[Congressional Record Volume 157, Number 114 (Wednesday, July 27, 2011)]
[Senate]
[Pages S4922-S4924]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                             THE DEBT LIMIT

  Ms. MIKULSKI. Madam President, I come to the floor today with a great 
sense of urgency. We are less than 1 week away from reaching our debt 
limit. If we fail and we falter, the United States of America will be 
irrevocably fractured. We aren't at an impasse; we are at the edge of a 
cliff. Unless Congress acts, we are going to go over it.
  What will be the consequences of it? If we do not meet our 
obligations to pay our debts, it will result in a default, and default 
will result in enormous increases in interest rates. For Americans who 
are so worried about tax increases, I've got to send a real red alert. 
When interest rates go sky high because of our failure to act, it will 
be the biggest tax on America that we could have, and it will be a tax 
at the kitchen table. It means if anyone has a variable-rate mortgage, 
it will skyrocket.
  If you have a student loan, that interest is going to increase. If 
you have a car loan, forget it. The payments are going to be enormous. 
So we need to face what this means: raising the debt limit. We need to 
prevent the default so our bond rating is not lowered.
  I have never been big on talking about bond ratings, but this is a 
crucial one. We now have a AAA bond rating. So what does that mean? It 
means when they buy our Treasury bills or other government-secured 
investments, but particularly our T-bills, it is as good as gold. If we 
are downgraded, we could just be a tinhorn, tin-cup nation. This is not 
the United States of America. This is not what people fought and died 
for.
  When people say they represent a party that wants to defend the 
Constitution, we all have to defend the Constitution. Right now, 
defending the Constitution and defending America is to lift our debt 
ceiling and get to the hard work of, No. 1, dealing with our debt but 
also dealing with job growth.
  We have to get to work. Instead, we are busy at work playing the 
blame game. Squabbling is not a solution. But I believe we Democrats do 
have a solution, and I think the solution does lie in the Reid 
proposal. The Reid proposal the majority leader has offered is 
substantive, it is real, and it is achievable.
  I was on TV yesterday, and they said: Oh, you are a liberal Democrat. 
Well, I don't know if I am a liberal, I don't know if I am a 
conservative, but I will tell you what I am. I am a diner Democrat. I 
think about the people. I think about the ordinary people, and I think 
about their day-to-day needs. When people talk about what kind of 
solutions they mean, they want everything on the table. What I want on 
the table are the things that affect the kitchen table. That is why I 
support the Reid proposal. It is an achievable framework for avoiding 
default and downgrade of our bond rating now.
  What does it do? It has three important elements.
  One, timing, to take us through 2012. It is not about the next 
election. It is showing we are serious and we are substantive.
  Second, it has important content where we do cut Federal spending. 
It's observable, it's quantifiable, and it's verifiable.
  No. 3, it gives us a path forward to deal with the important issues 
of entitlement and revenue reform. Wow.
  So why can't they take it? I am puzzled about why they can't take it. 
Is it 2012? OK. Who knows who is going to be in control of either the 
White House or the Congress then? But it can't be about us. It is not 
about me. It is about we--we, the people.
  Let's go to the content. There are substantial cuts there in 
discretionary spending. And there are substantial cuts to defense 
spending that do not affect readiness or military health care. These 
are actually cuts that the House voted for in the Ryan budget. So a few 
weeks ago, they said yes to the cuts. But when we say yes to the cuts, 
they say no to the proposal. I don't get it. But it's not whether I get 
it. It is that we have to make sure we get a solution.
  What I think is important about the Reid proposal is it is $2.7 
trillion in cuts. I understand CBO has scored it and they say it is 
$2.2 trillion. Well, $2.2 trillion, $2.7 trillion, that is real money. 
That is real money, and it shows we are serious.
  It also provides this important path forward called a Joint 
Committee. It is not a commission where it is going to be outsiders who 
are experts from think-tank environments and hoo-ha, hoo-ha. It's 
Members of Congress, both sides of the aisle, both sides of the Dome. 
Let's get it together with them, and then let's have this committee 
where we then move forward on the reform of revenue as well as looking 
at entitlement reform.
  I want to be clear that if, the horror of all horrors comes where we 
fracture the standing of the United States of America, not only in the 
financial markets but in the standing of the world, it will have very 
serious consequences.
  The President is going to have to pay the bills based on whatever 
money is coming in. He would not be able to borrow. America would not 
be able to borrow. So our T-bill will not have the same value it once 
did. He is going to have to pay our bills.
  What are the consequences on federal benefits? One is paychecks. The 
first paycheck he is going to meet is the paycheck for our troops. He 
has to make sure that if they are fighting to defend America while we 
are squabbling around and screwing around, we are going to pay our 
troops. My God, did it ever occur to anyone that our troops wouldn't 
get paid? Yes, it is going to be tight.
  So we pay the troops. We are going to certainly pay our veterans' 
benefits. They might not be the same amount the first month, but we 
will kind of squeak through. Then, it will be Social Security. Well, 
maybe the checks will go out, but maybe it will only be at half the 
amount. But the Social Security offices will be closed. So benefits 
will have a direct impact.
  Where is he going to slow down the trickle of money? To State and 
local governments. So what does that mean? Community development block 
grant money, education, and so on. That is going to cause enormous 
layoffs of public employees and contractors at the State and local 
level. The asphalt contractor, the person who handles the office 
machinery, minority contractors, and so on--all that small business 
they love to romanticize over are going to have a big impact.
  Then the Federal Government will definitely have to slow down or not 
pay at all contractors, whether it is the big defense guys that employ 
thousands and thousands of people or it is the small- to medium-sized 
businesses, like the ones in my own State that do information 
technology?
  We are about to destroy the reputation and solvency of the United 
States of America. We are about to destroy the reputation and solvency 
of the United States of America not only for one day but for a decade 
and maybe the rest of the century. This is not being done by an outside 
power. We are spending $700 billion on defense, and we are destroying 
ourselves by a self-inflicted wound because of political dysfunction, 
political rigidity, and political ideology. What the heck is this? I 
could even use more intense language. What we are about to do, we 
cannot allow this to happen.
  One of my colleagues said to me yesterday, Senator Mikulski, what 
would it take to get you to the table? I said: Get me a plan and 30 
Republican names behind it; I will see if I can support the plan and 
get 30 others.
  I know my time is up, but I don't want the time to be up on America. 
Let's come together. Let's stop being Democrats, let's stop being 
Republicans, let's call us what we should be called: Americans.
  What do Americans do? When the times are tough, the tough get going. 
Let's get going. Let's make the tough decisions. Let's put politics 
aside, put America No. 1, and get us back on track.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from New York.
  Mr. SCHUMER. First, I wish to thank my good friend and colleague

