[Congressional Record (Bound Edition), Volume 161 (2015), Part 12]
[Senate]
[Pages 16413-16416]
[From the U.S. Government Publishing Office, www.gpo.gov]




                          DEBT LIMIT DEADLINE

  Mr. HATCH. Mr. President, we are apparently pressing another deadline

[[Page 16414]]

with regard to the statutory debt limit. I am reminded of the old 
paradoxical proverb: ``The more things change, the more they stay the 
same.''
  We have dealt with the debt limit here in Congress on numerous 
occasions, and while there are significant differences this time 
around, there are some things that just don't change, particularly when 
we are dealing with the Obama administration.
  One thing that is different is that our national debt is higher than 
it has ever been before, more than $18 trillion--an astronomical 
number, when you think about it. That is $57,000 of debt for every U.S. 
citizen--every man, woman, and child from age 1 to 101. Just for the 
people in my State of Utah, which has a relatively small population, 
that means $167 billion of debt.
  As a share of our GDP, the debt is higher now than at almost any time 
with the exception of a brief period surrounding World War II. Yet, 
even though our debt has gotten further and further out of hand under 
this President, the administration's approach has not changed. As we 
all know, Treasury Secretary Lew recently sent a series of letters 
urging Congress to raise the debt limit. In his latest communication, 
he projected that on November 3, the Treasury will begin to run 
dangerously low on cash, creating an unacceptably high risk of having 
to delay payments.
  Of course, we don't have an ability to verify that projection. 
Treasury has long been uncooperative in Congress's efforts to get more 
information as to how they arrive at those specific dates. Don't get me 
wrong, I take the November 3 date very seriously. I think we all 
should, but given the lack of hard data shared by the Treasury 
regarding those projections and the fact that the date has in just the 
last few weeks moved around a little bit, I do understand why some 
people appear to believe this latest best guess from the Treasury is 
fungible.
  In addition to providing the November 3 deadline, the latest debt 
limit letter from Secretary Lew includes what has become a stale set of 
talking points punctuated by the admonition that ``only Congress can 
extend the nation's borrowing authority.'' I know no one wants to hear 
a civics lesson, but given the administration's repeated attempts to 
assign all responsibility relating to the debt limit to Congress, it 
means that a short refresher about how a bill becomes law might be 
helpful.
  No one disputes that Congress must act to extend the government's 
borrowing authority, but the President can also sign or veto any debt 
limit legislation we pass. The same is true of any legislation 
authorizing or appropriating spending increases or reductions. Congress 
writes and passes. The President signs legislation into law, and 
hopefully he does his best to enforce it. In other words, both Congress 
and the executive branch share responsibility with regard to the debt 
limit and our Nation's overall fiscal health. Unfortunately, rather 
than trying to work with Congress on these issues, the Obama 
administration has repeatedly chosen to try to deflect responsibility 
with misleading statements about the various burdens borne by the 
separate branches of government.
  Sadly, the Treasury Secretary's tired arguments with regard to the 
debt limit are not the only problem. In fact, when you examine this 
administration's record, you will find that the problems are much worse 
than most want to admit. I am talking, of course, about the massive 
accumulation of debt we have seen under this administration, as well as 
the lack of leadership and willingness to work with Congress to address 
what we know are the main drivers of our debt.
  As the nonpartisan Congressional Budget Office has repeatedly made 
clear, the main drivers of our debt are unsustainable promises in the 
Social Security benefit programs and unsustainable spending on the 
Federal Government's major health care programs, Medicare, Medicaid, 
health insurance subsidies under the Affordable Care Act, and others.
  True enough, we have seen some deficit reduction in recent years. 
These days, the President and his allies are always quick to point that 
out. Of course, we know that these temporary reduced deficits have 
resulted predominately from increased tax receipts and only modest 
spending restraint. Still, even with these reduced deficits, our debt 
remains well above the historic average and is expected to grow even 
more in the near future as, according to CBO, our deficits will start 
to go back up in the next few years.
  Our deficit this next year has been brought down but I would have to 
say mainly because of the work that we have done in the Congress to 
restrain the growth, the reconciliation act. Had we not done that, this 
administration would not have done anything. We would be in worse shape 
than we are.
  Simply put, no one in this administration should be bragging about 
supposed fiscal responsibility. Under this administration, the 
outstanding public debt has risen by more than an astounding $7.5 
trillion, a 71-percent increase just since this person has become 
President. Once again, as a share of the economy, our current debt 
remains at levels that, with a very narrow and understandable 
exception, are heretofore unseen in modern U.S. history.
  According to CBO, by 2025, Federal debt felt by the public will be 
roughly twice the average of the past 5 decades. As CBO says, ``Such 
high and rising debt would have serious negative consequences both for 
the economy and for the Federal budget.'' Given this risky path of debt 
accumulation, CBO also warns on increasing risks of a Federal fiscal 
crisis. Unfortunately, those dire warnings have been ignored by this 
administration. Instead, the administration seems to believe that a 
temporary lull in deficits is a good time to accelerate spending, even 
though spending grew well above growth in the economy last fiscal year, 
all while they continued to ignore the growing crisis in our 
entitlement programs.
  We still have approximately one-half trillion dollars of debt. They 
are bragging about that. When he was serving in the Senate and a 
different party controlled the White House, President Obama famously 
argued that an increase in the debt limit was a sign of leadership 
failure. Now his definition of leadership is to assign all 
responsibility to Congress for the debt limit.
  When he was running as then-Presidential candidate Obama, he pledged 
not to kick the can down the road on reforming entitlements, 
particularly Social Security. Now, he shirks responsibility and his 
proposed solution to the most immediate problem with Social Security--
the Disability Insurance Trust Fund--is to kick the can much further 
down the road without any changes or reforms to the program. We are 
just going to borrow from the already dysfunctional general Social 
Security fund to pay for Social Security disability insurance. My gosh, 
when does it stop?
  I believe that the debt limit has and can play a role in promoting 
fiscal discipline. Historically, debates over the debt limit have 
provided opportunities to reexamine our fiscal outlook and, where 
necessary, make corrections. Debt limit votes give a voice to Members 
of Congress who do not serve on committees that make the spending and 
tax decisions.
  Unfortunately, as we contemplate another debt limit increase, 
President Obama does not see the need to even talk to Congress about 
our fiscal future. In fact, the administration won't even take a clear 
position on how much of an increase it believes is appropriate or how 
long it should last.
  Common sense would indicate that the President would like Congress to 
extend the debt limit past next year's election. That would be a debt 
limit hike of about $1 trillion, and $1 trillion would mean more than 
$3,000 per person in the United States just to get us through next 
year. Utah's share of that would be about $9 billion. Yet while the 
President undoubtedly wants at least that much of an increase, he 
refuses to make any such desire known.
  Instead, we have gotten vague demands that borrowing authority be 
extended by certain dates and threats to veto any such extension that 
comes with even modest spending reforms. Essentially, President Obama's 
position

