It is
foolish for America not to have one. Certainly it is not foolish to
attempt to have a budget.
I feel that we, in this Congress, have not quite assimilated the
severity of the situation in which we find ourselves. We remain in
denial about how seriously we are being impacted and what substantial
changes are going to be necessary. We are going to have to do like the
Brits who are turning their country around. We might have to do as they
did in Estonia. Talk to the Estonian people. The cabinet members took a
40-percent pay cut. I wonder what would happen around here if we talked
about taking a 40-percent pay cut? But their debt to GDP is 7 percent,
not 93. They intend to keep it that way. And their growth is coming
back already. They are showing about 6-percent growth. Our growth is
1.8 percent in the first quarter. Coming out of a recession, it should
be higher.
If we do the right thing, we get this country on the right path, we
reduce our spending, we watch every dollar we spend, and we make our
country more productive, we eliminate unnecessary regulation, we focus
on creating jobs and growth, the natural capabilities, work ethic,
integrity, the legal system of America will allow us to continue to be
the most prosperous Nation in the world.
I ask unanimous consent to have printed in the Record the letter I
referred to earlier to the President.
There being no objection, the material was ordered to be printed in
the Record, as follows:
June 14, 2011.
Hon. Barack Obama,
President, 1600 Pennsylvania Avenue, Washington, DC.
Dear Mr. President: Our country faces extraordinary
economic challenges: a soaring budget deficit, a jobs
deficit, and a leadership deficit in Washington that has
resulted in our failure to confront a looming debt crisis.
These fiscal problems are driven in large part by the
unsustainable growth in health care entitlement programs and
an inability to credibly face our budget challenges that
severely undermines confidence in our economy. The failure of
politicians to put forward real solutions that will save and
strengthen these critical programs is threatening the
economic security of American families and the health
security of America's seniors. Just last month, we learned
that Medicare's Hospital Insurance Trust Fund will become
insolvent by 2024, only 13 years from now.
On May 13, 2011, the Medicare Trustees not only warned us
that Medicare's insolvency date had advanced five years since
last year's report but also confirmed that the program is now
running a $32 billion cash-flow deficit. To pay current
benefits, the program is redeeming tens of billions of
dollars in treasury debt instruments and dramatically
contributing to our nation's surging publicly held debt. More
troubling is that, in total, Medicare faces $36.8 trillion
dollars in unfunded obligations over the next 75 years,
according to Medicare's non-partisan Chief Actuary.
For the sixth consecutive year, the Trustees have projected
that general revenues will account for more than 45 percent
of all of Medicare's outlays. When Medicare breaches this
limit, section 802 of P.L. 108-173, the Medicare Prescription
Drug, Improvement, and Modernization Act of 2003 (MMA),
requires the President to submit a legislative proposal to
Congress to respond to the warning within 15 days of the next
budget. Yet again, the Medicare Trustees have issued a
funding warning that requires action by your administration.
In fact, the Trustees have urged action ``sooner rather than
later'' in order to ``minimize adverse impacts on vulnerable
populations.''
As Chairman and Ranking Member of the House and Senate
Budget Committees, respectively, we are deeply disappointed
that your administration continues to ignore this legal
obligation. In 2008, the previous administration submitted a
proposal to Congress that took steps to address Medicare's
fiscal imbalance. By contrast, your administration has not
provided a response to the annual Medicare trigger, ignoring
the law in each of the past three years. This year your
budget did not even acknowledge the existence of the Medicare
funding warning.
The country deserves honest leadership on this critical
issue. The Fiscal Year (FY) 2012 budget that you submitted to
Congress this year showed a lack of seriousness about the
major fiscal challenges before the nation. And, although you
abandoned this budget in a subsequent speech, your
administration still has not formally submitted a revised
FY2012 budget to Congress. Meanwhile, Senate Democrats have
not passed a budget in 776 days, disregarding legal statute
and further eroding the integrity of the federal budget
process. Now more than ever is the time to fulfill our
obligations under the law rather than skirt them, and we
would respectfully suggest that this mandate extends to the
Medicare warnings issued each year that you have been in
office.
Under the budget you submitted to Congress, Medicare as we
know it will soon be unable to meet its promises to current
beneficiaries. Rather than impose cuts on current
beneficiaries and leave Medicare bankrupt for future
generations, the House-passed FY2012 budget resolution
outlines reforms to preserve and protect Medicare for those
in or near retirement while saving and strengthening the
program for future generations. Given the severity of this
problem and your legal obligations, the nation needs
leadership on this issue. Therefore, we reasonably expect
your administration to submit a detailed legislative proposal
to Congress addressing the Medicare funding warning as
required by law.
We look forward to receiving a proposal from you that
responds to the Medicare warning and to working with you to
strengthen the health and economic security of those we have
the honor to serve.
Sincerely,
Paul Ryan,
Member of Congress, Chairman, House Budget Committee.
Jeff Sessions,
U.S. Senator, Ranking Member, Senate Budget Committee.
Mr. SESSIONS. I yield the floor and suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. WYDEN. Madam President, I ask unanimous consent that the order
for the quorum call be rescinded.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
Mr. WYDEN. Madam President, I ask unanimous consent that Senator
Coats, who is on the floor, and I be allowed up to 15 minutes to pursue
a discussion about tax reform as if in morning business.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
____________________