[Congressional Record Volume 161, Number 155 (Thursday, October 22, 2015)]
[Senate]
[Pages S7445-S7447]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
DEBT LIMIT DEADLINE
Mr. HATCH. Mr. President, we are apparently pressing another deadline
with regard to the statutory debt limit. I am reminded of the old
paradoxical proverb: ``The more things change, the more they stay the
same.''
We have dealt with the debt limit here in Congress on numerous
occasions, and while there are significant differences this time
around, there are some things that just don't change, particularly when
we are dealing with the Obama administration.
One thing that is different is that our national debt is higher than
it has ever been before, more than $18 trillion--an astronomical
number, when you think about it. That is $57,000 of debt for every U.S.
citizen--every man, woman, and child from age 1 to 101. Just for the
people in my State of Utah, which has a relatively small population,
that means $167 billion of debt.
As a share of our GDP, the debt is higher now than at almost any time
with the exception of a brief period surrounding World War II. Yet,
even though our debt has gotten further and further out of hand under
this President, the administration's approach has not changed. As we
all know, Treasury Secretary Lew recently sent a series of letters
urging Congress to raise the debt limit. In his latest communication,
he projected that on November 3, the Treasury will begin to run
dangerously low on cash, creating an unacceptably high risk of having
to delay payments.
Of course, we don't have an ability to verify that projection.
Treasury has long been uncooperative in Congress's efforts to get more
information as to how they arrive at those specific dates. Don't get me
wrong, I take the November 3 date very seriously. I think we all
should, but given the lack of hard data shared by the Treasury
regarding those projections and the fact that the date has in just the
last few weeks moved around a little bit, I do understand why some
people appear to believe this latest best guess from the Treasury is
fungible.
In addition to providing the November 3 deadline, the latest debt
limit letter from Secretary Lew includes what has become a stale set of
talking points punctuated by the admonition that ``only Congress can
extend the nation's borrowing authority.'' I know no one wants to hear
a civics lesson, but given the administration's repeated attempts to
assign all responsibility relating to the debt limit to Congress, it
means that a short refresher about how a bill becomes law might be
helpful.
No one disputes that Congress must act to extend the government's
borrowing authority, but the President can also sign or veto any debt
limit legislation we pass. The same is true of any legislation
authorizing or appropriating spending increases or reductions. Congress
writes and passes. The President signs legislation into law, and
hopefully he does his best to enforce it. In other words, both Congress
and the executive branch share responsibility with regard to the debt
limit and our Nation's overall fiscal health. Unfortunately, rather
than trying to work with Congress on these issues, the Obama
administration has repeatedly chosen to try to deflect responsibility
with misleading statements about the various burdens borne by the
separate branches of government.
Sadly, the Treasury Secretary's tired arguments with regard to the
debt limit are not the only problem. In fact, when you examine this
administration's record, you will find that the problems are much worse
than most want to admit. I am talking, of course, about the massive
accumulation of debt we have seen under this administration, as well as
the lack of leadership and willingness to work with Congress to address
what we know are the main drivers of our debt.
As the nonpartisan Congressional Budget Office has repeatedly made
clear, the main drivers of our debt are unsustainable promises in the
Social Security benefit programs and unsustainable spending on the
Federal Government's major health care programs, Medicare, Medicaid,
health insurance subsidies under the Affordable Care Act, and others.
True enough, we have seen some deficit reduction in recent years.
These days, the President and his allies are always quick to point that
out. Of course, we know that these temporary reduced deficits have
resulted predominately from increased tax receipts and only modest
spending restraint. Still, even with these reduced deficits, our
[[Page S7446]]
debt remains well above the historic average and is expected to grow
even more in the near future as, according to CBO, our deficits will
start to go back up in the next few years.
Our deficit this next year has been brought down but I would have to
say mainly because of the work that we have done in the Congress to
restrain the growth, the reconciliation act. Had we not done that, this
administration would not have done anything. We would be in worse shape
than we are.
Simply put, no one in this administration should be bragging about
supposed fiscal responsibility. Under this administration, the
outstanding public debt has risen by more than an astounding $7.5
trillion, a 71-percent increase just since this person has become
President. Once again, as a share of the economy, our current debt
remains at levels that, with a very narrow and understandable
exception, are heretofore unseen in modern U.S. history.
