[Congressional Record (Bound Edition), Volume 157 (2011), Part 7]
[Senate]
[Pages 10146-10149]
[From the U.S. Government Publishing Office, www.gpo.gov]




                       BALANCED BUDGET AMENDMENT

  Mr. HATCH. Madam President, today we are beginning what might prove 
one of the most consequential debates in American history. The American 
people are demanding that Congress debate and pass a balanced budget 
amendment to the Constitution. They are going to get that debate, and I 
am confident that if Congressmen and Senators listen to their 
constituents, the citizens of this Nation are going to have the 
opportunity to ratify a balanced budget amendment this year. All 47 
Republican Members of the Senate are of one mind on the need for a 
balanced budget amendment to the Constitution. We have listened to our 
constituents who are pleading with us to take action that will 
permanently resolve our debt crisis and keep us from getting into this 
situation again.
  The situation is a disaster. We all know the numbers: three straight 
trillion-dollar-plus deficits; $14.5 trillion in debt and rising every 
day; $62 trillion in total liability that this government owns. Since 
Democrats last passed a budget--that was over 790 days ago--our 
national debt has risen by $3.2 trillion, and now the administration is 
asking for more.
  We simply cannot do this anymore. Madam President, 100 percent of our 
tax revenues are spent on mandatory spending and interest on the debt. 
Every other penny is borrowed. The money is simply not there to finance 
a government of this size, and everyone knows this, although not 
everyone will admit it. They know deficit spending and skyrocketing 
debt have come to an end. Our Nation's current debt-to-GDP ratio is 95 
percent. Countries with debt above 95 percent of GDP have growth that 
is 1 percent below normal, resulting in a loss of 1 million jobs. Our 
debt is a lead weight around the neck of the economy.
  But in the current negotiations over the debt limit, the 
administration insists that it is Republicans who, by refusing to pass 
an increase of the debt limit that does not include meaningful efforts 
to address our fiscal situation, are holding back the economic recovery 
and undercutting the stock and bond markets. This has things exactly 
backward. The markets understand that our long-term deficit projections 
are moving toward a full-blown debt crisis. The markets understand that 
we are currently on the glidepath to Greece. The markets would respond 
like gangbusters to spending cuts, spending caps, and a balanced budget 
amendment that brings our long-term fiscal problems under control.
  I am more convinced than ever that a balanced budget amendment to the 
Constitution is essential if we are to right our fiscal ship. This is 
not the first time we have been down this road, but the stakes could 
not be higher this time, and the amendment could not be better designed 
to address the crisis. Our amendment is not just an amendment for 
fiscal balance, it is an amendment that takes on the root cause of our 
current debt crisis; that is, government spending. Our amendment 
requires a balanced budget. It establishes a spending cap of 18 percent 
of GDP, and it establishes supermajority requirements for tax increases 
or future debt-limit increases.
  We will hear a number of tired arguments against the BBA. Its 
opponents will say the amendment is not properly vetted. We have been 
talking about the balanced budget amendment for decades, and if we had 
passed it back in 1997, when it fell by 1 vote short of being sent to 
the States for ratification, we would not be in the mess we are in 
today.
  They will say it stacks the deck by requiring spending cuts rather 
than tax increases to balance the budget. This is an issue I will 
address at length, but the American people understand the solution to a 
spending crisis is not to give the government more money to spend, 
especially this government.
  They will say a balanced budget amendment is unnecessary and Congress 
just needs to do its job. But we have heard this over and over before, 
and the American people know that waiting for Congress to balance the 
budget and shrink the size of government without a constitutional 
amendment is less fruitful than waiting for Godot.
  They will say the spending cuts required as a result of this BBA will 
hurt children and the elderly. But the real harm to our children will 
be when we hand them a future of national indebtedness and dim economic 
prospects, and the real harm to the elderly will be the coming 
bankruptcy of the Nation's entitlement programs--the guaranteed result 
of the President's failure to lead on entitlement reform.
  Finally, they will say the Constitution should not be amended. I 
agree that it should not be amended lightly, but the Founders 
themselves expected that changing circumstances and national 
emergencies would demand amendments to the Constitution from time to 
time.
  The American people understand that this is one of those times. In 
this country, the people are sovereign, the Constitution is their 
Constitution, and they are demanding that Congress pass a balanced 
budget amendment and send it to them and the States for ratification.
