[Congressional Record (Bound Edition), Volume 156 (2010), Part 4]
[Senate]
[Pages 5628-5629]
[From the U.S. Government Publishing Office, www.gpo.gov]




                            THE FEDERAL DEBT

  Mr. SESSIONS. Mr. President, I shared recently with my colleagues my 
concern about the surging Federal debt and the ramifications that arise 
from that, and how it has a damaging effect in ways a lot of people 
have not considered on our economy and on the quality of life of the 
American people.
  A scholar at the Cato Institute published an excellent op ed in 
yesterday's Washington Times on the impact of borrowing on the American 
economy. Savings are essential, as we all know, for economic growth 
because it is from those savings that people borrow, and then they are 
able to invest in new factories, equipment, research, development, and 
create businesses that create jobs. That is how we get economic growth. 
It is part of our tradition of a free economy, and it has served us 
well. Very few would deny that this is the best way to allocate wealth, 
rather than trying to have a government-mandated economy.
  When the government issues debt and private citizens and corporations 
buy it, that, by definition, steers that money, that savings, from the 
productive or private sector of the economy toward the government. If 
the government wasn't issuing the debt, or borrowing the money, people 
would have money that they would likely invest in private corporations 
through bonds or stocks. They might place it in a bank and buy a CD, 
and then the bank would loan that to a private company, or some person 
who is wishing to build a home or a shopping center, creating jobs and 
growth in the economy. Some of our colleagues like to think that you 
can borrow money and you can increase debt and it is free money. But we 
know that is not true. Nothing comes from nothing. Everything has a 
cost, and it will be paid for one way or the other, at one time or 
another.
  The unprecedented Federal debt that we are dealing with today is 
unlike anything we have seen before. I think it is fair to say that 
both parties have blame to share, but I have to say we have never seen 
anything like the President's 10-year budget and what impact it will 
have on the debt in our country.
  Our debt in 2008 was $5.8 billion. In 2012, it is projected to double 
to $11.6 billion. In 2018, it will triple to 17.6 billion. That is a 
tripling of the entire debt of the United States in that many years. 
People would say, well, what does that mean? I say to you it means one 
thing I can show you. You borrow that money--somebody loaned it to the 
government. When the government took that loan and borrowed that money, 
they have to pay interest on it.
  Just to show what the Congressional Budget Office has told us about 
what that actually means, in 2009 we paid $187 billion in interest on 
our debt. That is going to go up every single year, according to them, 
until 2020 when we will be paying $840 billion in 1 year in interest on 
the debt.
  All of us have projects in which we believe. We believe in education 
or health. We believe in helping seniors or young people. We believe in 
highways and research and development, national defense, the National 
Institutes of Health, science and technology, improving our energy use, 
cleaning up our environment. Those things cost money.
  According to the projections of the Congressional Budget Office, $840 
billion will have to be taken off the top. It will have to be paid 
first. That will be larger than anything in our budget, including 
defense, unless it continues to surge, and we hope it does not. It will 
be larger than any other account. It will be crowding out money we 
could have been spending on things that work.
  Some of the money we spend does not work. Too much of it is wasteful 
Washington spending. Some of this money is very productive, and we like 
to think we are making the world a better place. We are going to have 
less of it because of this interest.
  The unprecedented Federal deficit last year of $1.4 trillion is a 
stunning number, and the projected $1.5 trillion deficit this year will 
be taking $3 trillion out of the economy. In fact, the CATO scholar, 
Richard Rahn, compared the percentage of money the government is taking 
out of the economy in this recession with how much the government took 
out of the economy in previous recessions and found that the current 
depletion of savings that is going to the government is unprecedented 
over the last 30 years.
  He says in 2009 the government took 38 percent of all the gross 
savings in the country by borrowing it, money that might have been 
available to a shopping center guy or a startup company or a person who 
needs to buy a home. They would borrow the money. The government is 
borrowing the money. The number of dollars in savings in this country 
is limited. We are taking 38 percent of it.
  By contrast, it did not take more than 15 percent in any other 
recession in the past 30 years. The average takings have been less than 
5 percent.
  I will show this chart: savings taken by the government during 
recessions. The average per quarter in the last 30 years is 1 or 2 
percent. In the 1982-1983 recession, it hit about 12; in the 1992-1993 
recession, it hit about 15 percent; in 2003-2004, about 11 or 12 
percent. Look at this, 38 percent in the 2009 recession we are in.
  Some say this is worse than anything we have ever seen before. It is 
very bad, and it is unprecedented. If it is so easy, and if there is no 
cost to borrow, why don't we borrow twice as much? We all know there is 
a cost. We have to make judgments about how far we can go, how much we 
can continue to borrow.
  We borrowed $800 billion for the stimulus package. Now we have a $270 
billion stimulus package that is proposed. Since that would not fly as 
a big package, it is being broken up. We voted to have another $18 
billion for a 2-month extension of unemployment insurance, the doctor 
fix, and some other items. We just borrowed it.
  We thought when we did the largest expenditure in the history of the 
Republic, when we borrowed $800 billion for the stimulus package--I 
thought that was more than we could possibly afford to borrow to try to 
stimulate ourselves artificially out of this economic slowdown. It 
worried me. In fact, I supported a plan that I believe would have cost 
half as much and created more jobs using the studies of the President's 
adviser on economics, Christina Romer. It would have been more 
productive than the one Congress did.
  One of the great tragedies of this whole process is how little 
stimulus we got out of the $800 billion. As Gary Becker, the Nobel 
Prize winner, said, it was not a stimulus package. It was not written 
to create jobs and growth. He predicted it would not create jobs, and 
he, unfortunately, has turned out to be correct.
  Senator Coburn and several of us and others opposed this bill because 
it ought to have been paid for. It should have been paid for out of the 
stimulus package. Unemployment compensation is certainly one of the 
items that was in the stimulus package. The doctor fix--what about 
that? We have to do that, don't we? Yes, we do. We really do. From 
where should that money come?
  The failure of compensation to our physicians--please understand--is 
a result of a law we passed that we now cannot adhere to that if it is 
in effect would cut physicians' pay for Medicare patients 21 percent. 
Many physicians are already quitting taking Medicare patients. If this 
were to pass, we would have very few continuing to take Medicare 
patients. The whole system would collapse. They are not getting paid 
enough now. Private insurance pays them much more than the government 
does. How should we pay the doctors? Don't we have to borrow the money?
  One of the great flaws in the health care bill was the failure to fix 
the

