[Congressional Record (Bound Edition), Volume 157 (2011), Part 8]
[Senate]
[Pages 10739-10742]
[From the U.S. Government Publishing Office, www.gpo.gov]




                          BUDGET NEGOTIATIONS

  Mr. SESSIONS. Mr. President, the situation involving the need for a 
budget and the situation involving the need to raise the debt limit for 
the United States is getting more and more crucial, it seems, by the 
hour. I have been a firm and consistent critic of this idea that has 
been developing the last several years in the Congress that a few 
people meet in closed, secret meetings and somehow reach a decision 
that I am supposed to assume is good and decent and ought to be 
confirmed by a vote here in the Senate.
  I feel that there are 100 Senators--and some a lot smarter and more 
capable than I--but I feel a personal sense of obligation and duty to 
ensure that when I vote on an important piece of legislation my 
constituents care about, that I know what is in it and that I 
understand what is in it, and it is hard to know. When you have a bill 
that comes out that proposes to have changes in the trillions of 
dollars, involving Federal spending for a decade, in a budget or some 
other fashion, it requires us to be careful about that.
  So I would express again my dissatisfaction and belief that this 
Senate--not the House--has failed in its duty to participate in an open 
process concerning our budget. The House of Representatives did. The 
Republican House promised to have open hearings. They had a bill on the 
floor--a budget. They passed it within the time required--by April 15. 
It completely changed the debt trajectory of America and put us on 
sound footing. It reduced spending by $6 trillion--not $2 trillion but 
$6 trillion--and it didn't raise taxes on the American people. In fact, 
it reduced taxes in a way they felt would engender better economic 
growth,

[[Page 10740]]

which is the best way to engender more tax revenue--having more people 
make more money and pay more taxes. So I really believe the House 
fulfilled their constitutional duty.
  In the Senate, we have now gone well over 800 days without a budget. 
We didn't have a budget when our Democratic colleagues had 60 
Senators--the highest number one party has had in probably 70, 80 
years, maybe longer. They didn't pass a budget. You can pass a budget 
with 51 votes--with the Vice President, 50 votes. It is a simple 
majority. It is an expedited procedure. Budgets have been passed when 
parties have only had one-vote majorities in the Senate.
  So I would say it is odd that we have gone 2 years without a budget, 
but it is not odd--in part because of having no budget--that we have 
seen the largest surges of debt the Nation has ever seen. President 
Bush was criticized for running up debt. He had, in 1 year--his last 
year--a $450 billion deficit, and he was roundly criticized for that. 
Some of that was TARP money, which they scored as monies spent, and it 
was properly and accurately scored. So it came out to $450 billion. The 
year before, it was a $160 billion deficit. President Obama's first 
budget deficit was $1,200 billion. His next budget was $1,300 billion. 
This year's budget, by September 30, is projected to be around $1,500 
billion. We haven't had a budget. Is anything connected there?
  So I want to say, first of all, one of the ways you act responsibly 
is when you do it out in front of the people.
  I noticed at the press conference today that President Obama, when 
asked about some of these matters, pushed back and said: Well, we want 
to have an agreement right now. We don't want to wait any later, close 
to the election.
  He was basically saying--it is pretty clear, really, and I am not 
exaggerating anything--when you get close to the election, Senators and 
Congressmen don't like to vote for more debt and they do not like to 
vote for more taxes. What is wrong with that? The American people don't 
want debt. They do not want taxes. They want us to bring this 
government under control. But what is being suggested is, oh, it is 
politics. There is something corrupt politically if you believe you 
shouldn't bail out the big spenders in Washington by taking more money 
from hard-working Americans and taking it out of the private sector to 
give to the public sector that has mismanaged the money they have.
  Some might say: Well, Jeff, we have these big deficits because you 
all cut taxes.
