[Congressional Record (Bound Edition), Volume 150 (2004), Part 18]
[Senate]
[Pages 24001-24003]
[From the U.S. Government Publishing Office, www.gpo.gov]




                          DEBT LIMIT INCREASE

  Mr. DODD. Mr. President, I speak about the vote that took place 
yesterday to raise the statutory limit of our Nation's indebtedness. It 
is terribly unfortunate that for the third time in three years this 
administration has run up against the Federal debt limit, thereby 
forcing once again an increase in the National debt from $7.384 
trillion to $8.184 trillion.

[[Page 24002]]

  I think it is a mistake for this body to give the administration what 
is essentially an $800 billion check to continue its irresponsible 
fiscal policies.
  For quite some time now, the Treasury Department has been forced to 
halt payments owed to federal retirement accounts and take other 
extraordinary measures in order to keep the government from defaulting. 
And now we are in a position where the Treasury Department has said 
that Congress must increase the debt ceiling by the end of this week or 
the government will default on its obligations. What this says is that 
the government is living far beyond its means.
  Just several years ago, when President Clinton was President, the 
National debt was shrinking, not growing. In 1997, the debt held by the 
public was $3.745 trillion. By FY2001, it decreased by more than $400 
billion to $3.296 trillion. Former President Clinton made it a goal to 
pay off the debt by 2013, so that America would be debt free for the 
first time since 1835. He recognized that eliminating the debt would 
strengthen our economy, allow investments in education and other 
critical priorities, and ensure that Social Security could meet the 
challenges to come when the baby boomers retire.
  By contrast, under the Bush administration, the debt limit was raised 
by $450 billion in 2002 and $984 billion in 2003. And now, this year, 
in 2004 it will increase by $800 billion. I find it astounding that 
just four years ago we were having compelling conversations in the 
Senate Banking Committee with Federal Reserve Chairman Alan Greenspan 
about what would happen if we paid off the debt too quickly. And now, 
here we are about to pass another increase of $800 billion to the 
National debt.
  This new increase will bring the grand total to more than $2 trillion 
under President Bush--the largest total debt limit increase recorded 
under any President. Now instead of being eliminated, we are expecting 
the debt held by the public to reach $6.5 trillion by 2011.
  When President Bush first came to office he assured the nation that 
if we adopted his tax cuts, we would not only see job growth, but we 
would still be able to eliminate the publicly held debt by 2008. 
Instead, we have seen 1.5 million private-sector jobs lost, making this 
the first Administration since Herbert Hoover to actually lose jobs. In 
just 4 years, we have gone from a projected 10-year surplus of $5.6 
trillion to a 10-year deficit of over $3 trillion. And now we are about 
to once again, for the third year in a row, increase the debt.
  If additional debt is going to be accumulated, the administration and 
the majority could at the minimum ensure that we are adequately 
investing in our children's education, the country's infrastructure, 
health care, the solvency of Social Security, and other vital national 
priorities. But that does not appear to be the case considering that we 
are seeing across the board cuts in the upcoming omnibus bill, and this 
Administration continues to push for policies that push us further in 
the red without any real results.
  The administration's reckless policies will pass the burden of paying 
for them onto future generations, and unfortunately, the administration 
has shown absolutely no regard for the hardship this will cause. We 
often discuss the so-called ``death tax'', this administration's 
reckless fiscal policies are forcing a ``birth tax'' on every child 
born today.
  What do I mean by the term ``birth tax''? Simply this: a child born 
today is born owing his or her country $25,000. That is that child's 
share of the national debt. This is unconscionable. We have a 
responsibility as lawmakers to leave our country better off tomorrow 
than it is today. With policies like this, I am afraid that this 
administration and its supporters are failing to meet this fundamental 
moral responsibility to our country and to future generations.
  Also deeply troubling is that in order to cover increased borrowing, 
the U.S. is going deeper into debt to foreign countries. Japan, China, 
the United Kingdom, and Caribbean Banking Centers are now the largest 
foreign holders of U.S. Treasury Debt.
  We have borrowed over $720 billion from Japan, over $174 billion from 
China, and even tens of billions of dollars from South Korea. During 
the term of the President's first four years, we have seen our foreign 
debt holdings increase 83 percent from just over $1 trillion to over 
$1.8 trillion. This is especially dangerous because these countries can 
collect their debt when it suits them, which could potentially puts our 
nation in a very difficult economic situation.
  I find it astounding that the administration and the majority of this 
Congress have not put forward any plan to reduce the alarming increase 
in our nation's debt--an increase largely caused by their reckless tax 
and budget policies. Indeed, their only known plans to permanently 
extend tax breaks for the affluent and drain at least $1 trillion from 
Social Security--would only make our current problems worse.
  I strongly believe that increasing the debt limit once again without 
a plan is a big mistake. We owe it to future generations to do more to 
ensure that their future is economically sound. I hope that this 
Administration, and the majority of the Congress begin to enact more 
responsible fiscal policies before it truly is too late.
  Mr. CORZINE. Mr. President, yesterday I voted against legislation 
that will authorize a massive increase in the Federal debt. This bill 
highlights the gross irresponsibility of our Nation's current fiscal 
policies. And I hope that, in casting a negative vote along with many 
of my colleagues, we have helped send a message to the White House that 
it is long past time to change course.
  When President Bush came to office, we were expecting to run a 
surplus over the next ten years of $5.6 trillion. Instead, we now 
project a deficit of $3.5 trillion. That is a reversal of more than $9 
trillion.
  President Bush promised that he would not raid the Social Security 
trust fund. But, instead, under the Bush budget, we will spend every 
last penny of Social Security surpluses over the next 10 years, all 
$2.4 trillion. These surpluses won't be saved. They won't be used to 
help us keep our promise to working Americans. They will be diverted 
for tax breaks and other spending programs. This is not what the 
President promised. It is the opposite.
  In effect, the administration's policies are using payroll taxes paid 
by working Americans, and using them to finance tax breaks for the most 
fortunate among us. I think that is wrong.
  The past few years have been marked by unprecedented fiscal 
recklessness. The 2004 deficit, even including the Social Security 
surplus, is $413 billion. That is a record. Last year, the deficit was 
$377 billion. That was another record. The budget is spinning out of 
control, and few in the administration seem to care.
  Unfortunately, as bad as things have been in recent years, the 
outlook for the long term is even worse. The baby boomers are about to 
retire. And by 2050, 81 million Americans will be on Social Security--
about double the current level. We need to prepare for that. We need to 
save for it. Instead, we are doing the reverse. We are putting 
ourselves deeper and deeper in debt.
  In 2001, gross Federal debt stood at $5.8 trillion. By 2014, that 
debt will have skyrocketed to almost $15 trillion.
  With more debt, of course, comes higher interest costs. The 10-year 
cost of Federal interest payments has gone up from $622 billion in 
2001, to $2.4 trillion.
  All this debt, and all these interest payments, have consequences. 
They reduce the capital available for productive investment. They 
increase interest rates. They slow economic growth. And they lower the 
standard of living for American families.
  Another consequence of all this debt is that our Nation is slowly 
losing its economic independence. Foreign holdings of U.S. Treasury 
debt has increased 83 percent under this administration. Today, the 
U.S. owes China more than $170 billion. We owe Japan more than $700 
billion. Increasingly, our Nation is dependent on these countries to 
bolster our economy and to

