[Congressional Record Volume 159, Number 9 (Thursday, January 24, 2013)]
[Senate]
[Pages S243-S245]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                            FISCAL PLANNING

  Mr. THUNE. Madam President, I come to the floor to talk about the 
debt crisis facing this country and the opportunity we have to address 
this issue in a way that balances the budget and ensures the long-term 
fiscal solvency for future generations.
  The recent fiscal cliff agreement which enacted tax relief for 99 
percent of Americans addressed the revenue side of the equation. But as 
everyone knows, revenue increases alone are not going to solve the debt 
crisis. In fact, the tax increases that went into effect as a part of 
the fiscal cliff deal generate enough revenue over the next 10 years--
and I should say if we annualize that over the next year--to fund the 
government for less than 1 week next year. So all the talk about the 
higher revenues and what that will do to address our long-term fiscal 
solvency and what it will do to address the deficit, if we think about 
it in those terms, it puts into perspective what the real problem is.
  We have a debate in this city and in the Congress all the time about 
whether we can address the huge debt we have in front of us--the 
trillion-dollar annual deficits--by raising taxes on the so-called rich 
and people in the higher income categories. That was done. That was 
done as part of the fiscal cliff negotiations that occurred. Remember, 
those taxes were all scheduled to go up. They were scheduled to go up 
on everybody--anybody who had income tax liability on January 1. 
Because of the agreement that was reached, we were able to protect 99--
in my case in South Dakota more than 99--percent of taxpayers from 
those tax increases. That being said, there are those in the higher 
income categories and some businesses that will see higher taxes as a 
result of that. But those higher taxes represent enough revenue next 
year to fund the Federal Government for less than 1 week.
  The question before us is, What do we do for the other 358 days of 
the year? That is what we have to start talking about, the real 
problem: What truly affects and afflicts Washington and our fiscal 
situation for the foreseeable future and for the long-term future; that 
is, government spending.
  The reality is the Federal Government doesn't tax too little; it 
spends too much. Over the past 4 years, the deficit has exceeded $1 
trillion each

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year. The long-term outlook is even worse. This country faces 
unsustainable fiscal imbalances largely because of entitlement programs 
such as Social Security and Medicare that have not been reformed in a 
way that aligns our current demographics with the needs of these 
programs, which must be done if we are going to save and protect these 
programs for future generations.
  Entitlement spending is the largest driver of our national debt over 
the long term. While it is true Federal revenues as a percentage of GDP 
have declined over the past few years, this was true because of the 
great recession, not because tax rates were too low. The average ratio 
of Federal revenue to GDP over the past 40 years has been roughly in 
the 18-percent range. Based on Congressional Budget Office data, it is 
expected that Federal revenues will exceed their historical averages 
within the next 10 years and remain there for the foreseeable future, 
even without additional tax increases.
  I wish to illustrate with this chart which I think tells the story. 
We always talk about a picture telling a story in exchange for a 
thousand words. I can talk a lot about this, but I think this visually 
illustrates it perhaps as well as anything.
  If we look at the green part, that represents Federal revenue 
historically, and this goes back to 1980. If we took this chart back to 
literally the 1970s, late 1960s, we would find, I think over that time 
period, the revenues stayed pretty static. They go up and down a little 
bit based on what is happening in the economy, and of course we have a 
downturn in the 2007 and 2008 timeframe, but revenues are starting to 
climb back up to that historical average. So it is about, give or take, 
18 percent of GDP. That is what historical revenues are.
  The black strip, which may be perhaps hard to see, is what was 
enacted in the fiscal cliff negotiation. Those are enacted tax 
increases that will add a little bit to the total as we project out. 
This chart takes us out literally to 2040.
  The purple represents the additional taxes the President would like 
to get. If the President got everything he wanted in the form of taxes, 
the revenue picture would be about right here. Again, this takes us 
from where we are today out to about 2040. As we can see, even if the 
President got all the tax increases he wanted, represented by this line 
right here, it still doesn't come anywhere close to dealing with the 
spending that is going to explode in the outyears if we don't do 
something to rein that in by reforming many of these programs I just 
mentioned.
  If we are going to save and protect Social Security and Medicare for 
future generations, we have to reform those programs in a way that 
doesn't create this huge red line that spikes into the future and 
literally bankrupts the country. In fact, Social Security ran a cash 
deficit in 2010. Medicare, we are told by the actuaries, will be 
insolvent by the year 2024. In fact, in the hospital portion of the 
Medicare trust fund, we are told it may be insolvent by the year 2016. 
These are important dates to remember because those are the dates at 
which the revenue coming in from the payroll taxes that support Social 
Security and Medicare no longer pay for the benefits paid out to 
beneficiaries.