  My hope is that the party of Thomas Jefferson will listen to their 
constituents and follow their founder's lead, keeping faith in the 
people and their good sense and stewardship over the Constitution.
  Later this summer we will vote on a balanced budget amendment. God 
willing, this fall the people in the States will start down the road to 
ratification.
  I am proud to be joined this morning by several of my colleagues who 
have been critical leaders on the balanced budget amendment. Each 
brings a unique perspective to this debate, and I think it is great 
that they are standing up to lead on this issue.
  I yield 5 minutes to my colleague, the junior Senator from Kentucky. 
He is a remarkable spokesperson for limited government, and I am glad 
to have him on my side in the coming fight for the balanced budget 
amendment.
  Mr. PAUL. Madam President, the balanced budget amendment is 
interesting when you look at polls and ask the American public: Do you 
approve of what Congress is doing? Do you approve of congressional 
action? Do you think they are doing a good job? It is actually 14 
percent to 15 percent of the American public who think we are doing a 
good job. The other side of that equation is, you ask the American 
public: Do you think a balanced budget amendment would help Congress do 
a better job? It is 75 percent to 80 percent of the American public who 
think we would do a better job if we had a balanced budget amendment.
  I don't think this is a partisan issue. I would ask the Senator from 
Utah--and perhaps an opinion from the Senator from Texas--do you think 
this should be a partisan issue or do you think this goes beyond 
partisanship, and can we get the Democrats to understand this isn't a 
Republican-Democratic issue but really an issue for the good of the 
country?
  Mr. HATCH. Well, that should go way beyond partisanship. If we pass 
it here by the requisite two-thirds vote and we pass it in the House, 
which we will, this will be submitted to the States, and then the 
States can make their determination whether or not we have a balanced 
budget amendment. The

[[Page 10147]]

Democrats who hate the balanced budget amendment--some of them; in 
fact, most of them--all they have to do is get 13 States to defeat it. 
We have to get 38 States to win. Frankly, we will win this because the 
American people are with us. And this is the right thing to do. It is 
the right thing to do at this time. It is the only thing that is going 
to get us to right this fiscal ship.
  Mr. PAUL. What does the Senator say to those who say that statutory 
caps would work, something like Gramm-Rudman or something like pay-as-
you-go? What is his answer?
  Mr. HATCH. Gramm-Rudman lasted all but a year and a half, 2 years, 
before the same people went on a spending spree again, although it was 
a light spending spree compared to today. Today it is multitrillions of 
dollars.
  I have to tell you that has never worked. We have to put a 
straitjacket into this matter where the Congress has to live the way 49 
States have to live. There is only one State that doesn't require a 
balanced budget in its State constitution. Why should we have a 
requisite desire--not only desire but rule to have a balanced budget as 
well? I am convinced that we have to do it after being in the Senate 
for 35 years and seeing, year after year after year, people unwilling 
to do this.
  Mr. PAUL. And I think what is interesting, if you look at this and 
you really look at polling data and say: Who is for the balanced budget 
amendment, it goes across all party lines. If you look at Independents, 
Democrats, if you look at Republicans, it is in the high sixties to the 
midseventies in the percentage of the public who would like to see 
this. And I think it goes hand in hand that they don't think we are 
doing a good enough job here and that we need more backbone, and the 
Constitution is supposed to be our backbone. The Constitution helps us 
to do a good job, to help restrain the size and growth of government.
  I can't see an argument against this, and I really don't understand 
how a vast majority of the public can be for this and yet this body 
still refuses to act.
  Mr. HATCH. I agree with the Senator. I think the Senator makes very 
good points there. Frankly, I know this body very well. I am the most 
senior Republican. I have been here 35 years. I have seen year after 
year after year excuses to go into debt, excuses to deficit spend, 
excuses for why they are putting our country into this terrible state 
of bankruptcy--just plain excuses. And, of course, they hide behind the 
fact that they are trying to do it for the good of the people. It is 
not for the good of the people. It is not good to not live within your 
means, and unfortunately that is what has been going on here all of the 
time I have been here.
