[Congressional Record Volume 157, Number 114 (Wednesday, July 27, 2011)]
[Senate]
[Pages S4924-S4929]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                            THE DEBT CEILING

  Mr. McCAIN. Madam President, as the Senator from Illinois just 
pointed out, today we are 6 days away from a possible default which 
could plunge this country into a serious crisis. In fact, there are 
some who view maybe it is not exactly 6 days; it could be a few days 
more. There are those who argue that somehow--in a bizarre fashion--
that somehow we could prioritize our payments to the most urgent 
requirements, such as our veterans, such at Social Security and others.
  I wonder, what if the Greek Government came up with that same 
proposal as they went into bankruptcy, that they would prioritize 
spending that is remaining?
  The point is, today we are 6 days away. The point is, markets are 
jittery. Investors are concerned. Most importantly, our constituents 
are frustrated. They are confused and they are

[[Page S4925]]

angry. Today, on the front page of USA Today, there is a headline that 
says:

       The Debt: What Americans Think About The Political Debate.

  It goes on to say:

       Just get it done, work it out.

  Another person:

       ``I'm sick of it,'' says Davis, 73, a retired economist. . 
     . . ``They're playing games. Here we are, trying to pull 
     ourselves out of recession, and they can't come to an 
     agreement.''

  If anyone thinks that the reputation and the approval rating of 
Congress and the Presidency has improved during this situation we find 
ourselves in, obviously they are out of touch with their constituents 
and the American people. Not only are the American people concerned, 
not only are the American people upset, but I will quote from and ask 
unanimous consent to have printed in the Record an article from this 
morning's Washington Post.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

               [From the Washington Post, July 26, 2011]

  Frustrated Executives Say Political Impasse Slows Hiring, Investing

                            (By Neil Irwin)

