[Congressional Record Volume 157, Number 120 (Tuesday, August 2, 2011)]
[Senate]
[Pages S5230-S5233]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
BUDGET CONTROL ACT
Mr. SESSIONS. Mr. President, we just passed legislation that would
raise the debt ceiling. Part of that was an effort to reverse the debt
trajectory we are on, but it can only be called, at best, a first step.
We can all agree on that.
Indeed, there is an article in the Financial Times, written by
Professors Rogoff and Reinhart, who wrote a book that has gotten a
great deal of attention and is widely respected, describing and
analyzing sovereign debt and countries that have gone bankrupt around
the world. They commented that much of what occurred in our debate
occurred in those other nations. The other nations scramble around when
the pressure is on with something like a debt ceiling, and they don't
really change anything significantly, but they meet the crisis and tell
everybody everything is OK.
They say in this article in the Financial Times that everything is
not OK. Indeed, the debt will increase over the
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next 10 years by approximately $13 trillion, and this package would
reduce the increase in our debt by $2.1 trillion to $2.4 trillion. That
is not much.
In addition to that, Larry Lindsey, a former economic adviser to
President Bush, has done some analysis of the Congressional Budget
Office score of what the budget would look like over 10 years. He
points out that they were predicting nearly 3 percent growth the first
and second quarter of this year.
So now we have re-analyzed first quarter growth. Economic growth
wasn't 3 percent, it was 2.4 percent. And the second quarter initially
was scored at 1.3--not 3 percent or 2.7 but 1.3 percent. Dr. Lindsey
said that loss in GDP alone will mean less economic growth, less tax
revenue for the government, and over 10 years it puts the government on
a trajectory to lose $750 billion--it would collect $750 billion less,
which is about one-third of the savings that were to occur in the bill.
Dr. Lindsey says the second, third, and fourth quarters of this year
will also be well below that. We may be looking at, in this year alone,
enough decline in GDP to wipe out half--maybe more--of the savings
estimated in the bill we just passed.
I wanted to point out that I believe many in Congress and in the
Senate are in denial about how serious the debt threat is and that we
are too often, as Rogoff and Reinhart noted, saying the same things
other nations said before their economic crises hit. Indeed, the name
of their book, ``This Time Is Different,'' refers to what government
leaders said in those countries--those other countries that went into
default and into debt crises--up until the last minute. They were
saying: We have it under control. It is not so bad. This time, they
say, it is different.
Immediately, there was a crisis, which resulted in a loss of
confidence, and they had a serious problem--similar to when people lost
confidence in the housing market several years ago, which helped put us
in this recession.
This is worrisome. We are not facing a little problem; we are facing
a problem that will require our steadfast attention for a decade to get
this country on the right course.
I note that the President had a press conference today. In a way, it
rejected everything we have been talking about in this debate. It
really did not talk about the nature of the crisis as Rogoff and
Reinhart described. He didn't tell the American people that the real
problem is spending that is surging out of control. He didn't say we
can't continue, as a nation, borrowing 42 cents of every dollar we
spend or that we can't continue spending $3.7 trillion when we take in
$2.2 trillion. He did not talk to us honestly about that. He did not
send a signal; he has not sounded the alarm. Therefore, I think a lot
of people--even some in Congress and some outside of Congress--sort of
think it must not be so bad. The President hasn't told us it is.
More and more people are expressing concerns. There is a growing
unease nationwide, as demonstrated in consumer confidence and business
investment, and in some bad manufacturing numbers we received
yesterday. So things are not looking good. We have to be honest with
ourselves that this is a difficult time.
He did, however, make repeated statements in his press conference
about raising taxes. I don't think that is a good thing to do when the
economy is in a fix the way it is. He flatly--and erroneously, I
believe--stated that you can't balance the budget with spending cuts.
Well, you certainly can. You can argue that you would rather have tax
increases and fewer spending cuts, but we can and must balance our
budget. It can be done with spending reductions. Quite a number of
plans are out there proposing to do just that.
The President continues to talk as if the problem was the debt
ceiling, but the debt ceiling is really a signal that we have spent too
much, and we borrowed all Congress has allowed the President to borrow,
and you can't borrow any more unless Congress agrees to raise the debt
ceiling. But that is not the problem. The problem, as Rogoff and
Reinhart said, is our debt. That is the real problem. It is not going
to be easy to fix. I wish it was. If we work together as a nation, we
can do it. This country can rise to meet the challenge. I am totally
convinced of that.
The President said:
And since you can't close the deficits with just spending
cuts, we'll need a balanced approach.
That means we need to balance a cut with tax increases. That is what
that means.
He went on to say:
We can't make it tougher for young people to go to college
or ask seniors to pay more for health care.