  Mr. PAUL. I think one of the alarming things we see is that on the 
course we are taking now, if we do nothing dramatic to reform the 
process--if we don't pass the balanced budget amendment--within about a 
decade, the budget will be entirely consumed by entitlements and 
interest. This is being driven by something beyond the control of 
Republicans, beyond the control of Democrats, and out of everyone's 
hands. It has to do with the fact that we are living longer and there 
are fewer young people and more old people because a lot of babies were 
born after World War II.
  These are demographic facts we can't escape. When we look at some of 
the charts about what goes on with this, we see what happens if we do 
nothing. We see the projected debt way out here. Most of this debt 
problem is entitlements. We have to come together as parties. The 
balanced budget amendment will help us do this, but then we need to 
acknowledge that these problems exist and we need to come together--
both parties--to figure out solutions.
  I think the balanced budget amendment may well be what forces us to 
have a discussion. To be good legislators, we need to decide priorities 
instead of just adding on new program after new program. We have 80 
different Federal programs that are work programs. We need to think 
about consolidating and minimizing government. I think the balanced 
budget amendment would allow us to have a discussion in this body on 
where we can cut spending.
  Mr. HATCH. Madam President, I wish to thank the distinguished Senator 
from Kentucky. I think he states it very well. That is the whole 
purpose of the balanced budget amendment. So I thank him for his cogent 
remarks and his erudition.
  Last week, I signed a pledge that many people in this body are 
hearing about from their constituents. It is called the cut, cap, and 
balance pledge. Those of us who signed this pledge committed ourselves 
to significant spending cuts, a cap on government spending, and a 
balanced budget amendment to the Constitution as a condition for 
supporting any increase in the debt limit. I was pleased to work with 
my colleague from Utah, Senator Lee, in developing a balanced budget 
amendment that is supported by every Republican in this body. Of 
course, we worked with many others as well, especially Senator Cornyn. 
I am now pleased to be working with him on the goals of the cut, cap, 
and balance coalition, a remarkable group of grassroots activists 
committed to getting our Nation's spending under control.
  Madam President, I yield 5 minutes to my friend and colleague from 
Utah, Senator Lee.
  Mr. LEE. I thank my distinguished colleague, my senior Senator from 
Utah, Mr. Hatch, for his leadership on the balanced budget amendment 
over the years. He has been a consistent and stalwart advocate for the 
cause of amending the Constitution in such a way that restricts 
Congress's ability to engage in deficit spending.
  It is the practice of perpetual, reckless deficit spending that has 
created this almost $15 trillion debt we are now dealing with. It is 
this practice of perpetual, excessive deficit spending that has fueled 
the expansion of the Federal Government far beyond the limits the 
Founding Fathers had in mind and far beyond the natural limits this 
government can handle.
  It is important to remember we are now spending through the Federal 
Government more than 25 percent of our annual GDP. More than one-
quarter of every dollar that moves through the American economy is 
consumed by Washington. This is a problem. This is a problem, and it 
is, unfortunately, not something that is at all consistent with where 
we have been historically as Americans.
  We have to remember that for about the first 140 years of our 
Republic's existence under the Constitution, our Federal spending was 
nowhere near this high as a percentage of GDP. Between 1790 and the 
early 1930s, the Federal Government tended to spend between 1.5 and 4 
percent of GDP every single year, year in and year out. There were two 
blips, two exceptions--one during the Civil War and one during World 
War I and its immediate aftermath. But after those cycles passed, we 
went right back to where we had been before. That started to change in 
the 1930s and we have been on a gradual upswing almost ever since then 
to where we are now above 25 percent.
  But it gets worse. By the year 2035, we are predicted to be spending 
almost 34 percent of gross domestic product by the Federal Government 
every single year. As a result, the Federal Government will be 
commanding a very substantial portion of the American economy. That 
makes every American less free. The more government spends--the more 
money it has access to and the more it borrows on our behalf--the less 
free we become, the less individual liberty we have to spend our money, 
to use our resources, to devote our lives to the pursuits we choose.
  That is why the cut, cap, and balance pledge is necessary to support 
individual liberty and to protect our most basic freedoms, because it 
will protect us from the inexorable growth of the government.
  We are at an important time in American history. We are at a time 
when we are being asked to extend our debt limit once again; a time 
when we are being asked to say: Yes, we are going to give the Federal 
Government authority to borrow even more money against our unborn 
children and grandchildren. This is a problem.