       Chicago.--Business leaders are growing exasperated with 
     Washington. And they say the dysfunction in the political 
     system is holding them back from hiring and investing.
       A new sort of risk to growth is emerging, not from the kind 
     of economic forces that led to the recent recession but from 
     elected officials' inability to agree on how to deal with 
     them. This angst in the executive suite is reflected in this 
     month's uptick in lobbying by business groups eager to see a 
     deal on the federal debt ceiling, in surveys showing falling 
     confidence among business leaders--and, in the American 
     heartland, by the deepening frustrations of corporate chiefs.
       In interviews in this great industrial capital, senior 
     executives in the area said they lack confidence that 
     political leaders can execute the basic nuts and bolts of 
     governing, as exemplified by the brinksmanship over raising 
     the debt ceiling. Indeed, the frustration over the political 
     climate and Washington's seeming inability to solve problems 
     appears to weigh more heavily in their minds than any 
     specific government policy.
       The executives are hostile to President Obama and his 
     agenda and say higher taxes would damage their business 
     prospects and make them less inclined to invest and hire. But 
     in contrast to congressional Republicans' claims that any tax 
     increases would stop job creation in its tracks, many 
     executives say they could tolerate somewhat higher taxes if 
     they were part of a broader plan that offered clarity on the 
     nation's future policies, particularly one heavy on spending 
     cuts.
       ``What are the rules of the game going to be in the long 
     term?'' said Lyle Heidemann, chief executive of the 5,000-
     store hardware chain True Value. ``What our retailers would 
     like to have is consistency and predictability. We can handle 
     decisions we don't agree with, but that's easier than not 
     knowing what the decision is going to be.''
       For example, he said, several True Value franchisees have 
     sold their stores in the past year--even though they would 
     have preferred to hold on to them for a few more years--
     because they feared that the 15 percent capital gains tax 
     will rise at the end of the year, when it is scheduled to 
     expire.
       The loss of confidence in Washington seems to be a driver 
     of a more fundamental lowering of expectations in America's 
     executive suites. The Conference Board, a business research 
     group, found in its most recent survey of chief executives 
     that 43 percent expected economic improvement in the next six 
     months, down from 66 percent at the beginning of the year.
       The groups that represent businesses in Washington, 
     including the U.S. Chamber of Commerce and the Business 
     Roundtable, have been urging Congress to raise the debt 
     ceiling to avoid the risk of a default or downgrade of the 
     U.S. credit rating, even as many newly elected Republican 
     members of the House--who received support from business 
     interests when running--are reluctant to vote for such a 
     measure. A group of major business groups sent a letter to 
     the president and every member of Congress two weeks ago, 
     imploring them to raise the debt ceiling.
       The tenor of the debates in Washington has damaged the 
     executives' sense, long taken for granted, that the taxes and 
     regulatory policies they face will be predictable and 
     reasonably constant. The executives are horrified that the 
     nation might be on the verge of losing its AAA credit rating, 
     and they have a deep hunger for a grand bargain: a master 
     plan to determine the nation's fiscal future over the coming 
     decade.
       There is no telling what the tax code will look like next 
     year or who will ultimately bear the burden of reducing the 
     nation's budget deficits. That makes it an ominous time to 
     consider even buying a new piece of equipment or hiring 
     another worker, businesspeople said.
       ``Clarity is everything, even if it's negative clarity,'' 
     said Rick Bastian, chief executive of Blackhawk Bank, which 
     has eight branches in northern Illinois and southern 
     Wisconsin. The mid-size manufacturers to whom the bank lends 
     money have made it through the worst of the recession, 
     Bastian said. But now they are resistant to upgrading 
     equipment or expanding production capacity because they don't 
     know what the tax burden will be on their revenue.
       ``Let's say you make an investment that will return 
     $100,000,'' Bastian said. ``I don't know if I'll be paying 
     $10,000 more in taxes or $15,000 more. That could be the 
     difference between whether you can afford to service a loan 
     to pay for it or not. I'm not going to make a long-term 
     investment that requires me to commit cash flow for years if 
     I don't know what taxes are going to be.''
       There has been plenty of political bickering in the 
     nation's history, and the current situation bears some 
     resemblance to the standoffs between President Bill Clinton 
     and the Republican Congress that shut down the government 
     twice in 1995 and 1996.
       But executives describe a very different environment this 
     time around. The economy was in generally strong shape in the 
     mid-1990s, and business confidence--then high--was little 
     phased by the showdown in Washington. Now, with 9 percent 
     unemployment and an exceptionally weak two-year-old recovery, 
     confidence is far more fragile.
       ``We're still coming out of a deep crisis and recession,'' 
     said Kevin Kelly, chief executive of Heidrick & Struggles, a 
     leading executive-search firm, who said his conversations 
     with executives in recent weeks have frequently featured 
     fretting over the debt-ceiling talks. ``There have been fits 
     and starts toward stronger growth, and now the outlook hinges 
     on what happens in Washington.''
       At Quality Float Works, a Schaumburg, Ill., company that 
     makes metal float balls for industrial use, the debt impasse 
     has General Manager Jason Speer nervous that it could cause 
     interest rates to spike and make the line of credit the firm 
     uses to finance its inventory more expensive to manage.
       As a result, even with business up 30 percent this year and 
     more long-term orders coming in, ``we're kind of holding back 
     on hiring and major purchases,'' Speer said. ``We're waiting 
     and seeing what effect all this will have on our credit and 
     on our ability to do business overseas.''
       Many executives describe the uncertainty around taxes and 
     spending as only one in a series of confidence-sapping 
     challenges coming from Washington.
       For example, BrightStar Care provides staffing services for 
     home health-care workers through 225 franchisees worldwide 
     with a combined 6,000 employees. Shelly Sun, the company's 
     founder and chief executive, said that as she works with 
     potential franchisees, many are held back by uncertainty over 
     whether they will have to pay for their workers' health-care 
     costs once last year's health-reform legislation is fully 
     enacted, and if so, what it will cost.
       ``This is a very price-competitive business,'' Sun said. 
     ``Consumers are already having difficulty scraping together 
     funds to pay for services, and if the franchisees have to 
     bear an extra dollar, $1.25, or $1.50 per hour for health-
     care costs, what could be a viable business may not be.''
       And at Discover Financial Services, the large credit card 
     and transaction processing firm with 11,000 employees, 
     President Roger Hochschild has had to grapple with great 
     uncertainty about how the financial system will evolve under 
     changing regulations.
       ``It's really challenging to enter the mortgage business 
     with no clear understanding of what Fannie Mae and Freddie 
     Mac will look like down the road,'' Hochschild said.
       But for many executives, the uncertainty about how the 
     United States will lower its budget deficit over time and who 
     will pay for it looms most heavily over their decisions.
       ``Among the other presidents and CEOs I interact with, the 
     only consensus of opinion is none of us has any idea where 
     things are going,'' said Scott Morey, chief executive of 
     Morey Corp., a 700-employee company in Woodridge, Ill., that 
     makes electronic equipment. ``And in my observation, the 
     uncertainty we are experiencing is caused almost entirely out 
     of Washington and other governments around the world.''

