[Congressional Record (Bound Edition), Volume 162 (2016), Part 11]
[Senate]
[Pages 14737-14739]
[From the U.S. Government Publishing Office, www.gpo.gov]




                               THE BUDGET

  Mr. ENZI. Mr. President, I want to start off by reminding everybody 
of an old but very short Hans Christian Andersen story about an emperor 
who was convinced by two very clever weavers that they could make 
clothes that would be invisible to anybody who was unfit for a position 
or stupid or incompetent. As a result, everybody thought they could see 
the clothes, until one little boy said: The emperor doesn't have any 
clothes. And then everybody gasped and realized that was the case.
  Well, we have kind of been weaving a budget through the years that is 
kind of like the emperor's clothes. We want everybody to be able to see 
them and think we are fit and competent and not stupid, but as this 
year quickly draws to a close, we are once again approaching a Federal 
spending deadline that will likely be postponed with yet another 
temporary spending bill. In the last 40 years, Congress has enacted 175 
of these continuing resolutions to avoid doing its job. This will be 
the 176th continuing resolution since the modern budget process was 
established.
  The November election results show the American people are eager for 
change. With a new President taking the oath of office on January 20, 
Congress has an opportunity and a responsibility to get back to work. 
One of our top priorities must be fixing America's broken budget 
process to provide our Nation with a responsible fiscal blueprint and 
help guide our spending decisions now and into the future.
  Let me tell you about America's coming fiscal crisis. America is on a 
course for a fiscal disaster. Sadly, that is not going to surprise many 
people. We all know the statistics: $20 trillion in debt, on track to 
grow to $29 trillion in 10 years, unchecked entitlement spending that 
assumes 70 percent of the budget, and the imminent return of trillion-
dollar deficits.
  Everyone knows we are in deep trouble, but what is surprising is that 
Congress is not considering ways to fix it. The country's finances are 
in a perilous position and the Federal Government has refused to act. 
We pretend to see the clothes.
  That is because, when it comes to spending money, Congress is kind of 
like a binge eater. We don't want to start our diet until right after 
the next dessert, and we never seem to run out of ideas for new 
desserts. That attitude has led to a mammoth, oversized debt burden 
that will crush future generations' prosperity.
  The first step to spending within our means is to establish healthy 
habits. We should stock the fridge with fruits and vegetables, not cake 
and cookies. Unfortunately, America's broken budget process does the 
opposite. It makes it easy for Congress to spend and spend without ever 
checking its fiscal waistline. Congress never has to consider the 
fiscally healthy options that would put our budget on a better path.
  America's looming fiscal crisis actually has its roots in the way 
America's budget and spending process is laid out. This money funds 
activities that most people would associate with good government, such 
as national defense, education, and infrastructure spending. This is 
the portion of the budget that attracts the most congressional 
scrutiny. We have limits in place that

[[Page 14738]]

