[Congressional Record Volume 162, Number 114 (Thursday, July 14, 2016)]
[Senate]
[Pages S5136-S5137]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                            DEBT LEGISLATION

  Mr. HATCH. Mr. President, the total outstanding Federal debt has 
risen by more than $8.7 trillion during President Obama's tenure, to 
almost $19.4 trillion today.
  That is the highest level of Federal debt in U.S. history and, 
relative to the size of the economy, is at a level not seen since the 
years surrounding World War II. Such debt levels pose significant risks 
to financial stability and the economy, as the nonpartisan 
Congressional Budget Office has repeatedly made clear for many years 
now.
  Unfortunately, President Obama's failure to address the debt leaves 
those risks in place and leaves a legacy of burden on future 
generations, who will be saddled with almost twice as much Federal debt 
today than when the President took office.
  According to CBO projections, Federal deficits and debt are on an 
upward trajectory. As we all know, the main drivers of our debt are 
entitlement programs that are, at this point, essentially on autopilot.
  As the Nation confronts its astronomical debt, it is imperative that 
those charged with managing the debt do so with transparency and 
accountability. I am sure that all of my colleagues agree that, if we 
are going to saddle future workers with outsized debt, then, at the 
very least, Congress and the American people are entitled to know how 
debt management decisions are made.
  That, of course, requires the cooperation of the U.S. Treasury 
Department, as well as its fiscal agents at the Federal Reserve. As our 
debt has exploded, the Federal Reserve has simultaneously ballooned its 
balance sheet, in part by increasing its holdings of U.S. debt 
securities by nearly $2 trillion since President Obama took office. 
Like it or not, what the Fed does with its debt purchases and holdings 
carries many implications for the Treasury debt market.
  At the same time, both Treasury and the Fed have been unacceptably 
opaque regarding federal debt management practices, cash management, 
and contingency planning. This has been a pattern that has repeated 
itself over and over under the Obama administration.
  When we have approached the Federal debt limit, the Obama Treasury 
has repeatedly withheld vital information.
  When the U.S. sovereign credit rating was downgraded for the very 
first time in 2011, Treasury, the Fed, and other financial regulators 
withheld vital information.
  When members of Congress have asked Treasury, the Fed, and other 
agencies for contingency plans for dealing with any kind of default 
resulting from any number of causes, they have withheld vital 
information.
  When members of Congress have simply needed to know the amount of the 
Federal Government's operating cash balance--which is managed by 
Treasury--the Obama administration has withheld that vital information.
  For years now, since at least 2011, I have, as either the Chairman or 
Ranking Member of the Senate committee with oversight jurisdiction over 
the management of our debt, repeatedly requested basic information 
about our Nation's finances and, at almost every turn, have been 
stonewalled. Often, the stonewalling has come with the excuse that the 
information I have been seeking is ``market sensitive,'' an ironic 
designation given that much of the information I and others have been 
seeking has been shared with large financial institutions--actual 
participants in the markets.
  Let me get a little more specific.
  Beginning almost exactly five years ago--in July of 2011--I began 
asking the administration for information regarding contingency plans 
formulated by Treasury, the Fed, and other agencies that would outline 
what they would do in the event of delayed payments, a default, or a 
credit-rating downgrade.
  I made my initial request in the weeks surrounding the debate over 
the debt limit in 2011 when there was clear evidence that various 
agencies had formulated these kind of contingency plans. In addition, I 
asked questions about how much cash was in the till at Treasury, and 
how much they were projecting would be available in future days and 
weeks.
  Rather than giving a full and fair accounting to Congress and the 
American people, the administration withheld this vital information 
and, instead, opted to engage in a political battle over the statutory 
debt limit, apparently believing that their position in that debate 
would be strengthened if lawmakers and their constituents were unaware 
of the fiscal state of the country or what plans were in place.
  Before anyone jumps to the conclusion that my inquiries were 
politically motivated and that I was trying to strengthen the hand of 
congressional Republicans in debt-limit debates, let me be clear: my 
requests for contingency plans were not and have not been limited to 
debt limit impasses.
  Instead, I have sought to find out what Treasury and others would do 
if timely payments could not be made for any reason.
  Delayed payments could occur under a variety of circumstances, not 
only in the event of a debt-limit impasse. A cyberattack, a terrorist 
attack, a prolonged power outage in financial centers, or a natural 
disaster could all result in delayed payments. While any such event 
would surely be catastrophic, they are all within the realm of 
possibility. Quite frankly, it would be imprudent risk management and, 
really, fiscal malpractice to not plan for those types of 
contingencies.
  Indeed, we know that agencies in the Federal Government have made 
such plans, in consultation with representatives of large financial 
institutions--or, as my friends on the other side would say: Wall 
Street.
  We know they have developed these plans because investigations and 
subpoenas issued by the House Financial

