[Congressional Record (Bound Edition), Volume 155 (2009), Part 11]
[Senate]
[Pages 14765-14766]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           DEBT AND DEFICITS

  Mr. THUNE. Madam President, one final point I wish to make is all of 
this sort of ties back to what I think is the pattern, the precedent we 
have seen so far in this Congress, and that is incredible amounts of 
spending, incredible amounts of borrowing. The stimulus bill started it 
off to the tune of about $800 billion. The budget we passed this year 
on the discretionary, nondefense domestic side was 8.9 percent more 
year over year than the previous year. The omnibus bill we passed--
which was unfinished business from the last Congress--was 8.3 percent 
over the previous year, which, again, more than doubled the rate of 
inflation. We have all these Federal obligations and liabilities that 
are being created by virtue of these interventions in the marketplace. 
We have the TARP program; we have all this taxpayer exposure out there, 
all this spending, and this year we know we are going to have a $1.8 
trillion deficit which dwarfs anything we have ever seen in history and 
as far as the eye can see. For the next decade, we are looking at about 
a $1 trillion, on average, annual deficit.
  Our debt to GDP is headed to historically high levels if predictions 
are accurate. I think the predictions are optimistic in terms of what 
we are going to see in economic growth, unemployment, inflation, and 
interest rates. Even if the projections with respect to the economic 
indicators are accurate, we are going to see, 10 years from now, the 
public debt, as a percent of the GDP, reach over 80 percent--a rate we 
have not seen literally since the end of World War II.
  These are very troubling signs. I think they should be warning flags, 
warning signs to the people in this country that this level of 
borrowing, the amount of spending, the amount of taxation, with the new 
obligations in the health care bill, is too much for our economy to 
bear and for the American taxpayer to bear.
  What the President came out with earlier this week is a new 
announcement that, all of a sudden, we have gotten religion, and we are 
going to submit all of the new spending and all of these programs now 
to what is known as pay-go. I will submit for the Record an editorial 
from the Wall Street Journal from a couple days ago.
  I ask unanimous consent that it be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

             [From the Wall Street Journal, June 11, 2009]

