[Congressional Record (Bound Edition), Volume 157 (2011), Part 4]
[Senate]
[Pages 4617-4619]
[From the U.S. Government Publishing Office, www.gpo.gov]




                            BUDGET ANALYSIS

  Mr. SESSIONS. Madam President, I want to share some thoughts this 
morning and to report to our colleagues on the analysis done by the 
Congressional Budget Office of the President's budget he has submitted 
to us and asked that we adopt.
  The budget has been roundly criticized as in no way getting us off 
this unsustainable path, and allowing the country to continue to head 
toward a financial abyss. Expert after expert, witness after witness 
before the Budget Committee--on which I am the ranking Republican 
Member--has testified to the danger we face and the need for us to take 
action. The Congressional Budget Office, in sum, concludes that the 
very insufficient reforms contained in the President's budget are more 
insufficient than the President has said, when properly analyzed. It is 
a very firm and severe rebuke to the President and his team of analysts 
who presented it to us. It is not good.
  I believe it is probably the most erroneous budget ever submitted to 
Congress, in changing the numbers by $2.3 trillion in debt. In other 
words, the Congressional Budget Office says the budget submitted by the 
President, which was supposed to add to the debt some $13 trillion or 
so, is actually going to add $2 trillion more to the debt over 10 
years, more than doubling the national debt. This is a very serious 
matter.
  The budget presentation to the Congress continues a policy by this 
administration to minimize the danger of the debt crisis we face. It 
has been a sophisticated, long-term, continuous effort to not only say 
that cuts are too severe, too extreme--as the talking points go--and 
that, indeed, this President has things under control; that the debt 
crisis is not real, and we don't have to take firm action. The 
President does not look people in the eye and explain the true 
situation we are facing.
  Indeed, this is the rhetoric they have used. The President has used 
this language; Jack Lew, his Director of the Office of Management and 
Budget, has used this language. They claim the budget they submitted 
calls on us to ``live within our means.'' His budget causes us to live 
within our means. They also have used this phrase, more than once: ``It 
only spends money that we have each year.'' Also they say that their 
budget ``does not add more to the debt.'' At a press conference about 
this, the press secretary to the White House was asked: Do you stand by 
these statements? What did he say? Absolutely. And when Budget Director 
Lew came before the Budget Committee, and I asked him about it, he 
stands by these statements. He didn't acknowledge they are in any way 
in error.
  If we are going to have reform in America, if we are going to do 
something about the debt crisis this Nation faces, we have to be honest 
with one another. We have to deal honestly with the grave challenges we 
face. We can't be in denial. We can't continue to say we are living 
within our means and that we are not going to add more to our debt.
  Why do I say that? Well, the President's own budget said the deficits 
would surge, would continue to be out there every single year, with the 
lowest single deficit in 10 years, according to his budget, to be $600 
billion and going up in the outyears to almost $800 billion.
  What does CBO say about all of this? This is what they told us after 
they analyzed the President's budget. Let me explain what happens. The 
President submits a budget to the Congress. We have our own 
Congressional Budget Office, and they analyze what the President 
proposes. They then give us a report on it and say what it means, if 
adopted; how it would impact our economy, how it would impact our debt, 
how it would impact the financing of our government. So what does CBO 
say? It says the President's debt-doubling budget adds more to the debt 
than the President claims. The score reveals the President's budget 