[[Page S4923]]

from Maryland for her great words. She comes from the heart of Maryland 
and the heart of America. Very few people I have met in politics in my 
many years in this endeavor have an understanding of how average people 
feel and think and tick than the great Senator from the State of 
Maryland, and I wish to thank her for her outstanding remarks. If this 
body on both sides of the aisle would listen to her and her commonsense 
intelligence, we would be in a lot better shape than we are now. So I 
thank my colleague from the great State of Maryland, the senior 
Senator.
  I rise to discuss the deadlock we have reached in the debate over 
raising the Nation's debt ceiling. Two nights ago, the President spoke 
and put the current stalemate in the context it belongs: The result of 
a small block within the House Republicans that refuses to compromise 
even one inch, it is on their shoulders.
  We have perhaps 100 Republicans at the extreme right who seem to be 
leading the Congress and the Nation over a cliff. They don't even care 
about the idea that we might default. It is appalling. Yet they seem to 
be calling the shots.
  For the last few weeks, the President has met over and over with 
House Republicans trying to meet them halfway and in some instances 
more than halfway. He has offered to cut record amounts from our debt 
and make cuts in programs that would be extremely painful to our side 
of the aisle. This minority in the House has come to think of 
``compromise'' as a dirty word, and it appears as if they can't take 
yes for an answer. If you don't care about debt reduction, if you don't 
care about debt ceiling, rather, you can't get something done.
  Speaker Boehner, who is a good and reasonable man, wants to do the 
right thing and compromise, but he is struggling to rein in his caucus. 
Instead of leading the House, Speaker Boehner is being led by a fringe 
in his caucus that thinks default is OK. This week, Speaker Boehner 
offered a two-step plan that simply kicks the can down the road. It 
resolves the debt ceiling only for the next few months. With the new 
CBO numbers, it will inevitably resolve it for even a shorter period of 
time, and that puts us, within a few months, right back at square one, 
all over again, with the same anxiety, the same gridlock, the same 
problems we face today. What sense, in the good Lord's name, does that 
make to just repeat this over and over until we drive off the cliff? It 
makes no sense.
  All we have to do is look at how difficult this crisis has been to 
resolve after a year of negotiations. Does anyone think it would be a 
good idea to do this all over again in less than 6 months? The 
Speaker's approach is not only wrong, it is dangerous. It would leave a 
cloud of default hanging over our heads for the next several months, 
undermining confidence in U.S. bonds.
  Market analysts have rejected the Speaker's approach, saying it could 
actually bring some of the same bad consequences as a default itself. 
It could even cause a credit rating downgrade.
  Just yesterday, the CEO of Nasdaq testified before the Judiciary 
Committee and said:

       The longer the deal, the better it is for the markets.