[[Page S5137]]

Services Committee have made clear that Treasury, the Fed, and Wall 
Street are routinely engaged in contingency planning and have been 
doing so for the entire time I have been submitting my inquiries.
  Frankly, if no contingency plans existed, the American people would 
have ample cause to be concerned--if not completely outraged--at the 
recklessness of our debt managers. Given that we know these plans 
exist, however, they should be similarly outraged and concerned with 
the fact that the administration refuses to share any relevant 
information about the plans.
  Rather than reveal pertinent information to Congress and the American 
people, Treasury and the Fed have continually insisted on keeping the 
plans secret, usually refusing to acknowledge they even exist.
  I have received the same basic response to all of my inquiries. To 
paraphrase, I have been told that we should never default on our debt 
because of the debt limit and that Congress has an obligation to make 
sure the debt-limit is always raised, without discussion, in order to 
prevent such a default.
  However, once again, delayed payments could result in a variety of 
scenarios, and a debt-limit impasse is just one of them.
  The reason for this lack of transparency is simple: Leaders in the 
Obama administration clearly believe that their political position in a 
debate over a debt-limit increase will be stronger if the American 
public believes that they don't have any plans for dealing with delayed 
payments or a default.
  This secrecy with regard to such a serious matter of public interest 
is simply absurd, bordering on embarrassing, and the American people 
deserve better.
  Enough is enough.
  Yesterday, I sent letters to the Treasury Department and the Federal 
Reserve, once again asking for more information about how the country's 
debt and cash-balance information is being handled.
  In addition, I introduced a bill titled The Debt Management and 
Fiscal Responsibility Act.
  This is a nonpartisan bill, and I welcome members from both sides of 
the aisle to sign on as cosponsors. The aim of the bill is simple: to 
provide greater accountability on the nation's debt, contingency 
planning for debt disruptions, and a more certain debt limit process.
  Specifically, the bill takes the existing, opaque, and chaotic 
process followed by Treasury and others as they manage the Federal 
debt, and replaces it with a transparent, consistent, and constructive 
process. It requires greater information sharing between federal 
regulators and Congress with regard to the debt, along with more 
administrative accountability for debt management practices. In 
addition, the legislation provides a more orderly and informed process 
for dealing with periods during which our debt approaches the statutory 
limit.
  The bill also establishes a requirement that the Treasury Secretary 
report to and appear before Congress whenever a statutory debt limit is 
impending, to work and communicate with Congress in order to 
responsibly address the debt, and to make Treasury's information on the 
debt readily available to the public in a single online repository.
  If enacted, this legislation will bring Treasury, Congress, and the 
American people together on equal informational footing to ensure that 
Federal debt and fiscal management occurs in the open, where everyone 
shares the same information.
  After all, if, as we have repeatedly been told by Secretary Lew, 
Treasury has ``the best information'' when it comes to the state of our 
debt, then policymakers outside the Executive Branch, as well as the 
American people, should have access to that same information.
  Once again, our current debt of nearly $19.4 trillion is outsized in 
absolute terms and relative to the size of our economy. It is a threat 
to our government, our financial system, and our economy.
  I don't know anyone without a political ax to grind who believes 
differently.
  We cannot continue to roll the dice with the future of our children 
and grandchildren.
  One of the first steps we can take toward fiscal sustainability is 
greater transparency and accountability from those in the Federal 
Government that we have assigned to be agents of the American people 
for management of our fiscal affairs.
  The Debt Management and Fiscal Responsibility Act enables that 
accountability and transparency, and will help put an end to the 
politicization of debt management and to the ongoing practice of 
selective disclosure of vital debt information.
  Put simply, it will give Congress and the American people a clear-
eyed account of the debt so that we can focus on returning public 
finances to a more solid long-term path.
  I hope all of my colleagues will support this important legislation.

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