  We haven't cut taxes in years. President Bush cut taxes with revenues 
much higher today than when those taxes were cut. We have gone into an 
economic decline, and this recession has reduced our income. That is 
true. It is not so much the rate of taxes. It is the rate of profit. It 
is the rate of income. It is the rate of money people are being paid, 
so they do not have as much money and they are not paying as much in 
taxes. Now, we can run around and find everybody who is left with money 
and try to tax them, but at some point that begins to be self-
defeating.
  So I guess I am trying to raise the point, How did we get here? Well, 
there is another way we got here with these huge deficits we have. In 
the Keynesian philosophy of economics, we had a big spending bill 
called a stimulus bill. I opposed it. I remember reading a piece by the 
Nobel laureate, Professor Becker, from the University of Chicago, not 
long before the vote saying it was not going to create jobs; that it 
was not sufficiently stimulative to be a good stimulus bill, in fact, 
in his mind, as a Nobel Prize-winning economist. And that is exactly 
what happened. It didn't create jobs. It went to social programs, it 
went to State aid, and it went to things other than the infrastructure 
that we were told it was going for. Only 4 percent of that money went 
to roads and bridges--4 percent out of $850 billion. Every penny 
borrowed will be to create or to stimulate jobs, they said. We are 
going to redo our infrastructure, they said. It was not done that way. 
It was social spending overwhelmingly, and it didn't create growth in 
the economy.
  Another reason we have the debt is because the baseline spending has 
surged under the Democratic leadership and President Obama. Defense 
Department has gone up 3 or so percent the last couple of years in 
spending. Nondefense discretionary spending--the things we do such as 
energy programs and road programs and aid and grants and things we like 
to spend around here--went up 24 percent in 2 years. We were having a 
drop off in income, a drop off in tax revenue, and we increased 
spending dramatically.
  We never had 10, 12 percent increases in spending per year. But hold 
your hat. The budget the President submitted to us in February of this 
year--several months ago--proposed increases for the Education 
Department of 10.5 percent, proposed increases for the State Department 
of 10.5 percent, with 9.5 percent for the Energy Department and a 60-
percent increase for transportation--the high-speed rail projects. But 
we don't have the money. All of that would have been borrowed. We 
couldn't sustain flat spending without borrowing money, we are so far 
in debt. Forty cents of every dollar we spend today is borrowed.
  So I have been a big critic of this scheme to meet behind closed 
doors and not tell the rest of the Congress or the American people what 
we are doing and to plop down on the floor of the Senate some proposed 
deal that we have to sign at the eleventh hour or the government is 
going to shut down. Why haven't we been talking about this? They talked 
about it in the House. They voted on it. They reduced spending $6 
trillion. In the phantom budget that has been talked about by our 
Democratic colleagues, one they never produced so it could actually be 
accounted for, they are claiming it would reduce spending $2 trillion 
and are patting themselves on the back about how great they are. But 
when you take out the interest savings that occur, it is only $1.4 
trillion in actual reduction of spending and it is a 2.7-percent, we 
estimate, increase in taxes.
  Senator Conrad, the chairman of the Budget Committee, does a good 
job. He is a smart man. I think he understands the threat America 
faces. I thought he did, although this phantom secret budget that they 
just leak out descriptions of whenever it is convenient has not 
impressed me. Really, it just hasn't been impressive. Is it a vision? 
Is it a specter of some kind of a budget that nobody can ever grasp 
their hands around, and it is only what the people who are holding it 
close to their vest say it is and all the rest of us have to accept 
that? I don't think so. I have become very uneasy about what we hear in 
this city of Washington about plans and policy.
  When President Obama announced his budget, it was the most 
irresponsible budget this country has ever been presented with by a 
President. I don't think anybody can dispute that. I am prepared to 
defend that against anybody who says so. It increased spending, it 
increased taxes. Over a decade, it increased taxes and increased 
spending and made the deficit worse than if we hadn't done anything, at 
a time when the Nation should have been working from January until 
today figuring out how to bring this government under control and 
contain the growth in spending and contain the debt. This is what he 
said, and his budget director in our committee said--Mr. Lew--that: Our 
budget calls on us to live within our means and pay down the debt.
