[Congressional Record Volume 157, Number 95 (Wednesday, June 29, 2011)]
[Senate]
[Pages S4167-S4171]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
BALANCED BUDGET AMENDMENT
Mr. HATCH. Madam President, today we are beginning what might prove
one of the most consequential debates in American history. The American
people are demanding that Congress debate and pass a balanced budget
amendment to the Constitution. They are going to get that debate, and I
am confident that if Congressmen and Senators listen to their
constituents, the citizens of this Nation are going to have the
opportunity to ratify a balanced budget amendment this year. All 47
Republican Members of the Senate are of one mind on the need for a
balanced budget amendment to the Constitution. We have listened to our
constituents who are pleading with us to take action that will
permanently resolve our debt crisis and keep us from getting into this
situation again.
The situation is a disaster. We all know the numbers: three straight
trillion-dollar-plus deficits; $14.5 trillion in debt and rising every
day; $62 trillion in total liability that this government owns. Since
Democrats last passed a budget--that was over 790 days ago--our
national debt has risen by $3.2 trillion, and now the administration is
asking for more.
We simply cannot do this anymore. Madam President, 100 percent of our
tax revenues are spent on mandatory spending and interest on the debt.
Every other penny is borrowed. The money is simply not there to finance
a government of this size, and everyone knows this, although not
everyone will admit it. They know deficit spending and skyrocketing
debt have come to an end. Our Nation's current debt-to-GDP ratio is 95
percent. Countries with debt above 95 percent of GDP have growth that
is 1 percent below normal, resulting in a loss of 1 million jobs. Our
debt is a lead weight around the neck of the economy.
But in the current negotiations over the debt limit, the
administration insists that it is Republicans who, by refusing to pass
an increase of the debt limit that does not include meaningful efforts
to address our fiscal situation, are holding back the economic recovery
and undercutting the stock and bond markets. This has things exactly
backward. The markets understand that our long-term deficit projections
are moving toward a full-blown debt crisis. The markets understand that
we are currently on the glidepath to Greece. The markets would respond
like gangbusters to spending cuts, spending caps, and a balanced budget
amendment that brings our long-term fiscal problems under control.
I am more convinced than ever that a balanced budget amendment to the
Constitution is essential if we are to right our fiscal ship. This is
not the first time we have been down this road, but the stakes could
not be higher this time, and the amendment could not be better designed
to address the crisis. Our amendment is not just an amendment for
fiscal balance, it is an amendment that takes on the root cause of our
current debt crisis; that is, government spending. Our amendment
requires a balanced budget. It establishes a spending cap of 18 percent
of GDP, and it establishes supermajority requirements for tax increases
or future debt-limit increases.
We will hear a number of tired arguments against the BBA. Its
opponents will say the amendment is not properly vetted. We have been
talking about the balanced budget amendment for decades, and if we had
passed it back in 1997, when it fell by 1 vote short of being sent to
the States for ratification, we would not be in the mess we are in
today.
They will say it stacks the deck by requiring spending cuts rather
than tax increases to balance the budget. This is an issue I will
address at length, but the American people understand the solution to a
spending crisis is not to give the government more money to spend,
especially this government.
They will say a balanced budget amendment is unnecessary and Congress
just needs to do its job. But we have heard this over and over before,
and the American people know that waiting for Congress to balance the
budget and shrink the size of government without a constitutional
amendment is less fruitful than waiting for Godot.
They will say the spending cuts required as a result of this BBA will
hurt children and the elderly. But the real harm to our children will
be when we hand them a future of national indebtedness and dim economic
prospects, and the real harm to the elderly will be the coming
bankruptcy of the Nation's entitlement programs--the guaranteed result
of the President's failure to lead on entitlement reform.
Finally, they will say the Constitution should not be amended. I
agree that it should not be amended lightly, but the Founders
themselves expected that changing circumstances and national
emergencies would demand amendments to the Constitution from time to
time.
The American people understand that this is one of those times. In
this country, the people are sovereign, the Constitution is their
Constitution, and they are demanding that Congress pass a balanced
budget amendment and send it to them and the States for ratification.
