[Congressional Record Volume 161, Number 154 (Wednesday, October 21, 2015)]
[Senate]
[Pages S7372-S7374]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
FISCAL DEADLINES FACING AMERICA
Mr. CARDIN. Mr. President, to paraphrase Ronald Reagan, ``Here we go
again.''
Treasury Secretary Jack Lew has warned us that the Federal Government
will bump up against the statutory debt ceiling on Tuesday, November 3.
Shortly after that, on December 11, the fiscal year 2016 continuing
resolution will expire, bringing the prospects of yet another
government shutdown.
Absent a budget deal to suspend sequestration and lift the spending
caps imposed under the Budget Control Act, we face draconian spending
cuts that will harm both our economic recovery and our national
security. Meanwhile, authority for the Export-Import Bank has expired
already, and authority to spend surface transportation funding will
expire at the end of this month.
This is no way to run a government. It is time to end this mindless
fiscal brinkmanship and negotiate a comprehensive budget deal that
resolves all of these issues. The American people demand and deserve no
less. But first we must act on the debt ceiling.
With respect to the debt ceiling, Treasury Secretary Lew wrote to
House Speaker John Boehner on October 15 warning that extraordinary
measures to forestall hitting the statutory debt ceiling will be
exhausted as soon as November 3. At that point, the Federal Government
will have a cash balance of about $30 billion but will be facing
obligations totaling as much as $60 billion on certain days.
Secretary Lew wrote in his letter:
Operating the United States government with no borrowing
authority, with only the cash on hand on a given day, would
be profoundly irresponsible. As I wrote previously, we
anticipate that a remaining cash balance of less than $30
billion will be depleted quickly. In fact, we do not foresee
any reasonable scenario in which it would last for an
extended period of time. The government makes approximately
80 million payments a month, including Social Security and
veteran benefits, military salaries, Medicare reimbursements,
and many others. In the absence of congressional action,
Treasury would be unable to satisfy all of these obligations
for the first time in the history of the United States . . .
The creditworthiness of the United States is an essential
component of our strength as a nation. Protecting that
strength is the sole responsibility of Congress, because only
Congress can extend the nation's borrowing authority.
Moreover, as you know, increasing the debt limit does not
authorize any new spending. It simply allows Treasury to pay
for expenditures Congress has approved, in full and on time.
I couldn't agree with Secretary Lew more. Raising the debt ceiling
allows us to pay for what has already been appropriated by Congress for
spending. This has nothing to do with how much we are going to spend as
a nation; it has everything to do with whether we are going to honor
our bills. The United States of America has to pay its bills. Just as
when American families use a credit card, when a bill is due, it needs
to be paid in a timely manner. At no time in our history has our
country been unable or unwilling to pay its debts. Raising our debt
ceiling has to be done--not so we can spend more, as Secretary Lew
pointed out, but to pay the bills we already have. Default is not an
option.
Some Republicans, particularly in the House, have suggested that the
Federal Government can prioritize its payments to avoid a technical
default. Some have dubbed this ``pay China first'' because, as my
colleagues know, much of our public debt is held by the Chinese. It is
disturbing that our Republican colleagues are considering such a
proposal. It simply won't work. The Federal Government makes 80 million
to 100 million payments monthly, including Social Security, veteran
benefits, military salaries, and Medicare reimbursements. The Treasury
Department doesn't have the manpower, the computer capability, or the
guidelines to sort out who gets paid when.
The Bipartisan Policy Center has prepared a comprehensive analysis of
what happens if we hit the so-called X-date without lifting the debt
ceiling. As the Bipartisan Policy Center notes, ``The reality will be
chaotic,'' with the Treasury Department being forced to pick
``winners'' and ``losers.'' We might have to shut down the entire
Justice Department, the Federal courts, the
[[Page S7373]]
Federal Highway Administration, the Federal Aviation Administration,
and other agencies. These are critically important missions that people
in this country depend upon. We might have to suspend tax refunds--
refunds taxpayers desperately need. We might have to stop paying
Federal workers, 30 percent of whom are veterans and contractors. As
the Bipartisan Policy Center notes, ``On a day-to-day basis, handling
all payments for important and popular programs, (e.g., Social
Security, Medicare, Medicaid, Defense, Military Active Duty Pay) will
quickly become impossible.''
