[Congressional Record (Bound Edition), Volume 157 (2011), Part 14]
[Senate]
[Pages 19215-19218]
[From the U.S. Government Publishing Office, www.gpo.gov]




                        SPENDING VERSUS REVENUE

  Mr. ENZI. Madam President, I wanted to take this opportunity to share 
with you what has been keeping me awake, and I am sure, if I explain it 
well enough, it will keep you awake as well. Misery loves company. This 
is misery that is going to affect your future, and the Senate has to 
make some changes to have a future for this country.
  For 14 years, I was the only accountant in the Senate. I have been 
joined by Senator Johnson of Wisconsin, who is an accountant, and these 
kinds of numbers always bother us a little bit. I have put together a 
couple of pie charts here. This one on the left represents the spending 
we are doing; the one on the right represents the revenue we are 
receiving to do the spending. These are proportionately correct. This 
is the spending; this is the revenue to do the spending. Dramatically 
different. The revenues are dramatically lower.
  There are a number of pieces to this that I think probably will 
reveal more. The spending, incidentally, is $3.456 trillion. We are 
spending $3.456 trillion. We are taking in $2.2 trillion. That is $1.3 
trillion less than we are spending. So we are spending a third more 
than we are taking in.
  How long can you do that? There is no end in sight. What is that made 
up of? Well, one of the things we worry about is Medicare, Medicaid, 
and Social Security. I have the revenues represented here for Social 
Security and other social insurances, and we are taking in $865 billion 
a year to support these programs. This piece of the pie is what we are 
having to put out for those same programs. We are having to put out 
$1.494 trillion; so $865 billion versus $1.494 trillion.
  When we say these programs are going broke, I think that fact is 
pretty evident. If you don't make any changes, this kind of spending 
will eliminate a program that seniors rely on. I used to say when we 
are spending at this rate, we are stealing from our grandkids. Now we 
are to a point where we have spent so much, it is no longer our 
grandkids we are stealing from, it is our kids. And in a matter of 
months the bill could come due.
  Europe is having some difficult financial times, and they are 
changing the way money is going to be available to secure the bonds 
that allow us to do this kind of spending. These actions could have 
widespread implications for the United States very soon. We also took 
Social Security money and put it in a trust fund. I always say, don't 
trust the trust funds. What we did is put IOUs in a drawer and we spent 
the money. We are spending some of the money twice. How long can you 
spend the money twice?
  Let us take a look at some of the other parts of this pie, because we 
always talk about the nondiscretionary spending. Well, to cover our 
discretionary spending, which includes Defense and all of the 
nonmandatory

[[Page 19216]]

