[Congressional Record (Bound Edition), Volume 157 (2011), Part 7]
[Senate]
[Pages 10081-10085]
[From the U.S. Government Publishing Office, www.gpo.gov]




                            THE DEBT CRISIS

  Mr. KYL. Mr. President, last week, three events conjoined to elevate 
the subject of the U.S. debt crisis in this country and should energize 
us in the Senate and our colleagues in the House to redouble our 
efforts to find a solution to this serious problem.
  I wish to briefly mention those three events and then talk about the 
problem from my perspective, some of the potential solutions, and put 
an item in the Congressional Record for my colleagues' review.
  The first of what occurred was a new report by the Congressional 
Budget Office which was a new projection about U.S. debt as a 
percentage of our economy. One of the things they said was that our 
debt could almost double by the year 2035--far larger than they thought 
it would be as a percent of our economy or the GDP--and they said it is 
going to exceed 100 percent by the year 2021. Actually, it could get to 
that point sooner than that. It is approaching 100 percent right now. 
Greece is a little bit over 100 percent. Countries that get to that 
100-percent level of public debt as a percent of GDP have a very hard 
time ever recovering. As a result, the time is now for the U.S. 
Government to act on our huge and growing debt.
  Secondly, we had reports by the Labor Department, the Commerce 
Department, and others that confirm what we already know about the 
state of our economy and the state of joblessness in this country.
  Applications for unemployment benefits rose. It was the biggest jump 
in a month. We are over 9 percent unemployment now. New home sales fell 
in May. The values of our homes in this country have decreased more 
than they did during the Great Depression. That has been a horrible 
factor for millions of American families. Stocks fell last week. The 
Federal Reserve Board lowered its outlook for growth, which in the last 
quarter was less than 2 percent--it was 1.9 percent--and this is 
unacceptable. It is much lower than ordinarily recovery is coming out 
of a recession. Confidence is slipping among small businesses and 
households. There are higher gas prices, higher food prices.
  All of this simply confirms what most of us have heard from our 
constituencies; namely, this recovery is not much of a recovery and we 
need to do everything we can to try to improve it.
  Third, of course, is the news that negotiations with the White House 
over extending the debt ceiling had broken down. Actually, as a member 
of the group negotiating that, I would not say they had broken down. I 
think the Vice President is correct that they have moved on to a new 
phase; namely, the phase where the President himself, the Speaker of 
the House, and the two leaders here in the Senate are going to have to 
try to resolve some of the largest issues--the kinds of issues that the 
negotiators in the so-called Biden talks were simply not able to 
resolve because it would go against instructions from our principals.
  The primary problem there was the insistence by the Democratic 
negotiators that Republicans agree to tax hikes--something which we 
think would be inimical to economic growth, the very problem of the 
slow recovery in the economy would be exacerbated by, if we were to 
increase our tax rates. You do not add new taxes to an already 
struggling economy. So the White House's insistence that had to be a 
condition to approving the reductions in spending we had been talking 
about made it impossible for us to go forward at that time.
  There is an old saying that there is a difference between a pessimist 
and an optimist. I usually think of myself as optimistic. The saying 
is: The pessimist says things are so bad they can't get any worse. The 
optimist says, sure they can. And they could. If the Congressional 
Budget Office is correct about its projections here, we could be in a 
far worse debt situation tomorrow or the year after that than we are 
today--a situation which would make

[[Page 10082]]