Delaying the decision to increase the debt limit jeopardizes our
economy and our standing in the world. The mere suggestion that the
Federal Government might miss a payment caused Standard & Poor's to
downgrade our sovereign credit rating from AAA to AA-plus after the
2011 debt limit standoff.
A default is a default. We can't pick winners and losers. If we
default on any of our debt, it will affect our creditworthiness and our
bond ratings. If we don't transfer the payments to State and local
governments--and a large part of our budget depends upon them receiving
their Federal share of programs--it will cause State and local
governments to default, affecting their bond ratings and increasing the
cost of borrowing, a hidden tax--not a hidden tax--an additional tax to
the taxpayers of this country.
During the last debt limit showdown in 2013, yields for targeted
securities in secondary markets rose from 1 basis point in mid-
September to over 50 basis points just prior to the resolution of the
standoff in October. The Government Accounting Office estimates that
the 2013 impasse cost the Federal Government between $38 million and
$70 million in added interest payments to service the debt. This is
what taxpayers had to pay because Congress did not in a timely way
increase the debt limit. So it is not only the default, it is the time
we take. We have to act now. We should have acted well before now. If
we keep playing with fire, we are going to get burned and burned badly.
In addition to lifting the debt ceiling, which needs to be done
first, we need to negotiate a comprehensive budget deal. Last week
administration officials announced that the fiscal year 2015 deficit
was $44 billion--$44 billion--less than the previous year. Last year's
deficit was $439 billion. This is still too high, but let's put the
number in context. It was the lowest share of our economy--at 2.5
percent--since 2007. As Treasury Secretary Lew pointed out, under the
President's leadership, the deficit has been cut by roughly three-
quarters as a share of the economy since 2009--the fastest sustained
deficit reduction since just after World War II.
It is important to remember that the previous administration--the
Bush administration--inherited the biggest surpluses in history and
promptly squandered them on two ill-conceived tax cuts and a war in
Iraq that was paid for on a credit card.
Then we had the biggest recession since the Great Depression. This
was the situation the Obama administration inherited--from surpluses to
deficits to recession. The Obama administration took effective,
extraordinary measures to pull the economy back from the brink.
Economists Alan Blinder and Mark Zandi, writing for the Center on
Budget and Policy Priorities, estimated that without the measures taken
in late 2008 and early 2009 the peak-to-trough decline in real gross
domestic product, which was barely over 4 percent, would have been
close to a stunning 14 percent; the economy would have contracted by
more than 3 years, more than twice as long as it did; more than 17
million jobs would have been lost, about twice the actual number; the
unemployment rates would have peaked at just under 16 percent, rather
than the actual 10 percent; the budget deficit would have grown to more
than 20 percent of GDP, about double the actual 10 percent, topping off
at $2.8 trillion in fiscal year 2011.
My point is that the actions taken by the Obama administration pulled
our economy out of recession and back to growth. It did it in a
responsible manner. So we took emergency measures necessary to stop the
economic free fall, and since then we have had the fastest deficit
reduction since just after World War II.
We are now using a different policy, as we should. I mention that
because our Republican colleagues want to cut domestic spending even
more. That is not sustainable. As the Center on Budget and Policy
Priorities noted last year, spending cuts have exceeded tax increases
by a 3-to-1 margin already. Put another way, for every dollar of new
revenue we have received, we have cut spending by $3.27. We have
contracted, particularly on the discretionary domestic side.
We need to come together and negotiate a deal that keeps the Federal
Government open, not shut. The 2013 shutdown, according to Moody's
Analytics, cost the economy $20 billion and 120,000 jobs. Still, the
so-called tea party Republicans and Presidential candidates want to
shut down the government right before the holidays in a misguided
notion that it will somehow prevent Planned Parenthood from providing
health care services to low-income women and their families. Two years
ago, the same individuals thought that shutting down the government
would prevent the Affordable Care Act from being implemented. They were
wrong then, and they are wrong now. The damage they did--and could do
again--is to our economy and our standing in the world.