[[Page 24003]]

maintain the value of the dollar. But if those countries and other 
foreign investors pull out in the face of rising fiscal imbalances, as 
has happened elsewhere, the consequences for our economy could be very 
serious.
  In my view, the current course of fiscal policy is not only unwise 
and dangerous, it is ultimately unsustainable. We can't go on like 
this. Either our leaders here in Washington will face reality and 
reverse course, or the markets will punish us until we do. Either the 
dollar will collapse, or interest rates will rise substantially, or 
inflation will rise, or all these problems will hit at once.
  When that might happen is anybody's guess. But you can't reverse the 
basic laws of economics. Sooner or later, the piper gets paid.
  So, I think we have made a mistake by increasing the debt limit so 
substantially. Needless to say, we must protect the full faith and 
credit of the United States. But we do not need a debt limit extension 
of this magnitude. And we should not have approved it yesterday. 
Instead, we should have passed a much smaller increase, in order to put 
real pressure on the Congress next year to finally get serious about 
the need for fiscal discipline.
  Next year we will begin perhaps the most important domestic policy 
debate in a generation when we take up President Bush's call to 
privatize Social Security. At that point, Congress will have to make a 
decision. Either we will keep our promise to American workers, or we 
will break that promise and cut earned benefits. I think we should keep 
our promise and protect benefits. But we can only afford to do that if 
we quickly reestablish some measure of fiscal discipline. Increasing 
our debt by $800 billion is not the way to do that and, in my view, is 
a serious mistake.
  So for all these reasons, I cast my vote no yesterday. For the sake 
of our economy, for the sake of our future, and for the sake of our 
values as a Nation, we must restore fiscal discipline. And we must do 
it soon.

                          ____________________