[Congressional Record (Bound Edition), Volume 157 (2011), Part 8]
[Senate]
[Pages 11099-11101]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           U.S. CREDIT RATING

  Mr. DURBIN. Madam President, this morning's Wall Street Journal has a 
headline which I hope America will pay close attention to: ``Raters put 
U.S. on notice.'' The United States of America has a credit rating, 
much as we do as individuals, businesses, and families. The credit 
rating of the United States is AAA, the very best.
  What does it mean? It means two things. First, that those who do 
business with America think it is the best place to do business--the 
most reliable economy, the rule of law, transparency. It says good 
things about America. It translates into the lowest interest rates 
charged when America borrows money. That is a good thing because we 
borrow a lot of money.
  This AAA rating, of course, is something that is not guaranteed. You 
have to work for it. Countries around the world now, particularly in 
Europe, are struggling and failing economically, some in worse shape 
than others. In the Irish Times yesterday they referred to what they 
called the ``PIGS''. I had never seen that term before. It refers to 
Portugal, Ireland, Greece, and Spain. They said this week Italy was 
joining the PIGS, the seventh largest economy in the world, roiling in 
euro debt, being called on to transform and change their economies and 
their government to deal with their national debt.
  It is a tough time in the European Union, and the jury is still out 
about any one of those countries and how this will end. The United 
States is not in that situation, thank goodness. Our economy has its 
problems. We know

[[Page 11100]]

that: 9.2 percent of our workforce is unemployed, a situation where 
many small businesses are still struggling, where families struggle, 
many of them paycheck to paycheck, to get by. But still, the fact that 
we have to guard our borders to keep people from coming here is an 
indication of what America's promise means to the rest of the world.
  This notice from the rating agencies that now we are on a watch, a 
credit watch, as to whether our AAA credit rating in America should be 
diminished is serious. Secretary of Treasury Tim Geithner meets with us 
when we go down to the White House to talk about the current 
negotiation over the debt ceiling. What he told us yesterday was that 
this rating is the product of two things: First, there is no clear path 
available to indicate that Congress is able to extend the debt ceiling 
of the United States on August 2; and, secondly, there is no clear 
indication that Congress and the President are working together to deal 
with our national deficit. Because of that, Secretary Geithner said 
this rating has come out, and that is the reality of what we face.
  First, a word about the debt ceiling. What is it? Most people do not 
know, and it is understandable because it does not get much attention, 
although it has been around a long time. The debt ceiling was created 
in 1939. It was created because Congress decided they did not want to 
vote every time we issued a national bond or some other note. We would 
rather give our Department of Treasury the authority to issue debt 
obligations up to a certain dollar level. As the debt of the United 
States increased and the need to borrow increased, that level increased 
as well. Between 1993 and today, we have extended the debt ceiling in 
America 89 times, 55 times under Republican Presidents, 34 times under 
Democratic Presidents, and virtually without notice. Who is the No. 1 
President in the history of the United States to extend the debt 
ceiling and to increase America's debt? Ronald Reagan, far and away. He 
did it 18 times, and during the course of his 8 years in office, raised 
the national debt ceiling by 199 percent.
  Then you go to the next President, who raised it 90 percent in debt, 
President George W. Bush. So it is a bipartisan undertaking. What it 
means is that when needed, the Congress of the United States authorizes 
the President to borrow the money necessary to cover what we have spent 
in appropriations from Congress, in our entitlement and mandatory 
programs--Social Security, Medicare, and the like--we have to borrow 
money.
  In fact, we borrow 40 cents for every $1 we spend in Washington for 
everything--40 cents for every $1. So we are looking to the people to 
loan us money on a regular basis. The No. 1 one creditor of the United 
States, among countries, is China--ironic--our No. 1 creditor, our No. 
1 competitor. An interesting relationship.
  The debt ceiling comes due August 2. As it has been routinely 
extended time and time again, this time is different. The House 
Republican leadership has said: We refuse to vote to extend the debt 
ceiling of the United States unless we see deficit reduction. What 
would happen if we did not extend the debt ceiling?
  What would happen if you did not make your mortgage payment? I think 
I would know what would happen to Loretta and me in Springfield, IL. We 
might hear from our bank, and our bank might say: Mr. Durbin, you know, 
the month of July has come and gone and you did not pay your mortgage 
on your home in Springfield. What is up?
  If you said: I am just not going to pay it this month, they would 
say: That is not what you signed up for. You signed up to meet your 
obligation. So if you do not pay it, you face foreclosure.
  But in the meantime, what have you done, what my family would have 
done under those circumstances, is to jeopardize our credit rating. The 
next time my family would want to borrow money for a home, the bank 
would say: I am not sure you are such a good risk. You have missed your 
mortgage payment or, if they loaned us money, it would be at a higher 
interest rate.
  That is the reality of what happens if you do not extend the debt 
ceiling. This situation when it comes to America is grave. It is not 
just about America paying a higher interest rate to borrow money, it is 
about the interest rate across our country being affected. Down at the 
Federal Reserve, Ben Bernanke and the Federal Reserve Board of 
Governors are doing everything in their power to keep interest rates 
low because we want businesses to expand, to be profitable, and to hire 
people.
  When interest rate costs go up, businesses find it more expensive to 
borrow and borrow less. Individual families find it more difficult to 
buy the car, the home, the appliances they might need. So with interest 
rates going up as a result of our failure to extend the debt ceiling, 
we are doing exactly the opposite of what the American economy needs 
today. That is why it is so serious. In fact, it could be catastrophic. 
In a few minutes, we are going to hear from Treasury Secretary Tim 
Geithner, who is going to come before us and talk about the impact of 
failure to extend the debt ceiling.
  What we are doing in the White House today is negotiating with 
leaders of Congress, Democrats and Republicans, and the President to 
extend the debt ceiling because many of us believe it would be 
disastrous. If we would default on our debt, we call into question the 
full faith and credit of the United States of America. At the end of 
the day, we would find ourselves with a self-inflicted wound to the 
American economy: raising interest rates and making it more difficult 
to come out of this recession.
  We are trying to reach an agreement, and it has been hard going. We 
have had five face-to-face meetings in the White House so far. 
Yesterday's was reported in the news as contentious, and it was. The 
President has said he believes our first obligation is to get the 
American economy back on track and Americans back to work. We should 
not do anything in the course of our business that would make that more 
difficult. I could not agree with him more.
  The highest priority in America is putting Americans back to work in 
good-paying jobs right here at home. The highest priority in America is 
allowing small businesses to expand, to do more business, and hire more 
people. That is what we ought to be about. If we fail to extend the 
debt ceiling, it makes it more difficult to reach those goals.
  I listened as Presidential candidates of the other party in Iowa say: 
It does not matter. Default on the debt. Let's see what happens. That 
is the most--let me think of a good word here--naive comment on our 
economy I can imagine. The people who are making it have no business 
aspiring to the highest office in the land. We need to accept this 
responsibility and deal with this debt ceiling honestly. We need to 
extend it so there is no question about the credit rating--the full 
faith and credit of the United States of America.
  Secondly, we need to get serious about this deficit. I know the 
occupant of the chair has strong personal feelings about this. She has 
introduced legislation dealing with this deficit and how we can cope 
with it in the Senate and in the House. I have been part of the 
President's deficit commission. I have been engaged with colleagues of 
both political parties on how to take it further. Our goal is, very 
simply stated, I believe and those who are engaged in these 
conversations believe we can reduce the debt of the United States by up 
to $4 trillion over the next 10 years. We can do it in a sensible, 
thoughtful way, with shared sacrifice across America.
  We need to put everything--and I underline the word ``everything''--
on the table. Spending programs are the start. We should go to them and 
root out what we consider to be wasteful, unnecessary, fraudulent, and 
abusive practices in our spending, whether it is in the Department of 
Defense or any other agency of government.