it extremely difficult for us to ever recover and essentially relegate 
our children and our grandchildren to a standard of living far below 
that which we have all been accustomed to, and which they deserve.
  Looking at some of the other factors that should frame the problem 
for us, we have over a $14 trillion debt--and growing every day. We are 
going to need $2.4 trillion in increased debt ceiling authority to get 
us through the end of next year. You cannot tax your way out of it. You 
cannot borrow your way out of it.
  We have to reduce the level of spending, which is now approaching 25 
percent of our gross domestic product. The average is around 20 
percent, and that is where we were before President Obama took office. 
We have to borrow now 40 cents of every $1 we spend. So when we talk 
about spending more money in a new stimulus package--another new idea 
to come out of the Democratic Congress last week--we are talking about 
having to borrow 40 cents of all of that money that would be spent. 
Think of it now: For every program we have here at the Federal 
Government level, we have to borrow more than 40 cents of the money we 
are then going to spend. That takes money out of the private sector 
that is needed to produce jobs and provide for investment in the 
private sector.
  I mentioned before unemployment is over 9 percent now and according 
to the CBO projection is not going to go down by very much over the 
course of the next year, if at all.
  So what is the solution? A lot of our Democratic friends have said we 
need to have a new stimulus program, we need to spend even more, 
notwithstanding we do not have the money, and we should be raising 
taxes. As I mentioned, that is the reason why we terminated the 
discussion with Vice President Biden last week, because of the 
insistence on the part of our Democratic colleagues that the only way 
they were willing to move forward was if we committed to raising taxes, 
and I mean by a substantial amount. There was $400 billion in revenue 
raisers on the table, put there by our Democratic colleagues. That 
simply will not pass the House of Representatives. But, more 
importantly, it would be the worst medicine possible for an ailing 
economy.
  We cannot afford more spending. Even if we could, it would not put 
Americans back to work. Jobs are created by private businesses, and the 
more the government taxes or borrows, the less there is available for 
businesses to invest and hire. So the answer here is less government 
spending, not more taxation and more borrowing.
  We put forth a budget. The Republicans passed it in the House of 
Representatives. We voted on it here in the Senate, and it did not pass 
because Democrats in the Senate would not support it. But it is a 
legitimate effort to allow job creation, economic recovery, and 
eventually get our budget balanced at the Federal Government level back 
here in Washington.
  People have said it is a radical budget. It is not. Even under the 
so-called Ryan budget, we would go another $5 trillion in debt. You 
cannot call that radically slashing spending if over the next 10 years 
we add another $5 trillion to our national debt. That shows you how 
hard it is to reduce spending. People say: Well, you can't cut this 
program, you can't cut that program. You cut them in a way that still 
adds $5 trillion in debt over 10 years, and they say it is radical, you 
are slashing spending.
  The Obama budget, by contrast, would add $12 trillion in debt. So 
both of them would add to our debt. But at least under the Ryan budget 
that was passed by the House of Representatives, over time we would get 
back into balance. In fact, it would be in primary balance by the year 
2014, meaning except for interest payments it would be a balanced 
budget, and we would reduce Federal spending from 25 percent of our 
economy back down to a little over 20 percent, which is the historic 
average. Excuse me, it would be a little under 20 percent, which would 
be close to our historic average of spending as a percent of the gross 
domestic product.
  One of the best ways for us to ensure we are in balance is to adopt a 
balanced budget amendment to the Constitution. All 47 Senate 
Republicans have cosponsored the balanced budget amendment. It is 
carefully written so that even though it requires balance in the 
budget, it does not easily allow Congress to raise taxes as a way of 
achieving balance. That would require a two-thirds vote. It also 
contains a very important spending limitation as a percent of the gross 
domestic product. So we would achieve balance, but we would achieve 
balance by reducing our appetite for Washington spending here and, as a 
result, could achieve the kind of balance that would promote economic 
growth.
  You could spend more money if we had more economic growth because 
spending would be tied to the gross domestic product. So it is a 
perfect solution for Republicans and Democrats alike. If you like to 
spend more money, there is a perfectly good way to get to spend more 
money: Do that which would enhance the recovery of our economy--because 
the bigger our economy got, the higher the percentage of money 
Washington could spend. The incentives are aligned properly. We propose 
to promote economic growth. So this balanced budget amendment would 
accomplish that. For those who like to spend money, the more growth, 
the more money you would get to spend.
  We hope that balanced budget amendment will come to the Senate floor 
in the next week or two or three. We certainly look forward to the 
opportunity to debate it and getting a vote on it.
  But when you look at the alternative that has been proposed by a lot 
of our colleagues on the other side--a new stimulus program and 
increased taxes--you have to wonder: How serious are they about 
actually helping our economy recover? Everything so far that the other 
side has tried under the leadership of the President has failed to 
work. In fact, it has actually made things worse.
  We are all familiar with the stimulus that did not help, did not 
bring unemployment down as the President promised. It made things 
worse. That is why I have this chart here in the Chamber that shows the 
Obama economic record has not made things better. It has made things 
worse.
  Look at a few of the things that are afflicting our economy today, 
the indicia of what is wrong. You start with the Inauguration Day for 
President Obama, where we are today, and what the change has been.
  If you look at unemployment, unemployment has gone up by 1.9 million 
Americans. The unemployment rate has gone up 17 percent since the 
President took office. This is not like the situation where he said: 
Well, I inherited a bad economy, but I am gradually making it better. 
He is making it worse.
  Gas prices have gone up 101 percent under President Obama. He will 
not approve the leases that would allow our oil companies to explore 
for more oil and gas, thus bringing the prices down.
  The Federal debt has gone up 35 percent since the President took 
office.
  The debt per person has increased by $11,311. It has gone up from 
$34,000 to over $46,000. That is the debt each one of us has.
  So it has increased that much in just 1 year. By the way, health 
insurance premiums have gone up 19 percent, notwithstanding the passage 
of the so-called ObamaCare.
  Getting back to this matter of debt, just to put it in perspective, 
if we took all of the Presidents of the United States from George 
Washington all the way through the Presidency of George W. Bush, if we 
took all of those Presidents and added up all of the debt--the debt 
from the Civil War, the debt from World War I, World War II, Vietnam, 
all of the debt that all of the Presidents of the United States 
accumulated--in one budget, President Obama will double that debt.
  Each one of the years he has been President we have had a deficit of 
over $1 trillion, closer to $1.5 trillion. So at the end of 5 years, he 
will have doubled the debt. At the end of 10 years, he will have 
tripled the debt that all of the