never once produces a deficit of less than $748 billion, and climbs to 
a deficit in the tenth year of $1.2 trillion--one thousand two hundred 
billion dollars.
  I have been saying the lowest budget was $600 billion because that is 
what the President's own numbers said in the document he sent to us, 
but CBO says no. The CBO Director and his team, for the most part, were 
in place when the Democrats controlled both Houses of Congress. They 
are a nonpartisan group that tries to give honest numbers and do honest 
work. They are certainly not a Republican organization. They say the 
actual number was not going to be a $600 billion low annual deficit but 
that the lowest deficit would be $748 billion, increasing to $1.2 
trillion.
  You see, this is why the experts say we are on an unsustainable path. 
We cannot continue. How much is $1.2 trillion? Well, the highest 
deficit President Bush ever had was $450 billion, I believe, give or 
take. That was way too high, and he was roundly criticized for that. 
But this is three times that in the tenth year. This year, we are going 
to have a $1.6 trillion, $1.5 trillion deficit. In this fiscal year we 
will have, for the third consecutive time, a trillion dollar deficit. 
These are deficits the likes of which the Nation has never seen before 
and cannot sustain. It puts us on a path to financial instability and 
danger. It is a path we must get off. We can do so, but it is going to 
take some will. We are going to have to do some of the same things our 
cities and counties are doing.
  Also, the CBO said that, using gimmicks, the President's budget 
concealed a total of $2.3 trillion in deficit spending and $1.7 
trillion in increases of gross debt for the country. The debt to GDP 
reaches 116 percent in the 10th year.
  Let's talk about that. Why is that important? Professors Rogoff and 
Reinhart, who testified before our committee, have written a very 
significant and highly regarded book. Their book, ``This Time It's 
Different,'' says that from a study of sovereign nations all over the 
world, when their debt reaches 100 percent of GDP, the economy is 
pulled down. It has a depressing effect on their economy. The economy 
will grow on average about 1 percent less than it would have grown 
otherwise, which is huge.
  When you are talking about economic growth of 2, 3, 4 percent, to 
have a 1-percent reduction is a major drain on our economic growth, and 
growth is so critical for job creation and actually tax revenue to fund 
our government and get us out of the debt we are in. You cannot borrow 
your way out of debt. The deeper you get into debt, the more it pulls 
down the vitality and growth potential of your economy. We have to get 
off this path.
  CBO says in the 10th year it will be 116. Senator Conrad, the 
Democratic chairman of the Budget Committee, is very worried about this 
number. He had a chart about it at our hearing recently. He showed that 
this year for the first time we will go over 100 percent of GDP in 
national debt. It is about 5 percent now, and we will go over 100 
percent and will stay over it under the President's budget. Experts 
tell me this is unsustainable. Something bad will happen to us.
  In addition, when Secretary of Treasury Geithner appeared before our 
committee, he acknowledged the Rogoff and Reinhart analysis. He 
acknowledged that this high level of debt will weaken the growth in our 
economy, and he added this: This level of debt creates a greater 
potential for an economic kickback, an economic catastrophe; another 
recession could occur as a result of these high debts.
  CBO analysis reveals a number of other things that are disturbing 
because they are so plainly false, so plainly gimmicky, and so plainly 
designed to mislead the American people about the true nature of this 
budget that it, again, raises credibility questions about the White 
House and how they are explaining the situation we are in to the 
American people. They seem to be denying we are in a crisis.