My hope is that the party of Thomas Jefferson will listen to their
constituents and follow their founder's lead,
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keeping faith in the people and their good sense and stewardship over
the Constitution.
Later this summer we will vote on a balanced budget amendment. God
willing, this fall the people in the States will start down the road to
ratification.
I am proud to be joined this morning by several of my colleagues who
have been critical leaders on the balanced budget amendment. Each
brings a unique perspective to this debate, and I think it is great
that they are standing up to lead on this issue.
I yield 5 minutes to my colleague, the junior Senator from Kentucky.
He is a remarkable spokesperson for limited government, and I am glad
to have him on my side in the coming fight for the balanced budget
amendment.
Mr. PAUL. Madam President, the balanced budget amendment is
interesting when you look at polls and ask the American public: Do you
approve of what Congress is doing? Do you approve of congressional
action? Do you think they are doing a good job? It is actually 14
percent to 15 percent of the American public who think we are doing a
good job. The other side of that equation is, you ask the American
public: Do you think a balanced budget amendment would help Congress do
a better job? It is 75 percent to 80 percent of the American public who
think we would do a better job if we had a balanced budget amendment.
I don't think this is a partisan issue. I would ask the Senator from
Utah--and perhaps an opinion from the Senator from Texas--do you think
this should be a partisan issue or do you think this goes beyond
partisanship, and can we get the Democrats to understand this isn't a
Republican-Democratic issue but really an issue for the good of the
country?
Mr. HATCH. Well, that should go way beyond partisanship. If we pass
it here by the requisite two-thirds vote and we pass it in the House,
which we will, this will be submitted to the States, and then the
States can make their determination whether or not we have a balanced
budget amendment. The Democrats who hate the balanced budget
amendment--some of them; in fact, most of them--all they have to do is
get 13 States to defeat it. We have to get 38 States to win. Frankly,
we will win this because the American people are with us. And this is
the right thing to do. It is the right thing to do at this time. It is
the only thing that is going to get us to right this fiscal ship.
Mr. PAUL. What does the Senator say to those who say that statutory
caps would work, something like Gramm-Rudman or something like pay-as-
you-go? What is his answer?
Mr. HATCH. Gramm-Rudman lasted all but a year and a half, 2 years,
before the same people went on a spending spree again, although it was
a light spending spree compared to today. Today it is multitrillions of
dollars.
I have to tell you that has never worked. We have to put a
straitjacket into this matter where the Congress has to live the way 49
States have to live. There is only one State that doesn't require a
balanced budget in its State constitution. Why should we have a
requisite desire--not only desire but rule to have a balanced budget as
well? I am convinced that we have to do it after being in the Senate
for 35 years and seeing, year after year after year, people unwilling
to do this.
Mr. PAUL. And I think what is interesting, if you look at this and
you really look at polling data and say: Who is for the balanced budget
amendment, it goes across all party lines. If you look at Independents,
Democrats, if you look at Republicans, it is in the high sixties to the
midseventies in the percentage of the public who would like to see
this. And I think it goes hand in hand that they don't think we are
doing a good enough job here and that we need more backbone, and the
Constitution is supposed to be our backbone. The Constitution helps us
to do a good job, to help restrain the size and growth of government.
I can't see an argument against this, and I really don't understand
how a vast majority of the public can be for this and yet this body
still refuses to act.
Mr. HATCH. I agree with the Senator. I think the Senator makes very
good points there. Frankly, I know this body very well. I am the most
senior Republican. I have been here 35 years. I have seen year after
year after year excuses to go into debt, excuses to deficit spend,
excuses for why they are putting our country into this terrible state
of bankruptcy--just plain excuses. And, of course, they hide behind the
fact that they are trying to do it for the good of the people. It is
not for the good of the people. It is not good to not live within your
means, and unfortunately that is what has been going on here all of the
time I have been here.