                         The ``Paygo'' Coverup

       Some things in politics you can't make up, such as 
     President Obama's re-re-endorsement Tuesday of ``pay-as-you-
     go'' budgeting. Coming after $787 billion in nonstimulating 
     stimulus, a $410 billion omnibus to wrap up fiscal 2009, a 
     $3.5 trillion 2010 budget proposal, sundry bailouts and a 13-
     figure health-care spending expansion still to come, this 
     latest vow of fiscal chastity is like Donald Trump denouncing 
     self-promotion.
       Check that. Even The Donald would find this one too much to 
     sell.
       But Mr. Obama must think the press and public are dumb 
     enough to buy it, because there he was Tuesday re-selling the 
     same ``paygo'' promises that Democrats roll out every 
     election. Paygo is ``very simple,'' the President claimed. 
     ``Congress can only spend a dollar if it saves a dollar 
     elsewhere.''
       That's what Democrats also promised in 2006, with Nancy 
     Pelosi vowing that ``the first thing'' House Democrats would 
     do if they took Congress was reimpose paygo rules that 
     ``Republicans had let lapse.'' By 2008, Speaker Pelosi had 
     let those rules lapse no fewer than 12 times, to make way for 
     $400 billion in deficit spending. Mr. Obama repeated the 
     paygo pledge during his 2008 campaign, and instead we have 
     witnessed the greatest peacetime spending binge in U.S. 
     history. As a share of GDP, spending will hit an astonishing 
     28.5% in fiscal 2009, with the deficit hitting 13% and 
     projected to stay at 4% to 5% for years to come.
       The truth is that paygo is the kind of budget gimmick that 
     gives gimmickry a bad name. As Mr. Obama knows but won't tell 
     voters, paygo only applies to new or expanded entitlement 
     programs, not to existing programs such as Medicare, this 
     year growing at a 9.2% annual rate. Nor does paygo apply to 
     discretionary spending, set to hit $1.4 trillion in fiscal 
     2010, or 40% of the budget.
       This loophole matters, because on the very day Mr. Obama 
     was hailing paygo the House Appropriations Committee was 
     gleefully approving a 12% increase in 2010 nondefense 
     discretionary spending, the third year running that Democrats 
     have proposed double-digit increases. Or consider that the 
     2010 budget resolution included a $2 billion increase for 
     low-income heating assistance as an entitlement change that 
     should be subject to paygo. But Congressional Democrats 
     simply classified it as discretionary spending, thereby 
     avoiding the need for $2 billion in cuts elsewhere. C'est-la-
     paygo.
       Mr. Obama's new proposal includes even more loopholes. 
     There's an exception for Congress's annual alternative-
     minimum tax ``patch,'' which is worth at least $576 billion 
     over 10 years; for any of the Bush tax cuts that Mr. Obama 
     decides he wants to extend past 2010; and to protect against 
     planned cuts in Medicare doctor payments. These carve-outs 
     alone spare Democrats from having to come up with some $2.5 
     trillion in spending cuts or new taxes. To add insult to 
     profligacy, the rules also allow the Administration to run 
     huge early deficits for its looming health-care bonanza, and 
     only pay for it later--say, after 2012.
       The President also revived the myth that paygo was somehow 
     responsible for eliminating budget deficits during the 
     Clinton years. In fact, that brief era of balanced budgets 
     was due to: mid-decade spending reductions by a GOP Congress 
     elected on a balanced-budget pledge; an excessive cut in 
     defense spending to 3% from 5% of GDP across the decade; and 
     an unsustainable revenue boom due to the dot-com bubble. But 
     harking back to the 1990s lets Mr. Obama avoid having to 
     defend his own spending record.
       The real game here is that the President is trying to give 
     Democrats in Congress political cover for the health-care 
     blowout and tax-increase votes that he knows are coming. The 
     polls are showing that Mr. Obama's spending plans are far 
     less popular than the President himself, and Democrats in 
     swing districts are getting nervous. The paygo ruse gives 
     Blue Dog Democrats cover to say they voted for ``fiscal 
     discipline,'' even as they vote to pass the greatest 
     entitlement expansion in modern history. The Blue Dogs always 
     play this double game.
       The other goal of this new paygo campaign is to make it 
     easier to raise taxes in 2011,

[[Page 14766]]

     and impossible to cut taxes for years after that. In the near 
     term, paygo gives Mr. Obama another excuse to let the Bush 
     tax cuts he dislikes expire after 2010, while exempting those 
     (for lower-income voters) that he likes. In the longer term, 
     if a GOP Congress or President ever want to cut taxes, paygo 
     applies a straitjacket that pits those tax cuts against, say, 
     spending cuts in Medicare. The Reagan tax reductions would 
     never have happened under paygo.
       The main political question now is when Americans will 
     start to figure out Mr. Obama's pattern of spend, repent and 
     repeat. The President is still sailing along on his charm and 
     the fact that Americans are cheering for an economic 
     recovery. But eventually they'll see that he isn't telling 
     them the truth, and when they do, the very Blue Dogs he's 
     trying to protect will pay the price. And they'll deserve 
     what they get.

  (Mr. BEGICH assumed the Chair.)
  Mr. THUNE. Mr. President, I will make a couple of observations they 
made in that editorial, as well as similar observations made by some of 
my colleagues in the Senate, since this announcement was made--that 
pay-go is going to now be enforced--statutory pay-go.
  This editorial from the Wall Street Journal said:

       The truth is that paygo is the kind of budget gimmick that 
     gives gimmickry a bad name. As Mr. Obama knows but won't tell 
     voters, paygo only applies to new or expanded entitlement 
     programs, not to existing programs such as Medicare, which 
     this year is growing at a 9.2 percent annual rate. Nor does 
     paygo apply to discretionary spending, set to hit $1.4 
     trillion in fiscal year 2010, or 40 percent of the entire 
     [Federal] budget.