[[Page 10148]]

  One reason we are willing to sign this pledge is that we are willing 
to say: OK. We have been put on a path with government spending at this 
rate. We can't halt that spending immediately. We are willing to 
consider raising the debt limit but if and only if certain conditions 
have been satisfied to make sure this doesn't continue in perpetuity. 
We need cuts. We need some kind of significant cuts to our spending 
right now. We need some kind of statutory spending cap to put us on a 
gradual glidepath toward a balanced budget. Most importantly, we have 
to amend the U.S. Constitution so as to say this will not continue in 
perpetuity and future Congresses will not be able to do what Senator 
Hatch referred to a minute ago, which is exempt itself out of statutory 
spending caps once it has adopted them.
  We can't bind future Congresses to cut $2 trillion over the course of 
a decade or more because we can't command future Congresses to do what 
we want it to do unless, of course, we amend the Constitution, which is 
why we have to do that right now. This is essential to economic 
progress in America. This is essential to economic well-being and to 
individual liberty in America.
  I would love to talk with anyone who wants to about this. I have 
invited Utahans who may be in town and I invite anyone within the sound 
of my voice, here or elsewhere, to join me in my office this 
Wednesday--today--and every Wednesday at 3:30, when we have what we 
refer to as a JELL-O bar. Utah consumes more JELL-O per capita than any 
State in the Union. We serve up JELL-O and we will talk about the cut, 
cap, and balance pledge.
  Thank you very much.
  Mr. HATCH. Madam President, I thank the Senator from Utah. He is a 
wonderful Senator and he serves as a leader in this area.
  I don't have enough good words to say about my friend from Texas, my 
colleague, Senator Cornyn, who was a judge on the Supreme Court in 
Texas before coming here. From the minute he set foot in this Chamber, 
he has been a strong conservative, committed to constitutional 
government. From the beginning of this Congress, he knew we needed to 
pass a balanced budget amendment, and we are going to need him in this 
fight.
  I yield 5 minutes to my friend and colleague from Texas, Senator 
Cornyn.
  Mr. CORNYN. Madam President, I join my colleagues from Kentucky and 
the junior Senator from Utah in recognizing the leadership of the 
senior Senator from Utah, Mr. Hatch, on this even more compelling issue 
today than it was even back in 1997, the balanced budget amendment.
  I couldn't help but be struck by the figures the senior Senator from 
Utah mentioned earlier when he said that in 1997, the House of 
Representatives passed the balanced budget amendment. It came to the 
Senate and failed by one vote. The deficit in 1997 was roughly $107 
billion. Today, it is $1.5 trillion. The national debt in 1997, if I 
recall what the Senator said--and he can correct me if I am wrong--
today it is roughly $14.3 trillion, approaching $15 trillion. Back in 
1997, it was $5 trillion. Did I get those figures roughly correct?
  Mr. HATCH. The Senator did. Back in 1997, we lost by one vote. I was 
leading the fight on the floor. We had 67 votes and one of our Senators 
flipped on us at the last minute and we lost it by one vote.
  Mr. CORNYN. I agree with the Senator from Kentucky who says this is 
not a partisan issue. As a matter of fact, back in 1997 a lot of our 
Democratic colleagues joined Republicans to vote in favor of a balanced 
budget amendment. If there is an issue that threatens not only the 
economy but also our national security today more than the national 
debt, I don't know what it is.
  The Chairman of the Joint Chiefs of Staff, Admiral Mullen, said the 
single largest threat to our national security is the debt. Secretary 
of State Hillary Clinton said the debt sends a message of weakness 
internationally.
  I was just over at the Heritage Foundation giving a speech. They are 
studying the role of China in the world, the rise of China, but 
particularly what I was concerned about, and the subject of my remarks, 
was the fact that the Treasury Department estimates that $1.1 trillion 
of U.S. debt is held by the Communist Chinese Government. That is one-
third of all our outstanding debt. We know that at least on one 
occasion, a retired Chinese general said that if we didn't do what 
China wanted, they would then threaten to disrupt our economy by 
selling off the debt they own. So my colleagues may care to comment.