Mr. PAUL. I think one of the alarming things we see is that on the
course we are taking now, if we do nothing dramatic to reform the
process--if we don't pass the balanced budget amendment--within about a
decade, the budget will be entirely consumed by entitlements and
interest. This is being driven by something beyond the control of
Republicans, beyond the control of Democrats, and out of everyone's
hands. It has to do with the fact that we are living longer and there
are fewer young people and more old people because a lot of babies were
born after World War II.
These are demographic facts we can't escape. When we look at some of
the charts about what goes on with this, we see what happens if we do
nothing. We see the projected debt way out here. Most of this debt
problem is entitlements. We have to come together as parties. The
balanced budget amendment will help us do this, but then we need to
acknowledge that these problems exist and we need to come together--
both parties--to figure out solutions.
I think the balanced budget amendment may well be what forces us to
have a discussion. To be good legislators, we need to decide priorities
instead of just adding on new program after new program. We have 80
different Federal programs that are work programs. We need to think
about consolidating and minimizing government. I think the balanced
budget amendment would allow us to have a discussion in this body on
where we can cut spending.
Mr. HATCH. Madam President, I wish to thank the distinguished Senator
from Kentucky. I think he states it very well. That is the whole
purpose of the balanced budget amendment. So I thank him for his cogent
remarks and his erudition.
Last week, I signed a pledge that many people in this body are
hearing about from their constituents. It is called the cut, cap, and
balance pledge. Those of us who signed this pledge committed ourselves
to significant spending cuts, a cap on government spending, and a
balanced budget amendment to the Constitution as a condition for
supporting any increase in the debt limit. I was pleased to work with
my colleague from Utah, Senator Lee, in developing a balanced budget
amendment that is supported by every Republican in this body. Of
course, we worked with many others as well, especially Senator Cornyn.
I am now pleased to be working with him on the goals of the cut, cap,
and balance coalition, a remarkable group of grassroots activists
committed to getting our Nation's spending under control.
Madam President, I yield 5 minutes to my friend and colleague from
Utah, Senator Lee.
Mr. LEE. I thank my distinguished colleague, my senior Senator from
Utah, Mr. Hatch, for his leadership on the balanced budget amendment
over the years. He has been a consistent and stalwart advocate for the
cause of amending the Constitution in such a way that restricts
Congress's ability to engage in deficit spending.
It is the practice of perpetual, reckless deficit spending that has
created this almost $15 trillion debt we are now dealing with. It is
this practice of perpetual, excessive deficit spending that has fueled
the expansion of the Federal Government far beyond the limits the
Founding Fathers had in mind and far beyond the natural limits this
government can handle.
It is important to remember we are now spending through the Federal
Government more than 25 percent of our annual GDP. More than one-
quarter of every dollar that moves through the American economy is
consumed by Washington. This is a problem. This is a problem, and it
is, unfortunately, not something that is at all consistent with where
we have been historically as Americans.
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We have to remember that for about the first 140 years of our
Republic's existence under the Constitution, our Federal spending was
nowhere near this high as a percentage of GDP. Between 1790 and the
early 1930s, the Federal Government tended to spend between 1.5 and 4
percent of GDP every single year, year in and year out. There were two
blips, two exceptions--one during the Civil War and one during World
War I and its immediate aftermath. But after those cycles passed, we
went right back to where we had been before. That started to change in
the 1930s and we have been on a gradual upswing almost ever since then
to where we are now above 25 percent.
But it gets worse. By the year 2035, we are predicted to be spending
almost 34 percent of gross domestic product by the Federal Government
every single year. As a result, the Federal Government will be
commanding a very substantial portion of the American economy. That
makes every American less free. The more government spends--the more
money it has access to and the more it borrows on our behalf--the less
free we become, the less individual liberty we have to spend our money,
to use our resources, to devote our lives to the pursuits we choose.
That is why the cut, cap, and balance pledge is necessary to support
individual liberty and to protect our most basic freedoms, because it
will protect us from the inexorable growth of the government.
We are at an important time in American history. We are at a time
when we are being asked to extend our debt limit once again; a time
when we are being asked to say: Yes, we are going to give the Federal
Government authority to borrow even more money against our unborn
children and grandchildren. This is a problem.
