[Congressional Record Volume 159, Number 143 (Saturday, October 12, 2013)]
[Senate]
[Pages S7427-S7430]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
DEFAULT PREVENTION ACT OF 2013--MOTION TO PROCEED--Continued
The PRESIDING OFFICER. The Senator from Iowa.
Mr. HARKIN. Mr. President. I understand that we are in session for
Senators to speak for up to 10 minutes?
The PRESIDING OFFICER. The Senator is correct.
Mr. HARKIN. I thank the Presiding Officer.
Mr. President, we are here on Saturday, and we just had a very
significant vote in the Senate. The vote was on whether we would move
to a bill, fully debatable, to raise the debt ceiling without any
strings attached.
The Republicans, en bloc, voted against that. As a result--since we
need 60 votes to bring a bill to the floor--the vote was 53 to 45.
There should be no mistake in anyone's mind. This was a very clear
vote, simply to move to a bill, fully debatable, amendable even, but
the Republicans would not even vote to go to that bill today.
Quite frankly, I must admit that when I was driving in to the Senate,
I was thinking about this. I thought what we will do is that we will
get on the bill. Obviously they will vote for cloture to proceed to the
bill, and then we will get on the bill. I was wondering to myself how
long we will have to be on the bill, what kinds of amendments would be
offered, and then would we have to file cloture on that bill also.
I was quite surprised to see every Republican vote against even going
to the bill. It begs credulity. I am incredulous at this, especially
with the markets opening in Asia later tomorrow, on Sunday. How are
they going to read this? I think if we had voted to at least move to
the bill and debated it, they would have stabilized somewhat because
they would say at least they are willing to talk about it. Now they can
look at the bill and say simply, Republicans are not going to discuss
this.
It is shocking that this would have transpired today at this last
minute. No one gave up anything in the bill. It was simply to move to
the bill, and the Republicans said no.
We have been closed for 2 weeks. I have come to the floor several
times, as I know others have, to talk about this irresponsible and
dangerous episode in our Nation's history. I understand that different
groups are coming together trying to float some kind of an idea.
I hope something comes of it. I truly hope cooler heads will prevail
and we will reach some agreement that will allow the government to
reopen, allow the debt ceiling to be extended with no strings attached
for at least 1 year or more--at least to get us through the next
elections of 2014--and then we ought to go to negotiations.
Our Budget Committee passed a budget. The House passed its budget.
They should meet and try to work it out in conference. Our
Appropriations Committee passed our bills. The House hasn't passed all
of them. Then we could go to work and work these things out in the next
6 weeks, up to December 1. I hope that works and we get that kind of a
compromise, but I do not want to see some kind of compromise which says
to one side or the other that you have to do this or you have to do
that.
It should be open. Our Budget Committee is under the able guidance
and direction of Senator Murray of Washington. I am not a member of the
Budget Committee, but they ought to go to conference without any
strings attached or some artificial levels put in. They ought to take
what we passed as the budget, as the House did.
What is happening is that--and it is getting worse every day, another
week, another 2 weeks--it is unfathomable how many more people are
going to be hurt.
A lot of Americans may think sequestration wasn't a big deal or that
closing the government wasn't. I saw a piece in the paper where some
tea party people were meeting. What came through is they weren't being
directly hit or hurt by the government shutdown.
One respondent was quoted in the paper as saying: We need to go back
to the late 1800s, the way this country ran then, where everybody grew
their own vegetables.
I would say to that person: If you want to grow your own vegetables,
you can grow your own vegetables. If you want to live somewhere without
electricity, air conditioning, with no health care, and never go to the
doctor, you should be able to do that. But why should you make the rest
of the country go back to the 1800s?
This is what a handful of people are trying to do. They can't do it
legislatively, they can't do it through the courts, they can't do it
politically, and they can't win elections on that basis. So they are
trying to do it by holding a gun to our heads, keeping the government
closed, and threatening to default on the full faith and credit of the
United States.
I wish to say in the few minutes I have remaining what another
yearlong sequester would mean in human terms. These are things that
come under the jurisdiction of my Appropriations Committee, which I
have been privileged to chair or where I have been the ranking member
since 1989. We have never had these kinds of problems before--
Republicans or Democrats--when Republicans ran it or Democrats. I have
been back and forth on this many times, in terms of Republicans
chairing it--Democrats, Republicans, Democrats. We have never had these
kinds of problems.