[[Page 10083]]

other Presidents of the United States combined accumulated. Now, I say 
the Presidents. Obviously, it takes a Congress to do this as well.
  What the Members of the House of Representatives are saying to the 
Obama budget is, no. Even the President decided not to pursue his 
budget. When that was offered on the Senate floor, not a single Member 
of the Senate, Democrat or Republican, voted for the Obama budget 
because it takes us in the wrong direction. It would make things even 
worse than they are today.
  At least with the Republican budget we have an effort to begin to 
solve the problem, even though a lot of people say it is not enough in 
the way of cuts, and they have proposed alternatives to reduce spending 
even more. I am all for reducing spending even more. The bottom line 
is, however, we have to get something passed. That is going to take 
Democrats and Republicans working together. So I am happy to work with 
my colleagues on the other side of the aisle, but we have to have some 
cooperation to reduce spending and not insist on tax increases.
  What we have said as a part of these negotiations to increase the 
budget deficit is, some of us might be willing to increase the debt 
ceiling if we do not have to keep doing it. We need reforms that will 
enable us to not have to keep raising the debt ceiling, or at least not 
so much. The way we achieve those reforms is, first of all, to identify 
savings that can be made. There is an enormous amount of wasteful 
Washington spending. We have identified it is closer to $500 billion. 
The Vice President has said more than $1 trillion. The money is 
certainly out there to be saved. We need to save that kind of money on 
the front end as a downpayment to let the markets know and to let the 
American people know we are serious. That is savings that we can pass 
that can be locked in.
  By the way, there is a little bit of revenues involved in that. It is 
not just all savings. There are some fee increases. There are user 
fees. There are some means testing of various Federal programs that can 
actually result in some increased revenue.
  So when our Democratic friends say, well, there has to be revenue on 
the table, there is revenue on the table, but it is not tax increases. 
So if you are so ideological that you have to insist on tax increases 
in order to cut spending, unfortunately, you have taken yourself out of 
the game.
  The bottom line is, there is somewhere between at least $500 billion 
and $1 trillion, probably more, in various kinds of mandatory savings 
that we could achieve. Then we have discretionary spending. We need to 
set a budget number since the Senate has not passed a budget in over 
700 days now--I forget the exact number. We have not had a budget, so 
we do not have a number that the Appropriations Committee can deal with 
to appropriate funds for the discretionary part of our spending in this 
country.
  We need to set that number. The Ryan budget set that number, and we 
were negotiating with the White House as to what that number would be. 
But we need to set that number. Then we need to make sure in the 
ensuing years Congress will actually live with that number. The 
tendency around here has been to set a budget number, then we have an 
emergency here, and we need to waive it there. The next thing we know, 
we are way over the number that we all agreed to in the beginning.
  So we need something that will constrain both discretionary and 
mandatory spending over the course of the next 10 years and, hopefully, 
beyond. A lot of us believe the best constraint is the balanced budget 
amendment. But for colleagues who say: No, we are never going to agree 
to that--and, of course, we would have to get 20 colleagues in the 
Senate to agree in order pass it; it takes a two-thirds majority--then 
at least agree with us to put handcuffs on the Congress and the 
President, some kind of straitjacket so we do not spend beyond the 
number we agree on for next year and the year after that.
  We can save well over $1 trillion, somewhere between $1 trillion and 