One reason we are willing to sign this pledge is that we are willing
to say: OK. We have been put on a path with government spending at this
rate. We can't halt that spending immediately. We are willing to
consider raising the debt limit but if and only if certain conditions
have been satisfied to make sure this doesn't continue in perpetuity.
We need cuts. We need some kind of significant cuts to our spending
right now. We need some kind of statutory spending cap to put us on a
gradual glidepath toward a balanced budget. Most importantly, we have
to amend the U.S. Constitution so as to say this will not continue in
perpetuity and future Congresses will not be able to do what Senator
Hatch referred to a minute ago, which is exempt itself out of statutory
spending caps once it has adopted them.
We can't bind future Congresses to cut $2 trillion over the course of
a decade or more because we can't command future Congresses to do what
we want it to do unless, of course, we amend the Constitution, which is
why we have to do that right now. This is essential to economic
progress in America. This is essential to economic well-being and to
individual liberty in America.
I would love to talk with anyone who wants to about this. I have
invited Utahans who may be in town and I invite anyone within the sound
of my voice, here or elsewhere, to join me in my office this
Wednesday--today--and every Wednesday at 3:30, when we have what we
refer to as a JELL-O bar. Utah consumes more JELL-O per capita than any
State in the Union. We serve up JELL-O and we will talk about the cut,
cap, and balance pledge.
Thank you very much.
Mr. HATCH. Madam President, I thank the Senator from Utah. He is a
wonderful Senator and he serves as a leader in this area.
I don't have enough good words to say about my friend from Texas, my
colleague, Senator Cornyn, who was a judge on the Supreme Court in
Texas before coming here. From the minute he set foot in this Chamber,
he has been a strong conservative, committed to constitutional
government. From the beginning of this Congress, he knew we needed to
pass a balanced budget amendment, and we are going to need him in this
fight.
I yield 5 minutes to my friend and colleague from Texas, Senator
Cornyn.
Mr. CORNYN. Madam President, I join my colleagues from Kentucky and
the junior Senator from Utah in recognizing the leadership of the
senior Senator from Utah, Mr. Hatch, on this even more compelling issue
today than it was even back in 1997, the balanced budget amendment.
I couldn't help but be struck by the figures the senior Senator from
Utah mentioned earlier when he said that in 1997, the House of
Representatives passed the balanced budget amendment. It came to the
Senate and failed by one vote. The deficit in 1997 was roughly $107
billion. Today, it is $1.5 trillion. The national debt in 1997, if I
recall what the Senator said--and he can correct me if I am wrong--
today it is roughly $14.3 trillion, approaching $15 trillion. Back in
1997, it was $5 trillion. Did I get those figures roughly correct?
Mr. HATCH. The Senator did. Back in 1997, we lost by one vote. I was
leading the fight on the floor. We had 67 votes and one of our Senators
flipped on us at the last minute and we lost it by one vote.
Mr. CORNYN. I agree with the Senator from Kentucky who says this is
not a partisan issue. As a matter of fact, back in 1997 a lot of our
Democratic colleagues joined Republicans to vote in favor of a balanced
budget amendment. If there is an issue that threatens not only the
economy but also our national security today more than the national
debt, I don't know what it is.
The Chairman of the Joint Chiefs of Staff, Admiral Mullen, said the
single largest threat to our national security is the debt. Secretary
of State Hillary Clinton said the debt sends a message of weakness
internationally.
I was just over at the Heritage Foundation giving a speech. They are
studying the role of China in the world, the rise of China, but
particularly what I was concerned about, and the subject of my remarks,
was the fact that the Treasury Department estimates that $1.1 trillion
of U.S. debt is held by the Communist Chinese Government. That is one-
third of all our outstanding debt. We know that at least on one
occasion, a retired Chinese general said that if we didn't do what
China wanted, they would then threaten to disrupt our economy by
selling off the debt they own. So my colleagues may care to comment.