  We have this sort of train wreck coming. We know what drives Federal 
spending are these entitlement programs. What we call mandatory 
spending in the Federal budget is about 60 percent now of all Federal 
spending, largely imposed by Social Security, Medicare, and Medicaid. 
We have this crisis looming. We see the way this thing just starts 
exploding in the outyears because of the demographics of the country. 
We have more baby boomers who are reaching retirement age, people 
living longer--all good things--but we have to align those programs 
with the demographics of this country and today they are not. Today we 
are headed on a path that will take us toward a fiscal train wreck 
unless we do something about that.
  I think it is important to point out the reason we are where we are, 
the reason we are running nearly $1 trillion deficits or north of $1 
trillion deficits every single year for the past 4 years is because 
spending has increased dramatically over that timeframe. Again, just to 
put that into perspective, before the great recession in 2007, the 
Federal Government was generating about $2.5 trillion annually in tax 
revenue. At that time, the government was spending about $2.7 trillion 
each year. So we had somewhere on the order of a couple hundred billion 
dollars in annual deficits.
  As I said, revenues dropped off a little bit from that period in 2008 
in the financial meltdown, but those have started to pop back up to a 
more historic and traditional level. So now revenues are back up to 
roughly that $2.5 trillion annual range. What has changed over that 
same period of time, between 2007 and 2012, is the amount the Federal 
Government spends annually.
  I just mentioned that in 2007 the Federal Government spent $2.7 
trillion. We are now at the end of fiscal year 2012, which ended on 
September 30 of this year, and the Federal Government spent $3.5 
trillion. We saw almost a $1 trillion increase in spending over that 5-
year period at a time when revenues have stayed somewhat static, 
although they dipped into recession, but now they have come back, as I 
said, to that more historic level.
  Essentially, what is driving these deficits is the massive runup in 
spending. What caused them? We had a stimulus program that was going to 
be one-time spending, much of which I think has gotten factored into 
the baseline. Eventually, we are going to have with the new health care 
mandates enormous amounts of new spending associated with that, which I 
think is going to make this picture much worse than it looks already. 
But my point is we have a fiscal crisis in this country which needs to 
be addressed. We have been kicking that can down the road for way too 
long and we have run out of road.
  The Congressional Budget Office has made it abundantly clear that in 
each of their assessments of our fiscal situation as a country, most 
recently in November of 2012, a couple months ago, they said the 
following:

       With the population aging and health care costs per person 
     likely to keep growing faster than the economy, the United 
     States cannot sustain the Federal spending programs that are 
     now in place.

  That is from the CBO. They track this stuff on a daily basis for us.
  We have a real challenge ahead of us. We have a major problem. I 
would argue, again, this is predominantly a spending problem, and I 
think it is illustrated, again, by this chart. When we look at 
government revenues, it is a fairly flat line. Even with the ups and 
downs in the economy, it averages about 18 percent of revenue. 
Actually, without any changes in the baseline, I think it ends up at 
about 18.6 percent of revenue a decade from now. But what we see is 
spending, which historically has been in the 20- to 25-percent range if 
we go back over the past 40 years, is going to explode. The spike we 
see right here is why we have a fiscal crisis on our hands and why it 
is so important we act to rein in out-of-control Federal spending.
  I suggest to my colleagues in the Senate, as I have for a long time, 
that where this starts is with passing a budget. We have to go back a 
long time now. I mentioned this the other day, but the last time the 
Senate passed a budget the iPad didn't even exist. Most of us now take 
iPads for granted. Many Americans--not all but some Americans--have 
iPads. They came on the scene around April of 2010. There hasn't been a 
budget passed in the Senate since April of 2009.
  We are going on 4 years and now 1,360-some days since the last time 
the Senate acted on a budget. That is irresponsible. It is especially 
irresponsible in light of this problem. We have a responsibility to the 
taxpayers of this country, as stewards of their tax dollars, to do what 
we can to ensure that we are putting the fiscal house of this country 
in order in a way that will ensure that future generations of Americans 
have at least as good, if not better, standard of living and quality of 
life than what the generation that came before us had.
  That is not going to happen because we are piling on the backs of 
future generations enormous amounts of debt. In fact, the $16.4 
trillion in debt the Nation has today, if you break that down an on an 
individual basis, that is about $53,000 for every man, woman,