even more than $1.5 trillion in discretionary spending over the next 10 
years if we would agree to these so-called section 302(a) top-line 
budget numbers, and then constrain ourselves to sticking with those 
numbers over time.
  The reason? It is kind of like compound interest. Let's say we reduce 
spending in next year's budget by $30 billion over the previous year. 
That is not a huge amount of money. But over a course of 10 years, when 
we set a new baseline, that translates into hundreds of billions of 
dollars if we really do it.
  The bipartisan Congressional Budget Office says: We are not sure we 
want to score that as real savings because we are not sure you will 
really do it. But if we are able to pass some kind of constraint--such 
as the old Gramm-Rudman bill, for example--then I think the 
Congressional Budget Office will give us some credit for those 
constraints.
  The best proposal I have seen is one proposed by Senator Corker and 
Senator McCaskill. It is bipartisan, a Republican and a Democrat, and 
they have Republican and Democrat cosponsors for the same proposal in 
the House of Representatives. It is called the CAP Act, to cap 
spending. So once the level is determined--they do it as a percentage 
of GDP.
  I think that is the smartest way because that is an incentive for 
everybody to help the economy grow more. The more it grows, then the 
more, as a percentage, the spending can be. Over 10 years, we save a 
lot of money that way. It is enforced by the simple mechanism that if 
we do not achieve the savings that is called for, then there is an 
automatic sequester where all of the accounts of the government--
defense spending, nondefense spending, mandatory spending--would all 
have to save a little bit. They would not be able to spend quite as 
much money so that we could make up the difference between the target 
or the goal and what the law called for.
  There are other ways to do it as well. We were discussing different 
alternatives in the conversations with Vice President Biden. But the 
point is, we cannot allow waivers. We cannot have exemptions and 
emergencies and all of that--at least not without a supermajority vote, 
such as a three-fourths vote or a two-thirds vote--or else it is going 
to be too easy for Congress to do what it has done in the past, which 
is to simply say: This is too uncomfortable for us to comply with. We 
are going to declare this an emergency, vote for it by a majority vote, 
and then it is done.
  If we mean it, we would have to be willing to abide by it. So we have 
to have a meaningful downpayment. We can do that. We have already 
identified substantial savings. We need to have a 302(a) budget number 
for at least the next couple of years and a mechanism for enforcing 
that over the next decade and beyond.
  Finally, we need to have a way to help the markets actually believe 
we are serious about entitlement reforms so the biggest part of our 
budget--representing two-thirds of all of the money we spend; namely, 
the entitlements--is actually beginning to grow at a slower pace.
  We are not talking about drastic cuts, but we are talking about 
slowing the pace of growth. We can do that without having huge benefit 
cuts or without slashing payments to the providers. I mean, the last 
thing we want to do for Medicare--for example, I am concerned about my 
mother. We can use any of our mothers or dads or grandparents on 
Medicare. The last thing we want to do is say we have a great Medicare 
Program except for one thing: there is no doctor or hospital to take 
care of people because they will not because we are not paying them 
enough. So we need to be able to pay the people we rely upon for the 
medical treatment we have promised. We cannot do that by slashing 
payments to providers. Too many physicians have already said they 
cannot afford this program anymore and therefore are not going to take 
any more new Medicare patients--we have all had that experience--nor 
should we do it by slashing benefits. But we do not have to do either 
of those two things to have reforms.
  I mentioned in these negotiations we have been discussing a lot of 
waste,

