[Congressional Record (Bound Edition), Volume 152 (2006), Part 3]
[Senate]
[Pages 3320-3321]
[From the U.S. Government Publishing Office, www.gpo.gov]




                            BUDGET DEFICITS

  Mr. BAUCUS. Mr. President, the Book of Proverbs says: ``The borrower 
is servant to the lender.''
  This is a sad week for America, for we have become servants to many 
nations.
  This week, we debate legislation to raise the Government's borrowing 
by $781 billion. That is more than three-quarters of a trillion 
dollars.
  This will be the fourth largest debt increase in the history of our 
country, and it will be the fourth debt limit increase enacted in this 
administration.
  In 2002, the Government raised the debt ceiling by $450 billion. The 
next year, 2003, the Government raised it by $984 billion--nearly a 
trillion dollars. That was an alltime record. And in 2004, the 
Government raised the debt ceiling by another $800 billion.
  This week, we consider legislation to raise the debt ceiling by 
another $781 billion. When added to the three other debt ceiling 
increases during this administration, the total increase in the debt 
ceiling will be a mammoth $3 trillion. That is servitude.
  When this administration took office, the limit on Treasury borrowing 
was about $6 trillion. It took us as a country 212 years to accumulate 
that much debt. Now, a mere 5 years later, this administration has 
added another $3 trillion. This one administration has added half again 
as much debt as all the other administrations that came before it put 
together. That is servitude.
  During the period that this administration has been in office, the 
debt has gone up by about $10,000 for every man, woman, and child in 
America. For a family of four, that is an increase of $40,000 just 
during the time this President has been serving as President.
  What would an average American family think of that amount of debt? 
Imagine an average American family sitting at the kitchen table. 
Imagine them looking at $40,000 in new debt. What would they think? 
Would they just call up the credit card company and ask for a higher 
limit?
  The right thing to do would be to turn over a new leaf. The right 
thing to do would be to balance the family budget. When your debt spins 
out of control, you cut up the credit card, you try to live within your 
means, and you stick to a budget for the future of your family.
  The question is, Will Congress show the kind of fiscal discipline 
that is necessary? Will Congress show that discipline that any American 
family should be expected to show?
  And to whom are we servants? We are servants to foreigners. Much of 
the Treasury debt is now owned by foreigners. That includes both 
foreign citizens and central banks in foreign countries. That means we 
pay interest to foreign citizens and foreign central banks. Over time, 
this will lower America's standard of living.
  How is debt like servitude? These large foreign holdings of our 
Treasury debt are a risk to our homeland security and our economic 
security. Suppose the President thinks that another country is 
jeopardizing America's security. Suppose the President would like to 
tell that country that America would like action from it and would take 
action against it if it did not change its actions. If that country's 
central bank owned a large amount of our Treasury debt, it could 
threaten to sell it quickly. That sale would drive up interest rates 
and cause the dollar to fall. That would cause a recession in America. 
As a result, the President might have to back down from threats against 
that other country. America would be at greater risk.
  Or take the situation where America has a trade dispute with a 
foreign country. Imagine that the foreign country's central bank owned 
a lot of our debt. Then that country could threaten to sell the debt to 
force America to back down from our position in a trade dispute. 
America would be weaker in trade.
  Foreigners own more than $2 trillion of Treasury debt today. This is 
double the amount they owned at the beginning of this administration.
  Mr. President, 96 percent of the increase in debt held by the public 
between December 2004 and December 2005 resulted from foreign purchases 
of that debt. The bottom line is simple. These massive increases in 
debt harm America. They make us the servants of foreign nations.
  How did we get to this point? Federal budget deficits drive up our 
debt, and these deficits have been huge during this administration. 
When this administration took office we were running large budget 
surpluses--not deficits, surpluses. In fiscal year 2000, the last year 
of the previous administration, we ran a surplus of $236 billion. We 
ran a surplus of $86 billion even without counting Social Security. By 
fiscal year 2001, the surplus, counting Social Security, had dropped to 
$128 billion, down from the $236 billion in the prior year. Then, the 
tide of red ink really flowed. In fiscal year 2002, the Government ran 
a deficit of $158 billion. The following year, 2003, the Federal 
Government ran a budget deficit of $375 billion. That was an all-time 
record. But that record lasted just 1 year.
  The next year, fiscal year 2004, the Government set a new record by 
running a deficit of $413 billion. The following year, fiscal year 
2005, the Government ran a deficit of $319 billion. Although this was 
not a record, it was still larger than deficits run in any year before 
this administration took office. In the current year, the deficit will 
go up again. The administration predicts that the deficit will rise to 
$423 billion. This represents yet another all-time record.
  To make matters worse, these record deficits are occurring just at 
the time the retirement of the baby boom generation is about to begin. 
The retirement of the baby boom generation will put enormous stress on 
the Federal budget. It will lead to huge increases in the cost for 
Social Security, Medicare, and Medicaid, and this will drive up budget 
deficits.
  The fiscal policy of this administration has been the most 
irresponsible in the Nation's history. This fiscal policy has generated 
huge budget deficits, and

[[Page 3321]]

these deficits, in turn, have contributed to massive increases in 
Federal debt.
  We need to change course. We must reenact the tough pay-go budget 
rule. The pay-go rule says if you want to increase entitlement spending 
or tax cuts, we have to pay for them. Senators Conrad and Feingold will 
offer an amendment to the budget and again to the debt limit 
legislation to restore tough pay-go rules.
  I will have more to say about that when the amendment is offered, but 
for now let me cut to the chase. Every Senator ought to vote for that 
amendment. We need to enact a tough pay-go rule. We need to work 
together to stop increasing the budget deficit. We need to vote against 
the hemorrhaging of debt that has afflicted us these last few years. 
That is what we need to do.
  The choice is clear. Will we fall further into debt to foreign powers 
or do we have the will to break the bonds of our debt servitude? All 
that is at stake is our freedom.
  I urge Senators to think deeply about the upcoming vote. The future 
of our country, in many deep senses of the term, depends on that vote, 
especially the future of our children and our grandchildren.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. FRIST. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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