  Mr. McCAIN. That article says:

       Frustrated executives say political impasse slows hiring 
     and investing.
       Business leaders are growing exasperated with Washington. 
     And they say the dysfunction in the political system is 
     holding them back from hiring and investing.

  So where we are is, average American citizens are worried, Social 
Security recipients who are entitled are calling our offices, and the 
markets are already jittery. Most economists believe, if we allow this 
deadline to pass, that we will see a cratering of the financial 
markets, which, obviously, has a significant impact on savings, on 
people's holdings in the stock market, 401(k)s, et cetera. Meanwhile, 
here we are with a situation, and over on the other side of the 
Capitol, our Republican friends are trying to come up with a proposal 
that will receive the support of their majority. Over here, we have 
individuals who believe somehow there is still a chance, at least in 
this Congress, to pass a balanced budget amendment to the Constitution.

[[Page S4926]]

  I will take a backseat to none in my support of the balanced budget 
amendment to the Constitution. I have voted for it 13 times. I will 
vote for it tomorrow. What is amazing about this is, some Members are 
believing we can pass a balanced budget amendment to the Constitution 
in this body with its present representation, and that is foolish. That 
is worse than foolish. That is deceiving many of our constituents by 
telling them that just because the majority leader tabled the balanced 
budget amendment legislation that, through amending and debate, we 
could somehow convince the majority on the other side of the aisle to 
go along with a balanced budget amendment to the Constitution. That is 
not fair. That is not fair to the American people to hold out and say 
we will not agree to raising the debt limit until we pass a balanced 
budget amendment to the Constitution. It is unfair. It is bizarro. 
Maybe some people who have only been in this body for 6 or 7 months or 
so believe that. Others know better. Others know better.
  I am confident, one, someday we will pass a balanced budget amendment 
to the Constitution. Two, I am confident the overwhelming majority of 
the American people support it. Three, I am convinced that is the only 
way that at the end of the day, we will get spending under control 
because I have seen in the past Congress enacting very strong 
restrictions on spending, such as the Gramm-Rudman legislation, which 
required spending cuts with increases in spending and all of them 
failed because Congresses cannot bind future Congresses.
  That is why I remain committed to a balanced budget amendment to the 
Constitution. To somehow think or tell our citizens that if we have 
enough debate on amendments in the Senate, in the short term, in the 
next 6 days, we will pass a balanced budget amendment to the 
Constitution is unfair to our constituents. It is unfair to our 
constituents, frankly, to come up with a plan--the so-called Reid 
plan--that is full of smoke and mirrors, and, frankly, does not entail 
any increase--real spending cuts. It is unfair of the President of the 
United States to lead from behind. It is unfair of the President of the 
United States not to come forward with a specific plan that perhaps 
could be considered by both bodies but only to go out and give lectures 
and act in as partisan a fashion as I have seen in his addresses to the 
American people. It is no wonder the approval ratings of the American 
people of the President and of Congress are literally at alltime lows.
  I wish to talk for just a minute about an editorial in The Wall 
Street Journal this morning. The Wall Street Journal is not known to 
be--especially on its editorial page--a liberal periodical. It is 
entitled ``The GOP's Reality Test.'' It talks about:

       The debt-limit debate is heading toward a culmination, with 
     President Obama reduced to pleading for the public to support 
     a tax increase and Speaker John Boehner and Senate Majority 
     Leader Harry Reid releasing competing plans that are next-to-
     last realistic options. The question is whether House 
     Republicans are going to help Mr. Boehner achieve significant 
     progress, or, in the name of the unachievable, hand Mr. Obama 
     a victory.
       Mr. Obama recognizes these stakes, threatening yesterday to 
     veto the Boehner plan in a tactical move to block any 
     Democratic support.

  It goes on and talks about the two-phase Boehner plan.

       Congress would authorize $1 trillion in new debt in return 
     for $1.2 trillion.

  It has since been scored by CBO, and now I believe that on the House 
side--they are struggling but I hope will succeed in coming up with a 
proposal that will authorize the cuts we have advertised.
  But I go on to read:

       Unless the plan passed, Mr. Obama couldn't request the 
     additional $1.6 trillion debt ceiling increase that he would 
     soon need. The political incentive is for a reasonable 
     package, and many Senate Democrats also don't want to vote 
     for tax increases before 2012.