[[Page 10084]]

fraud, and abuse-type reforms. Those of us in the Senate and the House 
kind of smiled because we always talk about the amount of money that 
can be saved because of the amount of waste, fraud, and abuse in the 
system. But the reality is, there is a lot of waste, fraud, and abuse 
and we can save a lot of money if we put our minds to it.
  But what that means is, for example, we have to enforce the law. I 
will pick a hypothetical program because we are not going to be talking 
about the specifics with our negotiations. I am assuming we will get 
back to those negotiations at some point.
  But we have eligibility standards to receive a certain Federal 
benefit, let's say. But 20 percent of the benefits that are being paid 
out are being paid out erroneously to people who do not qualify. They 
are not supposed to get the benefit. So we have to enforce the law.
  We say: Sorry, you do not qualify for this benefit. This is a benefit 
for the elderly or this is a benefit for poorer Americans or for 
whatever. If we just enforce the law, we can save a lot of money, and 
that is not cutting benefits for anyone.
  We can also do means testing. Republicans, for years, have said--
well, I will use a couple of names because they both said we do not 
need the benefits of all of these Medicare Programs. People such as 
Warren Buffett, for example, have made it clear, and Bill Gates. They 
have both made it clear they do not need to have the government take 
care of their medical requirements when they are age 65 or older.
  There are a lot of Americans who are in the position to be able to 
afford a lot more of their own care, and they do not have to rely 
exclusively on the Federal Government. So through means testing we can 
either provide that their benefits will not be as generous as for 
people who are less fortunate economically or that they will pay a 
little bit more in the way of a copay or a deductible or maybe even a 
premium.
  The bottom line, there are ways to ensure the future success of a 
program such as Medicare without affecting people who cannot afford to 
have big benefit cuts. One idea that has not been discussed--but I have 
heard it discussed--is to simply conform Medicare benefits to the same 
age eligibility as Social Security. That would save a great deal of 
money. It would represent a slowing in the time when people are 
eligible for the benefit.
  Maybe some people believe, therefore, that it should not be 
considered. My point is that there are a lot of ways the entitlement 
programs can be reformed so they will be there when people need them. 
If we do not, if we say we do not want to touch them, here is what is 
going to happen. I will give one program as an example: Medicare Part 
A, the hospital part.
  The Medicare trustees say by the year 2021, Medicare Part A will 
begin to run out of money. There will not be as much money in the trust 
fund, and it could well therefore happen in the following years if 
people need to go to the hospital, the hospital is not there anymore. 
If one lives in a small town, and it is the only hospital there and 
they cannot afford to stay open, they are going to close. So someone 
thinks they have Medicine Part A benefits, but the hospital either is 
not there or it cannot take care of them because it does not have the 
money to do so because it is not being reimbursed by the Federal 
Government.
  So the choice is not to do something or to do nothing. If we do 
nothing, the benefits will not be there--the benefits we have promised 
to senior citizens will not be there. Doing nothing is not an option. 
We have to do something. So instead of demagoguing the issue 
politically, some politicians need to be responsible, get in the game 
and say: Let's figure out a way to save these programs so they will be 
there when we want them.
  I also wanted to mention--this is a little bit off point, but it just 
shows how some of these things work. I mentioned high gas prices 
before. Ironically, one of the things the President has said we want to 
do is to tax the oil companies.
  Well, of course, if we tax the oil companies more, then gas prices 
are going to be higher. The President just released some of the 
petroleum from the National Petroleum Reserve to try to bring gas 
prices down. It will bring them down a little bit temporarily. But why 
would we then want to have those prices go right back up again by 
taxing the oil companies, which everyone knows will flow through to the 
consumer? It does not make sense.
  There is something else, however, that does make sense, and this has 
had an impact on gas prices. The Federal Reserve Board has been buying 
bonds under a program called QE2--buying Treasury bonds. The purchase 
of those Treasury bonds has made our dollar less valuable. That means 
it takes more dollars to buy the same amount of gasoline. So, 
ironically, this effort by the Fed to put more money into the economy 
has had the pernicious effect of raising gas prices, raising food 
prices, and raising other prices because the dollar is not as valuable 
as it used to be, and to buy some commodities, especially commodities 
that are bought and sold on the world market such as gas, we have to 
have more dollars to pay for the same amount. So gas prices are 
increased. This QE2 program is going to come to an end at the end of 
this month. The Federal Reserve has already announced that. What will 
happen as a result is that the value of the dollar will not be cut by 
the amount of this selling of bonds, and so the expiration of the 
program lets the dollar strengthen, causing oil to return to levels we 
saw in the beginning of the year. That will have the result of having 
more purchasing power with the dollar you have, so you can buy the same 
amount of gasoline for fewer dollars or, to put it another way, the 
same amount of dollars you have will buy you more gasoline. That is one 
positive effect as a result of that change in policy by the U.S. 
Government.
  The key is to allow our economy to work without too much government 
interference. That is a good example of government interference that 
displaces or reduces the value of the dollar and therefore hurts the 
consumer.
  I heard our colleague from Florida, Senator Rubio, say the other 
day--this is reported on June 14--in his first speech on the Senate 
floor:

