Mr. President, we are in the middle of the budget debate and, as the Ranking Republican on the Budget Committee, it is something which is very important to me, and, I believe, to America.
There are two aspects of it. One is, how will we finish this fiscal year that ends September 30? The House Republicans have sent over legislation that funds the government, but it is $61 billion less than was expected or had been projected under last year's budget. I don't think anyone would be surprised, after the last election and the big spenders took a pretty big hit, that there would be a reduction after the continuing resolution of, I guess, 5 months expired. Since that expired a few weeks ago and we have had some short-term continuing resolutions, we have reduced spending by about $10 billion. I truly believe we need to move it on down to a full $61 billion and, over 10 years, that will reduce the baseline by $61 billion and, fairly computed, it will save, over a 10-year timeframe alone, $860 billion. That is close to $1 trillion. It is real money. It is a significant step we should take. I hope this Congress will take it.
The next matter that is before us is, what about next year's budget? We should already be in that cycle. The President has submitted the budget he is required by law to submit to the Congress. It does nothing about the threat to our country economically and financially. It is a great disappointment, the most irresponsible budget ever submitted, I am confident, by any President in the history of the American Republic. I have said that before, and I truly believe it. It is irresponsible. We cannot adopt it, we will not adopt it, and it will not become law. But our Senate has indicated they are prepared to consider--Democrats, too--a better budget, perhaps, but we haven't seen it. It has not been brought forth to the Budget Committee, as the law requires us to do, so far, and we are behind schedule. But the House tomorrow will consider a historic budget that honestly and carefully confronts the challenges facing us, long term and short term, dealing with entitlements, without gimmicks, and allows us to begin to focus on what the challenges are and why we have to take these steps.
Because who wants to talk about cutting spending? What politician likes to do that? It is not something we like to do. Why are we talking about this? Why? Can't it be put off? Is it just political squabbling between Republicans and Democrats? They are always bickering. Is this what it is all about? Is there anything real here? Do we have a problem that can't be avoided? Is it something--can't we just continue like we are? Why do we have to worry about more reductions in spending?
That is the question: Do we have a real crisis? Are we facing a threat to our economic well-being that could throw this country into another recession, maybe even a depression--surely, hopefully, not--a fiscal, financial crisis; is that possible?
Let's talk about a couple things. Admiral Mullen, the Chairman of the Joint Chiefs of Staff, recently stated that our national debt is the greatest threat to our national security. That is a pretty strong statement. Secretary of State Clinton said something very similar. Is that true? The American people pretty clearly agree with Admiral Mullen by a huge margin. They say we are on the wrong track. You are mismanaging Washington. There was a shellacking of the big spenders in the last election. People know we are spending too much money. We have had a 24-percent increase in spending since President Obama has been President--a 24-percent increase in discretionary nondefense spending. Inflation has been 1 or 2 percent during this time, and we had a 24-percent increase.
Next year's budget by the President calls for an 11-percent increase in education, a 10.5-percent increase in the State Department, a 9.5-percent increase in the Energy Department, and a 61-percent increase in transportation and high-speed rail. What? The inflation rate is 2 percent and we have 5 times--or 50 times, nearly, that amount in spending increases?
Alarmingly, it is not just the American people or just the tea party, great American people who are concerned about their country. It is not just tea party members who are expressing concern and calling for action. It is the Nation's top financial experts. This is what is important. They are calling for action sooner rather than later.
Erskine Bowles, President Obama's choice to head the deficit commission, who was also President Clinton's Chief of Staff and is a very successful businessman himself--he was chosen by President Obama to head the debt commission, along with Alan Simpson, a former Republican Senator. In a written statement they submitted to the Budget Committee just 2 weeks ago, this is what they said. This is a formal written statement from the debt commission cochairman to the Budget Committee of the Senate:
This is the most predictable financial crisis this Nation has ever faced.
Predictable crisis. In other words, we can see it coming. They spent months doing research. They heard from all kinds of witnesses. When asked when the crisis might occur, which could involve some sort of double-dip recession or even a longer recession or higher unemployment, Mr. Bowles said it could be 2 years, maybe sooner, maybe later. Alan Simpson said it could be within a year. These are stark warnings, and the same message is coming from a host of the world's top financial experts.