  It talks about the critics, about people putting out statements, 
telling Republicans, telling the Speaker to come up with a better 
solution.

       The usually sensible Club for Growth and Heritage Action, 
     the political arm of the Heritage Foundation, are scoring a 
     vote for the Boehner plan as negative on similar grounds.
       But what none of these critics have is an alternative 
     strategy for achieving anything nearly as fiscally or 
     politically beneficial as Mr. Boehner's plan. The idea seems 
     to be if the House GOP refuses to raise the debt ceiling, a 
     default crisis or gradual government shutdown will ensue, and 
     the public will turn en masse against Barack Obama. The 
     Republican House that failed to raise the debt ceiling would 
     somehow escape all the blame. Then Democrats would have no 
     choice but to pass a balanced budget amendment and reform 
     entitlements, and the tea party Hobbits could return to 
     Middle Earth having defeated Mordor.
       This is the kind of crack political thinking that turned 
     Sharon Angle and Christine O'Donnell into GOP Senate 
     nominees. The reality is that the debt limit will be raised 
     one way or another, and the only issue now is with how much 
     fiscal reform and what political fallout.
       If the Boehner plan fails in the House, the advantage 
     shifts to Mr. Reid's Senate plan, which would raise the debt 
     ceiling by $2.4 trillion in one swoop through 2012. That 
     would come without a tax increase but also $2.7 trillion in 
     mostly fake spending cuts like less government ``waste, 
     fraud, and abuse.''

  How many times have we heard we are going to cut waste, fraud, and 
abuse?

       And a $1 trillion savings from troop drawdowns in Iraq and 
     Afghanistan that are already built into the baseline. As 
     fiscal reform, this is worse than Mr. Boehner's plan.
       The Speaker has made mistakes in his debt negotiations, not 
     least in trusting that Mr. Obama wants serious fiscal 
     reforms. But thanks to the President's overreaching on taxes, 
     Mr. Boehner now has the GOP positioned in sight of a 
     political and policy victory. If this plan or something close 
     to it becomes law, Democrats will have conceded more spending 
     cuts than they thought possible, and without getting the GOP 
     to raise taxes and without being able to blame Republicans 
     for a debt-limit crackup or economic damage.
       If conservatives defeat the Boehner plan, they'll not only 
     undermine our House majority. They'll go far to re-electing 
     Mr. Obama and making the entitlement state that much harder 
     to reform.

  Let me say, again, I believe the plan crafted by Senator McConnell 
that would call for significant cuts in spending, which would not have 
raises in taxes, would, in the short term, be a most reasonable 
solution. I hope that on both sides of the aisle we could work together 
and negotiate a way through that. I also think the much derided by some 
idea of a committee composed of Members of Congress--of Members of 
Congress only--from both sides of the aisle, from both sides of the 
Capitol, to sit down and work out a long-term solution to our fiscal 
calamities we are facing and those results and those recommendations by 
that committee be subject to an up-or-down vote only is the only way we 
can go.
  How many times have we had a budget resolution that tasks the various 
committees to come up with savings and always those savings are phony 
or they are dismantled on the floor of the Senate? The only way we are 
going to have the courage to make these cuts is with a committee 
composed of an equal number of Republicans and Democrats on both sides 
of the Capitol who come up with tough measures that need to be taken. I 
believe the American people will support it. If it is not an up-or-down 
vote, we know what happens around here. Let's be honest. Let's have 
some straight talk. The special interests prevail, and they would 
dismantle the tough provisions this committee would come up with. I say 
to my friends on this side of the aisle, this is a balance, Republican 
and Democrat. We only control one-third of the government, and that is 
the House of Representatives. It seems to me a balanced, equal 
representation is to our advantage.