       There is nothing wrong with our people. Americans haven't 
     forgotten how to start a business. They haven't run out of 
     good ideas. Americans are as great as we have ever been. But 
     our government is broken. And a broken government is keeping 
     us from doing what we have done better than anyone in the 
     world for over a century: create jobs.

  He is right. If the government will get out of the way and not insist 
on burdening our economy with new taxes and let Americans do what they 
have always been able to do well, I think we will be able to come out 
of this economic downturn and come back to life as an economy, helping 
families, small businesses and, ironically, by making more money and 
paying taxes at the same tax rate, the Federal Government will have the 
benefit of our increase in salaries, profits, and so on, and will have 
more money to spend as well.
  Spending more money, taxing more, having the government try to 
stimulate the economy has never worked. I want to put into the Record a 
quotation from the Wall Street Journal of today, June 27, which is as 
follows:

       With spending at 24 percent and debt held by the public at 
     70 percent of GDP--both modern records--the U.S. needs 
     drastic spending cuts to head off a downward future spiral of 
     tax increases and unaffordable interest payments. As Milton 
     Friedman taught, spending is the real measure of government's 
     burden on the private economy, and reducing it leaves more 
     resources for private actors to spend and invest.

  I ask unanimous consent to have this printed in the Record at the 
conclusion of my remarks.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  (See exhibit 1.)
  Mr. KYL. Mr. President, the point they are trying to make is, 
government spending is a pretty good indicator of what is left over for 
the private sector to invest and spend, for example, on new jobs. When 
the government spends more, inevitably, it has to borrow more--40 cents 
on every $1--or increase taxes--either way, reducing what is available 
for the private sector to invest and hire.

[[Page 10085]]

