[Congressional Record Volume 163, Number 34 (Monday, February 27, 2017)]
[Senate]
[Pages S1450-S1452]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. HATCH (for himself, Mr. McConnell, Mr. Cornyn, Mr. 
        Barrasso, Mr. Blunt, Mr. Boozman, Mr. Burr, Mrs. Capito, Mr. 
        Cassidy, Mr. Cochran, Ms. Collins, Mr. Corker, Mr. Crapo, Mr. 
        Cruz, Mr. Daines, Mr. Enzi, Mrs. Ernst, Mrs. Fischer, Mr. 
        Flake, Mr. Gardner, Mr. Graham, Mr. Grassley, Mr. Heller, Mr. 
        Hoeven, Mr. Inhofe, Mr. Isakson, Mr. Johnson, Mr. Kennedy, Mr. 
        Lankford, Mr. Lee, Mr. McCain, Mr. Moran, Ms. Murkowski, Mr. 
        Paul, Mr. Perdue, Mr. Portman, Mr. Risch, Mr. Roberts, Mr. 
        Rounds, Mr. Rubio, Mr. Sasse, Mr. Scott, Mr. Shelby, Mr. 
        Strange, Mr. Sullivan, Mr. Thune, Mr. Tillis, Mr. Toomey, Mr. 
        Wicker, and Mr. Young):
  S.J. Res. 24. A joint resolution proposing an amendment to the 
Constitution of the United States relative to balancing the budget; to 
the Committee on the Judiciary.
  Mr. HATCH. Mr. President, 70 years ago this May, the Senate 
Appropriations Committee sent to the full Senate a constitutional 
amendment to require a balanced Federal budget. It had been proposed by 
Senator Millard Tydings, a Democrat from Maryland. In its report, the 
committee said this: ``In no other way except by an amendment to the 
Constitution can Congress be compelled to balance its budget in 
peacetime.''
  Seven decades of experience proved that the Appropriations Committee 
was right, and we have never been in a more serious, perilous situation 
than we are today.
  Two essential facts compel me once again to introduce a 
constitutional amendment to require fiscal responsibility: the gravity 
of the national debt crisis and the fact that neither willpower nor 
legislation will solve it.
  The greatest challenge in describing the gravity of the national debt 
crisis is deciding how much of the bad news to present at one time. 
During the 2008 Presidential campaign, one of the candidates criticized 
the outgoing President for adding $4 trillion to the national debt. 
That increase, Barack Obama said, was not only irresponsible but 
``unpatriotic.'' The national debt on inauguration day 2009 was $10.6 
trillion, and on inauguration day 2017 it was $19.9 trillion. If a $4 
trillion increase was irresponsible and unpatriotic, what words 
describe a $9.3 trillion increase?
  President Obama won the 2008 election with the Government 
Accountability Office warning that the Nation's long-term fiscal 
outlook was unsustainable. In its January 2017 assessment of the 
Nation's fiscal health, GAO reports that the national debt as a share 
of GDP in 2016 was 75 percent higher than the average since World War 
II. As it had been before, GAO concluded that ``the federal 
government's fiscal path is unsustainable.''
  One way to understand the gravity of the national debt is to compare 
it to the size of the economy, or the gross domestic product. In other 
words, we can compare what we owe to our ability to pay. When President 
Obama took office, the national debt was 82 percent of GDP and is now 
105 percent of GDP today. Some economists prefer to evaluate the 
national debt as a percentage of tax revenue; that is, by comparing 
what we owe to what we earn. The national debt rose from approximately 
350 percent of Federal revenue when President Obama took office to 600 
percent of Federal revenue today.
  But neither numbers nor percentages tell the whole story because the 
national debt crisis is becoming not only a bigger crisis but a 
different kind of crisis. During the last several years of skyrocketing 
national debt, the interest rate on that debt has been nearly zero. If 
interest rates had been at the historical average, annual interest 
costs would be more than twice what they are today and on their way to 
consuming more than half of all Federal revenue. And now interest rates 
are starting to creep up. The Concord Coalition and the Committee for a 
Responsible Federal Budget both anticipate that over the next decade, 
interest payments on the national debt alone will approach $1 trillion 
per year. That is interest payments. In other words, as GAO found in 
its new fiscal report, the growing national debt now means that the 
rising cost of servicing that debt becomes one of the drivers of the 
growing debt itself. This is becoming what one study calls a self-
propelling crisis.
  A national debt of this magnitude dampens the economic growth 
necessary to minimize borrowing to fund the government, and rising 
interest costs for such a monstrous debt add to the debt on which more 
interest must then be paid. Last month, for instance, the Treasury 
Department echoed this point in its financial report with the U.S. 
Government for fiscal year 2016. The Treasury Department concluded:

       The debt-to-GDP ratio rises at an accelerating rate despite 
     primary deficits that flatten out because higher levels of 
     debt lead to higher net interest expenditures, and higher net 
     interest expenditures lead to

[[Page S1451]]

     higher debt. The continuous rise of the debt-to-GDP ratio . . 
     . indicates that current policy is unsustainable.

  We can also consider the legislative budget and economic outlook from 
the Congressional Budget Office. I want to highlight a few things that 
stood out to me.
  First, annual budget deficits are on their way back up after 6 years 
of decline. In fact, the budget deficit for fiscal year 2016 will be 
one-third larger than in 2015.
  Second, CBO projects that the national debt will rise by nearly $10 
trillion over the next decade. Looking beyond the next decade, CBO says 
that under current law, the national debt will explode to more than 150 
percent of GDP--by far the highest level in American history.
  Third, CBO also says that interest on the national debt is itself an 
increasingly forceful engine driving the debt even higher. Interest 
payments on the national debt are increasing nearly twice as fast as 
spending on Social Security and Medicare. Just last month, CBO Director 
Keith Hall said that over the next 10 years, interest payments are 
expected to triple in nominal terms and double relative to GDP.
  Fourth, CBO repeated some of the serious negative consequences of 
this national debt for the budget, the economy, and the Nation. In 
addition to substantially higher interest payments, these include lower 
productivity and wages, less flexibility by lawmakers to respond to 
fiscal challenges, and increased likelihood of a fiscal crisis.
  In addition to these problems, former Joint Chiefs of Staff Chairman 
Michael Mullen and experts from the Heritage Foundation to the 
Brookings Institution warn that the national debt crisis is a serious 
threat to national security.
  Economists tell us that national debt above 90 percent of GDP for a 
sustained period of time will lead to substantially slower economic 
growth and higher interest rates. The United States is now in the 
longest period in its history with the national debt above that toxic 
90-percent level. Not surprisingly, since the recession ended in June 
2009, the national debt has grown more than twice as fast and GDP has 
grown less than half as fast as during the comparable period after 
previous recessions.
  It is no wonder to me and to many others that more than two-thirds of 
Americans say that their concern over the national debt is growing and 
more than three-quarters of Americans say that the national debt should 
be among Congress's top three priorities. The national debt was once 
such a top priority. In fact, America's Founders were so determined to 
avoid debt that their commitment to fiscal balance was often called our 
unwritten fiscal constitution. President George Washington, for 
example, told Congress that the regular redemption of the public debt 
was the most urgent fiscal priority. That was George Washington. Thomas 
Jefferson wrote in 1798 that if he could add a single amendment to the 
Constitution, it would prohibit the Federal Government from borrowing. 
That commitment, of course, is long gone. The Federal budget has been 
balanced in only a dozen of the last 80 years. And, as I said earlier, 
we are in the longest period in American history with a debt above 90 
percent of GDP.
  As its fiscal willpower failed, Congress has also tried to address 
the debt crisis by legislation. The first bill requiring a balanced 
budget was introduced in 1934 when the national debt was 40 percent of 
GDP. Fifty years later, Congress enacted the Balanced Budget and 
Emergency Deficit Control Act. Since then, we have enacted multiple 
budget control acts and budget enforcement acts, only to see the 
national debt climb from 42 percent of GDP in 1985 to 105 percent of 
GDP today.
  Good intentions will not balance the Nation's checkbook. Statutes 
that Congress can change or ignore will not keep our fiscal house in 
order. Neither willpower nor legislation will tackle the national debt 
crisis. Pretending otherwise is the fiscal equivalent of fiddling while 
Rome burns.
  All the evidence--every bit of it--proves true the conclusion drawn 
by the Appropriations Committee 70 years ago. In no other way except by 
amendment to the Constitution can Congress be compelled to balanced its 
budget in peacetime. We have, as lawyers put it, exhausted our other 
remedies for this crisis. This would be a very different country--a 
freer and more prosperous country--if Congress had already proposed the 
only solution that exists, a constitutional amendment which requires 
fiscal responsibility.