  Mr. President, the thing that strikes me about this announcement is, 
it seems it is, as is often said, too much, too little, too late. We 
already passed an $800 billion stimulus bill, which we financed by 
borrowing from the next generation. That wasn't subject to pay-go nor 
have many of the spending programs in the past couple of years been 
subject to pay-go.
  When the Democrats took control of the Congress after the 2006 
elections, it was announced by Speaker Pelosi that they were going to 
enact pay-go--saying pay-go is going to be the policy, the rule 
followed in terms of the spending done by the Federal Government. But 
that was quickly ignored. As I said before, if we look at the reality 
of what happened in the last few years, despite all the lipservice paid 
to pay-go, it doesn't apply all that much. It applies to new 
entitlement programs and to tax cuts, but as far as I can tell, it 
doesn't apply to discretionary spending, to current entitlement 
spending, which, as I said earlier, is growing--Medicare at about a 
9.2-percent annual clip. So what is it really good for?
  Well, it seems to me it is a statutory excuse to raise taxes. If we 
continue to exempt more and more things--one of the things we debated 
in the last year or two is whether an extension or exemption will be 
afforded to taxpayers from the AMT, which would capture more taxpayers, 
and whether it ought to be offset and paid for and the pay-go rules 
ought to apply to it.
  Well, the President, in his announcement a couple days ago, went so 
far as to say he is going to exempt the AMT fix from pay-go. That is a 
$576 billion ticket item over a 10-year period. The AMT would be 
exempted. The physician fee fix would be exempted, which is something 
we have had to do recently in Congress on a regular basis to protect 
doctors from the cuts that would occur under statutes passed many years 
ago. So we come in and we do what we call a physician fee fix. That 
will be exempted from the pay-go rules.
  So we would be carving out big chunks of Federal spending, of tax 
relief, and there were a couple of other exemptions that were mentioned 
that would be exempt from pay-go. If we take them off the table, and if 
we take entitlement spending off the table--at least current, present 
entitlement spending--and we take discretionary spending off the table, 
it seems to me all we have done is, again, created this gimmick that is 
trying to pull the wool over the eyes of the American people that we 
are really doing something serious about fiscal responsibility which, 
in fact, we all know is not the case.
  Mr. President, I hope we get serious about fiscal responsibility 
here. It means we have to get our arms around spending. We cannot fix 
the fiscal problems in this country when we exempt everything and say 
we are going to continue to spend--in fact, the appropriations bill 
passed in the House of Representatives the other day; they passed one 
of their appropriations bills with a 12-percent increase over last 
year. How can we justify that when we have a $1.8 trillion deficit this 
year and an economy that is in recession? The Federal Government is 
supposed to be leading the way, setting the example, and we cannot even 
live within our means. We say we are going to implement pay-go and, 
boom, before the ink is even dry on whatever statement they may have 
signed, we have a House Appropriations subcommittee passing an 
appropriations bill with a 12-percent year-over-year increase. And, 
again, because discretionary spending is exempt from pay-go, what 
difference does this announcement on pay-go really make, other than to 
try to pull the wool over the eyes of the American people?
  I hope the American people figure that out. I think they will. I 
certainly know, around here at least, we get new data all the time 
about the size of the deficit and what we are going to look at in the 
foreseeable future. It is a very disturbing picture. That is why I 
think it is so important we get spending under control, that we get the 
Federal Government out of the private ownership of American business, 
and let American business do what it does best: create jobs and make 
their own management decisions, not the Federal Government, because it 
controls such a big part of these businesses, intervening and trying to 
impose their political will on this decisionmaking process, and that we 
do everything we can to prevent a government takeover of our health 
care system, at a cost of somewhere between $1 trillion and $2 
trillion, which will inevitably lead to much higher taxes.
  Somebody has to pay. These things all have to be paid for or we can 
borrow it, which is what we did with the stimulus bill. So we can have 
higher taxes or more borrowing. I argue the spending has to stop. That 
is the only way we are going to get our fiscal house in order and make 
it clear to the American people we are serious in Washington about 
getting spending under control. I hope we get a vote on my exit plan, 
my bill. I think we need a plan to exit the scene and get government 
out of the ownership of large parts of the private economy and private 
businesses in this country. I hope we will do everything we can to 
prevent a government takeover of our health care system, which is one-
sixth of our economy.
  I also hope we will not fall for dumb gimmicks like pay-go, which do 
nothing to address, fundamentally, the financial and fiscal problems 
our country faces, but that we will get serious about getting spending 
under control and putting America on a fiscal path toward fiscal 
discipline that is fair and responsible to the people in this country, 
who pay these bills, the American taxpayers.
  I yield the floor, and I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. REID. 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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