[Congressional Record Volume 159, Number 23 (Wednesday, February 13, 2013)]
[Senate]
[Pages S678-S680]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
FISCAL CHALLENGES
Mr. THUNE. Mr. President, I come to the floor today to talk about the
fiscal challenges facing this country, and particularly the spending
problem we have and how it impacts not only the economy but also the
lives of the American people.
Last week, the nonpartisan Congressional Budget Office released the
latest Budget and Economic Outlook, which confirmed the threat that
long-term fiscal imbalances pose to the Nation's economy. The
Congressional Budget Office found that the national debt will climb by
$10 trillion, to $26 trillion, over the next 10 years if Federal
spending continues on its current trajectory.
Spending on mandatory programs will remain on auto pilot, resulting
in high annual deficits. To kind of put things in perspective, if you
go back to 2007 and you look at what the Federal Government spent, it
was about $2.7 trillion annually. If you look at what the Federal
Government spent in fiscal year 2012, which ended September 30 of last
year, it was $3.5 trillion, an increase of nearly 30 percent.
Inflation during that same time period was 10.8 percent, meaning that
government grew at almost three times
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the rate of inflation. Again, I want to emphasize what I think is an
important point here, because in the discussion we are having about
spending and debt, there is somehow this assertion that has been made
that this is not a spending problem, that actually this is more a
revenue issue.
Well, again, if you look at what has happened just in the past 5
years, spending has increased nearly 30 percent, Federal spending, or
at a rate of almost three times the rate of inflation. So clearly
spending has increased dramatically just in the last 5 years. The trend
is projected to continue over the next 10 years and beyond, with
spending exceeding its historical average over that time period, and
then ballooning in the years beyond that.
Such levels of spending will cause the Federal debt to grow, and
according to the Congressional Budget Office, ``Such a large debt would
increase the risk of a fiscal crisis during which investors would lose
so much confidence in the government's ability to manage its budget
that the government would be unable to borrow at affordable rates.''
Again, why is this important? Well, obviously, if the deficits
continue to continue year after year, adding more and more to the
Federal debt, eventually investors are going to lose confidence in our
government. They are going to demand a higher return, higher interest
rate when we borrow money. That obviously has an impact all across the
economy. Because when interest rates go up, everything else that is
pegged to it goes up. If you look at middle-class Americans who are
trying to borrow money, for example, to buy a home or to get a college
education or for a small business to make investments in order to
create and expand jobs, the interest rates go up for everyone.
Inflation also goes up if the Nation's fiscal challenges are not
addressed, meaning that the hard-earned dollars are not going to go as
far. That is going to put further pressure on hard-working middle-class
families.
The threat of the budget challenges facing this country and our
economy is very real, because of this report that came out last week
from the Congressional Budget Office. It confirmed we are headed toward
Greece if we do not take the steps that are necessary to change the
direction we are on.
A lot of that reality, however, unfortunately, is lost on lots of
people here in Washington, DC. As I said earlier, there has been this
debate about whether we do, in fact, have a spending problem. Over the
weekend, the Democratic leader in the House of Representatives, Nancy
Pelosi, repeated what has become doctrine to many in the Democratic
Party; that is, the idea that the U.S. Government does not have a
spending problem.
She said, ``It is almost a false argument to say we have a spending
problem.'' This comes from the top Democrat in the House of
Representatives. ``It is almost a false argument to say we have a
spending problem.'' Well, obviously the White House scrambled quickly
the next day to come out: Yes, yes, we know we have a spending problem.
But there is reporting out there that suggests the President of the
United States has also made this assertion, that this is not a spending
problem. I do not know how you can examine the Federal budget
projections and not come to the conclusion that we have a spending
problem. It is driving our national debt, a debt that is very harmful
to our economy.
You have to look no farther than the Congressional Budget Office
report last week to see that this is a spending problem, not a revenue
problem, because that same CBO report said that the revenue--money that
is raised by the Federal Government--is returning to its historical
average of 17.9 percent of GDP. That is the way we have measured the
amount of revenue coming into the Treasury as a percentage of our
entire economy. You measure that over time, and getting back to the
historical average, the 40-year average would be 17.9 percent.
