[Congressional Record Volume 157, Number 109 (Wednesday, July 20, 2011)]
[Senate]
[Pages S4685-S4687]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         CUT, CAP, AND BALANCE

  Mr. MORAN. Mr. President, in my view something significant happened 
yesterday in the House of Representatives. I am pleased with the 
outcome of the passage of the cut, cap, and balance legislation. I 
think we have a serious responsibility here in the Congress to see that 
we address the economic circumstances in which we find ourselves. 
Certainly the way we do that is important. I am one who believes it 
would be irresponsible not to address the debt ceiling, but I also 
believe it would be irresponsible only to address the debt ceiling 
without adequately taking into account the economic circumstances we 
are in and the tremendous debt our country faces.
  There is no way we can continue down the path we are on. While it is 
easy for us to make accusations, the reality is that this country, 
through its Congress and through various administrations, has overspent 
year after year. The fact that 42 cents of every dollar we spend is now 
borrowed tells us we cannot continue down that path. In one of my 
townhall meetings this past weekend back in Kansas, the suggestion was 
we are willing to take a cut in what benefits we get from government 
but let's do this in a fair way and let's do an across-the-board 
reduction in Federal spending. The suggestion by the constituent was 
maybe if we all took 5 percent off of what we received, we would be 
fine.
  I appreciate that attitude but it fails to recognize the magnitude of 
the problem. Reducing Federal spending by 5 percent across the board 
will not get us out of the financial circumstance we are in, will not 
restore fiscal sanity to our Nation. So while we are about, between now 
and August 2, seeing what we can do to raise the debt ceiling, in my 
view we have to come together with a plan that addresses the long-term 
financial condition of our Federal Government.
  I am a supporter of cut, cap, and balance, and was pleased by the 
broad support that legislation received in the House. It is my 
understanding we will now consider that legislation here in the Senate 
this week. But I read the press reports and the political pundits who 
say that legislation is dead on arrival in the Senate. I encourage my 
colleagues not to reach that conclusion. It may be the one and only 
path we have to accomplish what we need to accomplish in the next 2 
weeks. It may be this is one of the very few measures, if not the only 
one, that would pass the House of Representatives. We have now received 
in the Senate a message that says this is something we are willing to 
do. For a long time I have been told as a Senator there is nothing that 
will pass the House of Representatives that raises the debt ceiling. 
Yet we saw last night that was not the case. So let's not be so quick 
to say that the Senate will not address and seriously consider and 
potentially pass legislation based upon cut, cap, and balance.
  In some circles, this concept of cut, cap, and balance is considered 
radical, extreme. Cutting spending is not extreme. That is what every 
Kansas family does when the budget gets too tight, when we have 
overspent, when the credit cards are maxed. We reduce our spending. It 
is unlikely we can go out and say I need a raise to solve our problems. 
Our employers are not that sympathetic. We ought not be so quick to say 
we need a raise. We ought to say what can we find within the government 
that we can reduce, that we can cut.
  The idea of capping is certainly not radical. For the last 60 years, 
our country has averaged 18 percent of the gross national product in 
spending by the Federal Government. In the last couple of years that 
average has increased to 24, 25 percent. It would not be radical to 
move us back to the days in which we were living with 18 percent--what 
seems to me to be a significant percentage; if we would go back to the 
days in which only 18 percent of our gross national product was spent 
by the Federal Government.
  Finally, balancing the budget is not a radical idea. Amending the 
Constitution ought to be done rarely and with great regard for this 
divinely inspired document, but the Constitution allows for an 
amendment process. In fact, it has been utilized to solve many of our 
country's problems and challenges over the time of history. It is not 
radical. Forty-nine States have a provision that requires them to have 
a balanced budget in some form or another at the end of the year. So 
amending the U.S. Constitution to say we are not ever going to get back 
in the mess we are in today certainly is worth pursuing. Of the cut, 
cap, and balance provisions, perhaps it is the constitutional amendment 
that is the most controversial among my colleagues. I certainly would 
express an interest to work with others to find the right 
constitutional amendment, the right language in an amendment to the 
U.S. Constitution that met their concerns.
  This cut, cap, and balance seems to me the path forward and the 
Senate should pass a version of cut, cap, and balance to not only allow 
the debt ceiling to be raised but to allow the debt ceiling to be 
raised only if we become responsible stewards of American taxpayer 
dollars.
  I actually have a fourth component of cut, cap, and balance. I would 
say it is cut, cap, balance, and grow. The last time our fiscal house 
was in solvency--was solvent--was back at the end of President 
Clinton's administration. In part, Republicans and Democrats could not 
get along well enough in those days to spend money on big programs. 
There was legislation that was passed that was supported in a 
bipartisan way by President Clinton and Republicans in Congress to 
limit spending, so there was some spending restraint. But the reality 
is that the last time we had our fiscal house in order, that we were 
spending less money than we were taking in, was a time at which the 
economy was growing. If we want to address the issue of balancing our 
budget, we should focus much more attention than we have on growing the 
economy, putting people to work and allowing, as they work, that the 
taxes will be collected.
  The greatest opportunity we have to improve people's lives is to 
create an environment in which jobs are created,