  I just wish to say a word, again, about the Reid plan. First of all, 
I congratulate the majority leader for coming up with a plan because 
certainly the President has not. Spectrum auctions is part of it. That 
is going to provide auction of billions of dollars. I have been in this 
body for a considerable period of time. I can't tell you the number of 
times we have called for auction of spectrum. It is an annual basis. It 
is a copout that prevents us from making tough decisions. Most 
egregiously, the majority leader's plan provides $1 billion to pay 
television broadcasters who return unused television broadcast 
spectrum. The television broadcasters got the spectrum for free, and 
now we are supposed to ask the taxpayers to give them $1 billion to 
give back the spectrum they own?
  Then, very interestingly, savings in Freddie Mac and Fannie Mae. 
There

[[Page S4927]]

are $30 billion in Fannie Mae and Freddie Mac reforms. There is nowhere 
in this proposal that mentions that, but I would point out we have 
already spent $150 billion on Fannie Mae and Freddie Mac that we have 
never seen the end of. Then, of course, the large claim that there is 
$1 trillion in savings from winding down the wars in Iraq and 
Afghanistan and, of course, that is phony. Everybody knows we are 
winding down the war in Afghanistan and Iraq.
  So here we are 6 days away, and we still have members of Congress who 
are saying we have to pass the balanced budget amendment to the 
Constitution. We have Members on the other side who are saying we have 
to raise taxes. We have a President of the United States who so far has 
refused to come forward with a detailed plan of his own. That is called 
leading from behind. It is time we listened to the markets. It is time 
we listened to our constituents. Most of all, it is time we listened to 
the American people and sit down and seriously negotiate something 
before we face a situation where we are depriving the American people 
of the fundamental right of having a government that doesn't deprive 
them of the essential services, goods, and entitlements which they have 
earned.
  I yield the floor and I suggest the absence of a quorum.
  The ACTING PRESIDENT pro tempore. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. CORKER. 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. CORKER. Madam President, I wish to speak for 10 minutes or so. 
When I have 2 minutes remaining, if the Chair could tell me, I would 
appreciate it.
  Madam President, I am here today with a sense of optimism. I know all 
of us are very concerned about what is happening in our country with 
the debt ceiling. I know we are getting lots of calls from 
constituents.
  I think we have made remarkable progress over the last couple of 
weeks. If we think back to just a couple of weeks ago, people were 
crafting legislation for sort of a political vote, if you will, and I 
understand that. But here we are today, and we actually have the leader 
of the U.S. Senate--a Democrat--who has proposed a bill that has to do 
with spending. The Republican leader of the House has introduced a bill 
that has to do with spending. Candidly, I am kind of uplifted. We are 
finally on the right topic now. Candidly, to use a colloquial term from 
Tennessee, we are beginning to cook with gas. What I mean by that is 
people are actually now focused on the right issue.
  We have all talked about this August 2 date. We have talked about the 
fact that our debt ceiling has to be raised by then. Certainly, there 
are a lot of ambiguities in the financial markets right now. A lot of 
them have been watching the Treasury Department and think the Treasury 
Department has actually made some ways of causing that to last a little 
bit longer. But I think one thing we can all agree to in this body at 
present is that we have until August 2. I think everybody would agree 
with that. Some people think we have longer. I think the one thing 
almost everyone would agree with in this body is that we have until 
August 2 to solve this problem, and I hope we will do so.
  The other thing that I think is becoming part of sort of the mantra 
and the understanding throughout our country is that many of the 
financial markets, the people who actually buy our Treasurys, are now 
not as concerned about the debt ceiling. They want it raised, don't get 
me wrong, and as I just mentioned, we all understand August 2 is the 
date we have until to do that. But now they are more concerned about 
the fact that we may raise the debt ceiling and not actually do what we 