items, we are spending $1.349 trillion. And the income? Individual 
income tax is paying $899 billion. Corporate income tax pays $191 
billion. I bet people thought there was a lot more corporate tax than 
that.
  Part of the reason for this corporate number is that a lot of people 
have single proprietorships, partnerships, or small business 
corporations. If a business is in one of those three categories, the 
money their company makes goes straight to their tax line, even though 
hardly anybody in business can take out all of the money they make. If 
they do not reinvest that money into the business, it business would go 
broke. So they do not get to take the money out, but have to count it 
through the individual tax code. That goes in this $899 billion of 
individual income, as opposed to the corporate tax of $191 billion. 
There is also an excise tax of $67 billion. These are the kinds of 
numbers that have to fund $1.349 trillion of spending.
  We have discretionary spending of $660 billion and we have military 
spending of $689 billion. I mentioned Social Security, Medicare, and 
Medicaid, but besides that we have other mandatory spending adding 
another $416 billion in spending. That $416 billion accounts for the 
other items we have said will definitely be paid no matter what kind of 
shape the Federal Government is in. There are all sorts of programs 
included in that tally.
  This little yellow sliver here, a very important one, is the interest 
we have to pay. That is mandatory as well. We don't have an option on 
whether we are going to pay the interest on the bonds that we owe. 
Those interest costs come to $197 billion a year and that is at the 
lowest interest rate in the history of the United States. What happens 
when that goes up? As European countries have more trouble trying to 
sell their bonds, they are going to have to pay a higher rate to be 
able to sell those bonds. When they have to pay a higher rate, we will 
have to pay a higher rate. We are all competing for the same dollars, 
and there aren't enough dollars out there to fund this kind of an 
increase in spending each and every year. How do we make up the $1.2 
trillion more we are spending than we are taking in? It's a huge 
difference we aren't coming close to addressing.
  I hope people can grasp the difference between spending and revenues. 
If you look at your own personal budget, your spending better be lower 
than your revenues, or at least no greater than the revenues. We 
haven't grasped that concept here yet. We did eliminate earmarks for 
the most part, and that helps, but it was still a rather small amount 
and we are still adding programs.
  Sometimes we add programs as a demonstration project. A group of 
Senators get together and they say, our five States could do something 
beneficial with this new program we have devised, so we will put a 
little money in the budget and draw up the criteria so just those five 
States can receive these monies. And the purpose is to see whether the 
program is effective. In my 14 years here, I have rarely seen one of 
these types of tailored programs that wasn't effective. I suppose there 
are some I never heard reported on, but I yet to see one that isn't 
effective. This means the following year the same group comes back and 
says, we just had this revelation, this marvelous experiment that 
happened in our State. It was spectacular and it ought to be expanded 
to every State in the Nation. Well, if it is that good, it probably 
ought to be expanded to every State in the Nation. But with whose 
money? With what money? We are already spending more than we are taking 
in.
  We can't do the demonstration programs on new ideas unless we can 
eliminate some of the old ideas, which brings up another problem. 
Another thing we do around here is we say we are going to eliminate 
this program, and over 10 years it will bring in the $5 billion needed 
to fund a new program. Well, that savings is accrued over 10 years, but 
the money on the new program is going to be spent over 1 year or 2 
years at the most. That is pretty bad accounting. That is how you get 
to a situation where you have the current spending level versus the 
current revenues, by using creative accounting to pay for that new 
program.
  Well, you can't bind a future Congress, so there is no assurance that 
the current method of getting the revenue will stay around. There is 
also no assurance we won't use that same pot of revenue two or three 
times. We will probably be told this is not the case, but I have seen 
some instances around here where revenue has been spent more than once.
  One of the other problems we have around here is that we have too 
many spending decisions to make. There isn't a business in the world, 
with the exception of a business like Wal-Mart, that spends $3.456 
billion in a year--1 year. There aren't many businesses that comes 
close to that. And they have a bevy of accountants figuring out how to 
make expenditures, cuts, and balance the budget for the year.
  What we do here in the United States Senate is an appropriations 
process. We have broken that process down into 12 pieces to make it 
more manageable, but 12 pieces doesn't cut it. You can't get into the 
detail for spending the billions. One of those numbers is $689 billion. 
How long would it take to go through the expenditures on $689 billion? 
We have to trust some of the past spending and some of the past 
obligations, but we can't be as conscientious and detail-oriented as we 
should be.
  So what do we do about it? Well, we do omnibus bills. That is where 
we look at what we spent last year, and we put everything into one 
package and hurry up and pass it so the government can continue to 
operate. Before that happens, we might do a series of continuing 
resolutions. We say, we can't shut down government because there are so 
many things people need that we have already approved--to the tune of 
$3.456 trillion--so we have to keep government operating. What we end 
up with is a continuing resolution.
  A continuing resolution allows a government agency to spend one-
twelfth of what they had the previous year each month until we get a 
funding agreement for the remainder of the fiscal year. In 2008, we 
spent 27 percent less than we spend right now. I think a lot of the 
agencies would be delighted to have us keep continuing one-twelfth of 
their last year's allotted spending each month this year. That is what 
we have been doing, and it's not getting us anywhere.
  I think there ought to be a penalty, which would be reflected in 
every one of the budgets. I think every time we pass a continuing 
resolution there ought to be a reduction in the amount spent each month 
until we get a final resolution. That could be 1 percent or \1/2\ 
percent or \1/4\ percent, but there should be some kind of a reduction 
if we are ever going to reduce spending and pay down our debt.
  There is another responsibility, and that is for appropriators to 
figure out how to get this spending circle down to the size of the 
revenue circle. This is the only part that the Appropriations Committee 
has worked on--this little third of the square that contains 
discretionary spending.
  What we are going to have to do now is come up with some solutions. I 
have some solutions. I am not going to go into those today, but what I 
want people to do right now is to think about how much we are spending 
versus the revenue we have. Every person in America needs to be 
thinking about the way the programs they are involved in can be a part 
of getting the spending circle down to the size of the revenue circle. 
It is everybody's responsibility.
  What we continually run into are the groups--particularly from our 
States--that come in and say: I have this fantastic program and we just 
need a little increase for inflation because it is such a phenomenal 
program. For years, we have been able to do that. That is how the 
balloon got this big. We are not going to be able to do that anymore.
  What would be helpful is if people could suggest how, in their 
program, they could make it better for less money. It is either going 
to have to be better for less with a little pain right now, or wait a 
couple years and have it worse for less with a lot of pain.
  We are at a point right now where we reduce spending 1 percent for 
each of 7