  The Congressional Budget Office scored the budget. They analyzed it 
over 10 years. The lowest single annual deficit that was occurring 
during that time was $750 billion, the lowest deficit, almost half 
again higher than President Bush's highest deficit. And it starts going 
up in the outyears 8, 9, and 10--to over $1 trillion in the 10th year 
annual deficit. Interest on that debt that would be accrued by such an 
irresponsible budget would go from around $200 billion last year, $240-
some-odd billion this year, to $930 billion in 2021. That would be 
larger than Medicare, larger than Social Security, larger than the 
defense budget including the war--much larger than those. So interest 
is a danger.

[[Page 10741]]

  Senator Conrad talked this afternoon about his phantom budget, and he 
told us a lot of things he wanted us to know about it, and he 
articulated it in a way that made you think that it is not such a bad 
idea. But we have real numbers people. Just like President Obama said 
his budget was going to pay down the debt and cause us to live within 
our means when it had no deficit lower than $740 billion--he said it is 
a blueprint. He said it is a framework. But he didn't say it was a 
budget because it is not a budget. A budget is a document that can be 
read, ascertained, evaluated, and scored.
  So they leak it to the Washington Post--not to Members or colleagues 
of the Senate here--they leak to the Washington Post some of the good 
things he wanted to get out, and then they talk about some of the good 
things here today. Forgive me if I am not impressed. If it is such a 
good budget, why don't you print it out and propose it to us? That is 
what the House of Representatives did. They are prepared to defend 
their budget.
  Senator Conrad said this: that he thought it could play a part in 
this big deal the President is talking about to change our debt 
trajectory in a positive way. Well, those words are good words, just 
like the President's statement that he had a budget that was going to 
cause us to live within our means and pay down our debt. That is what 
he said. That is what his budget director said. Well, you can say 
things, but it doesn't make them true. I can say I don't have a desk in 
my hand, but I have a desk in my hand, reality being what it is. So 
that was not a good budget he submitted, and I am worried about this 
phantom budget we are hearing about today.
  The way we calculate this phantom budget and the things that have 
been released about it, it would raise taxes as much as $2.8 trillion 
and cut spending about 4 percent over the 10 years--this is a 10-year 
budget--at a time when we are projected to add, under the President's 
plan, $13 trillion to our national debt. So we are going to reduce the 
debt by 4 percent from $13 trillion--an utterly unsustainable figure. 
The House budget would cut discretionary spending $6 trillion. The 
Toomey plan would have cut spending $8 trillion.
  Senator Conrad actually said on the Senate floor that his budget--
which raises taxes, as I indicated--would reduce taxes by $700 billion. 
He said it would reduce taxes by $700 billion. Now, how is this 
accounting--this trick, I will suggest--accomplished? Well, to get to 
that number, he is obviously comparing it to a CBO baseline which 
assumes that every single tax rate from the 2001 and 2003 tax cuts that 
has been in place now almost a decade is going to expire and all those 
rates go up. So he is saying that if he keeps a few of them from going 
up, he has cut taxes. Only in Washington can you raise taxes 
dramatically, change the tax rates that have been in place for a 
decade, see taxes go up dramatically, and call that a tax cut.
  By the way, baseline is very important. We don't know what baseline 
the chairman of the Budget Committee is using. He understands it very 
well. He is one of the most knowledgeable, capable Members of our body, 
and he understands these well. I believe the phrase he used was that it 
is a plausible baseline--a plausible baseline.