  Larry Lindsey, the renowned economist, wrote an article recently 
where we cited three things that worry him the most about high 
unemployment and the lassitude of the private sector. He said it is 
slow economic growth, of course, because many in the private sector are 
discouraged--the entrepreneurs who create jobs, the job creators who 
would otherwise expand--and slow economic growth concerns him. I think 
in the first quarter it was 1.8 of our gross domestic product. It is 
not enough to generate jobs to get people back to work and one reason 
for our high unemployment.
  He said the other two issues that worry him the most are, one, the 
interest payments on our national debt. He points out that because of 
the Federal Reserve policy, the interest rates on our national debt are 
at below historic norms. He points out, for example, if inflation were 
to kick in or the Federal Reserve, for some reason, should decide to 
tighten its policy and raise interest rates, what it would do to 
balloon the interest payments alone on our national debt in a way that 
would threaten our ability to fund national defense or other issues as 
well.
  Two, he also points out the exploding costs of the health care bill, 
with more and more employees incentivized to dump people onto the 
State-based exchanges subsidized by taxpayers as opposed to their 
employers.
  I wonder if any of my colleagues--I see the Senator from Kentucky--
may have some comments about the interest on the debt and what he views 
as a threat to our economy and our security.
  Mr. PAUL. From that same article, it is interesting that he talks 
about what happens if interest rates rise. For every point of an 
interest rate rising, it adds $140 billion. So he talks about getting 
back to the historic average of 5.4 percent, that over 10 years it 
would add $4.9 trillion to our debt problem. But here is the rub. We 
are having discussions where people are saying we are going to cut $2.5 
trillion over 10 years. Senator Hatch points out we cannot bind future 
Congresses. Senator Lee said the same thing. So when they promise us 
that they are going to cut $2.5 trillion, compare that to what happens 
if interest rates rise. One, we can't bind future Congresses, but if 
interest rates rise, all of a sudden we have $5 trillion in extra 
expenses.
  We must bind future Congresses and we must bind ourselves by amending 
the Constitution.
  Mr. CORNYN. Madam President, I couldn't agree more with the Senator 
from Kentucky. This is the silent but potentially deadly threat to our 
whole economy. If interest rates were to go up, if China purchases more 
of our debt, they are not going to buy it at current rates; we are 
going to have to offer a better rate of return.
  The ACTING PRESIDENT pro tempore. The Senator has consumed 5 minutes.
  Mr. CORNYN. So I join my colleagues in supporting the balanced budget 
amendment. I look forward to the vote on this amendment--sometime 
during the week of July 18 I think we are shooting for. We invite our 
colleagues on the other side to join us. The reason we are here today 
is because it is important to let the people across the country know 
what we are doing, the solution we are proposing, and to ask them to 
encourage other Senators and Congressmen to support it because this is 
the single most important thing we could do to get our economy back on 
track and to save generations in the future.
  Mr. HATCH. Madam President, I thank my colleague for those cogent 
remarks.
  My colleague from North Dakota, Senator Hoeven, knows a thing or two

[[Page 10149]]

about balancing budgets. As a former Governor, he knows this is 
something States have to do every day. Governors and legislatures 
balance their books by making the tough decisions the Federal 
Government is too often unwilling to make.
  So I yield the remaining time to my friend and colleague from North 
Dakota, Senator Hoeven.
  Mr. HOEVEN. Madam President, I thank my esteemed colleague, the 
senior Senator from Utah, for taking the lead on this balanced budget 
amendment. I am pleased to join him, pleased to be one of the original 
cosponsors, and I am extremely pleased every member of the Republican 
caucus--all 47 Senators are supporting this balanced budget amendment 
and doing everything we can to reach across the aisle and bring our 
Democratic colleagues with us and then to send this balanced budget 
amendment to a vote--to pass this balanced budget amendment by a two-
thirds vote--and then send it out to the States for ratification. 
Three-fourths of the States would have to ratify it as well. I believe 
they will.
  What a great way for us to join together at the Federal and State 
level to make sure we live within our means, that we balanced our 
budget, that we do the things we need to do to not only get this 
economy back on track but to make sure future generations can enjoy the 
great country, the great opportunity we and those who have gone before 
us have enjoyed in the United States of America. We have that 
opportunity. We need to seize that opportunity by passing this balanced 
budget amendment.
