[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
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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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