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is it's my way or the highway, but oddly enough, he does not want to 
explicitly define what his way is, and he repeatedly argues that he 
plays absolutely no role and bears no responsibility in getting us 
there. It is absurd, absolutely absurd.
  Make no mistake, I don't want to see a default. Default on U.S. 
Treasury securities and failure to pay Federal obligations, which, by 
the way, are two separate things, is not a desirable or acceptable 
outcome. Ultimately, I don't believe Congress should shirk
its responsibilities, even if President Obama refuses to acknowledge 
his.
  Let's be clear. Neither the administration's uncompromising stance on 
fiscal reforms nor its selective use of information about our Nation's 
debt are productive. The President's refusal to work with Congress on a 
path forward and to share information about our Nation's finances is 
irresponsible brinksmanship. I want to talk about that information 
sharing for a few minutes because it is an important part of this 
continual impasse between Congress and the administration when it comes 
to the debt limit.
  When we talk about our Nation's debt, there are other policy matters 
in play besides the periodic actions taken to raise the debt limit. The 
administration is charged with managing the debt in a responsible and 
effective manner. Toward that end, it has the obligation to preserve 
the integrity of Treasury securities markets. Congress has the duty to 
exercise oversight of these activities. As chairman of the Senate 
committee with jurisdiction over these issues, I have to say that when 
it comes to accountability and transparency on these matters, a great 
deal of improvement is necessary. That is putting it kindly.
  For example, each time the debt begins to approach the statutory 
limit, the administration makes a lot of noise about how it is 
difficult to deal with delayed payments on Treasury securities. Please 
note that I am talking about payments on securities, not general 
payment obligations of the Federal Government for spending programs, 
which is all together a separate matter. A number of scenarios could 
give rise to delayed payments on Treasury securities.
  One of those scenarios is a debt limit impasse between Congress and 
the administration, but there are others, including weather events, 
cyber or terrorist attacks, or any number of known risks, that 
responsible debt managers must take into account. We know for a fact 
that the Treasury Department and the Federal Reserve have developed 
contingency plans for these types of risks.
  The existence of such plans has been made public in minutes of the 
Federal Reserve's Federal Open Market Committee and in minutes of 
meetings involving Fed and Treasury officials and representatives of 
large financial firms. However, the administration has flat out--flat 
out--refused to share those contingency plans with Congress or to even 
openly acknowledge their existence.
  I have been the lead Republican on the Senate Finance Committee since 
January 2011. I have been asking to see those plans since the summer of 
2011. Over more than 4 years and through multiple requests for 
information, I have been told a number of things, usually stories that 
end with the claim that, even though plans have been discussed, nothing 
has ever been formalized.
  So there are really only two plausible conclusions to be drawn: 
Either the administration is being dishonest with Congress and they 
have contingency plans in place, or the administration is being 
irresponsible by failing to account for the obvious potential risks. 
Apparently, they are comfortable with Congress, not to mention the 
American people, reaching either one of those conclusions if it means 
they don't have to share more information.
  Simply stated, there is no reason for Treasury and the Fed, along 
with large financial firms participating in the Treasury securities 
markets, to formulate contingency plans for these markets without 
reporting them to Congress or sharing them with the Senate Finance 
Committee--no reason whatsoever. Yet here we are. Sadly, this lack of 
transparency does not end with obviously needed contingency plans. As I 
alluded to earlier, Treasury also shares very little information with 
Congress concerning cash forecasts, particularly as we approach the 
debt limit. I have asked for detailed, contemporaneous updates of cost 
forecasts in order to, among other things, properly verify Treasury's 
debt limit projections. In response, Treasury officials have told me 
that those projections are ``highly market sensitive'' and, at times, 
cannot be shared with Congress. Yet I have to assume that a number of 