Larry Lindsey, the renowned economist, wrote an article recently
where we cited three things that worry him the most about high
unemployment and the lassitude of the private sector. He said it is
slow economic growth, of course, because many in the private sector are
discouraged--the entrepreneurs who create jobs, the job creators who
would otherwise expand--and slow economic growth concerns him. I think
in the first quarter it was 1.8 of our gross domestic product. It is
not enough to generate jobs to get people back to work and one reason
for our high unemployment.
He said the other two issues that worry him the most are, one, the
interest payments on our national debt. He points out that because of
the Federal Reserve policy, the interest rates on our national debt are
at below historic norms. He points out, for example, if inflation were
to kick in or the Federal Reserve, for some reason, should decide to
tighten its policy and raise interest rates, what it would do to
balloon the interest payments alone on our national debt in a way that
would threaten our ability to fund national defense or other issues as
well.
Two, he also points out the exploding costs of the health care bill,
with more and more employees incentivized to dump people onto the
State-based exchanges subsidized by taxpayers as opposed to their
employers.
I wonder if any of my colleagues--I see the Senator from Kentucky--
may have some comments about the interest on the debt and what he views
as a threat to our economy and our security.
Mr. PAUL. From that same article, it is interesting that he talks
about what happens if interest rates rise. For every point of an
interest rate rising, it adds $140 billion. So he talks about getting
back to the historic average of 5.4 percent, that over 10 years it
would add $4.9 trillion to our debt problem. But here is the rub. We
are having discussions where people are saying we are going to cut $2.5
trillion over 10 years. Senator Hatch points out we cannot bind future
Congresses. Senator Lee said the same thing. So when they promise us
that they are going to cut $2.5 trillion, compare that to what happens
if interest rates rise. One, we
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can't bind future Congresses, but if interest rates rise, all of a
sudden we have $5 trillion in extra expenses.
We must bind future Congresses and we must bind ourselves by amending
the Constitution.
Mr. CORNYN. Madam President, I couldn't agree more with the Senator
from Kentucky. This is the silent but potentially deadly threat to our
whole economy. If interest rates were to go up, if China purchases more
of our debt, they are not going to buy it at current rates; we are
going to have to offer a better rate of return.
The ACTING PRESIDENT pro tempore. The Senator has consumed 5 minutes.
Mr. CORNYN. So I join my colleagues in supporting the balanced budget
amendment. I look forward to the vote on this amendment--sometime
during the week of July 18 I think we are shooting for. We invite our
colleagues on the other side to join us. The reason we are here today
is because it is important to let the people across the country know
what we are doing, the solution we are proposing, and to ask them to
encourage other Senators and Congressmen to support it because this is
the single most important thing we could do to get our economy back on
track and to save generations in the future.
Mr. HATCH. Madam President, I thank my colleague for those cogent
remarks.
My colleague from North Dakota, Senator Hoeven, knows a thing or two
about balancing budgets. As a former Governor, he knows this is
something States have to do every day. Governors and legislatures
balance their books by making the tough decisions the Federal
Government is too often unwilling to make.
So I yield the remaining time to my friend and colleague from North
Dakota, Senator Hoeven.
Mr. HOEVEN. Madam President, I thank my esteemed colleague, the
senior Senator from Utah, for taking the lead on this balanced budget
amendment. I am pleased to join him, pleased to be one of the original
cosponsors, and I am extremely pleased every member of the Republican
caucus--all 47 Senators are supporting this balanced budget amendment
and doing everything we can to reach across the aisle and bring our
Democratic colleagues with us and then to send this balanced budget
amendment to a vote--to pass this balanced budget amendment by a two-
thirds vote--and then send it out to the States for ratification.
Three-fourths of the States would have to ratify it as well. I believe
they will.
What a great way for us to join together at the Federal and State
level to make sure we live within our means, that we balanced our
budget, that we do the things we need to do to not only get this
economy back on track but to make sure future generations can enjoy the
great country, the great opportunity we and those who have gone before
us have enjoyed in the United States of America. We have that
opportunity. We need to seize that opportunity by passing this balanced
budget amendment.
As the senior Senator from Utah correctly mentioned just a minute
ago, I had the opportunity--the great honor and privilege--to serve my
State as Governor. As a matter of fact, at the time I was elected to
the Senate, last year, I was the longest serving Governor in the United
States. I served for a decade. Every single year we balanced our
budget.