A realistic budget deal will need to protect Federal workers from
further harm. Since 2011 Federal workers have contributed $159 billion
to deficit reduction. Federal workers have contributed $159 billion to
deficit reduction. They didn't cause the deficit. They have endured 3
years of pay freezes and two substandard pay increases since then for a
total of $137 billion. They lost another billion dollars in pay because
of sequestration-related furloughs. Federal employees hired in 2013 and
since 2014 are paying an extra $21 billion for their pensions.
Each and every Federal worker is being asked to do more with less as
agency budgets have been frozen or cut. This is happening to
hardworking, patriotic public servants who are mostly middle class and
struggling to get along as are so many other Americans. Enough is
enough.
Since the 1950s and 1960s, the U.S. population has increased by 76
percent and the private sector workforce has surged 133 percent, but
the size of the Federal workforce has risen just 11 percent. Relative
to the private sector, the Federal workforce is less than one-half the
size it was back in the 1950s and 1960s. The picture that emerges is
one of a Federal civilian workforce whose size has significantly shrunk
compared to the U.S. population it serves, the private sector
workforce, and the magnitude of its various missions and Federal
expenditures.
Additionally, picking on Federal workers in a budget deal or shutting
down the government hurts veterans. Over 30 percent of civilian Federal
employees are veterans, compared to 7.8 percent of the non-Federal
workforce. The Federal Government hires a lot more veterans--30 percent
of our workforce--another reason we should be mindful of what we do to
our Federal workforce. Do we really want to cut the pay and benefits
for these individuals even more than we have already? Do we really want
to force them to work during a shutdown but not pay them on time or
force them to stay home involuntarily and have them worry about whether
they will be paid at all? Is this how we want to honor the men and
women who stood in harm's way to defend our Nation and who continue to
serve us?
The missions that are carried out by our Federal workforce are great
missions, and they perform more work in a smaller workforce. It is time
to recognize what they do for our country. Preventing Federal workers
from doing their jobs doesn't just harm them; it harms all Americans
because Federal workers control our borders and make sure our air and
water are clean and our food and drugs are safe. They support our men
and women in uniform and care for our wounded warriors. They help our
manufacturers compete abroad, discover cures for life-threatening
diseases, and prosecute criminals and terrorists. They maintain and
protect critical infrastructure, explore the universe, process passport
applications, and make sure Social Security, Medicare, and other social
safety net programs are functioning properly. When Federal workers do
their jobs, they are
[[Page S7374]]
helping each and every American live a safer and more prosperous life.
Our tasks here in Congress should be straightforward. First, we need
to raise the debt ceiling so we can continue to pay our bills and
maintain the full faith and credit of the U.S. Government. Second, we
need to keep the Federal Government open for business and keep the
Federal workers on their jobs. Third, we need to negotiate a
comprehensive budget deal that replaces sequestration--a budget that
maintains critical Federal investments while spreading the burden of
deficit reduction in a fair way and holding Federal workers and their
families harmless after subjecting them to so much hardship over the
past several months and years. Fourth, we need to reauthorize the
Export-Import Bank, a bank that helps us with a level playing field on
international commerce, particularly with small companies, and we must
reauthorize our surface transportation program on a 6-year
reauthorization. You can't do a major highway, bridge, or transit
program with a Federal partner that gives only a couple months of
commitment. We need to have a multi-year transportation reauthorization
passed.
Heretofore, one of the greatest attributes of the American character
has been pragmatism. We can acknowledge and respect our differences,
but at the end of the day the American people have entrusted us with
governing. That means being pragmatic, sitting down, listening to each
other, compromising, and providing policies that will stand the test of
time. Let us do our job on behalf of all Americans.
Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The senior assistant legislative clerk proceeded to call roll.
Mr. CORNYN. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER (Mr. Sullivan). Without objection, it is so
ordered.
____________________