[[Page 11101]]

  When the Department of Defense came before the Bowles-Simpson 
commission, we asked them how many private contractors work for the 
Department of Defense.
  Their answer: We have no idea.
  We said: Give us a range.
  They said: The range is somewhere between 1 million and 9 million 
people working for the Department of Defense--maybe.
  That is unacceptable. We can do better. Our brave men and women in 
uniform deserve better, and so do the American taxpayers.
  We must put all spending on the table, reducing spending where we 
can, where we must, to move toward $4 trillion in deficit reduction. 
Then we need to put entitlement programs on the table. This is where 
many Democrats get nervous because you are talking about things that 
mean a lot to us--Social Security, Medicare, and Medicaid, for example. 
I am as committed to those programs as any Member of the Senate. I 
believe we can protect the basic benefits under those programs and 
still find ways to make them stronger and longer.
  Social Security, untouched, will make every promised payment, with 
cost-of-living adjustments, for the next 25 years. You can't say that 
about much in Washington. You can't say that about any program other 
than Social Security. We can do better by making minor, small changes 
in Social Security today and putting the savings back into Social 
Security, and then we can say it will last 75 years, which means 
everybody going into the workplace, starting their work career in 
America, will know they can count on Social Security to be there when 
they need it. That is an attainable goal, and if we face it honestly, 
we can do it.
  When I was elected in 1982 and came to office in 1983, we were facing 
bankruptcy in Social Security. We came together with a bipartisan 
approach and passed it. We bought literally 52 years of solvency for 
Social Security, and not a single Member lost the next election because 
we did it in a bipartisan fashion, determined to make Social Security 
stronger. We can do it again.
  Medicare--same story. Medicare, of course, provides health care for 
the elderly and disabled in America. It is extremely expensive because 
health care costs keep going up. Are there ways to reduce the costs of 
Medicare so that the people who are deserving of care--seniors and the 
disabled--will have it available to them?
  On January 1 of this year, 9,000 Americans turned the age of 65; on 
January 2, another 9,000; and then every day since--every day for the 
next 19 years. The boomers have arrived. They have paid into Medicare 
and Social Security their entire lives, and they expect America to keep 
its promise. And we will. But we can look at Medicare and find ways to 
make that program more cost-efficient. There are certainly ways that 
are obvious.
  Under the Medicare prescription drug program, we currently don't have 
a Medicare option. All we have is private health insurance company 
options. Let Medicare bargain with pharmaceutical companies to buy in 
bulk and bring down the cost of drugs for seniors, thus reducing their 
out-of-pocket costs and our costs as taxpayers. The pharmaceutical 
industry hates that the way the Devil hates holy water. The fact is 
that when you put Medicare in there, like the Veterans' Administration 
is in there, it can make a difference.
  We need to include spending, entitlements, and revenue. I hope we can 
do it on a bipartisan basis.

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