If you look at the year 2015 as a case in point, the revenues get
back to 19.1 percent of GDP, which is a 25-percent increase in 2 years,
significantly exceeding the historical average. If you look at the 10-
year outlook the CBO came up with, they said revenues would average
18.9 percent over the next decade, which is almost a full percentage
point more than the 40-year historical average.
The point is this: Revenues are not only at historic levels, will be
there by 2015 and stay there for the next decade, but they will exceed
the historic average for revenues over the next 10 years. So clearly,
what we are talking about here is not a problem of Washington taxing
too little, it is a problem of Washington spending too much.
I know that truth is hard and that math is hard to accept for the
people who want to grow government, but we absolutely have to govern in
reality. What the math shows is that mandatory spending, which as I
said is on auto pilot, continues to squeeze the Federal Government and
the Federal budget to a point where we are going to face a Greece-style
fiscal crisis if Washington continues to punt on the hard decisions
that have to be made.
Mandatory spending comprised roughly 60 percent of Federal spending
in fiscal year 2012. If you look at the big drivers of mandatory
spending, Medicare, Medicaid, and Social Security represented 40
percent of that total, according to the Congressional Budget Office.
Congress and the administration have an opportunity in the coming
months to reform these entitlement programs not only to get this
country back on a more sustainable fiscal track but also to save and
protect these programs not only for current retirees but for future
generations of Americans as well.
That is why I was disappointed last night that the President, in his
State of the Union Address, failed to lay out a plan to address the
fiscal challenges our country faces. I hope the President and my
colleagues here in the Congress will come to the table and work with us
to solve these problems, particularly as we consider ways to address
the sequester, the continuing resolution which follows after that, and
the fiscal year 2014 budget resolution.
We cannot simply wait and watch these programs crumble under the
weight of looming insolvency. We know Social Security operated at a
cash deficit in 2010. The Medicare trustees have told us that Medicare
will be insolvent by the year 2024 and the HI trust fund actually as
early as the year 2016. If we are going to keep the promises we have
made to current retirees and to future generations of Americans, we
have to make these programs solvent. That means we have to reform them
in a way that saves and protects them and makes sure they are fiscally
sustainable not only for today but for the future as well.
I have to say, as I listened to the debate about the issues of
spending and debt, there is an argument that is made by those on the
other side that this is just because of the two wars, and the two wars
drove up spending; you know, they were not paid for and that is the
reason we have this $16.4 trillion debt. Well, obviously the wars have
contributed to that. But if you look at through 2012, that is about
$1.4 trillion. Obviously, I would say, to be fair, Republicans have
contributed to this as well as Democrats. When Republicans were in
charge of the Congress, we did not do a good enough job of keeping
spending under control.
But the fact is even if you count in spending on Iraq and
Afghanistan, that is about $1.4 trillion. The total debt now, as I
said, is over $16 trillion, scheduled to go to $26 trillion 10 years
from now. Over the course of the first 4 years of this President's
term, his first term in office, the debt has increased almost $6
trillion. So it is hard to feature any objective analysis of these
facts and this data and say it was the wars that somehow caused all of
this.
Washington has been overspending for a long time. It is high time for
those habits to change. If you look at the war that is winding down,
the cost of that, the resources we are putting into these conflicts,
those dollars are not going to be showing up again as expenditures in
the next few years. We still have the Congressional Budget Office
telling us at the end of the next decade we will have added an
additional $10 trillion to the debt. So clearly that has certainly been
a factor, but it has not been the main factor.
There is again no objective analysis that would suggest spending on
the wars has been the driving reason for why we are facing the debt
crisis we have today. I would simply say too
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that when you are in a hole, it is advisable to quit digging.
Obviously, we continue to look at ways to add more and more spending
and, therefore, more and more debt. The health care bill is not
something anybody on my side here in the Senate supported when it
passed in 2009 and early 2010. But that too is going to drive up
spending and is going to drive up debt as we head into the future.