  The first balanced budget amendment was introduced in the House of 
Representatives in 1936. As you can see, the national debt as a 
percentage of GDP has been going up by leaps and bounds. I introduced 
my first balanced budget amendment in June of 1979, during my first 
term in the Senate when the national debt was 32 percent of GDP. That 
share of GDP doubled by 1997 when the Senate came within one vote of 
passing a balanced budget amendment that I introduced--one vote. It 
rose to 95 percent when the Senate last voted on a balanced budget 
amendment in 2011 and is 105 percent of GDP today.
  Since this crisis is already so grave and getting worse, since the 
only way to tackle it is through the Constitution, we should propose a 
balanced budget amendment and let the American people decide whether to 
take this step. After all, Congress cannot amend the Constitution. A 
requirement that Congress keep its fiscal house in order cannot become 
part of the Constitution until that is approved by three-quarters of 
the States.
  Congress, however, is not the only way to propose constitutional 
amendments. Article V of the Constitution also allows the States to 
apply for a convention to propose constitutional amendments. Concerned 
citizens have been working since the mid-1970s to reach the two-thirds 
threshold for calling such a convention to propose a balanced budget 
amendment and are only six States away from that goal. Since Congress 
has never called an article V convention, questions remain unresolved 
and theories untested regarding that method of proposing an amendment. 
I can assure my colleagues, however, that Congress's continued failure 
to propose a balanced budget--and a balanced budget amendment at that--
guarantees that our fellow citizens will continue working to force that 
course upon us.
  There are two facts that we must face: the gravity of the nation's 
debt crisis and the failure to address it by willpower or legislation. 
Perhaps some of my colleagues believe that the Congressional Budget 
Office is wrong in its disturbing projections and dire warnings; that 
the Government Accountability Office is mistaken and the fiscal path we 
are on is sustainable after all; that the Treasury Department is wrong 
about the spiral of increased debt and growing interest payments--some 
people feel that way; that the Concord Coalition and the Committee for 
a Responsible Federal Budget are wrong about how national debt interest 
payments will continue to grow and add to the debt; and that economists 
are wrong to warn about the impact of sustained national debt of this 
magnitude.
  If my colleagues are convinced that everyone else is wrong and our 
fiscal future is just fine after all, then they should say so and then 
try to make that case to the American people. Even they will not do 
that because they know they are wrong, yet we can't seem to get them to 
do what is right. I, for one, think that would be a very tough sell for 
them to make. Americans have been polled about this issue dozens of 
times over the years by major polling firms and national news 
organizations. Three-quarters of Americans supported a balanced budget 
amendment in 1976, and three-quarters support it today.
  Perhaps all of these polls over the last 40 years are wrong. Perhaps 
the American people are content watching their national debt swallow 
the economy. Perhaps our fellow citizens are actually OK with slower 
economic growth, a rising threat to national security, the greater 
likelihood of a fiscal crisis, and an unsustainable path to fiscal 
disaster. If that is what the American people actually believe, then 
they certainly are inclined to ratify a balanced budget amendment.
  The real reason Members of Congress refuse to give the American 
people this choice is that they know what the American people will say. 
I say with respect, but as strongly as I can, that this is not a 
legitimate basis for refusing to propose a balanced budget

[[Page S1452]]

amendment. In our system of government, as Founder James Wilson once 
put it, the people are the masters of government. They alone have 
authority to set rules for government. This choice must be theirs, not 
ours.
  Here is the heart of the matter. First, the national debt crisis 
poses a significant and growing threat to the economic and national 
security of this country. In fact, we have never been in such an 
extended, perilous period as we are right now. Second, Congress has 
tried and failed to address this crisis by either willpower or 
legislation and will actually do so only if the Constitution requires 
it. Third, the decision of whether to use the Constitution to require 
fiscal responsibility belongs to the American people, not to Congress.
  We can either take the responsibility we were elected for and propose 
a balanced budget amendment or the American people may do it for us. I 
hope we have the guts to do what is right. Our very country is hanging 
in the balance. The rest of the world depends on the United States and 
the strong principles of the United States, and we need to do what is 
right.
  I think it is time for us to wake up and realize this is the Congress 
that can make the difference. After all these years of impropriety and 
excessive spending, we can do it. We can live within certain 
constraints. It may take a period of time to wind this down, but we can 
do it. This amendment does provide for some ways of getting there.

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