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Medicare doctor payment. That was the crisis always in Medicare. The 
proposal that passed on a partisan vote in the Senate, the proposal to 
have a new health care program to raise taxes for Medicare, bringing in 
more money for Medicare, cut benefits from Medicare.
  Did they fix the crisis, the doctor payment first, like what had been 
said had to be done from the beginning? One of the reasons we needed 
health care reform is because we needed to have a permanent solution to 
the doctor payments shortfall. Did we use the money for that? No. We 
took the money and created an entirely new spending program, a new 
health care program.
  Our colleagues are proposing that we just borrow the money, the $371 
billion it is going to take over 10 years to fix the doctor payments.
  This is why the American people instinctively understand that we are 
not in control. We are out of control. We are in denial about how 
serious our situation is. I think the American people instinctively are 
right.
  People say: Oh, the townhall meetings are angry. Some of them are 
angry. I sense they are just deeply concerned about the country they 
love, and they have a sense--and it is correct--that we are 
irresponsibly managing our duties here. As a result, we are saddling 
them and their children with the largest increase in debt the Nation 
has ever seen. It has the potential to put a cloud over the long-term 
growth in our economy.
  I do believe we are going to get some economic strength from this 
stimulus package. It is impossible to spend $800 billion and not get 
some economic growth from it in the short term. In 1 more year it will 
almost all be spent. I guess before the election we will have a lot of 
money being spent, and we are going to get some benefit from that, and 
I hope we will have a long-term positive benefit.
  The Congressional Budget Office, our group that we ask to analyze 
spending and score the cost of legislation, analyzed the $800 billion 
stimulus package and this is what they said. I think it makes sense and 
I am afraid it is true. For the first 2 or 3 years, we are going to 
have an economic lift from this flood of money into the economy. But 
over 10 years, the Congressional Budget Office has concluded that the 
$800 billion in spending will not improve the economy. Their score was 
that the economy would grow less in 10 years having passed the stimulus 
package than if we passed nothing--if we didn't spend anything. Why is 
that? Mr. Elmendorf said the reason is that when you borrow $800 
billion, you crowd out borrowing from the private sector, which is 
where our economic growth is. You take available money that the private 
sector could have borrowed to run their businesses and factories and 
the government spends it on pork programs and social programs. This 
chart shows exactly that. I didn't know that 38 percent of the money 
that is being saved in this country would be gobbled up by Federal 
Government borrowing to keep our ship afloat so we can still try to buy 
our way out of this recession.
  The experts say recessions are cyclical. If you don't do anything, 
you will come out of it. We hoped some sort of stimulus package could 
help us come out of it faster, with less pain, and I was prepared to 
vote for and I did vote for several packages that would be more job 
oriented and more targeted to growth. But we didn't pass that kind of 
bill. We passed a big governmental spending bill. It was predicted not 
to be growth oriented, it was predicted not to be job creating, and 
apparently, unfortunately, that has been basically true.
  So I am hoping we will have some growth for a few years here, but I 
am confident, and logic tells me, that in the outyears that growth will 
not be as vigorous as it would otherwise have been because we are going 
to be carrying an unprecedented amount of debt and we are going to be 
paying an unprecedented amount of interest every year, and this will 
crowd out private borrowing and cost the government a stunning amount 
of interest. That means the government will not be able to do anything 
to improve the lives of the American people because that money first 
has to go to pay the interest.
  I wanted to share that, because there are some people who are saying 
that those of us who objected to this bill--this small $18 billion debt 
expansion that passed today--somehow we don't love America and we don't 
love people in need. We believe and we offered legislation that would 
have paid for these expenses by taking it from unobligated funds and 
programs that don't work effectively in our country. So we would have 
been able to fill this $18 billion need without increasing the debt. 
But instead of doing that, the majority of the Senate, or Democratic 
leadership, pushed through legislation that would borrow it.
  I guess that is the path we are on, to have an $800 billion stimulus, 
a $270 billion stimulus II, to start a new $2.5 trillion health care 
bill--with these kinds of bills, more and more spending each year, and 
more and more debt. But we have got to stop. I know it is hard to say 
no and hard to make the tough choices, but that is what we have been 
elected to do.
  I think we have to get serious about it. I am getting serious about 
it. I don't intend to continue to vote willy-nilly for these debt-
increasing bills. I believe this Congress has got to get serious about 
our financial future and take some commonsense steps that can lead us 
into a better future.
  I thank the Chair, and I yield the floor.

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