Madam President, 49 of the 50 States have some form of balanced
budget requirements. The only one that does not is Vermont. Forty-nine
States have that requirement. This year, so far, 46 of the States are
expected to balance their budgets.
Families balance their budgets. Businesses have to balance their
budgets. Cities have to balance their budgets. States have to balance
their budgets. The Federal Government needs to balance its budget. It
is not doing that.
When we look at the statistics--we have gone through them before, but
these statistics we have to continue to talk about; our current
situation is something we have to continue to talk about with the
American people--right now, our revenues are $2.2 trillion. The annual
revenues to the Federal Treasury, $2.2 trillion. Our expenses are $3.7
trillion. That is about a $1.5 trillion, 1.6 trillion deficit each and
every year.
When we roll that up, that is why we are now at $14.5 trillion in
debt, and that debt continues to grow. But it is similar to any debt,
as any family can tell us or any business can tell us or any State can
tell us, that as we continue to accumulate and grow that deficit and
accumulate that debt, it gets harder and harder to get on top of it. It
is akin to having credit cards. As one continues to charge and add to
that balance on the credit card, it gets more and more difficult to get
on top of that debt and deficit and reduce it.
So we have to get started. We have to get going. The task gets
harder, not easier. That is what the balanced budget amendment is all
about. We need the President to lead. When we talk about getting this
debt under control, we need the President to lead. We cannot have a
situation where we spend more and then simply borrow more or try to
raise taxes to cover that spending. That is making it worse. We need
this administration to join us. We need our colleagues to join us, to
get a grip on this spending, to start by passing this balanced budget
amendment.
If we look back to the decade of the 1980s and then into the 1990s
and we look at President Reagan and his approach and his leadership for
this country, he came and said: We have the most dynamic economy in the
history of the world, so we have to create an environment, a pro-jobs,
pro-growth environment that stimulates job creation, that stimulates
private investment, that puts people back to work, that gets this
economy growing. As we get that economy growing, we have the resources
then to do the things we need to do: to invest in infrastructure, to
make sure we take care of those who need help, to make sure we have
health care for our citizens. But at the same time--at the same time--
we need to control our spending and live within our means. That is the
rising tide that lifts all boats. That is how we make sure everybody
participates in the great opportunity that is the very foundation of
this country.
But to get back to that point, we need this balanced budget
amendment. We need this fiscal discipline in Washington to make sure we
continue to honor the legacy we have, the legacy we have been given,
and that we continue to make this country the country of opportunity. I
know we can do it.
I thank the Senator from Utah for his leadership in this effort, and
I thank my colleagues for joining together on this balanced budget
amendment. I ask all our colleagues to join with us so we can pass it.
The ACTING PRESIDENT pro tempore. The Senator's time has expired.
Mr. HOEVEN. Madam President, I yield the floor.
Mr. HATCH. Madam President, I thank my colleagues. I ask unanimous
consent for 1 additional minute and to give the other side an
additional minute.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
Mr. HATCH. I thank the Acting President pro tempore.
I thank my colleagues. They have made some very prescient points on
how important this balanced budget amendment is.
By the President's own Actuary, by 2020, our national debt will be
over $20 trillion. The interest alone will be over $1 trillion. We will
not have any money for the poor, the sick, and the needy because we
have not lived within our means. We simply have to get spending under
control. The only way to do that is to do what all these 49 States have
to do every year; that is, balance our budget through a requisite
constitutional amendment.
Let me make one last point; that is, I do not know why the
Democrats--some Democrats--fight against this. Because literally, even
if we pass it through both Houses of Congress by the requisite two-
thirds vote, there is still going to be a big battle in the States, and
if they hate it, they can fight it out there in the States.
I think the reason they fight it is they know if we pass it here, it
is going to pass through the States very fast because almost every
State knows what we have to do. Almost everybody of intelligence knows
what we have to do.
I yield the floor.
The ACTING PRESIDENT pro tempore. The Senator from Iowa.
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