  Well, let me tell you the baseline we should use. The baseline, when 
you talk about whether spending increases or whether spending 
decreases, should be what you are spending today. If you are spending 
$100 billion today and if you spend $102 billion, you have spent $2 
billion more. If you spend $98 billion, you are spending $2 billion 
less, right? Well, what they do in Washington and the reason this 
country is so close to bankruptcy is they assume growth rates, baseline 
growth rates. Then when you reduce the baseline growth rate, and it is 
going up $10 billion next year and you reduce that increase to $9 
billion, you claim you cut spending by $1 billion and it went up $9 
billion. Now, that is the kind of logic that has put us in the 
difficult position we are in.
  So I have decided and told my staff on the Budget Committee that when 
we get numbers, we are going to compare them to the only thing that is 
solid, and that is a level baseline--does it go up or does it go down? 
In fact, the Ryan House budget that cut $6 trillion still increases 
spending. It is not a real cut.
  So you do have to figure out how much you are talking about and what 
baseline you are using to know what the numbers are. The best way to do 
that and the most objective way to do that is to use a flatline number 
and see whether we are up or down, and then we can communicate. But if 
you get to choose your baseline--and CBO has one, the President has 
another one, and it looks as though the Senate Democrats have chosen 
another one they call a plausible baseline. I don't know what that 
means. The debt commission that had their recommendation for reducing 
debt chose another baseline. It makes it confusing, and it makes it 
harder to understand.
  So when you talk about a budget that is supposed to really make a 
difference in our economy and you propose $2 in tax increases for every 
$1 in spending cuts and suggest this is the kind of thing you are 
working with the President on in their negotiations, maybe we can begin 
to understand why the Members of the House and the Members of the 
Senate who have been in these meetings have been walking out of these 
meetings and saying: All they want to do is raise taxes.
  The President himself said several months ago that he thought $3 of 
spending cuts and $1 of tax increases would be a good mix. But what we 
are hearing today is $2 of tax increases to $1 of spending cuts. That 
is not acceptable and has no chance of passage. And if the American 
people have time to read that kind of legislation and find out that is 
what is in it, they are not going to be happy with anybody that 
supports it, in my view. So perhaps that is the reason they want to 
wait until the eleventh hour, claim the country is about to shut down, 
and try to force it through. As the President suggested, you don't want 
to get it too close to the election when people might remember what you 
did to them.
  Goodness gracious, they talk about a $900 billion cut in the Defense 
Department. That is part of their plan too. Well, let me just tell you 
how that gimmick works. You propose a $900 billion cut in the Defense 
Department and you know that almost 20 percent cut is not going to 
become law, but you go out and tell the public you saved $900 billion 
and you plan to cut it from the Defense Department, and you can't cut 
that much money from the Defense Department. So no wonder our retiring 
fine Senator Joe Lieberman, after the Democratic discussion of this, 
was moved to say he was worried about what such a budget would do to 
our national security. Well, he should be.
  I have been on the Armed Services Committee. I don't deny that the 
military has to tighten its belt. Just like every other department in 
this government, it may even have to take a real reduction in spending. 
But we are not going to have an 18-percent, 20-percent reduction. Are 
we going to have our men and women who place their lives on the line 
for us have to pay for profligacy in Washington? I don't think so.
  Mr. President, I would ask Majority Leader Reid, who I believe is the 
strategist in the Senate who told our chairman, Senator Conrad, that he 
should not bring up a budget--I think Senator Conrad and I were 
prepared to bring up a budget. He was working on one. His staff was 
working on one. We were within days of a markup. He was going to 
produce a budget, and those of us on the Republican side had amendments 
to offer, and we were preparing for a debate, and they decided all of a 
sudden not to have a markup. Later, Senator Reid said it would be 
foolish to produce a budget.
  I would say it would be foolish for the Congress of the United States 
to take a paycheck to operate the way we are operating when 40 cents of 
every dollar we spend is borrowed. That is unthinkable. How did we get 
in this position where we are spending $3,700 billion and taking in 
only $2,200 billion and all the difference is borrowed?
