[Congressional Record (Bound Edition), Volume 159 (2013), Part 10]
[Senate]
[Pages 13880-13881]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           FISCAL DISCIPLINE

  Mr. CORNYN. Mr. President, earlier this week the Congressional Budget 
Office released its latest long-term outlook. Of course, the CBO, as it 
is known around here, is the authoritative guide to all things 
involving the finances and the fiscal picture for the Federal 
Government. That long-term outlook offered us a sobering reminder the 
Federal Government cannot defy the laws of fiscal gravity forever. In 
other words, as every American knows--every working family knows--your 
output can't exceed your input forever. In other words, you can't spend 
more money than you have coming in. Unless you are the Federal 
Government, of course. But sooner or later we will have to reverse the 
trend of debt accumulation before it destroys our economy, because our 
current path is simply unsustainable.
  The crazy thing about it is that everybody in Washington, 
particularly the Congress, knows that. Yet it seems as though they are 
in a state of denial about what could very well happen to our country 
and to our future if we don't act. As I said, it is a very sobering 
message, and it is also very different from the message President Obama 
has been delivering lately. He likes to talk about America's short-term 
budget deficit falling. To remind everybody, there is the debt and 
there is the deficit. The deficit we measure on an annual basis. Debt 
is the cumulative shortfall between what comes in the front door and 
what goes out the back door. That debt is now about $17 trillion.
  For these young people down here, that means they each owe about 
$52,000 because my generation and other adults have not been 
responsible, and we have shoved off onto the next generation the 
responsibilities we ought to be meeting ourselves. So here is the 
reality. Any short-term deficit reduction will be meaningless unless we 
adopt longer term reforms. That means where the Federal Government 
spends most of its money, which is in mandatory spending--the spending 
that keeps Social Security and Medicare, among other programs, going. 
We need to also bend the spending curve down so that we are spending 
less money as well.
  The Congressional Budget Office estimates, when we factor in the 
likely impact of rising debt levels, the publicly held debt is on 
course to reach 108 percent of our gross domestic product in 2038. The 
gross domestic product is basically another way of saying the size of 
our entire economy. So 108 percent of the size of our entire economy is 
their projection, and that is before we include money the Federal 
Government effectively owes itself.
  I realize 2038 sounds like a long time from now. I remember as a kid 
I thought the year 2000 was going to be a long way away, but we now see 
that only in our rearview mirror. But by 2038, under current law, our 
net interest payments, as a share of our economy, will be 2\1/2\ times 
greater than the 40-year average.
  Let me boil that down a little bit. When we borrow money--because we 
are spending money we don't actually have--that adds to our annual 
deficit. But it also, over time, adds to our national debt. We have to 
get somebody to buy that debt so we can continue to spend money we 
don't have, so that we can continue to spend borrowed money. We have to 
pay interest to our creditors. In other words, they are going to expect 
a rate of return, as anybody would, when they loan somebody money. When 
China loans us money, it is not cost free. When they buy a huge portion 
of our national debt, it is not cost free.
  Over time we will see interest rates--which are really at historic 
lows now because of the aggressive action of the Federal Reserve 
keeping those interest rates low--go back up to historic norms, and 
then we are going to see that a larger and larger share of what the 
Federal Government spends is merely to pay China and our other 
creditors who buy our debt, unless we take aggressive measures to begin 
to bring our debt load down.

[[Page 13881]]