But at some point, when you don't have the money, we might not be
able to be as generous as we were just a few years ago when we were in
better financial condition. Isn't that common sense? What do you mean
you can't make any changes in how we do business? We are going to have
to make changes in how we do business.
He goes on to talk about investments, as he has often done. This is a
quote from the press conference:
Yet, it also allows us to keep making key investments in
things like education and research. . . .
Continuing to make investments in education? Does that mean we will
continue our current level in education and that we will try not to cut
it if we have to make reductions in spending? Is that what the
President means? No.
Just last week we saw the spectacle of the Secretary of Education
appearing before the Senate Appropriations Committee asking for a 13.5-
percent increase in education funding. Also last week, the President
talked about investments--more, more, more--including 13.5 percent more
for education. You know, 90 percent of education is funded by States,
cities, and counties anyway. It is not the Federal Government. It is
not our primary role and never has been. We only provide approximately
10 percent of the money that gets spent on education in America.
We can't have double-digit increases when we are borrowing 42 cents
of every dollar. Every penny of that increase will be borrowed money--
every penny. Doesn't common sense tell us we might not be able to
increase spending this year even if we would like to?
I point out that before the Budget Committee, on which I am the
ranking Republican, we had the Secretary of Energy testify that he
wanted a 9.5-percent increase for the Department of Energy--the
Department that does more to block energy than create energy. The State
Department was asking for 10.5 percent increase in the President's
budget, the President's request to us. The Department of Transportation
was to get a 60-percent increase in spending in the President's Budget.
Last year, it was about $40 billion.
I note that this year, interest on our debt will be $240 billion.
I say to my colleagues that we are not dealing with reality.
Americans know--maybe they are lucky enough to have two wage earners in
the family when one loses their job, but do they not change the way
they do business? Do they just think they can continue to spend twice
as much as their income as if they were both still working? People
don't do that. All over, Americans are making tough decisions. No
wonder they are upset at us for pursuing this idea that we don't have
to make any changes in what we do. It is very, very distressing to me.
The President said this about employment:
That's part of the reason that people are so frustrated
with what's been going on in this town. In the last few
months, the economy has already had to absorb an earthquake
in Japan, the economic headwinds coming from Europe, the Arab
spring, and the [increases] in oil prices, all of which have
been very challenging to the recovery. But these are things
we couldn't control.
I don't know that those are the big problems here. Rising oil prices
are. Today, oil prices are just about double--a little more--than what
they were when President Obama took office. We have shut down new
exploration in the gulf, and we are blocking the production of natural
gas and shale formations, which has so much promise for us. We are
doing a lot of things to drive up the cost of energy.
Then he goes on to say this, which is surprising. He is the one who
said the crisis was so large, it was a national problem.
Our economy didn't need Washington to come along with a
manufactured crisis to make things worse.
We had a serious debate over what to do about the debt ceiling that
we have
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reached, and Congress--the Republican House--yielded from $6 trillion
in cuts over 10 years, as they proposed in their budget, to taking $1
trillion in cuts up front as part of this debt deal. The President
wanted less cuts than that, apparently, and that is not enough. Of
course, it could be $2.4 trillion, if the committee functions
correctly, and we hope it will.
The PRESIDING OFFICER. Under the order, Senators are limited to 10
minutes.
Mr. SESSIONS. Mr. President, I ask unanimous consent to speak for an
additional 5 minutes.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. SESSIONS. What I wanted to point out is in this chart. It gives
some indication of how we are operating in the Senate and the Congress,
driven in substantial part by the President's desires. It is a chart
showing the growth in certain programs that are exempt from the
automatic cuts that would occur if a budget agreement is not reached as
part of the legislation we just passed.
These are all programs that we like and wish we could continue to
allow to grow every year. Unfortunately, we are not going to have the
money to do that. We are going to have to deal with these programs and
all spending--Defense and non-Defense programs, no doubt about it.
We have first over here the Civil Service Retirement and Disability
Fund. The average annual percentage increase of that fund's cost has
been 4.9 percent. The average annual increase in that fund each year--
2005 through 2010--was 4.9 percent. The average inflation rate during
this time was 2.5 percent. So that is about twice the inflation rate.
The next fund here--a fund all of us value--is the Military
Retirement Fund. It has increased at the average annual rate of 5.4
percent. Inflation is 2.5. Medicaid--a program that is administered by
States but has recently been as much as 66 percent funded by the
Federal Government--has been increasing at 8.5 percent each year.
I think most of us know the rule of seven, where if you have money in
the bank and it draws 7 percent interest, that money will double in 10
years. So this means in about 8 or 9 years the entire Medicaid Program
will double at that kind of rate of increase. And, remember, inflation
is 2.5 percent.