If we go 1 more year under sequester, that means 177,000 fewer
children will get Head Start services--177,000--and 1.3 million fewer
students will receive Title I education assistance. What is Title I?
This goes to the poorest kids, the poorest families, the poorest areas.
So 1.3 million low-income kids won't be helped.
Oh, our kids will be fine, kids from the middle class, the upper
class, and of Senators and Congressman. They have money. I am talking
about the poor kids, and there are 1.3 million.
There are 760,000 fewer households that would receive less heating
and cooling assistance under the Low Income Home Energy Assistance
Program, LIHEAP, and mostly they are elderly poor people.
There will be 9,000 fewer special education staff in the classroom.
In other words, under IDEA we provide money for special education
teachers and support staff for special education students, and 9,000
will be cut.
There will be $291 million less for childcare subsidies for working
families, for people who need childcare subsidies. They are low income,
they are going to work every day, but they need some childcare help--
$291 million cut away from that. How many will not be able to go to
work or what will they do with those children? Will they put them in
substandard childcare facilities?
One thing that is mind-boggling is we have a program in Medicare that
goes after fraud, waste, and abuse. We know from the past that for
every dollar that we put into that, we actually recover $7.90. I don't
mean something phony. I mean we actually bring back $7.90 for every $1
dollar we put into it.
Because of the cut under sequester that means in the next year there
will be $2.7 billion that we will not recover. By reducing the number
of people in the fraud, waste and abuse section, that means it opens
the door to fraud. People say: Oh, they are not there. They are not
checking, right?
People say: Well, now we are going to give them flexibility under
sequester. But there is no flexibility. That has to be cut.
Another yearlong continuing resolution under sequester means $2
billion less for the National Institutes of Health, which means 1,300
fewer research grants.
Again, I would say that people say: Well, we will give flexibility.
My colleague on the other side says: We will have sequester, but we
will leave flexibility to the departments.
Let's see how that goes.
The funds for the Administration for Children and Families--what
would they do? Would they preserve Head Start slots by cutting
childcare subsidies?
At NIH, would you preserve cancer research by cutting Alzheimer's
research? These are terrible choices. Flexibility does not answer these
questions. It is not the answer.
When they talk about flexibility, I know what is on their mind--
military spending. Everybody likes to talk about the sequester and the
level of sequester. Do you know what the House did? A sequester says it
is 50/50, 50 percent cut from defense, 50 percent from
[[Page S7428]]
nondefense discretionary. What the House did in the Ryan budget was to
leave things whole and take it out of things like Head Start, IDEA,
special education, and programs such as that. They took it out of
there, but they left defense whole. That is not at all what was in
sequester.
In my area of Health and Human Services, education, labor, Centers
for Disease Control and Prevention, NIH, next year we would cut about
$34 billion. People will say, I don't know what that means. As I said,
it is how many more children will not be in Head Start, how many more
families will not get childcare subsidies, how many more research
grants will not be funded by the NIH. We will not have our Centers for
Disease Control and Prevention epidemiologists out in the field
watching for food outbreaks, food-borne illnesses, et cetera.
It is a disaster if we continue with the yearlong sequester and a
continuing resolution. That is why we need a short-term one, so our
committees can go to work. Perhaps cooler heads will prevail, and we
can get a better budget for next year before the end of the year. To
me, this is the way to proceed.
I yield the floor.
The PRESIDING OFFICER. The Senator from Pennsylvania.
Mr. CASEY. I commend the words of our chairman, the senior Senator
from Iowa, for his warnings about the impact of sequestration and the
across-the-board indiscriminate cuts. We are grateful for that because
we need to be thinking about what happens down the road when we have a
budget agreement.
I want to start today with a brief comment on what happened earlier.
At about noontime we had a vote, which is a procedural vote which I was
hoping would go in a certain direction, but it didn't. It was a vote to
move forward on the question of how we are going to avoid default. I
don't think it is the last word on this issue for the next few days,
but I was hoping that the Republicans would at least allow a debate on
how we can avoid default. So far that hasn't happened, but we are
confident that in the next couple of days we will resolve this. But I
do think it is important we lay a foundation for why we need to avoid
default, because we have talked a lot about the consequences and the
impact of a government shutdown--and that remains what might be called
a clear and present danger to the middle class and to our economy--but
we have to talk at the same time about the consequences of default
because we are only days away from the deadline.