[[Page 4618]]

  For example, this budget submitted by the White House assumes there 
will be $315 billion for what we refer to as the doc fix in the final 8 
years of this 10-year budget. But there is no source of income for 
that. They do not propose a tax increase. They do not propose any 
income that would be there. The CBO says: You cannot just assume money 
is going to appear when there is no source for this money. It is a 
manipulation of the numbers to try to hide the fact that there are no 
moneys available to pay the doctors the kind of income they need to 
continue to treat Medicare patients. If we do not do something, 
physicians will have their pay cut 20-percent-plus for treating 
Medicare patients. That is not healthy. It cannot be sustained. 
Physicians will not work with another 20 percent cut. They get paid 
less for Medicare than any other source of work they do unless it is 
the Federal Medicaid Program. CBO called them on it and said: No, you 
cannot score income when you show no source of that income.
  What about transportation? There is a major increase proposed for 
spending on transportation next year, and their budget just assumes 
there will be a $328 billion income surge for transportation. It is 
called a transportation tax, but we are told it will not be a gas tax. 
I have referred to it as the ``not-gas-tax tax'' because all we know 
about this tax is they say it will not be a gas tax. They are talking 
about a $328 billion tax increase of some kind but no proposal where it 
would be, how it would be imposed, whether Congress would ever vote for 
it or not. They are not likely to vote for it, I have to tell you. CBO 
says that is phantom money. You need a better plan than that because 
otherwise your budget is just smoke and mirrors on that subject.
  Remember, when we borrow money, we pay interest. The interest we paid 
last year was $200 billion. As the debt goes up and increases, although 
interest rates are very low now, they are going to increase some. 
According to CBO's analysis, with the debt more than doubling in the 
next 10 years under the budget the President has submitted to us, the 
annual interest is over $900 billion. That is about one-fourth of what 
the entire government spends today. We spend about $3.8 trillion. This 
is almost $1 trillion in interest in 1 year. Frankly, I think CBO's 
estimate of what the interest rates are going to be on our debt are 
probably low.
  It is this kind of debt, where your debt is over 100 percent GDP, 
that puts you in a position where you could have a debt crisis kicking 
us back into another recession.
  What we have to have--from the President and from our Democratic 
leadership here in the Senate--is an honest evaluation of where we are. 
The President needs to look the American people in the eye and say: We 
are not on a course that we can sustain. Federal Reserve Chairman 
Bernanke told us in January that we are on an unsustainable path. We 
have to get off it. About these numbers that project out here for 10 
years, the doubling of the debt, Mr. Bernanke said: We are not going to 
get there because we will have a debt crisis before we get there, and 
there will be much, much harder times getting our finances in order 
than if we act today to get them in order. He said we wouldn't get 
there with these projections; they are too severe, too damaging to our 
economy.
  Madam President, what time is left on this side?
  The ACTING PRESIDENT pro tempore. The Republican side has 15 minutes.
  Mr. SESSIONS. If some of my colleagues appear, I will be glad to 
yield the floor, but I will share a few more thoughts.
  The President's budget does some other gimmicky things. He claims he 
has a 5-year freeze on nondefense discretionary spending. He told the 
American people that in the State of the Union Address. We have looked 
at those numbers, and it appears pretty clear that there is a 5-percent 
increase in the discretionary spending next year. How do they 
accomplish that? They reclassify all discretionary transportation 
funding as mandatory spending and say it is not discretionary. They 
just declare it is mandatory spending, and they say they have reduced 
discretionary spending by $7 billion. What kind of hokum is that? This 
is not worthy of the President of the United States and the Office of 
Management and Budget, coming here with a gimmick like that--just 
redefine discretionary spending and say it is there and say: I have a 
freeze in discretionary spending.
  What else did they do? They hide another $9 billion in the reverse of 
that, in one-time mandatory savings. Actually, they use it in the 
discretionary account, but they do not count it as increased spending. 
That is $9 billion. And the President's proposed spending levels for 
next year will be even further out of whack as a freeze because this 
Congress is going to reduce the spending this year, hopefully by the 
full $61 billion the House has asked that we reduce it.
  You say: Mr. Sessions, this is all partisan bickering. But it is not 
partisan bickering. We have bipartisan recognition in this Senate from 
Senator after Senator, Democrats as well as Republicans, who understand 
we are on an unsustainable course, and they know we need to get off 
this course. But I have to be critical about the President because he 
is not telling the American people the severity of the challenge we 
have and he is not proposing a plan that will actually fix it, but 
actually he is proposing a plan that will make it worse. This is a 
crisis. We have to confront this problem.
  The President is going to have to move from denial to reality, to the 
real world, and help us develop a plan that contains spending in 
America just like is happening all over this country. Governor Cuomo is 
talking about substantial reductions in spending in New York, as is 
Governor Christie in New Jersey and Governor Brown in California.
  I just saw my friend John McMillan, the head of agriculture and 
industry in the State of Alabama. He has 200 employees. He said they 
are going to have to reduce 60. That is almost one-third of the 
employees of his department. Do you think the department of agriculture 
and the industries of Alabama will cease to exist? I don't think so. I 
bet Mr. McMillan will figure out some way to perform most of the duties 
in his office. But he doesn't have the money, and when you don't have 
the money, you have to make tough decisions.
  The American people understand this. When they don't have money, they 
don't spend. If they spend when they don't have money, they know they 
are taking a risk and they know it can't continue long. But this 
Congress does not get it. We are in a denial mode. We think we can just 
continue to spend forever, and we have the majority leader in the 
Senate whining about losing money for a cowboy poetry festival in 
Nevada. Give me a break. When you don't have money, you have to make 
decisions. That is just the plain fact.
  What about next year's budget that the President proposes? The 
education budget next year is proposed to get an 11-percent increase 
over the past 2 years, which have had surging increases. Indeed, most 
Americans probably do not know that in this time of record deficits, 
over $1 trillion deficits, the last 3 years, the discretionary 
accounts--nondefense discretionary spending--increased 24 percent. And 
next year? They want another 11 percent for education, another 9.5 
percent for the Energy Department, another huge increase for 
transportation--the base, I believe, is over 10 percent but, including 
the phantom revenue, they will see around a 60 percent increase.
  Under the President's request, the State Department is demanding and 
expecting to get over a 10-percent increase in spending. And inflation 
is 2 percent or less? How can we do this? The American people know this 
is not realistic. They know it is dangerous, and they want us to do 
something about it.
  Frankly, I think that had something to do with the elections last 
fall. I think the American people were sending a message to a blind 
Congress that they expected us to do better on spending. Are we getting 
the message? We