The Children's Health Insurance Program--the CHIP program--has been
increasing at 9 percent a year, and the SNAP program--the food stamp
program--has been increasing at 16.6 percent a year for the last 5
years. It has been increasing at 16.6 percent.
So I ask, is this sustainable? We are borrowing 42 cents out of every
dollar. The economy is not growing as much as we hoped and expected,
and it is not going to bail us out of this so we can sustain these
kinds of spending levels.
We look at all these programs we value--and we hate to talk about it;
we don't want to mention it--and the odd thing about the agreement that
was passed earlier today, at the insistence of our Democratic
colleagues, is that these programs would receive no reductions if an
agreement to cut spending is not reached by the committee. Under the
rule, if the committee can't reach an agreement, there will be
automatic across the board cuts, except it is not evenly cut across the
board because these programs are untouched. They are untouchable
because our Democratic colleagues say we can't deal with them.
Well, it is time for us to look under the hood of the food stamps
program, I have to tell you. How could it be increasing at 16.6 percent
a year for 5 years? How could that happen? Don't we need to examine it,
take a good look at it? We have had no hearings. We have done nothing
this year to confront the surging cost. And what about Medicaid and
CHIP? Those are also surging. Maybe we could even save a little on some
of those programs that are growing faster than inflation.
I would point out that the military is in line, under the bill that
passed, if an agreement isn't reached, to take a 10-percent cut. That
is from the baseline military budget. It does not include Iraq and
Afghanistan, which are coming down and projected to come down
dramatically.
Forgive me if I am a little bit taken aback here about our priorities
and about the unwillingness of Congress to deal with out-of-control
spending. That is a good deal of money we are talking about--the
Medicaid Program at $270 billion a year. Food stamps have more than
doubled. It is now $78 billion a year. By comparison, Alabama's general
fund budget is about $2 billion.
The PRESIDING OFFICER. The Senator's time has expired.
Mr. SESSIONS. I thank the Chair. I ask unanimous consent for 1
additional minute.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. SESSIONS. As I notice no one else is here.
The PRESIDING OFFICER. The Senator from Florida is here.
Mr. SESSIONS. Oh, I am sorry. I didn't see that. Well, I should long
ago have yielded the floor, because he has something worthwhile to say,
I am sure.
I close by saying we are not dealing honestly with the crisis we are
in. The President is in denial. He is not looking the American people
in the eye and telling us what a serious fix we are in, or challenging
us all to deal with the reality that we are going to have to change the
way we do business. I hate to say it, but I believe that it is true. We
have to do better.
I thank the Chair and I would be pleased to yield the floor to one of
our more talented, insightful new Members, Senator Rubio of Florida.
The PRESIDING OFFICER. The Senator from Florida.
SPENDING AND DEFICITS
Mr. RUBIO. I thank my colleague from Alabama. He does a phenomenal
job always in outlining the economic realities. I enjoyed listening,
and I could have sat here longer. According to some, I may be one of
the last speakers today, so I don't want to keep the Senate open any
longer than it should be. We have done a lot of work here over the last
few days.
I went back and forth over whether I wanted to speak, because I think
almost everything that can be said has been said regarding the events
of the last few days. But I did ultimately want to share my thoughts
for a moment as we head into the August recess, as they call it here in
Washington, and many of us here in the Senate will be returning to our
home States to explain to the people we represent what we did or did
not do in the last few days.
I will start by pointing out that our Republic is an amazing thing.
As heated as the rhetoric may have been over the last few days, I think
all of us should stop for a moment and understand that all around the
world there are countries that solve the problems we solved through
debate with civil war and conflict, armed and otherwise. Our Republic
is amazing. It isn't always pretty. Quite frankly, more often than not,
it is very messy. But it has withstood 230-some-odd years of pressures
and choices, and it continues to do so. Even if ultimately what it
gives us is not always solutions to our problems, we are blessed to
have it.
I would remind many, such as like myself, who were elected in the
last election cycle, tightly embracing the principles of our
Constitution, that our Constitution is not just a set of words that
outline our principles. It gives us a system of government. It gives us
this Republic. This Republic is valid, and it matters even when the
people who are running it may not be people with whom you agree. We
should always remember that. What we have here is special and unique,
and we should embrace it and be thankful to our God each night that we
have the opportunity and the blessing of living in a nation such as
this.