  Christian Cooper, a currency trader, was quoted by Bloomberg News 
this morning saying:

       From the markets' point of view, a two-stage plan is a 
     nonstarter because we now know it is amateur hour on Capitol 
     Hill and we don't want to be painted in this corner again. 
     There is significant risk of a downgrade with a deal that 
     ties further cuts to another vote only a few months down the 
     road.

  He said it better than any of us could say it, and he is a currency 
trader.
  Mohamed El-Erian, the CEO of PIMCO, one of the most respected 
investors in the markets--and he invests, as I understand it, hundreds 
of billions of dollars. Mr. El-Erian expressed concern the other night 
that ``the political ground is being prepared for a short-term stop-gap 
compromise.'' He warned this could push stocks down and leave the U.S. 
debt rating ``extremely exposed to a damaging downgrade.'' Let me again 
quote Mr. El-Erian, one of the great experts on our credit markets. 
What he said is, the kind of plan that came over from the House that is 
attempting to be debated in the House--I don't think it will even make 
it over, but the kind of plan being debated in the House would ``create 
an extremely exposed damaging downgrade to our credit, to our Nation's 
debt rating.''
  Even Republicans rejected a short-term increase in the debt ceiling 
as recently as last month. Dave Camp, Republican chairman of Ways and 
Means, said:

       It doesn't give you certainty. Ideally, you'd like to get 
     that settled and not have to continually have it a 
     continually hanging-over issue.

  That is the Republican head of the Ways and Means Committee.
  House majority leader Eric Cantor said:

       If we can't make the tough decisions now, why would [we] be 
     making those tough decisions later. I don't see how multiple 
     votes on a debt ceiling increase can help get us to where we 
     want to go. It is my preference we do this thing one time. . 
     . . Putting off tough decisions is not what people want in 
     this town.

  That is from House Majority Leader Cantor. Yet he is leading the 
charge to send over the very type of plan he has criticized only a few 
weeks ago.
  Republicans have apparently flip-flopped on this point. They are now 
saying they want the same kind of short-term debt ceiling increase they 
opposed on substantive grounds previously. Republicans have flipped-
flopped on this point. Make no mistake about it, a short-term deal is 
still a nonstarter in the Senate and nothing more than a glidepath to a 
credit downgrade, and we will not allow it.
  While Republicans continue pushing for an unproductive plan, Senator 
Reid's plan, the Senate plan, offers real potential to finally break 
this impasse. It makes difficult choices. It includes almost $1 
trillion in domestic discretionary program cuts, including defense. 
This is serious belt tightening that will have consequences, good 
consequences, for years to come.
  The plan received a major boost this morning when Congress's official 
scorekeeper confirmed that the first draft cuts more--a lot more--than 
the Boehner plan. According to the Congressional Budget Office, the 
Senate draft bill achieves almost $1.3 trillion more in deficit 
reduction than the Boehner plan.
  The report also affirms that the $1 trillion in savings the Senate 
planned from the Iraq and Afghanistan wars is real. That is CBO saying 
it, not some Democrat who is hoping and praying for an easy fix. This 
completely undercuts the arguments by Republicans who have tried to 
call these savings a gimmick, even though they included them in their 
own budget and voted for them a few months ago. If it was OK in their 
budget, it has to be OK in our budget. You cannot just change your mind 
based on whose budget it is. Substance should matter to some extent.
  Plus, since the CBO only measured the plan's first draft before 
additional planned savings were incorporated into the bill, the final 
version of the Senate plan will achieve even deeper savings when it is 
filed on the Senate floor. As Politico reports this morning:

       In the battle of budget scores, the Senate Democratic 
     deficit reduction bill is the clear winner thus far over an 
     alternative by Speaker John Boehner.

  Lastly, Senator Reid's proposal allows for a joint committee that has 
the potential to achieve even deeper savings down the road to get our 
country back on the path to economic growth. All in all, this is an 
offer that Republicans cannot refuse. All of the cuts in Senator Reid's 
proposal have been supported at one point or another by the Republican 
side. It meets the two main requirements laid out by the House 
Republicans: First, Speaker Boehner said the amount of the debt ceiling 
increase must be matched by the amount of spending cuts. Our proposal 
will do just that.
  Second, Speaker Boehner said the tax increases must be off the table. 
Even though most of us would prefer tax increases, our proposal 
includes no revenue raisers whatsoever. We don't want tax increases on 
the middle class; we want tax increases on the wealthy and elimination 
of corporate loopholes. To not have them is a hard decision to many on 
our side who know we are going to need to do that for serious debt 
reduction.
  The bottom line: In conclusion, we are getting dangerously close to 
August 2. Over and over Democrats have shown a willingness to move in 
the direction of Republicans. It is time for

[[Page S4924]]