[[Page 19217]]

years and get to a balanced budget; that is, 1 percent true cuts. That 
isn't 1 percent less growth. It is 1 percent true cuts each and every 
year, and it has to cover the whole circle, not just the discretionary 
part of the spending circle--which is what we usually concentrate on--
and then have some discretionary capability on it. The fact is, the 
largest amounts we spend in this whole piece of the pie is spent on 
mandatory spending, and it is conversely funded by a much smaller 
amount. We can't do that for long. We are going to have to propose 
solutions.
  Instead we have been in scenario where people come in and say we need 
a little bit more money or don't cut my program; keep it the same size. 
I ask for suggestions on how we could keep this practice going in light 
of our disproportionate revenues and expenditures. The usual approach 
is to tell me and my fellow senators there are a couple of other 
programs that we ought to eliminate. We are looking at those too.
  We looked at them in the Health and Human Services areas, Senator 
Coburn and I did, and found there was $9 billion of duplication. Do we 
need duplication? I would hope not. Senator Coburn got so excited, he 
did this same study for the entire Federal Government and found $900 
billion in duplication. Does that mean a whole lot of other agencies 
were a whole lot less efficient than Health and Human Services? No. It 
means we have duplicative programs in every single agency.
  We also have financial literacy programs in every single agency. If 
we are spending $3.456 trillion and only getting $2.2 trillion in 
revenue, is the financial literacy in our government working? I don't 
think so.
  When I first got here, there were 119 preschool education programs. 
Preschool is important. The start children get from when they are first 
born until they go to school makes a huge difference in their growth 
and development for the rest of their lives. However, we had 119 
programs and once we took a closer look, we found many of them, 
according to their own evaluation, were failing. We now have that 
number down to 69 programs. Do you know why we can't go below 69? My 
jurisdiction as Ranking Member of the Health, Education, Labor, and 
Pensions Committee is over the Department of Education, which only has 
8 programs--8 of 69 preschool programs. The Department of Agriculture 
has the most preschool programs.
  That's why, when Senator Coburn is talking about duplication and 
looking at the complete picture of everything the Federal Government 
does, there is duplication in each and every agency. What we are going 
to have to do is pick out those that operate with the most efficiency 
and results, give them a little more funding and eliminate the other 
duplicative programs. Getting rid of duplication is a surer way of 
solving the problem than some of the other ways that have been talked 
about.
  One other avenue we keep talking about is waste, fraud, and abuse. 
Yes, there is waste, fraud, and abuse. We need everybody in America to 
help us find that waste, fraud, and abuse, but in reality, the total 
cost of waste, fraud, and abuse is a rather elusive number. Does 
anybody know how big that is? Everybody is guessing. It is only a guess 
how much there is. We need to find it, and we need to be taking the 
money from eliminating these actions before we spend it.
  We will sometimes attempt to use the waste, fraud, and abuse numbers 
as the pay-for for a new program. We aren't able to spend that money 
until we actually have it, but what happens it is used as pay-for and 
the program goes into effect, but nobody follows up to go out and dig 
up that waste, fraud, and abuse. Instead, the waste, fraud, and abuse 
money ought to go into a fund before it can be spent on something else.
  However, when I am talking about duplication, the $900 billion worth 
of duplication, I am talking about numbers that we can go to the 
Federal budget and look up. We can find out exactly how much those 
programs are spending. In its duplication, we wouldn't eliminate all of 