[[Page 4619]]

are proposing huge increases in spending next year, five times the rate 
of inflation in America, and we claim that is somehow frugal and living 
within our means. When the lowest single deficit over the next 10 years 
is projected to be $740-plus billion, that is unacceptable.
  We have to be careful about what we say about our economy. We have to 
keep our economy moving forward. It is struggling. It is moving. We are 
having some good growth. We want to see that growth continue and 
expand.
  The job situation is not good. We need to have at least 150,000 to 
200,000 new jobs a month to stay level. That is about where we have 
been, 150,000 or 200,000 jobs. That is basically keeping us level. We 
need more job growth than that. It is better having some jobs being 
added than none, I acknowledge that, but it is not as strong as we need 
it to be.
  One reason we are not having growth, as Professors Rogoff and 
Reinhart have told us, is the debt pulling down our economy. It is 
putting a cloud over our economy. The whole world is watching the 
United States. Are we going to go off the cliff or will this Congress 
rise up and put us on a path to sound fiscal policy that creates 
confidence in our financial situation; creates investment, growth, and 
jobs. That is the road we need to be on. It will be a tougher road. We 
will have to make some hard decisions about spending and which programs 
are going to get money and which ones aren't. Maybe all of them will 
have to take some sort of cut, but we can do that. We will get the 
country on the right track, and America is not going to fall into the 
ocean if we make some reductions in spending.
  I will just point out that it is difficult to do that when we are in 
a political world, according to the New York Times, where anybody who 
proposes to reduce spending is called an extremist. Senator Schumer 
started that. He got caught on a phone call saying we should use the 
word ``extremist.'' Cut $61 billion out of $3,800 billion in 
expenditures; that is what the House has sent over here to us, a 
proposal that we reduce spending, under the continuing resolution, by 
September 30, by $61 billion out of a total of $3,800 billion the 
Federal Government spends.
  This is extreme, we are told, and the government is going to sink 
into the ocean, and we cannot survive with these kind of reductions. So 
they had a meeting. They all were right on message, according to the 
New York Times. ``We are urging Mr. Boehner to abandon the extreme 
right wing,'' said Mrs. Boxer, urging the House to compromise on the 
scale of spending cuts and to drop proposed amendments that would deny 
funding for Planned Parenthood.
  Another Senator said, referring to the House Republicans as ``right 
wing extremist friends''--he is a real nice Senator. He did not want to 
be too harsh, so he called them ``right wing extremist friends.'' That 
is better than not calling them friends, I suppose.
  Another Senator decried Mr. Boehner as ``giving in to the extremes of 
his party.'' Another closed by speaking of the ``relatively small group 
of ideologues who are an anchor dragging down the budget-negotiating 
process.''
  Give me a break. $61 billion. If we cannot do that, what does the 
world think about us? Did we really get a message from this election? 
Did we really understand that we are challenged now; that this is our 
time in history to face up to the facts that we are on an unsustainable 
fiscal course that will lead us, as Mr. Bernanke said, to economic 
disaster long before these projections come to a conclusion?
  We cannot continue on this course. We have to get off this course. We 
owe it to every working American not to put this country back into 
another recession. The truth is, we can do these reductions in 
spending. This government is not going to sink into the ocean. We are 
going to continue to serve the American people. If we do it, we will 
get on the right path, and this economy can continue to grow knowing 
that we have gotten our fiscal house in order.
  It is not that hard. I urge my colleagues to do so. Let's not give up 
on the $61 billion total reduction in spending the House has asked us 
to meet. Let's do it, and let's be proud of it. Let's know then that we 
have done something that will amount to a real change in the debt 
trajectory we are on.
  We have calculated it. My budget staff has looked at the numbers. A 
$61 billion reduction in baseline spending--which is what they are 
proposing--over 10 years will save $860 billion. It will reduce the 
debt of America by almost $1 trillion. We need to do more of those 
kinds of things in the months ahead. If we do so, we can change the 
trajectory we are on.
  So I urge my colleagues, do not leave here talking about splitting 
the baby and just seeing how little we can reduce spending. Let's go on 
and accept the House number. Let's embrace it. Let's make a decision to 
get our finances in order just like cities and counties and families 
are doing all over the country.
  I yield the floor and reserve the remainder of our time.
  The ACTING PRESIDENT pro tempore. The Senator from Hawaii.
  (The remarks of Mr. Akaka pertaining to the introduction of S. 675 
and S. 676 are printed in today's Record under ``Statements on 
Introduced Bills and Joint Resolutions.'')
  Mr. AKAKA. I yield the floor.

                          ____________________