  Finally--this is important--a lot of us have heard these numbers but 
it has

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not resonated with us about how important they are. Professors Rogoff 
and Reinhart have written a book called ``This Time It's Different,'' 
studying eight centuries of sovereign governmental default on their 
debts, the kind of thing Greece is going through today. They have 
analyzed how it happens and the consequences. They chose the name 
because they said that every time politicians ran up debt in their 
country to high levels and caused a crisis, they said: It will not 
happen to us. This time it is different. We are different from those 
other countries that went belly up. Then it happens just like that, 
savagely, immediately, like the financial crisis that hit us in 2007-
2008. What they concluded in further study was something else. Not only 
when you get your debt too high do you run the risk of a financial 
crisis, but your debt slows your economic growth and the countries that 
have debts that equal 90 percent of the economy--I see my good friend, 
Senator Reid. He has the toughest job in Washington and I am not making 
it any easier for him. It will be good for him to hear this. I think he 
knows it.
  But they have concluded when your total American debt reaches 90 
percent of our economy, our GDP, and goes above that, it pulls down 
your economic growth by 1 percent. CBO now is scoring our growth to 
come in at .9 percent below what it otherwise would be because of our 
debt.
  The first quarter we had 2 percent economic growth. If we had 3 
percent economic growth that would be a 50-percent increase in growth. 
If we had 1 percent greater increase in growth that would amount to, 
according to the White House economic team some time ago, an increase 
of 1 million jobs in America.
  What I am saying is we erroneously state too often, I think, that the 
question is about our children and grandchildren. I truly believe the 
sluggish growth and the very weak job numbers we have been having are 
the result of carrying too much debt. We have to start reducing that 
debt even if it is painful for us to do so. I hope our colleagues will 
produce a budget that will actually change the numbers. I am not 
confident that will happen.
  Failing that I do hope, Mr. Leader, and I say this to my leader, too, 
that if a bill is brought forth in the Senate we have at least 7 days 
to consider it before we are asked to vote on it. I believe it will 
take that long to properly evaluate it.
  I see the majority leader here. It is always a pleasure to work with 
him.
  I yield the floor.
  Mr. REID. Mr. President, I would say before my friend leaves the 
floor, his leader, my friend, the senior Senator from Kentucky and I 
are representing the Senate along with Senator Kyl and Senator Durbin 
at the White House. We have been there many days now. We understand, 
all of us there, Democrats and Republicans, the significant adverse 
effect this huge debt has on our country. Everyone there is trying to 
arrive at a point where we do something about that. We are not there 
yet. It is difficult to do. We understand it is going to take, we 
believe, a mix of spending cuts and some way to generate some more 
revenue. We are working our best to get this done.
  My friend is right, the debt is a drag on the economy. There is no 
question about that. Once we are able to raise the debt limit, I think 
we are going to see some energy in this economy we have not seen in 
some time. But we are not there yet. I wish I could report to my friend 
from Alabama and the rest of the Senate and the country that we have 
completed our negotiations, but we have not. We are going to go back 
again tomorrow. The President said 3:45, and I said a.m. or p.m.? It 
will be 3:45 p.m. tomorrow that we will be back, trying to move 
forward.
  My friend from Alabama has an important responsibility as the person 
who is the ranking member now of that most important Budget Committee. 
I am sure he has learned a lot, having taken this assignment, that he 
did not know before. That is the way it is with everyone in the Senate. 
I have learned a great deal working through the CR, different 
iterations of that, and now on this work we are doing trying to arrive 
at a debt reduction package along with raising the debt ceiling. I have 
learned a lot. I have a lot more to learn.
  I appreciate the intensity of my friend in that in which he believes, 
whether it is this or as the person running the Judiciary Committee for 
the Republicans. He is always very intense. He and I don't always agree 
but we agree more than people think. But one thing no one can ever take 
away from the junior Senator from Alabama is the seriousness of his 
being in the Senate.

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