Maybe the best way to start is not with numbers but with part of a
letter I received from a constituent this week. The letter was dated
October 8, so my assumption is that most of what is contained in this
letter are fears about and the impacts from the shutdown only. The
sentiments expressed in this letter will only grow in significance and
severity as we get closer to the deadline and closer to default. I am
reading just in pertinent part. This particular constituent is from
northeastern Pennsylvania, about an hour from where I live, but in the
same basic region. She talked about her own circumstances and that of
her husband and then she continued on:
Besides our personal difficulties due to the budget
impasse, my elderly parents live with the worry of when and
if they will receive their Social Security checks. At 85 and
83 they should not have this uncertainty. These should be
their golden years. It breaks my heart to hear my mother say
she can't sleep and has a stomachache from the worry about
where our country is headed. Middle- and low-income families
cannot afford another economic downturn. We are just barely
recovering from the last one.
That is what she says about her parents. Now, again, it is my
assumption the worry and the anxiety expressed in that paragraph are
solely attributable to the government shutdown. Those worries and
anxieties, and, frankly, real pain, the physical pain expressed in that
paragraph about her mother, will only grow the closer we get to
default, because we know the consequences of default are almost
unimaginable--about the worst economic hit we could take as a country.
So that is why we have to take every step necessary to avoid it.
But I think the words of a constituent from Pennsylvania speak in
this case for the Nation. Why should people have a worry, even if that
worry is unfounded? We know Social Security checks are going out now,
thankfully, but they are slowed down substantially if there is a
default. We know even in a shutdown, if you reach the age of 65, it is
going to take you a while to get the checks you are entitled to because
the process of validating your eligibility is held up. But why should
there be uncertainty? Why should any mother or father or grandmother or
grandfather have an anxiety and a worry that leads them to have a
stomachache, in the case of this letter, or where they can't sleep
because of the political agenda of one part of one political party in
one House of Congress?
So that is where things are with people's feelings and their
anxieties, and we have to be able to respond to that.
The default question itself is of great significance now. Maybe 10
days ago it wasn't, but I am afraid we are in a period now where just
the talk of default, just getting close to default, will have an
adverse impact on our economy. This did happen in 2011. That is
irrefutable. All the data, all the facts, show just getting close to
default has an adverse impact on the economy. By one estimate, a recent
estimate, that was almost a $20 billion hit to the economy, if you
measure it over 10 years. There are all kinds of other consequences
that I won't dwell on right now.
There were two statements made by Secretary of the Treasury Jack Lew
in his opening statement to the Finance Committee on Thursday morning
that I think we should be reminded of. This was in reference to the
question, what if you go over the line in default and you have to
decide which bills to pay, which is the wrong way to go, but Secretary
Lew posited these two questions.
How can the United States choose whether to send Social
Security checks to seniors or pay benefits to our veterans?
That is question No. 1. Question No. 2.
How can the United States choose whether to provide
children with food assistance or meet our obligations to
Medicare providers?
These are the kinds of questions we are all going to have to answer
if we--as some people apparently want us to do--go over the default
line for the first time in American history. To say it is fiscal
madness doesn't begin to describe it.
Secretary Lew also said something else which we should contemplate
today. He said:
It is irresponsible and reckless to insist that we
experience a forced default to learn how bad it is.
We have heard talk in this body and in the other body about maybe we
can survive if we go over the line; that maybe it is okay, maybe we can
prioritize payments. I think we should be reminded of those words.
Again, that quote:
. . . to insist that we experience a forced default to
learn how bad it is.
It makes no sense and, fortunately, there is a consensus against it,
but we still have work to do to prevent it from happening.
I will read as well a couple of lines from a letter I received from a
friend of mine who has spent a lot more years in the financial markets
and has spent a lot of years trying to get both parties in Washington
to come together fiscally. I will read some lines from this memo he
sent me. He was talking about what happens with default. It is like
anything else--if you default on your mortgage, if you default in your
personal life, you have a credit problem. He said:
From the standpoint of our creditworthiness, a default is a
default. Once you have defaulted, you are a--
And I will leave the word out he put in there because it may not be
appropriate for this Chamber, but I think people can figure out what
the word might be here.--
And everyone fears they will be the next party not to be
paid. As in the Lehman bankruptcy--
And here he is talking about the fall of 2008.
the potential for unintended consequences that spiral out of
control is enormous. In short, toying with default is not
akin to playing with fire but is more like handling financial
weapons of mass destruction. It is a violation of the trust
we place in our elected leaders to safeguard the welfare of
our country.