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and child in America. That is what every individual owes, every 
individual in this country owes of that $16.4 trillion in debt. That is 
not fair to future generations.
  It is up to us as leaders to look at these things and make decisions 
today that are in the best interests of future generations. I think it 
has been sort of a tradition in this country, a heritage, if you will, 
for one generation of Americans to sacrifice so that the future 
generation, the next generation of Americans may have a better life, a 
better standard of living, a better quality of life.
  That is certainly something that is true where I come from in South 
Dakota and where the Chair comes from in North Dakota. We represent 
people who understand that you sacrifice so that the next generation 
and those who come after you have a better life than you had.
  If we don't change the way we are doing things, this next generation 
will be the first generation of Americans where that is not true. 
Literally, they will have a lower standard of living and a lower 
quality of life than what we experienced because we weren't willing to 
live within our means. This is because we continued to spend money we 
didn't have, we continued to borrow money from China, and we will hand 
the bill to future generations.
  It is unconscionable, given this picture--and, again, a picture 
speaks a thousand words--that we haven't done a budget in the Senate in 
the last 4 years. There is always a blame game played in Washington, 
DC, and I understand that both sides have contributed over the years. 
When my party was in charge of the Congress we spent too much. 
Obviously, since that time, since we have been out of the majority in 
Congress the numbers have increased dramatically.
  If you look at the amount of debt we piled up just in the last 4 
years under the current administration, it is about $6 trillion that we 
have added to the debt in that amount of time. The spending is 
exploding. The tax revenues are staying fairly steady over time, as I 
have pointed out with this particular graphic.
  One thing we know for certain is that raising taxes doesn't solve the 
problem. If the President got everything he wanted in terms of 
additional tax increases, and that would be this purple line right 
here, it doesn't come anywhere close to addressing the amount of 
spending we have already put on the books. We are going to have to 
borrow to pay and hand that bill to future generations. You can only do 
that for so long. It is high time that the Senate got on board and 
started doing the budget.
  I served on the Budget Committee for the last 2 years. I had hoped 
that being on the Budget Committee would be a place where a lot of big 
debates would occur about how to deal with these big fiscal issues that 
are facing our country. I turned out to be wrong. We didn't do a 
budget, we didn't mark up one, we didn't put one on the floor of the 
Senate. We didn't vote, we didn't have amendments, and we didn't do 
anything to address this fiscal crisis. To be fair, the House of 
Representatives, every single year, on time, has passed a budget.
  The President of the United States, who needs to be a party to this, 
is the only 1 of 307 million Americans who can sign a bill into law, 
can engage the American public and the Congress in a way that would 
address this. The budgets he submitted to the Congress, when they have 
been voted on in the Senate and the House, haven't received a single 
vote, not a single vote. Neither Republicans or Democrats in the House 
or the Senate have voted for the budgets the President has submitted.
  Why? Because they are not serious. The President hasn't taken this 
issue seriously. Neither has the majority in the Senate, where we 
haven't had a budget now for 4 consecutive years.
  It is high time that changed. I hope it will. I am encouraged, 
actually, by what I have been hearing from my colleagues. This year, 
perhaps now, finally, after 4 years, we will actually do a budget. We 
may put a plan in place for how we are going to address this fiscal 
crisis, this amount of spending that is going to bankrupt the country 
unless we take steps to avert it.
  There are lots of ideas out there. It is not like we don't know what 
the issues are, like we don't know what the problems are. We do. There 
have been many bipartisan commissions that have studied this and have 
examined it thoroughly, that have all come to the same conclusion with 
regard to what the various problems are--and, frankly, for that matter, 
what the solutions are.
  My colleague, Senator Hatch, was down here earlier this morning 
talking about some of those suggestions. Many of those suggestions, as 
I have said, have come from bipartisan commissions. We know if we do 
nothing, we are going to bankrupt the country and ensure that the 
programs that many Americans rely on today are not going to be 
available to future generations of Americans.
  I would hope this is the year in which we do a budget, and this is 
the year in which the President engages in this discussion in a 
meaningful way that allows us to put in place a path that will avert 
what is going to be a major crisis. The problem is not that we tax too 
little, it is that we spend too much.
  Madam President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Vermont.
  Mr. LEAHY. Madam President, I would note that, of course, we have 
passed a budget, and that is why we are facing sequestration now. That 
wasn't just a resolution; that was an actual law, signed by the 
President. A lot of people who voted for it don't like it, but we voted 
for it.

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