them, but we ought to be able to eliminate half of them. Madam 
President, $450 billion alone, half of Senator Coburn's total 
duplication findings, would be a huge change for this country.
  I hope we look at some of those ideas to cut spending. I have a 15-
page speech that would explain some ways we could solve this problem, 
but what I am trying to do is get people to grasp the concept that our 
Federal tax receipts, and total revenue, is far outweighed by the 
circle that shows what we are spending. As a family, people know they 
can't budget this way. As a government, we can't do it for very long, 
even if we print our own money. Somehow we are going to have to shrink 
the spending circle down until it is that size or grow the revenue 
circle until it is--they are comparable in size, or a combination of 
the two. As I said, I will give some other speeches to outline some of 
my other ideas. In the meantime, I hope everybody will take a look at 
the chart I have shown today.
  We can't look at it and say don't touch Medicare, Medicaid, and 
Social Security, we can't have $\1/2\ trillion of extra expenditure 
spending in that category alone for long. There is another $416 
trillion in mandatory spending in that same category. How long can we 
keep spending at this rate? What happens if interest rates go up? This 
piece of the spending pie can become much bigger and probably will. I 
don't know how long we can keep interest rates as low rate as they are 
now. If they go up, it will help some seniors because they have some 
investments in cash that would get higher interest rates, but for the 
country as a whole, rising interest rates that already make up 6 
percent of our budget will only be more cause for worry. When that one 
expands above the 1 percent we are spending right now--and it is going 
to expand in the next couple of years because of what is happening in 
Europe--we had better be worried about it.
  This is the kind of picture shown by the deficit commission that 
Erskine Bowles and Alan Simpson chaired. I was hoping we would repaint 
this picture a number of times between the time they released their 
report 1 year ago and now, because we have to get America to 
understand. Actually, I can tell you the people in my State understand 
this. I don't need to explain it to them. They know how much more we 
are spending versus what we are taking in. They can even tell you the 
numbers. They are concerned, and they need to be concerned. We all need 
to be concerned.
  I am open to suggestions on this. I will have some speeches I'll give 
later reiterating this definite problem we are in. I have said a number 
of times our country has maxed out its credit cards.
  A couple weeks ago during a trip to Wyoming, I checked into a hotel 
and I used my Senate credit card. The lady a few moments later, very 
embarrassed, said: ``I am sorry, but your card is being rejected.'' I 
said: ``I guess the Federal Government is in worse trouble than I 
thought,'' and used my own card and it went through.
  We had better be worrying about it now because we do have a problem. 
We have maxed out our credit cards, and there are not any other places 
we can go for money. We have been the bastion of money for years.
  Keep this in mind. Start thinking of ways we can actually make some 
cuts and increase some revenues. I have ideas for both in speeches I'll 
give in the future. We are in a crisis. It will be a more immediate 
crisis any time and we are no longer spending our grandkids' money; we 
are spending our kids' money, and it is about to come due on us. When I 
say ``on us,'' I am even including myself and the seniors in that 
count. The day of reckoning is not far away.
  I yield the floor, and I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. LAUTENBERG. Madam President, I ask unanimous consent that the 
order for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. LAUTENBERG. I ask to speak as if in morning business.

[[Page 19218]]

  The PRESIDING OFFICER. Without objection, it is so ordered.

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