[[Page S4686]]

in which employers feel comfortable in investing in the future, buying 
plant and equipment and putting people to work. So while it is cut, 
cap, and balance today, we need to make certain we do not forget what 
is in my view that fourth component: Grow the economy. In my view that 
means a Tax Code that is certain and fair, that does not change, that 
is something a business person or a family can rely upon. It is also a 
regulatory environment that allows businesses to have the opportunity 
to grow their business.
  The most common conversation I have had with a business owner in 
Kansas, walking through a manufacturing plant, some small business that 
manufactures a piece of agriculture equipment--that is pretty common in 
our State--the most common conversation we have is: Senator, what next 
is government going to do that puts me out of business? If that is the 
mindset, how do we ever expect that business person to reach the 
conclusion that they have the faith in the future to invest in their 
plant and equipment and in hiring new employees? We need to make 
certain our financial institutions, particularly our community banks, 
are not hamstrung by significant regulations that would discourage them 
from making loans and create uncertainty about the ability to do that, 
a tax regulatory and access-to-credit environment that says now is the 
time to invest in America, to put people to work.
  I am here to urge my colleagues to seriously consider, not dismiss, 
cut, cap, and balance and upon its passage for us to immediately return 
to the progrowth agenda that allows people to have the faith the future 
of their country is bright and we return to them the opportunity for 
the next generation of Americans to understand the American dream can 
still be lived.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from South Dakota.
  Mr. THUNE. Mr. President, I appreciate the good words of my colleague 
from Kansas. He comes from a State where they understand that the role 
of the government should be limited. They understand the importance of 
living within your means, of not spending money you do not have. The 
Senator from Kansas has had a long and distinguished career in public 
life, but before coming to Washington, DC, to serve in Congress I 
suspect he also was a State legislator and my guess is that when he was 
a member of the State legislature in Kansas they had to balance their 
budget every year.
  I ask my colleague if he could perhaps shed some light on what his 
State of Kansas does, year in and year out, in order to get their 
budget balanced, to make sure they are not spending more than they take 
in. I think, as he pointed out, that is something for most families in 
Kansas--I would say for most families in my State of South Dakota--
those are decisions they have to grapple with all the time and we don't 
always have the luxury of being able to borrow. Most States don't allow 
it. My State of South Dakota doesn't allow that. Certainly rules in our 
States probably are not very conducive to saying we are going to raise 
taxes on people and on small businesses, which requires then we have to 
make our decisions on spending.
  I would, through the Chair, ask my colleague from Kansas, perhaps 
that might have been the way in which they went about dealing with 
their fiscal crisis in the past?
  Mr. MORAN. Mr. President, I thank the Senator from South Dakota and 
would indicate that, yes, Kansas is one of those 49 States in our 
Constitution in which we are prohibited in almost all ways of living 
beyond our means. It has been something that the Kansas legislature and 
Governor have lived with throughout the history of our State, including 
in today's environment where an economic downturn creates the 
circumstance in which there are less revenues. So the solution to the 
problem in Kansas is not a try for more revenue, it is a recognition 
that spending in difficult times has to be reduced. It is the restraint 
that we desperately need in Washington, DC, that is so common in State 
capitals and families and businesses across the country. While I have 
always indicated to Kansans, while we have this debate every year how 
to balance the revenues with the expenditures--and it is not an 