That is what this person, who I know has a lot of experience in the
markets, describes could happen in the event of default.
[[Page S7429]]
I will conclude with some quick references to the impact of default
as described by economists, as described by experts in the field of
measuring the impact of default, and folks who know a lot about what
would happen. I will read them as quickly as I can, because we know
some of these already but we have to remind ourselves: Increasing
borrowing costs. Many have talked and written about that. Damaging
economic growth. Higher interest rates. Higher debt payments. Slow
economic growth.
One expert was talking about the Lehman bankruptcy and then putting
that in the context of a default, and making the case that a default
has a much bigger impact than even the Lehman bankruptcy had.
Consider this: In 2008, the Lehman bankruptcy was an ``event that
triggered the financial crisis that caused the stock market to lose
half its value over just 5 months and helped to trigger the worst
recession since the Great Depression.''
That was just the Lehman bankruptcy. Imagine in the context of
default how much worse it could be.
Retirement savings. According to newer data, an equivalent hit could
cost--comparing it to what happened in 2011--the average person in his
or her fifties, who has been saving for 20 or 30 years, as much as
$11,000.
Mortgage payments would be hiked. After the 2011 shutdown, mortgage
spreads jumped by 70 basis points, which would have added $100 per
month to the cost of a typical mortgage.
So we have data from 2011 that measures the adverse impact on
mortgages just by getting close to default, not in the event of default
itself.
Disrupted payments. Delayed or disrupted payments would prevent 57\1/
2\ million Americans from receiving Social Security benefits in a
timely manner and interfere with payments to 3.4 million veterans.
I will read two more. Moody's chief economist Mark Zandi, who has
testified in front of the Senate many times--who, parenthetically, as
relates to the shutdown testified yesterday over in the House, because
the Joint Economic Committee is a joint committee--predicts that, just
as it relates to the shutdown, in this fourth quarter, the fourth
quarter we are in, we will have lost \1/2\ point of growth. So instead
of the GDP growth in the fourth quarter being 2\1/2\ percent, as Mark
Zandi would have projected absent a shutdown, with the shutdown we will
go from 2\1/2\ percent growth to 2 percent. That is a shutdown in one
quarter. Just imagine the impact on growth if we default.
Here is what Mark Zandi says. I am quoting him directly:
It would be devastating to the economy. Confidence will
evaporate, consumer confidence will sharply decline,
businesses will stop hiring, consumers will stop spending,
the stock market will fall significantly in value, borrowing
costs for businesses and households will rise.
And he goes on from there. But, look, you don't have to be an
economist to know the impact of default. All you have to do is read
what economists are saying across the board. These are people who
disagree on a lot of things. They might disagree on a budget item. They
might disagree on econometric modeling. They might disagree on tax
cuts. They might disagree on a usual Democrat versus Republican
approach to the economy. They might have fundamental disagreements on
everything, but on this they are speaking with one voice: Don't
default, they are telling us. Don't even get close to defaulting. Don't
even talk about or debate defaulting. Just prevent it from happening.
That is the overwhelming consensus.
Let me conclude with one reference here. When I got to the Senate,
one of the leading Republican voices on the budget--because he happened
to be the ranking member on the Budget Committee--was Judd Gregg from
New Hampshire. He had been a Governor of New Hampshire and then served
in the Senate for many years. This is what he had to say recently in
talking about what would happen in the event of default and
brinkmanship with the debt limit.
[It] is the political equivalent of playing Russian
roulette with all of the chambers of the gun loaded. It is
the ultimate no-win strategy. A default would lead to some
level of chaos in the debt markets, which would lead to a
significant contraction in economic activity, which would
lead to job losses, which would lead to higher spending by
the Federal Government and lower tax revenues, which would
lead to more debt.
So says the former ranking member of the Budget Committee, the former
Republican Senator from New Hampshire. So the idea that some think for
some reason we could go into default or even get close to it doesn't
make a lot of sense.
I will conclude with this thought. That letter I started with from my
constituent in Pennsylvania, who speaks for the country, I believe,
when she was talking about her parents--her 82- or 83-year-old
parents--and about the uncertainty they have, about the worry and the
anxiety that is literally causing, in the case of her mother, according
to this letter, physical pain, but even if it didn't rise to that
level, just the idea of a government shutdown coupled with the
potential default is causing that kind of anxiety and is really
disturbing, and I think it is an insult to so many Americans.