make it difficult to spend more than what is allotted, and those limits 
are subject to fierce debate and negotiations every 2 years or so. We 
also must pass spending bills to fund these government activities every 
year, forcing a public debate about where taxpayers' dollars should be 
spent. This portion of the budget is not growing rapidly and is not the 
cause of our unsustainable fiscal course.
  The real culprit is the other 70 percent of the Federal budget. This 
portion is spent automatically without regular congressional action or 
review. Let me say that again. The real culprit is the other 70 percent 
of the Federal budget. This portion is spent automatically without 
regular Congressional action or review. In just 15 years, it will 
consume all government revenues as debt, interest payments and 
entitlements continue to grow rapidly. There are no effective limits to 
the amount that can be spent on that side of the budget, at least until 
this spending drives America into bankruptcy.
  This is how the budget process makes it easy to spend money. There is 
regular review and strict limits on the small and shrinking portion of 
the budget--the 30 percent--but the much larger automatic spending 
programs are not regularly reviewed and can grow almost without limit. 
Some automatic spending programs have a dedicated but insufficient 
source of revenue. For example, Social Security, Medicare, and 
unemployment benefits are funded in part--in part--by payroll taxes and 
insurance premiums.
  This makes sense. If Congress is not going to regularly review a 
program, there should at least be a source of funding to ensure the 
program is sustainable. However, the automatic programs that receive 
dedicated revenues are grossly underfunded, and many others do not 
receive any dedicated revenues. That means our government is making 
promises to pay for these programs even though they do not have any 
idea where the money will come from.
  Let me repeat that. The automatic programs that receive dedicated 
revenues are grossly underfunded, and many others don't even receive 
any dedicated revenues. That means our government is making promises to 
pay for these programs even though they do not have any idea where the 
money will come from.
  This chart gives us a little bit of an idea. The chart shows the 
dedicated revenues for some of the largest automatic spending programs. 
For example, Social Security and Medicare are each funded in part with 
a dedicated payroll tax. However, payroll taxes are less than benefit 
payments. We can see the Social Security spending gap over the next 10 
years is two and three-tenths trillion, or $2,321 billion. Medicare's 
receipts cover only 54 percent of spending, leaving a funding gap of 
four and four-tenths, or $4,365 billion.
  These annual cashflow deficits grow worse every year of the budget 
window, and they will continue to deteriorate at a faster rate outside 
the budget window as millions of baby boomers continue to retire.
  Now, I like to phrase this a little differently. On Social Security, 
the amount of spending versus the amount of revenue--$12,000 billion in 
spending but only $10,000 billion in revenue, which leaves a program 
deficit of $2,321 billion. It is not being funded by Social Security 
now. Instead of revenue as a percentage of spending, I like to say we 
overspend by 18 percent.
  On Medicare, $9,590 billion--that is a lot of money--in spending, but 
the revenue is only $5,225 billion. That is a deficit of $4,365 
billion. So revenue as a percentage of spending is 54 percent, but it 
is 46 percent overspent.
  Some people will say we shouldn't worry about these programs because 
we collected money from previous generations that will cover the cost 
of these programs. They say we have ``trust funds'' to pay for these 
programs. But you can't trust these government trust funds. There is no 
way the Federal Government puts away cash to be used later; instead, 
they took these excesses as they came in, in past years, when we had 
fewer baby boomers, and that cash was spent in exchange for bonds being 
put in a drawer. The bonds are with the full faith and trust of the 
Federal Government, but that is not real money. In order to spend that, 
money has to be put in the drawer. Yes, there was a surplus in Social 
Security, but it was spent. Now we will continue to manufacture money 
to make those payments, but the government has no way to invest money.
  As an accountant, I can tell you that the Federal budget operates on 
a cash basis, and previous Congresses spent that cash as soon as it 
came in--all the cash. There is no real money socked away to cover 
these costs. So when it comes time to pay for these programs, the only 
money the Treasury Department can rely on is these dedicated revenues. 
As the chart shows, they are not sufficient to cover spending, so the 
Treasury Department has to take extra money from taxpayers or borrow it 
in public debt markets.
  Overall, the nonpartisan Congressional Budget Office estimates that 
the government will spend over $35 trillion on automatic spending 
programs over the next 10 years, but this chart shows these programs 
will only collect $15.5 trillion, or $15,538 billion--$15,538 billion 
but the spending will be $35,333 billion. As a percentage of spending, 
that is 44 percent. Actually, that is overspending of 56 percent. We 
aren't even taking in half of what we promised. So guess what happens 
next. The Treasury Department will ask taxpayers and public debt 
markets for an additional $20 trillion to pay for these programs.
  That is why America is facing trillion-dollar deficits--overspending. 
``Deficit'' is another word for ``overspending.'' It doesn't sound 
quite as bad as ``overspending.'' But that is why we are facing 
trillion-dollar overspending amounts in each year. That is why 
America's debt is $20 trillion, on the way to $29 trillion; it is 
overspending.
  Let me talk about rising interest rates. To make matters worse, the 
historically low interest rates America pays on its debts are poised to 
rise, according to the latest signals from the Federal Reserve. That is 
why we have to do something, and we have to do something now. The 
interest is a mandatory expense--there is no way to avoid it--and it 
doesn't have any source of revenue other than the general fund. Now, we 
pay almost 2 percent interest on our $14 trillion in publicly held 
debt--$14,000 billion and we pay 2 percent on it. That is roughly $220 
billion a year, excluding the share paid to Federal revenues which goes 
back to the Federal budget. But a 2-percent interest rate is not the 
norm for our government. When interest rates rise, as they are expected 
to do in the next few years, the $220 billion could more than triple. 
That will be $700 billion, maybe $800 billion a year spent on only the 
interest on our Nation's debt. That is more than we spend on national 
defense. That interest is a mandatory expense with no source of 
revenue.
  So what is the bad news and the good news? That is the bad news, but 
there is good news too. Both the House Budget Committee, under the 
leadership of Chairman Tom Price, and the Senate Budget Committee have 
been working on solutions that would improve the way Congress considers 
budget legislation. Over the last year, the Senate Budget Committee has 
held a series of public hearings with expert witnesses, consulted with 
budget practitioners from both sides of the aisle, and sought advice 
from former chairmen. Members considered all the ideas presented and 
even entertained proposals to abolish the Budget Committee if it could 
be replaced with a better government structure. This yearlong effort 
demonstrated what successful budget reform should look like. I intend 
to pursue these reforms at every opportunity and enact as many as 
possible in the coming months.
  At a minimum, we need to fix budget procedures in the Senate so that 
the congressional budget is easier to pass and harder to ignore and 
easier to understand. The budget resolution is the only regular tool we 
have that forces Congress to examine all spending and revenues, 
including automatic spending, over a 10-year period. Unfortunately, the 
budget resolution has devolved into a purely political exercise,