You heard from the President last night a whole new series of new
spending initiatives, ``investments,'' he called them, in a whole range
of areas. As he was sort of laying that out, those of us who were
listening to that message were thinking to ourselves: Okay, if you put
a calculator on this thing, it keeps going and going and going. Yet the
President said we did not need to add a single dime to the deficit.
Well, I do not know how anybody could accept that with a straight face.
It flat does not pass the smell test.
We have a spending problem here in Washington, DC. The facts bear
that out. The revenues are going up. They are going to go up 25
percent, according to the Congressional Budget Office, in the next 2
years. In 2015 they will be at 19.1 percent of GDP, an average we have
not seen--or a number we have not seen in a long time. Then they will
stay roughly at that for the next decade. This is not a revenue
problem. This is not a problem where Washington taxes too little. This
is a problem where Washington spends too much.
If you look at the other side of the equation, spending continues to
go up as a percentage of GDP. We see a little bit of relief here in the
next few years, but then when the cost of the Affordable Care Act
starts hitting, when you start seeing the demographics of the country,
as they continue to change, if we do not do something to save and
protect Social Security and Medicare for future generations, it is
going to bankrupt us.
We are headed for a train wreck. We have to do something about that
and recognize what that problem is. That problem purely and simply is
that Washington spends too much. It is a spending problem. That is why,
again, when I heard the top Democrat, the minority leader in the House
of Representatives, say over the weekend that it is a false argument to
say this is a spending problem, I was shocked, because I think most
Americans would argue, as they look at this, and they can do the math,
Washington has a very serious spending problem which needs to be
addressed. It needs to be addressed sooner rather than later.
I thought the report that came out from the Congressional Budget
Office last week was instructive for a number of reasons. It pointed
out the impact that debt is going to have as we face this debt crisis
in terms of interest rates, in terms of inflation, in terms of loss of
jobs, and a more sluggish economy. We know from history that when you
get a certain amount of debt, it becomes such a drag on your economy
that it reduces economic growth. So we have seen this anemic, sluggish
economic growth which is going to be continued now for the foreseeable
future. We have slower growth, fewer jobs, massive amounts of debt.
Eventually what that is going to mean for the middle-class American is
higher interest rates when it comes to buying a home, when it comes to
buying a car, when it comes to financing a college education. It is
going to mean lower take-home pay when the economy slows down and there
is not the demand for workers out there. There are so many adverse
impacts on our economy from carrying the kind of debt load we are
carrying today. I think we have a responsibility to lead.
I hope the President of the United States will lead on this issue;
that he in his budget will put forward the types of remedies that are
necessary not only to deal with our short-term crisis in the
sequestration but also to put us long term on a sustainable fiscal path
by proposing reforms, reforms to these programs that are driving
Federal spending, that are going to add massive amounts to our debt
over the course of the next decade and beyond, and at the same time
look at things we can be doing that would generate economic growth,
that would create jobs in this country. Because when the economy is
growing and expanding, then all of these other problems look much
smaller by comparison.
Republicans here in the Senate are ready to work with the President,
work with Democrats.
We are anxious to go to work on entitlement reform to save Social
Security and Medicare. We are anxious to go to work on reforming our
Tax Code in a way that would unleash economic growth to obtain the
robust growth we need in the economy to create jobs and make the debt
crisis we face look much smaller by comparison.
I hope in the days ahead the President of the United States, the
leadership on Capitol Hill, and the Congress will do what we should
have done a long time ago. It is long overdue for action. It is high
time that we become busy and do the work of the American people, which
is about providing a more secure, prosperous, and a safer, debt-free
future for future generations. Anything less is negating or undermining
the responsibility we have to the American people.
Mr. President, I yield the floor.
Mr. REID. I ask unanimous consent that the quorum call be rescinded.
The PRESIDING OFFICER (Mr. Brown). We are not in a quorum call.
Mr. REID. Miracles never cease.
The PRESIDING OFFICER. That is true.
The Senator from Nevada.
Mr. REID. Mr. President, I have spoken with Senator Inhofe, the
ranking member of the Senate Armed Services Committee. It is very clear
that he and a number of Republicans are not willing to enter into an
agreement on the Hagel nomination.
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