We have to come together and open the government at long last and
make sure we pay our bills and not even get close to defaulting, and
then we can have negotiations and discussions for weeks and months
about long-term and short-term issues. In the meantime, we have to make
sure we pay our bills and open the Federal Government.
Mr. President, I yield the floor, and I suggest the absence of a
quorum.
The PRESIDING OFFICER. The clerk will call the roll.
Ms. LANDRIEU. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Ms. LANDRIEU. Mr. President, as we exited the Chamber to go to our
Democratic caucus, I am certain my Republican colleagues and friends
were talking among themselves as well, trying to find a way forward.
A reporter stopped me and said: What do you think the Senate is going
to do?
I don't know the specifics, but I am most certainly hopeful and
remain cautiously optimistic that the Senate will step up to the job at
hand and fulfill the promise and hopes of our Founders, who created the
Senate to operate at times just like these where there seems to be no
way forward, to find a way forward; where the political winds have
gotten so bitter and cold, for the 100 of us to find a way forward to
help keep our economy whole and operating and functioning well, not
just for our Nation but for the world, which is important; to help
support and bolster the recovery that is underway; to set aside the
bitterness and the rancor and try to find a way forward.
I am very encouraged despite the fact that the vote was very
divisive--all Republicans on one side and all Democrats on the other. I
am confident because I know Members of this body well and I have been
here long enough to know that the many people of good will on both
sides of the aisle can try to find a way forward. And I know the
President of the United States is open to negotiation.
Maybe we can find resolution within the political parties, but that
is not what is important. What is important is finding a resolution in
the Senate of the United States for all of the people of the United
States. We do not represent narrow districts with narrow ideologies. We
represent States--big ones, such as California, medium-sized ones, such
as Louisiana, and small ones, such as Delaware. But inside of Delaware,
inside of Louisiana, and inside of California, there are people of all
different political persuasions. As Senators, when we run for office we
have to listen and take all of that in and then try to make the best
decisions we can. It is an honor to serve in the Senate even though it
is tough, it is hard, and it is very difficult at times.
I have been proud to serve here for 18 years and be among many groups
that have found compromise and the middle ground, that have tried to
work to understand where the other side is coming from and move our
country forward. It has not always been perfect, and none of us are
perfect here, but I am proud I have at least been one to say: Count on
me to try to see what we can do to resolve the situation. I want to say
that today for my constituents. That is what they want me to do. That
is what they sent me here for 18 years ago and what I know they want me
to
[[Page S7430]]
continue to do. I do feel strongly on their behalf that the government
should open and the 21,000 of them who have been wrongly laid off by
the actions of a minority--the government needs to open, and the debt
of the United States most certainly needs to be honored so this
economic recovery can continue.
But there are plenty of things we can negotiate. The debt of the
country is too high. We do need to have some earned benefit and
potential entitlement reform--not necessarily cutting benefits from
people who count on them but for the government to do its part to meet
people halfway. There are always efficiencies that can be created if we
work together.
So on behalf of my constituents, I am very hopeful that we can find a
way forward. I think Senator Reid has been providing extraordinary
leadership, and hopefully we can find a way forward.
I would briefly mention that there have been some very good
conversations going on about funding for the city of Washington--not a
part of the Federal Government--which has not been resolved yet, but
Republicans, Democrats, and the White House are working together to
find a way so the District of Columbia, the city of Washington--with
its own mayor and city council, its own budget, its own local funds--
does not have to be caught up in a very tough circumstance that is not
of their making. They are not part of the Federal Government, and
neither is New York, Chicago, New Orleans, or Baltimore. They are
separate cities, and they should be treated that way. We haven't found
a way yet, but we are working on it.
I yield the floor.
Mr. REID. Mr. President, I appreciate the kind words of the Senator
from Louisiana, but I want the Record spread with the work she has done
that I have seen in our years together in the Senate. No one has been
more of an advocate for a State than the senior Senator from Louisiana.
What she did after that terrible hurricane hit that area is now
legendary--the ability that she had to change what had been standard
procedures and law in this country for decades. We changed that for a
lot of reasons. One was her advocacy. We did it because of her.
In fact, the Democrats in the Senate voted for things they never
voted for before because of the good Senator from Louisiana. It was not
done to help on a temporary basis but long term for the State of
Louisiana.
I hope they understand what a difference one person can make. She has
made a difference and she has changed things forever in Louisiana
already. I am sure the best is yet to come.
____________________