Speaker Boehner to cut off his extreme Republicans who refuse to 
support even the plan that he crafted to meet their reckless demands. 
The Reid plan is our best route to a compromise. It is a compromise we 
need soon before the markets render a truly ominous judgment that will 
set our economy back for years.
  I yield the floor.
  Mr. DURBIN. Madam President, I thank my colleague from New York, 
Senator Schumer, as well as Senator Mikulski from Maryland for coming 
to the floor this morning and speaking about the crisis we face. The 
debt ceiling default, which will occur in 6 days if we do not act, will 
have a profound, negative impact on America's standing in the world and 
our economy at home. It threatens to stifle job creation and to slow 
down the business growth we need to get out of this recession. It is 
the most serious impact one could imagine at a time when we are facing 
this kind of recession.
  This debt ceiling is being extended, or should be extended, under a 
law that was passed in 1939. We have extended the debt ceiling 89 
different times: 55 times under Republican Presidents, 34 times under 
Democratic Presidents, and virtually every President has done it.
  The President who holds the record for the most debt ceiling 
extensions in history is Ronald Reagan. Ronald Reagan extended the debt 
ceiling 18 times in his 8 years, during that period of time tripling 
the national debt. The President who holds the record next is President 
George W. Bush, who doubled the national debt in his 8 years and raised 
the debt ceiling 9 times.
  This should have been done, and done routinely. Many of the Members 
of Congress, House and Senate, who come to the floor and say we will 
never vote to extend the debt ceiling are not being honest with the 
American people. The debt ceiling is paying for what Congressmen and 
Senators voted for. They came to the floor and said: Let's go to war, 
let's stay at war, let's spend $10 billion a month. And the President 
said: That was Congress's decision. Now I have to borrow the money to 
keep that promise. And these Members of Congress are saying: Oh, no, we 
don't want to have any fingerprints on the debt ceiling extension.
  We cannot have it both ways. Members of Congress cannot ask for 
spending and then fault the President when he has to borrow money to 
make it happen. That is exactly what they are doing.
  The President has tried to work out a bipartisan agreement to deal 
with this debt ceiling crisis. He invited in Republicans and Democratic 
leaders with Vice President Biden to sit down and work out an 
agreement, a bipartisan agreement. About 4 weeks ago, the House 
Republican majority leader, Eric Cantor of Virginia, stood up and 
walked out. He said: I am walking away from these bipartisan 
negotiations. I am not going to be party to them. Leave it up to 
Speaker Boehner.
  Speaker Boehner then went into negotiations with President Obama, 
talking behind the scenes about ways to resolve this issue. That was a 
positive thing. But then he announced he was walking away from 
negotiations not once but twice, most recently last Friday.
  Monday night, television sets around America were tuned in as the 
President of the United States explained this crisis and then Speaker 
Boehner explained his point of view. Speaker Boehner said Monday night 
he had a plan, a plan that would solve this crisis in a responsible 
way. That was Monday night. But then came Tuesday, and as the dawn came 
on Tuesday morning and people took a close look at the Boehner plan, 
here is what they found.
  They found that business leaders across America were saying it was a 
terrible idea, the idea of a 6-month extension to the debt ceiling; 
going through this mess again and again would harm our economy.
  Then the Congressional Budget Office took a look at the Boehner plan. 
They talked about it Monday night and said it does not add up. It does 
not cut the spending Speaker Boehner said it would. Then, finally, 100 
members of Speaker Boehner's Republican caucus walked out on him 
yesterday, saying it was a bad plan.
  So here we are, 6 days away from a deadline, 6 days away from a 
manufactured political crisis. It is time to do what is right. Senate 
majority leader Harry Reid has a proposal which addresses this 
responsibly. It cuts spending--and it has already been scored, has it 
not, by the Congressional Budget Office? It turns out that unlike 
Speaker Boehner's plan, Senate majority leader Harry Reid's plan does 
cut spending to move us toward a balanced situation.
  Second, it extends this debate beyond the next election, beyond the 
next year, so we do not put our fragile and weak economy through this 
again and again. That is sensible. It also calls for the creation of a 
joint committee to deal with the long-term deficit. I have been 
involved in this conversation with the deficit commission, again, with 
the Gang of 6. We can do this on a bipartisan basis if we are honest 
and open with one another, and Majority Leader Reid leads us in that 
direction.
  We face a deadline 6 days from today. The Boehner plan of Monday 
night has disintegrated before our eyes. It has been rejected by 
business leaders. It has been rejected by the Congressional Budget 
Office. It has been rejected by the House Republican caucus. It is time 
for a little humility on both sides of the aisle from both parties.
  Let's put all this squabbling aside. Let's focus on America's 
economy, putting people to work, saving businesses, and handling our 
debt in a responsible way. We can do it. We can do it if we stop 
listening to the political extremists and start dealing with the center 
of America which calls for leadership and wants us to put an end to 
this squabbling.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The majority leader is recognized.

                          ____________________