According to CBO, by 2025, Federal debt felt by the public will be
roughly twice the average of the past 5 decades. As CBO says, ``Such
high and rising debt would have serious negative consequences both for
the economy and for the Federal budget.'' Given this risky path of debt
accumulation, CBO also warns on increasing risks of a Federal fiscal
crisis. Unfortunately, those dire warnings have been ignored by this
administration. Instead, the administration seems to believe that a
temporary lull in deficits is a good time to accelerate spending, even
though spending grew well above growth in the economy last fiscal year,
all while they continued to ignore the growing crisis in our
entitlement programs.
We still have approximately one-half trillion dollars of debt. They
are bragging about that. When he was serving in the Senate and a
different party controlled the White House, President Obama famously
argued that an increase in the debt limit was a sign of leadership
failure. Now his definition of leadership is to assign all
responsibility to Congress for the debt limit.
When he was running as then-Presidential candidate Obama, he pledged
not to kick the can down the road on reforming entitlements,
particularly Social Security. Now, he shirks responsibility and his
proposed solution to the most immediate problem with Social Security--
the Disability Insurance Trust Fund--is to kick the can much further
down the road without any changes or reforms to the program. We are
just going to borrow from the already dysfunctional general Social
Security fund to pay for Social Security disability insurance. My gosh,
when does it stop?
I believe that the debt limit has and can play a role in promoting
fiscal discipline. Historically, debates over the debt limit have
provided opportunities to reexamine our fiscal outlook and, where
necessary, make corrections. Debt limit votes give a voice to Members
of Congress who do not serve on committees that make the spending and
tax decisions.
Unfortunately, as we contemplate another debt limit increase,
President Obama does not see the need to even talk to Congress about
our fiscal future. In fact, the administration won't even take a clear
position on how much of an increase it believes is appropriate or how
long it should last.
Common sense would indicate that the President would like Congress to
extend the debt limit past next year's election. That would be a debt
limit hike of about $1 trillion, and $1 trillion would mean more than
$3,000 per person in the United States just to get us through next
year. Utah's share of that would be about $9 billion. Yet while the
President undoubtedly wants at least that much of an increase, he
refuses to make any such desire known.
Instead, we have gotten vague demands that borrowing authority be
extended by certain dates and threats to veto any such extension that
comes with even modest spending reforms. Essentially, President Obama's
position is it's my way or the highway, but oddly enough, he does not
want to explicitly define what his way is, and he repeatedly argues
that he plays absolutely no role and bears no responsibility in getting
us there. It is absurd, absolutely absurd.
Make no mistake, I don't want to see a default. Default on U.S.
Treasury securities and failure to pay Federal obligations, which, by
the way, are two separate things, is not a desirable or acceptable
outcome. Ultimately, I don't believe Congress should shirk its
responsibilities, even if President Obama refuses to acknowledge his.
Let's be clear. Neither the administration's uncompromising stance on
fiscal reforms nor its selective use of information about our Nation's
debt are productive. The President's refusal to work with Congress on a
path forward and to share information about our Nation's finances is
irresponsible brinksmanship. I want to talk about that information
sharing for a few minutes because it is an important part of this
continual impasse between Congress and the administration when it comes
to the debt limit.
When we talk about our Nation's debt, there are other policy matters
in play besides the periodic actions taken to raise the debt limit. The
administration is charged with managing the debt in a responsible and
effective manner. Toward that end, it has the obligation to preserve
the integrity of Treasury securities markets. Congress has the duty to
exercise oversight of these activities. As chairman of the Senate
committee with jurisdiction over these issues, I have to say that when
it comes to accountability and transparency on these matters, a great
deal of improvement is necessary. That is putting it kindly.
For example, each time the debt begins to approach the statutory
limit, the administration makes a lot of noise about how it is
difficult to deal with delayed payments on Treasury securities. Please
note that I am talking about payments on securities, not general
payment obligations of the Federal Government for spending programs,
which is all together a separate matter. A number of scenarios could
give rise to delayed payments on Treasury securities.
One of those scenarios is a debt limit impasse between Congress and
the administration, but there are others, including weather events,
cyber or terrorist attacks, or any number of known risks, that
responsible debt managers must take into account. We know for a fact
that the Treasury Department and the Federal Reserve have developed
contingency plans for these types of risks.
The existence of such plans has been made public in minutes of the
Federal Reserve's Federal Open Market Committee and in minutes of
meetings involving Fed and Treasury officials and representatives of
large financial firms. However, the administration has flat out--flat
out--refused to share those contingency plans with Congress or to even
openly acknowledge their existence.
I have been the lead Republican on the Senate Finance Committee since
January 2011. I have been asking to see those plans since the summer of
2011. Over more than 4 years and through multiple requests for
information, I have been told a number of things, usually stories that
end with the claim that, even though plans have been discussed, nothing
has ever been formalized.