enjoyable debate--we are fortunate in Kansas we have to reach that 
conclusion and it is something we need in Washington, DC.
  For a long time the political talk of Washington is that we are too 
likely to spend and tax. There is also a problem of spending and 
borrowing. We are now suffering the consequence. We are not immune from 
what we see in Greece and Italy and Portugal and Ireland. If we do not 
solve this problem that we face today in a responsible way, it will be 
solved for us by the markets, by those from whom we borrow money, 
determining we are no longer creditworthy. We don't have to worry much 
about that in Kansas because we have a constitutional provision that 
requires our legislature and Governor to reach the right conclusion, 
and it is why I thought this debate on the debt ceiling was the 
opportunity for us to force ourselves to do the things that politicians 
do not always like to do.
  Mr. THUNE. To the point the Senator from Kansas was making, he talks 
about higher interest rates and the impact of not dealing with the 
fiscal circumstances in which the country finds itself. Look at what is 
happening in Europe. Three-year government bond interest rates are 
about 19.4 for Portugal, 28.9 for Greece, and 12.9 for Ireland.
  Think about the impact in this country if we had interest rates go 
back to what is even a 20-year average. We would see an additional $5 
trillion, about $5 trillion in additional borrowing costs in the next 
decade alone. That is if we went back to the 20-year historical average 
for this country, not to mention going to what they are looking at in 
countries in Europe, with these 19, 20-percent rates. Think about auto 
loans, think about home loans, think about student loans, think about 
business loans--all those things we rely on in our economy and that 
families across this country rely on, in order to carry on with their 
daily lives if we were looking at those types of interest rates. That 
is the type of interest rate sensitivity we have. If we do not get our 
fiscal house in order, we could very well end up like many of these 
countries, and that would be devastating for our economy.
  The most important work we could be doing right now--and the Senator 
from Kansas pointed this out--is to put policies in place that actually 
grow the economy and support jobs. I also will support the cut, cap, 
and balance proposal that is before the Senate today because I think it 
does important work. It cuts spending today, immediately, it caps 
spending in the near term, and puts in place a process by which we 
balance the budget in a long term, a balanced budget amendment
  It is interesting to note, if we go back historically, something 
President Ronald Reagan said 29 years ago this week. He led a rally of 
thousands of people on the Capitol steps calling for a balanced budget 
amendment. This is what he said: ``Crisis is a much-abused word today 
but can we deny we face a crisis?''
  That is 29 years ago at a time when the Federal debt was $1 trillion. 
We face a debt 14 times as high, $14 trillion. Under the President's 
budget it would literally double in the next decade. We have to get our 
fiscal house and our spending in order.
  The Senator from Kansas also mentioned the size of government as a 
percentage of our entire economy. If you go back to 1800, the 
formation, in the early years of our country, 2 percent is what we 
spent on the Federal Government, 2 percent of our total economy. This 
year we are over 24 percent, in that 24 to 25-percent range. If you 
look at the 40-year historical average, about 20.6 percent is what we 
have spent as a percent of our entire economy. What does that mean? It 
means we are spending more at the Federal level and that the private 
economy is shrinking relative to our total economy. What we want to see 
is an expansion of the private economy where we put policies in place 
that enable our job creators to create jobs and that we get the Federal 
Government smaller, not larger. My view is, when you are looking at a 
debt crisis the way we are, you don't grow and expand the size of 
government, you make government smaller. You get the private economy 
growing and expanding and creating jobs, and that is how you ultimately 
get out of this situation.