need to do to actually get our deficits in order.
  First of all, we have the ratings agencies saying that if we don't 
get at least $4 trillion in savings in some form or fashion, then some 
of them are going to downgrade us. But our office over in the Banking 
Committee--our folks are constantly talking with folks who buy 
Treasurys, and the actual purchasers of these Treasurys are now telling 
us in our office that if we don't do something that at least shows $4 
trillion in savings, then they believe we don't have the political will 
to cause our country to be as worthy of a borrower and that we are 
going to be paying more in the way of rates.
  The other point I wish to make is that we have a proposal on the 
floor. Personally--and I may catch some grief back home for saying 
this--I think Senator Reid has actually tried to put something forward 
to help solve this problem. I believe that. I think he has been working 
closely with Senator McConnell. I think Speaker Boehner also--I know he 
has a different set of circumstances--is trying to solve this problem.
  Here is the point: We are at a place where we are now actually 
talking about the right topic, and we now know that if we don't put 
forth a solution that is at least $4 trillion or in that order of 
magnitude, we are going to be downgraded.
  It seems to me that people on the other side of the aisle--my 
Democratic friends--would not want to support a proposal that extends 
the debt ceiling that is less than $4 trillion because their President 
would be presiding over a country that was downgraded while he was 
President.
  It seems to me that the Republicans who have worked hard to press 
this issue--and everybody has gone through tremendous acrimony, and 
certainly people who are watching this are incredibly frustrated and 
angry--it seems to me that Republicans who are on the verge of 
potentially being able to craft something that actually solves this 
problem would not want to support something that is less than $4 
trillion either.
  In fact, I would make this statement which I think is true: Anybody 
who votes for a package in this body to address the debt ceiling and 
our deficits simultaneously that isn't of the order of magnitude that 
is real and scorable--those are two different definitions, real and 
scorable--of $4 trillion is actually voting for a package that likely 
will cause our country to be downgraded.
  So here is what I think. Senator Reid, has offered a proposal, and I 
think they scored it at $800 billion. I know it says $3 trillion; his 
scores at about $800 billion. Speaker Boehner has offered a package, 
and he, too, has some scoring issues with his package.
  It seems to me that all of us in this body should be pressing the 
leaders on both sides of the aisle to at least present a package that 
is scorable and real in the area of $4 trillion, depending on what we 
decide to do with that package. But if a Senator voted for a package 
that was less than that, they would be casting a vote to raise the debt 
ceiling and at the same time probably cast our country into a situation 
where we are downgraded, and that doesn't make any sense to me.
  So we have 6 days left. I know people back home are nervous. I did a 
tele-townhall last night. We had thousands of people on the phone. 
People are angry that we have waited this long to actually get serious 
about this issue. They are concerned about Social Security checks, 
disability checks, veterans' checks. I understand that. I empathize 
with them. But we haven't quite finished our work. We actually are on 
the right topic, finally.
  Again, Senator Reid has offered a proposal. The House has offered a 
proposal. Neither one of them is strong enough.
  For what it is worth--I know the Presiding Officer knows this, but I 
am talking to people on both sides of the aisle--I think people are 
reading what the markets are doing and becoming increasingly concerned 
about considering voting for a package. I know the Presiding Officer 
comes from the center of the universe as it relates to those kinds of 
issues. People are rising up. There are a lot of private phone calls 
taking place, and people are saying: Wait a minute, let's think about 
this. The markets--which matter, by the way, because they are the ones 
that buy our bonds--are now saying to us that they know we are going to 
deal with the debt ceiling--and I think we are--they know we are going 
to deal with the debt ceiling by the time we have to--and I think we 
are--but now they are beginning to think we are not