So there are really only two plausible conclusions to be drawn:
Either the administration is being dishonest with Congress and they
have contingency plans in place, or the administration is being
irresponsible by failing to account for the obvious potential risks.
Apparently, they are comfortable with Congress, not to mention the
American people, reaching either one of those conclusions if it means
they don't have to share more information.
Simply stated, there is no reason for Treasury and the Fed, along
with large financial firms participating in the Treasury securities
markets, to formulate contingency plans for these markets without
reporting them to Congress or sharing them with the Senate Finance
Committee--no reason whatsoever. Yet here we are. Sadly, this lack of
transparency does not end with obviously needed contingency plans. As I
alluded to earlier, Treasury also shares very little information with
Congress concerning cash forecasts, particularly as we approach the
debt limit. I have asked for detailed, contemporaneous updates of cost
forecasts in order to, among other things, properly verify Treasury's
debt limit projections. In response, Treasury officials have told me
that those projections are ``highly market sensitive'' and, at times,
cannot be shared with Congress. Yet I have
[[Page S7447]]
to assume that a number of officials at Treasury and probably the Fed
have access to this sensitive data.
I am not aware of any special security clearance assigned to these
individuals. It is evidently the position of the administration that
there are times where it is neither Congress's nor the American
people's business to know how much cash Treasury expects to have in the
Federal till. This needs to change. Given my oversight responsibilities
as chairman of the Senate Finance Committee, I am always interested in
preserving the integrity and efficiency of markets for Treasury
securities.
Unfortunately, under our laws, regulatory and oversight authority
with respect to those markets spreads far and wide with
responsibilities spanning across the Treasury, the Fed, the Securities
and Exchange Commission, the Commodities Future Trading Commission, and
an alphabet soup of other groups. As we saw with the most recent
financial crisis, this type of balkanization of authority inevitably
leads to ineffective oversight and regulation.
When problems arise, all the various parties point their fingers at
each other. Everyone has authority, yet no one ends up being
accountable.
Unfortunately, the so-called Dodd-Frank legislation did not fix any
of these problems. In fact, I would argue, all it did was give existing
regulators yet more authority and of course added a few more acronyms
into the mix.
All of this is relevant to current discussion about the debt limit
because it speaks to the overall management of our Nation's debt and
the lack of transparency among all these agencies. I can cite numerous
examples where a lack of communication and accountability has been
problematic. For now, I will briefly mention three such instances.
First, in 2013, Treasury began auctioning something called a
``floating rate note,'' the first new Treasury security since inflation
protection securities were introduced more than 15 years ago. This was
a significant debt management decision. Yet very little information was
shared with the Senate Finance Committee, even though Treasury had many
discussions about the new note with representatives from large
financial firms.
Second, Treasury recently decided again--after several meetings with
large banks--that an average cash balance for the Federal Government of
around $50 billion per day was too low and that going forward the
balance would need to be $150 billion or more. Once again, prior to
that decision being finalized, there was no communication from Treasury
to the Senate Finance Committee.
Third, on one particular day in October of 2014, there were unusual
and difficult-to-explain events in markets for Treasury securities.
While all the various regulators and interest groups have issued staff
reports and have held meetings and seminars relating to the apparent
volatility demonstrated by these events, I am not aware of any outreach
or information sharing with the members or staff of the Senate Finance
Committee.
Again, these are just three examples. There are certainly others, and
all of them demonstrate that this administration is far too often
unwilling to even provide simple updates about its debt management
policies--all while insisting that Congress repeatedly raise the debt
limit without asking questions or attaching reforms. This also needs to
change. If the administration is going to continue to demand that
Congress act to increase the debt limit, then it should, at the very
least, be more forthcoming about its policies and decisionmaking when
it comes to managing our debt.
While I agree we cannot and should not risk defaulting on our debt or
obligations, it is essential that Congress receives a complete picture
from the administration about its debt management policies. Therefore,
I want to make clear to Treasury--and other agencies with
responsibilities in this area--that there is an imminent need for
improved communication and increased transparency on these matters.
As chairman of the Senate Finance Committee, I intend to do all I can
to ensure greater accountability. That may include more hearings with
officials brought before the committee or legislation to require more
information flows between the administration and Congress. Ultimately,
what specific actions we take will depend on the administration's
ability to cooperate.
I yield the floor.
The PRESIDING OFFICER. The Senator from Arizona.
Mr. McCAIN. Mr. President, I ask unanimous consent to address the
Senate as in morning business.
The PRESIDING OFFICER. Without objection, it is so ordered.
____________________