I have to say the good news is our country has a strong work ethic and an entrepreneurial spirit still exists. The indications are that despite the economic drag and our huge debt burden, the economy--far slower than normal recovering from this recession--is struggling to rebound. If we act decisively now to end our wasteful spending habits, we can be confident that progress in growth will continue.
When our Nation's leaders are aware that their country is facing a crisis, they have no higher moral responsibility than to act to protect the Nation from that danger. Today's Wall Street Journal has an op-ed by the Nobel Prize laureate, Gary Becker; a former Secretary of the Treasury, George Shultz; and an economic professor, John Taylor. The article embraces the $61 billion in reduced spending passed by the House and debunks the critics unequivocally who call these cuts extreme. They directly and categorically rebut the assertion that these spending reductions will result in higher job losses and explain why that is a false view.
Again, is the debate over spending just another Republican and Democratic squabble? Is it just an attempt to gain political advantage? Sound and fury signifying nothing?
The answer is a resounding no. We are spending money we don't have in amounts dramatically greater than at any time in our history. When this fiscal year ends September 30, we will have spent $3.7 trillion and taken in only $2.2 trillion. Forty cents of every dollar we spend this year will be borrowed. We have to borrow the money we don't have. This will be the largest of three consecutive deficits exceeding $1 trillion.
President Bush was rightly condemned for his $450 billion deficit 1 year--the highest he ever had. We have been over $1 trillion in the last 3 years. Next year's budget deficit is expected to exceed $1 trillion.
This money must be borrowed and interest paid. Nothing comes from nothing. Last year, the Nation's total interest payment was $200 billion. That is how much we paid on the money we borrowed. For perspective, the Federal highway program--and Senator Inhofe knows about this--is about $40 billion, and we spent $200 billion on the interest. We would like to have spent more on highways. Federal education programs cost about $70 billion. So already the interest on our debt is the fastest growing expense of our government, and it is crowding out spending for other programs.
But hold your hat. Our current trajectory takes us at increasing speed on a ``road,'' as the former head of the European Union said, ``to financial hell.'' He said that about the United States.
According to the official score or analysis of the President's 10-year budget, the total debt of America will more than double, from $13 trillion to $27 trillion, over the 10-year period, and our annual interest will increase from $200 billion last year to $940 billion. That is how much interest we will be paying the tenth year under the budget. It will cost more than education, highways, energy, and the State Department combined.
Indeed, our interest payment will surge past defense, Medicare, and Medicaid. That is why expert after expert, witness after witness, Republicans and Democrats, say the United States is on an ``unsustainable path.'' Yet President Obama's budget increases all spending every year, including discretionary spending, doubling the debt of the United States again, all the while raising taxes by almost $2 trillion. He makes no proposals to put Medicare, Medicaid, and Social Security on sound footing--nothing. It creates a debt path where his lowest annual deficit in 10 years is $748 billion--that is the best year--with his outyear deficits increasing, so that by the tenth year his budget is scored as having a deficit of $1.2 trillion. Is that unsustainable or not?
Is it extreme to say we have to change that course, that we can't continue it? Well, let me quote a few experts--not just Jeff Sessions, the Senator from Alabama. How about some people whose lives have been enmeshed in the debt of America? They seem to share the concerns, it seems to me, of the ``extremists''--the tea party people. What do the experts say? How about Alan Greenspan, former Chairman of the Federal Reserve? This is what he said:
I think that the type of budget agreement that was put together by Alan Simpson and Erskine Bowles is the type of budget that will be passed by Congress.
It doesn't look like that is so, unfortunately. He goes on to say:
The only question is, will it be before or after the bond market crisis?
Is Alan Greenspan an extremist? He said, also, a few weeks ago that we could have a debt crisis in our country in 2 to 3 years.
Bill Gross, who heads the world's largest bond fund at Pacific Management, eliminated government-related debt from his flagship fund. They no longer have any U.S. Treasury bonds. This is what he wrote recently:
If the USA were a corporation, then it would probably have a negative net worth of $35-$40 trillion once our ``assets'' were properly accounted for. . . . No lender would lend to such a corporation.
Is Bill Gross extreme?
Erskine Bowles and Alan Simpson said:
We believe that if we do not take decisive action, our Nation faces the most predictable economic crisis in its history.