[[Page S4928]]

going to do something that is actually the real solution.
  So I am here today to talk to my friends on both sides of the aisle 
to say let's communicate with our leadership and say that we have 6 
days left. We have an opportunity to do something--we have all been 
saying this--that really does rise to the seminal moment to actually 
solve this problem. This is not a Republican issue. It is not a 
Democratic issue. It is something that is going to affect everybody in 
our country. And we are finally, after all of this time, focused on the 
right subject matter. I mean we really are.
  I just met with a group of Senators. I am going to meet with another 
group of Senators here in a little while. Let's make sure our 
leadership on both sides of this Capitol understands that we believe 
voting for a package less than $4 trillion in savings over this next 
decade that is not real and scorable really isn't getting the job done.
  I know Senator Reid's approach has been to do it all at once, and 
maybe there is a way to craft a package between now and next Tuesday 
that people can vote on that has $4 trillion in real savings. I think 
that might be difficult, but maybe something is happening behind closed 
doors that we are not aware of. I know that on the other side of the 
building, people are concerned about--well, actually, on the other side 
of the building they are looking at a short-term extension.
  I know the President has been concerned, candidly, about a short-term 
extension. In fairness, I think the business community around our 
country would be concerned about a long short-term extension--in other 
words, one that carries out months and months and we still don't have a 
solution to this problem. I understand that creates the kind of 
uncertainty that many of the people on my side of the aisle and, 
candidly, people on the other side of the aisle, to some degree, have 
talked about as it relates to the business environment.
  So, sure, I would love to vote for something that solves this problem 
and does it all on the front end. But I assume our leadership, knowing 
the acrimony that is taking place--but, again, at least we are on the 
right subject matter, finally--the acrimony that is taking place, I 
assume they have some really short-term extension in their back pocket 
that, to the extent we don't come to a conclusion by next Tuesday, they 
are ready to pull out and they know it is something that can actually 
pass both bodies.
  Again, I think we are so close now because we are finally focused on 
the right thing. I think we are close to getting to something that 
solves our country's problems for a while, causes people around the 
world and the country to know we actually have the will and the courage 
to deal with these issues and at the same time addresses the debt 
ceiling.
  Should we not quite get there by this Tuesday--and I know there are a 
lot of complications, and we have bodies that are made up of two very 
different groups of people--I would assume our leadership, who 
understand what is at stake here, have in their hands, in their back 
pockets, a very short-term extension that could be used as a bridge for 
the kind of solution that maybe takes us to a place that we can all 
agree helps solve our country's problems.
  Again, I have heard people have been coming down to the floor back 
and forth and criticizing each side of the aisle. I am actually more 
optimistic today--I am not over the top, but I am more hopeful than I 
was 2 weeks ago when we were not even focused on the right issues, at 
that time focused on casting blame. Now what we have is both bodies 
looking at packages to actually address the deficit we have before us.
  I hope people on both sides of the aisle will talk to leadership, 
will let them know they have no desire to support something that does 
not solve the problem with all we have gone through as a country and as 
a body over the course of the last couple of months. I am hopeful we 
will figure out a solution that actually meets that test--in other 
words, avoids the crisis on Tuesday and, at the same time, avoids the 
crisis that will occur if people look at our country as a downgraded 
entity because we have not shown we are willing to at least deal with 
$4 trillion.
  I think most people know I wish to do a lot more than that, and I 
offered a bill that was bipartisan that did a lot more than that. But I 
think we all now know that baked into the expectations about where our 
country is today is the fact that it has to be a minimum of $4 
trillion. I think a lot of people have worked toward that goal. To even 
set up a process that is short of that does not make any sense to me. 
It is kind of as though you have to be kidding me: We are going to go 
through the aggravation of the next 6 months working toward an 
aspirational goal that we all know does not solve the credit rating 
issue?
  Madam President, I thank you for the time. I hope we come to a 
successful conclusion soon. I stand ready and am talking with people on 
both sides of the aisle to try to come up with a solution so we either 
solve this on the front end or put in place a process, a very quick 
process, that takes us to a place where we know we have actually dealt 
with the problem.
  With that, I yield the floor.
  I suggest the absence of a quorum.
  The ACTING PRESIDENT pro tempore. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. FRANKEN. 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. FRANKEN. Madam President, I rise today to discuss the urgent need 
to raise the debt limit. I wish to take this opportunity to remind my 
colleagues of our obligation to represent our constituents' best 
interests and those of our great Nation, for at this late hour, with 
the deadline for an agreement fast approaching, the consequences of 
inaction are clear. They have been made clear by economists, they have 
been made clear by credit rating agencies, they have been made clear by 
the Federal Reserve and by our Treasury Secretary, and they have been 
made clear by respected leaders of each side of the aisle. And soon, if 
we do not act, they will be made clear by the market itself.
  I keep hearing from some Members talking about the August 2 deadline 
as if it is no big deal. They say they have their own theories about 
when the real deadline is. That leaves me dumbfounded. I, for one, am 
going to take the Treasury Secretary and virtually every economist at 
their word. We need a solution before August 2 or we risk economic 
catastrophe.
  There are some Members who are essentially saying the Treasury can 
prioritize payments to avoid default, but getting Social Security 
checks out should not be a problem. I heard a Republican Member of the 
House Budget Committee on Public Radio this past weekend say the money 
for Social Security checks is in the trust fund.
  Well, yes, we have $2.6 trillion in assets in the trust fund, but 
they are all in Treasury securities, not cash. I find it stunning that 
a Member of Congress, let alone a member of the Budget Committee, would 
not understand the most basic functioning of our government. If there 
is no debt limit increase, Treasury may be able to juggle payments to 
get Social Security checks out on August 3, and I am sure they will do 
everything they can to do so, but August 3 would be just day one of 
Treasury's improvised prioritization strategy. August 3 is a date that 
about half of the Social Security checks go out. But we have another 
round scheduled to out on August 10, and another on August 17, and 
another on August 24. In fact, the Treasury sends out over 70 million 
checks a month. August 3 is not the end of the problem, it is the 
beginning.
  About 1 month ago, the Bipartisan Policy Center briefed members of 
the House Republican caucus on the actual implications of the August 2 
deadline, what we can pay and what we could not pay. Jay Powell, the 
former Under Secretary of Treasury under President George H.W. Bush, 
presented at the briefing. He outlined his research on what is likely 
to happen on August 3. He suggested that in the month of August we 
could pay our debt interest, Social Security checks, Medicare and 
Medicaid, vendors for Defense projects, and unemployment insurance 
benefits. That is what we could pay, but no pay for active-duty 
military, no benefits for veterans, no Federal loans for low-income 
students about to head off to college in the fall, no Pell grants, no