  We have policies in place right now that are making it more 
difficult, and

[[Page S4687]]

more expensive I would argue, for our small businesses to create jobs. 
Anywhere you go--in my State of South Dakota and elsewhere--you talk to 
small business owners, you talk to farmers and ranchers, and what they 
will tell you is the policies, the regulations, and the taxes that are 
coming out of Washington, DC, make it more expensive and more difficult 
for our job creators to create jobs.
  If you look, the data on that it is pretty clear. Since this 
President took office, we have higher unemployment by 18 percent, we 
have 2.1 million more people unemployed than we did when he took 
office, and we have a 35-percent higher debt. We saw spending go up in 
the last 2 years alone, nondefense discretionary spending, by 24 
percent. The number of people who are receiving food stamps in this 
country is up by 40 percent.
  All the data, all the tools by which we can measure economic progress 
and growth demonstrate that the policies that have been put in place by 
this administration have been a complete failure. So what we need is a 
change in policies, and it starts by cutting Federal spending, capping 
it in the near term, and putting in place a long-term solution--a 
balanced budget amendment like so many States have in place, like the 
Senator from Kansas mentioned they have in his State of Kansas, like we 
have in my State of South Dakota, where our State governments have to 
live within their means. They cannot spend money they do not have. That 
is the problem we have in Washington, DC, today.
  In terms of our small businesses, there was a survey done by the 
chamber of commerce a couple of weeks ago in which they found that 64 
percent of the small businesses that responded to the survey said they 
are not going to hire this year. Another 12 percent actually said they 
are going to cut jobs. Why? Half of the small businesses listed 
economic uncertainty as the major reason. They are concerned about what 
is going to come out of Washington, DC. They don't know what policies 
and regulations are going to be imposed on them and what it is going to 
do to them and their cost of doing business, and as a consequence they 
are just hunkering down and trying to survive.
  We need to change that. We change that by getting Federal spending 
under control. Cut, cap, and balance is an important step in that 
process, and I am pleased the House of Representatives last night 
passed it and sent it over here to the Senate. We will have an 
opportunity to vote on that in the next few days, and I would argue to 
my colleagues that this is fundamentally the best we can be doing to 
not only get our fiscal house in order and get it on a more sustainable 
path going forward but also to help get our economy growing again and 
get jobs created out there. You can't do it by making government 
larger. If that was the case, the trillion-dollar stimulus bill that 
was passed last year would have brought unemployment down. But, as we 
all know, we are facing 9.2 percent unemployment today.
  We continue to see an economy that is struggling, that is growing at 
a very slow rate. We need to unleash that economy, and the way we do 
that is by capping or cutting spending in Washington, DC, making the 
Federal Government smaller, not larger, getting that amount of spending 
as a percentage of our entire economy back into a more historical norm, 
and working to ensure that taxes and regulations stay low on our job 
creators in this country.
  That is why I fundamentally object to what the President and many of 
his allies in Congress want to do with regard to the debt crisis; that 
is, increase revenues. You cannot create jobs, you cannot grow the 
economy by increasing taxes on our job creators. I can't think of a 
single tax that you could put on our economy that actually would help 
create jobs. It will have the opposite effect--it will make it more 
difficult for small businesses to create jobs, more difficult for us to 
get out of this economic downturn.
  I hope my colleagues will support cut, cap, and balance and that it 
will get a big vote here in the Senate and get this country on a more 
sound fiscal footing and on a path where we can create jobs and get 
this economy growing.
  I yield the floor.

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