Mr. Bowles, before the Budget Committee, March 8, was asked how and when that might happen by Senator Conrad, our chairman. He said:
The problem is going to happen. It is a problem we are going to have to face up to in maybe 2 years, maybe a little less, maybe a little more.
Simpson said this:
I think it [the crisis] could come before 2 years.
Timothy Geithner, Secretary of the Treasury, when asked about the Reinhart-Rogoff study--which said when debt reaches 90 percent of GDP, the economy of a nation slows down noticeably--and I believe Rogoff and Reinhart will be testifying before the committee tomorrow. When asked about their analysis, that 90 percent--your debt equals 90 percent of your gross domestic product, your economy is slowed and it pulls down; and we are already at 95 percent, heading to 100 percent by September 30--Mr. Geithner said it was an excellent study. He didn't say this is an extreme study. He said this:
In some ways . . . it understates the risks, because it is not just that countries that live with very high debt-to-GDP ratios are consigned to weaker growth; they are consigned to
Is Secretary Geithner extreme? Is Admiral Mullen extreme? Senator Conrad, our chairman, is very concerned about the trajectory we are on. On March 15, at a Budget Committee hearing, this is what he said:
I believe our Nation is in peril. We are hurtling toward a fiscal cliff. . . . We are clearly on an unsustainable course.
Pete Domenici, who was part of the Rivlin-Domenici debt commission, which was similar to Bowles-Simpson, and was also the former chairman of the Budget Committee in the Senate, said this:
I have never been more worried for my country.
Are Senator Conrad and Senator Domenici extreme? I think not.
Only three bodies can propose spending plans. The White House budget has been submitted. It would double our debt, surge our interest burden, increase spending at every level, and raise taxes substantially. Tomorrow we will have the House plan. It will be released by Budget Chairman Ryan. It is the most serious attempt ever made to solve America's spending and debt problems while saving critical programs, such as Medicare--saving those programs. They are beginning to default now.
What does the Senate plan to do, the Democratic Senate? Doing nothing seems to be the plan. We have not seen a budget proposal and haven't had a hearing set for the markup of a budget proposal. I doubt that the President's plan will be brought forward in its present form because it would receive not many Democratic votes and, I suspect, no Republican votes. I don't know.
The Senate has to do something. We have to propose a budget and be engaged in the process. We can't stick our heads in the sand. We cannot be in denial. Is the President going to change? Is he going to all of a sudden take responsibility for the fact that we may be heading to a fiscal crisis that could surge unemployment, surge interest rates, and place this Nation in financial risk? We have not seen it yet.
If he does not act, what will our Senate Democratic colleagues do? I call on them to step up and represent their constituents, to do the right thing. We have to do the right thing. We cannot continue on this course.
In my view, American leaders have no higher duty, no greater moral responsibility than to take all the appropriate steps to protect the good people we serve from a clear and present danger--a danger that has been detailed to us with clarity and repetition by some of America's finest leaders.
I yield the floor.
The Senator from Oklahoma.
Mr. President, first, let me say how refreshing it is to hear the Senator from Alabama, as scary as it is, to tell the truth about the problem we have. When I tell people back in my State of Oklahoma--I refresh their memories. I remember in 1996 standing at this podium--right here--when the Clinton budget came out for fiscal year 1996. It was a $1.5 trillion budget. I said a $1.5 trillion budget is impossible to sustain. And yet the budget the Senator from Alabama was talking about was the budget of this President--and, of course, with a majority in the House and the Senate--that actually has a deficit that is greater than the entire budgets around the entire United States of America in 1996. That is the deficit. That is what my 20 kids and grandkids are going to have to pay for.
When you use statements that are real and cannot be denied--and that is, that this President in the 2 years he has been here has increased the debt more than all the Presidents before him, from George Washington to George W. Bush--it is not believable. That is what makes it so difficult because people think: How can this possibly be? And yet, it is. That is the reality.
S. Con. Res. 41, H. Con. Res. 112, S. Con. Res. 37, S. Con. Res. 42, S. Con. Res. 44 En Bloc—Motions To ProceedMay 16, 2012
Approving The Renewal Of Import Restrictions Contained In The Burmese Freedom And Democracy Act Of 2003—Motion To ProceedSeptember 12, 2011
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