Moving aside from that, however, the facts still remain that this
coming month, and every month to come, more or less, this government
will spend $300 billion a month. That is a lot of money. It is more
than any government has ever spent in the history of man. And $180
billion of that $300 billion is money we collect from the people of our
country through taxes and fees and other ways. But we borrow $120
billion a month to pay our $300 billion a month bill. That is too much
money. That is too much money for Republicans, it is too much money for
Democrats. It is too much money. Although we should be happy that
tomorrow and in the days to come, we are not facing a default and an
inability to meet our bills, the truth is--an undeniable one that I
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don't think anyone here would disagree with me when I say it--we can't
keep borrowing $120 billion every month or more, because the point and
the day will come when the people who lend us that money will stop
lending us that money. If we keep doing this for long, we will one day
reach a day in this country where we will face a debt crisis, but it
won't be because of the debt limit or because of gridlock in
Washington. It will be because folks are no longer willing to buy
America's debt because they seriously doubt our ability to pay it back.
That is not hyperbole. It is not an exaggeration. It is a
mathematical, indisputable fact that no Member of either party would
dispute. There is general agreement on this. And there is general
agreement the only way to solve this problem is a combination of two
things: No. 1, this government needs to generate more revenue; and No.
2, this government needs to restrict its growth and spending. Because
as bad as the $300 billion a month looks, it only gets worse from here
on out, in ways I don't have time to explain in the next 10 minutes.
Suffice it to say our economy isn't growing. It is not producing enough
revenue moving forward. Meanwhile, all the programs we fund are about
to explode in their growth because more people than ever are going to
retire, they will live longer than they have ever lived, and the math
doesn't add up. These are facts. No one disputes that.
The debate in Washington is not about that fact but about how do we
solve it. How do we generate more money and reduce the spending at the
same time? I will tell you this is not a debate we will solve in the
month of August. In fact, I believe it will characterize the rest of
this Congress, the 2012 elections, and the years that lie ahead. The
division on how to solve it goes to the root of the dispute we face in
America between two very different visions of America's future--by the
way, one not more or less patriotic than the other. Patriotic, country-
loving Americans can disagree on their future vision of what kind of
country we should be. But this division--this difference of opinion--is
the reason why even though this bill passed, this debate we have had is
going to move forward for some time to come.
On the one hand, there are those who believe the job of government is
to deliver us economic justice--which basically means an economy where
everyone does well or as well as possibly can be done. There is another
group who believes in the concept of economic opportunity--where it is
not the government's job to guarantee an outcome but to guarantee the
opportunity to fulfill your dreams and hopes. One is not more moral
than the other. They are two very different visions of the role of
government in America. But it lies at the heart of the debate we are
having as a nation. Washington is divided because America is divided on
this point, so we have to decide what every generation of America
before us has decided, and that is what kind of government do we want
and what role do we want it to have in America's future.
The fault lines emerge from that. The solutions emerge from those two
visions. For those who want to see economic justice, their solution is
to raise more taxes. They believe there are some in America who make
too much money and should pay more in taxes. They believe our
government programs can stimulate economic growth. They believe that
perhaps America no longer needs to fund or can no longer afford to fund
our national defense and our military at certain levels.
Another group believes that, in fact, our revenues should come not
from more taxes but from more taxpayers; that what we need is more
people being employed, more businesses being created that will pursue
tax reform, that will pursue regulatory reform. But, ultimately, we
look for more revenue for government from economic growth, not from
growth in taxes. We believe the private sector creates these jobs, not
government and not politicians; that jobs in America are created when
everyday people from all walks of life start a business or expand an
existing business.
I believe and we believe in a safety net program, programs that exist
to help those who cannot help themselves, and to help those who have
tried but failed to stand up and try again but not safety net programs
that function as a way of life, and believe that America's national
defense and our role in the world with the strongest military that man
has ever known is still indispensable.
These are two very different visions of America and two very
different types of solutions. Ultimately, we may find that between
these two points there may not be a middle ground; that, in fact, as a
nation and as a people we must decide what we want the role of
government to be in America moving forward.
Let me close by saying this has been a unique week for me in a couple
ways. One has been, of course, the debate that has happened. The other
is my family has been here for the better part of a week, young
children. We had an opportunity today after the vote to walk around a
little bit and look at all the statues and the monuments that pay
tribute to our heritage as a people. It reminds us that we are not the
first Americans who have been asked to choose what kind of country we
want or what role of government we want in our country. It is a choice
every generation before us has had to make.
Even in this Chamber, as I stand here, you can sit back and absorb
the history of some of the extraordinary debates that took place on
this very floor, debates that went to the core and to the heart of what
kind of country we wanted to be moving forward. The voices of those
ancients call to us even now to remind us that every generation of
America has been called to choose clearly what kind of country they
want moving forward. And that debate will continue. It will define the
service of this Congress and for most of us who are here now. I pray we
choose wisely. I look forward to the months that lie ahead that we will
choose and make the right choice for our future and for our people.
I yield the floor.
The PRESIDING OFFICER. The Senator from New Hampshire.
____________________