  As the senior Senator from Utah correctly mentioned just a minute 
ago, I had the opportunity--the great honor and privilege--to serve my 
State as Governor. As a matter of fact, at the time I was elected to 
the Senate, last year, I was the longest serving Governor in the United 
States. I served for a decade. Every single year we balanced our 
budget.
  Madam President, 49 of the 50 States have some form of balanced 
budget requirements. The only one that does not is Vermont. Forty-nine 
States have that requirement. This year, so far, 46 of the States are 
expected to balance their budgets.
  Families balance their budgets. Businesses have to balance their 
budgets. Cities have to balance their budgets. States have to balance 
their budgets. The Federal Government needs to balance its budget. It 
is not doing that.
  When we look at the statistics--we have gone through them before, but 
these statistics we have to continue to talk about; our current 
situation is something we have to continue to talk about with the 
American people--right now, our revenues are $2.2 trillion. The annual 
revenues to the Federal Treasury, $2.2 trillion. Our expenses are $3.7 
trillion. That is about a $1.5 trillion, 1.6 trillion deficit each and 
every year.
  When we roll that up, that is why we are now at $14.5 trillion in 
debt, and that debt continues to grow. But it is similar to any debt, 
as any family can tell us or any business can tell us or any State can 
tell us, that as we continue to accumulate and grow that deficit and 
accumulate that debt, it gets harder and harder to get on top of it. It 
is akin to having credit cards. As one continues to charge and add to 
that balance on the credit card, it gets more and more difficult to get 
on top of that debt and deficit and reduce it.
  So we have to get started. We have to get going. The task gets 
harder, not easier. That is what the balanced budget amendment is all 
about. We need the President to lead. When we talk about getting this 
debt under control, we need the President to lead. We cannot have a 
situation where we spend more and then simply borrow more or try to 
raise taxes to cover that spending. That is making it worse. We need 
this administration to join us. We need our colleagues to join us, to 
get a grip on this spending, to start by passing this balanced budget 
amendment.
  If we look back to the decade of the 1980s and then into the 1990s 
and we look at President Reagan and his approach and his leadership for 
this country, he came and said: We have the most dynamic economy in the 
history of the world, so we have to create an environment, a pro-jobs, 
pro-growth environment that stimulates job creation, that stimulates 
private investment, that puts people back to work, that gets this 
economy growing. As we get that economy growing, we have the resources 
then to do the things we need to do: to invest in infrastructure, to 
make sure we take care of those who need help, to make sure we have 
health care for our citizens. But at the same time--at the same time--
we need to control our spending and live within our means. That is the 
rising tide that lifts all boats. That is how we make sure everybody 
participates in the great opportunity that is the very foundation of 
this country.
  But to get back to that point, we need this balanced budget 
amendment. We need this fiscal discipline in Washington to make sure we 
continue to honor the legacy we have, the legacy we have been given, 
and that we continue to make this country the country of opportunity. I 
know we can do it.
  I thank the Senator from Utah for his leadership in this effort, and 
I thank my colleagues for joining together on this balanced budget 
amendment. I ask all our colleagues to join with us so we can pass it.
  The ACTING PRESIDENT pro tempore. The Senator's time has expired.
  Mr. HOEVEN. Madam President, I yield the floor.
  Mr. HATCH. Madam President, I thank my colleagues. I ask unanimous 
consent for 1 additional minute and to give the other side an 
additional minute.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  Mr. HATCH. I thank the Acting President pro tempore.
  I thank my colleagues. They have made some very prescient points on 
how important this balanced budget amendment is.
  By the President's own Actuary, by 2020, our national debt will be 
over $20 trillion. The interest alone will be over $1 trillion. We will 
not have any money for the poor, the sick, and the needy because we 
have not lived within our means. We simply have to get spending under 
control. The only way to do that is to do what all these 49 States have 
to do every year; that is, balance our budget through a requisite 
constitutional amendment.
  Let me make one last point; that is, I do not know why the 
Democrats--some Democrats--fight against this. Because literally, even 
if we pass it through both Houses of Congress by the requisite two-
thirds vote, there is still going to be a big battle in the States, and 
if they hate it, they can fight it out there in the States.
  I think the reason they fight it is they know if we pass it here, it 
is going to pass through the States very fast because almost every 
State knows what we have to do. Almost everybody of intelligence knows 
what we have to do.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Iowa.

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