  The President and the Democrats frequently demand more spending on 
things such as research and development--that is a good thing--or 
infrastructure--that is a good thing--yet they refuse to embrace the 
serious reforms necessary that enable us to do so. Here again, when the 
interest payments on the debt invariably go up, they will crowd out 
spending on other priorities, such as research and development, such as 
infrastructure, such as education, and others that should be among our 
national priorities.
  The Congressional Budget Office projects that by 2038 total spending 
on everything other than major health care programs, Social Security, 
and net interest payments would decline to 7 percent of gross domestic 
product, and that is down from 11 percent, which is the average over 
the last 40 years. That is the crowding-out effect I was mentioning a 
moment ago. When we spend more and more money on these other programs, 
it crowds out spending on other things necessary to keep our economy 
growing and to keep people employed.
  If we don't start reforming our biggest mandatory spending programs--
again, that is Social Security and Medicare--in a responsible way, it 
will become much harder for the Federal Government to perform its most 
basic obligations and it will leave these young people and others--such 
as my daughters, who are in their early thirties--holding the bag, not 
only with the debt I mentioned a moment ago, but also with broken 
programs that are unsustainable, that will not be there for them when 
they turn 65 or when they get older.
  It is a law of nature that you cannot keep spending money you don't 
have, and you can't keep racking up debt forever without any 
consequences. The only question is whether the reforms I am talking 
about will be gradual--will be phased in over time--or whether they 
will be sudden and abrupt and disruptive. If we start now in a 
responsible way, these reforms can be gradual.
  Thank goodness, when Social Security was passed people didn't live to 
be 80 years old, on average, and they weren't as productive as they are 
today. That is a good thing. Modern medicine and nutrition have made it 
possible for us to live longer, on average, and to be much more 
productive. But we need to make sure we take into account, through 
Medicare and Social Security, the fact that people are living longer 
and are more productive. We need to make certain our programs are 
modernized to keep up with those facts and make sure they are available 
in the future, particularly among our most vulnerable citizens. If we 
wait until America is on the verge of a debt crisis, the reforms will 
have to be abrupt. In other words, when the bottom drops out, a lot of 
people are going to be hurt, and it will be far more difficult to 
protect the most vulnerable among us from the harshest sort of cuts.
  What I am suggesting makes sense. Wouldn't we prefer to be in control 
of a gradual reform of our mandatory spending programs that are phased 
in over years, in ways most Americans will not actually feel because it 
can be done gradually? To me, it makes sense to do that as opposed to 
watching the bottom drop out or just simply kicking the can down the 
road. You know, they say: If you kick the can down the road long 
enough, pretty soon you are going to run out of road.
  Let me again quote from the Congressional Budget Office. They said:

       At some point, investors will begin to doubt the 
     government's willingness or ability to pay U.S. debt 
     obligations, making it more difficult or more expensive for 
     the government to borrow money. Moreover, even before that 
     point is reached, the high and rising amount of debt that CBO 
     projects under the extended baseline would have significant 
     negative consequences for both the economy and the Federal 
     budget.

  Mr. President, I ask unanimous consent for 2 additional minutes.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  Mr. CORNYN. Those negative consequences would include less private 
investment; more Federal spending on interest, which I have talked 
about briefly; less flexibility to address unexpected events, which you 
know always seems to occur--such as 9/11 or a natural disaster--and 
more risk of a full-blown debt crisis.
  To the extent President Obama and our friends across the aisle 
acknowledge our long-term debt problem, their main solution seems to be 
always the same: Let's raise taxes some more. In fact, they are now 
trying to use tax reform, which we thought should be revenue neutral, 
as a vehicle for another $1 trillion tax increase. We are told that is 
a condition of even talking about reforming our Tax Code, to make it 
flatter, simpler, and more growth oriented. That is after the President 
and his allies have already raised taxes by $1.7 trillion. So there is 
never enough to feed the beast of the Federal Government here in 
Washington. It is insatiable.
  Meanwhile, to the extent the President acknowledges the need for 
Medicare reform, his proposals always involve more price controls, 
primarily on the providers. Yet price controls have not solved 
Medicare's fundamental cost problems, and they won't solve it in the 
future. They say: We can save money on Medicare. We will just whack the 
payments we make to doctors and hospitals. I can tell you from talking 
to the hospitals and doctors in Texas--who would like to see Medicare 
patients but they can no longer afford to do so--that it is limiting 
access to health care by just dealing with Medicare on this basis of 
price controls and whacking payments to providers.
  Amid the weakest economic recovery and the longest periods of high 
unemployment since the Great Depression, the last thing we need is 
another massive tax increase that would discourage work, savings, and 
investment. We all know we cannot simply tax our way back into fiscal 
stability, and we cannot spend our way back into economic prosperity. 
If the President would merely accept those two realities, we might 
finally get the kind of long-term reforms and the real long-term 
spending cuts that might finally produce the economic recovery America 
is desperately waiting for and desperately needs.
  Mr. President, I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Pennsylvania.

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