officials at Treasury and probably the Fed have access to this 
sensitive data.
  I am not aware of any special security clearance assigned to these 
individuals. It is evidently the position of the administration that 
there are times where it is neither Congress's nor the American 
people's business to know how much cash Treasury expects to have in the 
Federal till. This needs to change. Given my oversight responsibilities 
as chairman of the Senate Finance Committee, I am always interested in 
preserving the integrity and efficiency of markets for Treasury 
securities.
  Unfortunately, under our laws, regulatory and oversight authority 
with respect to those markets spreads far and wide with 
responsibilities spanning across the Treasury, the Fed, the Securities 
and Exchange Commission, the Commodities Future Trading Commission, and 
an alphabet soup of other groups. As we saw with the most recent 
financial crisis, this type of balkanization of authority inevitably 
leads to ineffective oversight and regulation.
  When problems arise, all the various parties point their fingers at 
each other. Everyone has authority, yet no one ends up being 
accountable.
  Unfortunately, the so-called Dodd-Frank legislation did not fix any 
of these problems. In fact, I would argue, all it did was give existing 
regulators yet more authority and of course added a few more acronyms 
into the mix.
  All of this is relevant to current discussion about the debt limit 
because it speaks to the overall management of our Nation's debt and 
the lack of transparency among all these agencies. I can cite numerous 
examples where a lack of communication and accountability has been 
problematic. For now, I will briefly mention three such instances.
  First, in 2013, Treasury began auctioning something called a 
``floating rate note,'' the first new Treasury security since inflation 
protection securities were introduced more than 15 years ago. This was 
a significant debt management decision. Yet very little information was 
shared with the Senate Finance Committee, even though Treasury had many 
discussions about the new note with representatives from large 
financial firms.
  Second, Treasury recently decided again--after several meetings with 
large banks--that an average cash balance for the Federal Government of 
around $50 billion per day was too low and that going forward the 
balance would need to be $150 billion or more. Once again, prior to 
that decision being finalized, there was no communication from Treasury 
to the Senate Finance Committee.
  Third, on one particular day in October of 2014, there were unusual 
and difficult-to-explain events in markets for Treasury securities. 
While all the various regulators and interest groups have issued staff 
reports and have held meetings and seminars relating to the apparent 
volatility demonstrated by these events, I am not aware of any outreach 
or information sharing with the members or staff of the Senate Finance 
Committee.
  Again, these are just three examples. There are certainly others, and 
all of them demonstrate that this administration is far too often 
unwilling to even provide simple updates about its debt management 
policies--all while insisting that Congress repeatedly raise the debt 
limit without asking questions or attaching reforms. This also needs to 
change. If the administration is going to continue to demand that 
Congress act to increase the debt limit, then it should, at the very 
least, be more forthcoming about its policies

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and decisionmaking when it comes to managing our debt.
  While I agree we cannot and should not risk defaulting on our debt or 
obligations, it is essential that Congress receives a complete picture 
from the administration about its debt management policies. Therefore, 
I want to make clear to Treasury--and other agencies with 
responsibilities in this area--that there is an imminent need for 
improved communication and increased transparency on these matters.
  As chairman of the Senate Finance Committee, I intend to do all I can 
to ensure greater accountability. That may include more hearings with 
officials brought before the committee or legislation to require more 
information flows between the administration and Congress. Ultimately, 
what specific actions we take will depend on the administration's 
ability to cooperate.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Arizona.
  Mr. McCAIN. Mr. President, I ask unanimous consent to address the 
Senate as in morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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