  We should be focused, as a result, as the editorial notes, on 
reducing wasteful Washington spending and allowing the genius of the 
American people to do what Senator Rubio has made very clear: We have 
always had the capability of creating jobs, unfettered by too much 
government taxation and regulation. So we need to do away with those 
policies, such as the Federal policy that reduced the value of the 
dollar, we need to try to eliminate as many regulations that burden the 
American people as possible, and we need to avoid raising taxes.
  Bear in mind, we are not talking about cutting taxes. We are not 
talking about cutting taxes for the wealthy or cutting taxes for 
business or cutting taxes for people, generally. Leave them alone, 
don't raise them, is all we are saying. When you hear some politicians 
say you want to cut taxes for the wealthy or give oil companies big tax 
breaks--no, leave it alone. Don't touch it. Let businesses and families 
and small businesses do what they have always done best. If you want to 
mess up the economic growth, to use the colloquialism, follow what the 
administration has been doing. We will have higher unemployment, higher 
gas prices, higher Federal debt, higher debt per person, and higher 
health insurance premiums, not to mention other pernicious effects. 
Those policies have made it worse, not better.
  That is why Republicans have said don't force us to raise taxes as 
part of this increase in the debt ceiling. Let's reduce spending, and 
let's enforce that through a balanced budget amendment and other kinds 
of spending constraints. We are not talking about drastic cuts, as I 
said. Think about this again.
  The Ryan budget that passed in the House, and that most of us on the 
Republican side voted for over here, adds $5 trillion to the debt over 
the next 10 years. That is $500 billion a year. That is higher than any 
other budget deficit in history, until President Obama came into 
office. We talked about the Bush budget deficits. It is a lot higher 
than any deficit under President Bush--$500 billion a year for 10 
years. That is another $5 trillion. You can't say that is drastically 
cutting spending. The alternative, though, is the Obama budget, which 
would add $12 trillion. At least the Ryan budget gets us on a path 
where we can get back into balance and back to the standard or the 
normal historical average of spending, as a percent of our GDP, around 
20 percent.
  If you don't like that budget, then produce one that you think will 
get us to the same place. We have laid that challenge down. Our 
Democratic colleagues have not produced a budget. It is pretty obvious 
they are not going to do so. That is why we have had to have these 
discussions with the Vice President. At least, perhaps as a conclusion 
to those discussions that the President is now involved in, we can make 
a big downpayment on spending reductions, set the budget levels for the 
next several years that represent a real reduction. It doesn't have to 
be huge. Even a $30 billion reduction over last year will save a huge 
amount of money in the outyears. We need to ensure that those 
reductions will be enforced, that we will not return to our wayward 
spending ways, and we need to deal with the two-thirds of the budget 
that represents the big money; namely, entitlements.
  There are ways to do so that don't represent big benefit cuts and 
that don't represent slashing payments to providers, although we would 
not have any more doctors to take care of them. We can effectuate 
reforms that will send the right signal to our constituents and also to 
the markets, which will have a lot to say about interest rates in the 
future and whether they believe in the recovery we would like to 
achieve.
  I hope my colleagues will be very open to the consideration of a 
balanced budget amendment when we bring that up. I wish the President 
and the leaders of the House and Senate all the best in their 
discussions now on how to deal with this problem. The President will 
have to make a decision: Is raising taxes more important than trying to 
get our budget back into balance and reduce spending? He will find 
there is support on both sides for the latter. There would not be much 
support for the former. By getting together and achieving those goals 
within the next 4 weeks or so, we can both meet the deadline of August 
7 that he has set for a debt ceiling increase and also get our country 
on a more sound fiscal path. We can do that to give confidence to the 
markets and to the American people. We owe our constituents, our 
children, and our grandchildren nothing less.

                               Exhibit 1

             [From the Wall Street Journal, June 27, 2011]

   Spending His Way to Austerity--President Obama's Latest Economics 
                                 Lesson

       President Obama enters the debt-ceiling talks today when he 
     meets with members of both parties, and in his Saturday 
     weekly radio address he unveiled a new line of argument 
     against significant spending cuts: ``We can't simply cut our 
     way to prosperity.''
       That's a nifty rhetorical riff, a play off the old Ronald 
     Reagan line that we can't tax our way to prosperity. The 
     argument is that if we cut too much spending on too many good 
     things--like education, ``clean energy'' and ``advanced 
     manufacturing,'' to name three examples highlighted by the 
     President--the economy will suffer.
       Too bad it won't fly. It's a truism that budget cuts alone 
     will not guarantee faster economic growth, but at the current 
     moment they will get us closer to it. With spending at 24% 
     and debt held by the public at 70% of GDP--both modern 
     records--the U.S. needs drastic spending cuts to head off a 
     downward future spiral of tax increases and unaffordable 
     interest payments. As Milton Friedman taught, spending is the 
     real measure of government's burden on the private economy, 
     and reducing it leaves more resources for private actors to 
     spend and invest.
       It is also true that some government spending can be 
     economically useful--to the extent that it enhances 
     productivity more than it would have in the private economy. 
     But the irony is that it is precisely the spending priorities 
     that Mr. Obama mentions that will be crowded out because of 
     his refusal to cooperate in reforming entitlements like 
     Medicare and Social Security. By trying to protect all 
     federal spending except defense, liberals are guaranteeing 
     that many of their most cherished plans will be squeezed. 
     They're the ones who are spending us into austerity.

  Mr. KYL. I suggest the absence of a quorum.
  The ACTING PRESIDENT pro tempore. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. LEE. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.

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