[[Page 14739]]

and that is often ignored. The last passed budget was good for about 3 
months before waivers overrode the budget.
  Congress cannot continue to lurch from crisis to crisis without 
meaningful, long-term budget plans. My reforms would fix congressional 
budgeting by reducing the political impediments to passing budget 
resolution. Budget proceedings would be more orderly and transparent, 
with less political ``gotcha'' amendments that define consideration of 
a budget resolution here in the Senate. My reforms would also make the 
budget meaningful by requiring a higher vote threshold for legislation 
that spends billions of taxpayer dollars without offsetting it--and 
offsetting it in a real way.
  We also need to revise the concepts and rules that determine how we 
budget and estimate the cost of legislation. These outdated rules 
haven't been comprehensively reviewed and updated since 1967 and often 
lead to confusing or inaccurate estimates. A new commission of experts 
should update our Federal budget concepts for the 21st century.
  We should also create new rules that encourage Congress to consider 
the annual appropriations measures on time under regular order. The 
current process has been completed on time only four times in the last 
40 years. The last time was 1998, and that is when there was a lot of 
Social Security extra money spent. This is a disgrace. Congress should 
do its job on time and in an orderly fashion. It should not be 
negotiating a year's worth of spending in the weeks before the holidays 
like a college student cramming for midterms or maybe stuffing on 
spending like everybody is a budget Thanksgiving.
  One of my proposals borrows an idea from the Wyoming State 
Legislature. They set aside a certain number of days every other year 
to consider only budget legislation. If a member wants to consider a 
nonbudget bill, which perhaps would be an emergency, they have to 
convince two-thirds of their colleagues to agree to take it up without 
any debate; otherwise, they stick to the spending.
  I will also encourage enactment of Senator Portman's bill to end 
government shutdowns and legislation to move the annual spending 
process to a biennial cycle so that it does not have to complete all 12 
spending bills each year. Each agency would have 2 years of planning 
that they would be able to count on.
  We need a fiscal course correction. Addressing America's long-term 
debt crisis is a daunting challenge that cannot be left to future 
generations as it has been in the past. But the annual budget process 
is not designed to force through the serious reforms needed to put 
America's budget back on a sustainable trajectory, nor should an annual 
majority-driven process be empowered to do so. That is why former 
Senators Kent Conrad and Judd Gregg, the former Democratic and 
Republican Budget Committee chairs, have advocated for a bipartisan 
task force, operating outside the annual budget process, to solve the 
country's long-term fiscal crisis. A BRAC-style commission similar to 
what has been introduced by Senator Coats should be created to set a 
sustainable, long-term fiscal target and recommend policy options to 
achieve that target, and Congress must take up and consider those 
recommendations.
  This institution cannot continue to willfully ignore these serious 
threats to our country's future prosperity. This is the major issue of 
our time, and substantive solutions should be considered on the floor 
of the House and Senate. I know it is fun to invent and spend on new 
programs, but Congress has to be the adult in the room. They have to 
recognize whether their emperor has clothes or not. They can't pretend 
to see.
  These bipartisan reforms wouldn't solve all of our budget problems, 
but they are a promising first step toward unsticking the budget 
gridlock that has gripped Washington in recent years. More importantly, 
they would create healthy fiscal habits that would force Congress to 
recognize and be able to address the daunting fiscal challenges this 
country faces. This crisis isn't going to go away, and only Members of 
Congress can fix it. The American people have spoken, and we owe it to 
them to put this country on a better path. These reforms are a 
necessary first step, and Congress must enact them as soon as possible.
  Mr. President, I yield the floor.
  The ACTING PRESIDENT pro tempore. The majority whip.
  Mr. CORNYN. Mr. President, while he is still in the Chamber, let me 
express my gratitude to the chairman of the Budget Committee, Senator 
Enzi, for his leadership on these very difficult but very important 
issues.
  One of the things I am most concerned about is that there no longer 
seems to be bipartisan consensus toward how to deal with our spending 
problems. We look at annual budget deficits and we look at the increase 
in the debt, and we know we have no current means to pay that back. 
While the Federal Reserve has basically made money free--in other 
words, interest rates are so low now, we don't have to pay our debt 
holders as much money now as we will in the future--we all know this is 
a ticking time bomb, with only about 30 percent of our Federal spending 
being discretionary or appropriated funds and roughly 70 percent being 
on autopilot. As our interest rates go up more and more, that is going 
to crowd out more of that 30 percent that we need to spend on our 
Nation's priorities, like national security.
  This is a very serious issue, and I am grateful to the Senator from 
Wyoming, the chairman of the Budget Committee, for his leadership. I 
look forward to working with him as we work together to try to come up 
with meaningful solutions.

                          ____________________