[[Page S4929]]

Federal Government employees, including counterterrorism agents in the 
FBI, for example, no border agents.
  Before we default, we could have time to make this sign for all 
points of entry. This is the tip of the iceberg. That is a symbol of 
things we definitely could not afford to do.
  That does not even address the global economic impacts of playing it 
so close to the edge. The dollar would be devalued, our credit rating 
would be downgraded. It would cost us much more--much more--to borrow 
and to pay the interest on our debt, and thus our debt would actually 
increase.
  More importantly, all adjustable interest rates would rise, including 
credit cards and mortgages and student loans. New loans, of course, 
would be more expensive. These impacts could have a legacy that dogs us 
for decades, if not centuries.
  This is serious business and we should not be testing this deadline. 
Yet that is exactly what some of my colleagues are doing. I worry that 
Republicans in the House are blind to research, deaf to reason, and are 
simply ignoring facts that are contrary to what they want to hear.
  Throughout this debate, conservative House Republicans have stood in 
the way of a deal. We have offered them some pretty sweet deals, and 
they have walked away. They treated the August 2 deadline as advisory, 
as optional. They suggest that the Treasury can figure out something to 
prevent a default.
  Now they are opposing Senator Reid's sensible deficit reduction plan 
because of how it calculates some of its savings. Specifically at issue 
is the Reid plan's $1 trillion in savings from winding down the wars in 
Iraq and Afghanistan, which Republicans are calling a budgetary 
gimmick, not real savings.
  Yet the Ryan budget, which almost every House and Senate Republican 
voted for, counted the same cuts almost identically. So to say it is 
real savings in the Ryan plan but fake savings in the Reid proposal--I 
am sorry, but you cannot have it both ways.
  Further, Senator Reid's plan is actually all cuts. I do not 
necessarily like that. It contains dollar for dollar spending cuts to 
match the debt ceiling increase. And as much as I do not like this 
aspect of it, it does not include any revenues, even though a 
Washington Post-ABC News poll says that 72 percent of the American 
public believe we should have those making over $250,000 pay more--72 
percent.
  But a cuts-only plan is what Republicans have been saying they wanted 
all along. Now we have given it to them, we have it out there, it is 
there, and all of the cuts in the Reid plan have been supported by 
Republicans in the past. So we are presenting a plan that is all cuts, 
no revenue. The pretense they are using to reject it does not pass the 
smell test. According to CBO, it saves $1.3 trillion more in savings 
than the Boehner plan, such as it is. You know, I often hear 
Republicans say corporations are sitting on trillions of dollars of 
cash instead of investing, expanding, and creating jobs, because 
businesses are facing so much uncertainty. Well, Senator Reid's plan 
offers certainty.
  But suddenly Republicans want a short-term deal, one that would very 
well put us in this same crisis again in 6 months. What kind of 
certainty is that? No, a short-term deal will not offer our businesses 
and markets the certainty they need. A short-term deal may very well 
induce a credit downgrade, according to Standard & Poor's. Yet 
Republicans say they prefer a short-term deal over Senator Reid's plan, 
which would take us through the end of next year.
  I do not get it. It sounds to me as though they care more about 
politics and winning than they do about their constituents' well-being 
and the prosperity and economic security of the Nation. Their hard line 
and cavalier attitude is frankly dangerous--very dangerous.
  Playing fast and loose with the facts is reckless. The American 
people deserve better. We need to raise the debt ceiling now, and 
Leader Reid has shown us the way forward. I do not like all of the cuts 
in his package. I wish there were increases in revenue from those who 
can afford it. But I know we have to pass it because it will keep us 
from defaulting, and it will do so responsibly and sensibly.
  We owe it to the American people to pull back from the brink and pass 
the Reid plan so we can avert disaster. We owe it to our constituents, 
and we owe it to our children.
  I yield the floor, and I suggest the absence of a quorum.
  The ACTING PRESIDENT pro tempore. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. BAUCUS. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Franken). Without objection, it is so 
ordered.

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