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Public Statements

Deficit Reduction Omnibus Reconciliation Act of 2005--Resumed

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Date:
Location: Washington, DC

DEFICIT REDUCTION OMNIBUS RECONCILIATION ACT OF 2005--RESUMED -- (Senate - November 03, 2005)

BREAK IN TRANSCRIPT

Mr. OBAMA. Madam President, I rise today to speak in favor of fiscal responsibility. This pay-go amendment introduced by Ranking Member Conrad of the Budget Committee, of which I am a cosponsor, seeks to fully reinstate the pay-as-you-go requirement for direct spending and revenue legislation in the Senate through 2010.

This is about restoring responsible budgeting. Previously, pay-go rules applied equally to increases in mandatory spending and decreases in revenue. New spending or tax cuts could only become law if they were offset or found 60 votes in support. This enforced a badly needed budget discipline. It said, either pay for your priorities whether entitlement spending or tax cuts or both or find a supermajority of colleagues willing to override the rule. Simple logic. Simple balance. Common sense. Pay-go worked well in the 1990s to reduce deficits and it can work well today.

Unfortunately, the rules were changed, and the balance was overturned. Now, the requirements of budget discipline apply to only half of the budget. Tax breaks are exempt from the logic and balance and common sense of budget discipline.

The problem is that there is no such thing as half a budget. Budget discipline requires enforcing control over both sides of the ledger. You can't fill a bath tub just by plugging the drain. You can't drive a car just by pressing on the brakes.

The original pay-go rules were abandoned to provide for a series of unfunded tax breaks. And since the tax breaks were unfunded, the Government had to borrow money to pay for them. So we borrowed from countries like Japan and China. And we borrowed from the Social Security trust fund. In the process, our national debt shot up to $8 trillion, and it is still rising. Last year, for example, our national commitments exceeded our national resources by more than $550 billion. And we continue to borrow.

Some have argued that this first chapter of reconciliation is an effort to reduce the deficit. They tout the reductions in spending, many of which I would support. But later this month, the Senate will get to chapter two of reconciliation, which proposes further unfunded tax breaks and guarantees additional deficits and growing debt. So much debt, in fact, that the third chapter of budget reconciliation, which no one really wants to talk about, will involve raising our country's debt ceiling to almost $9 trillion.

Americans deserve better financial leadership. The people I talk to in Illinois are not fooled by what is going on. They know what is happening with higher deficits and reduced levels of government service. They understand that, in this life, you get what you pay for and if you don't pay for it today, it will cost you more tomorrow.

Washington could learn a lot from the American people about fiscal responsibility. The people I have met with know that if you need to spend more money on something, you also need to make more money, and if your income falls, your spending must fall, too. This is the essence of the pay-go rules we are trying to reinstate in the Senate. Changes in spending must be offset by changes in revenue, and vice versa.

Americans know that when you are already deep in debt, it is not the optimal time to be gutting your revenue stream, whether it's a few hundred dollars in the case of a family or a $70 billion tax break in the case of the Federal Government.

They also understand the difference between a home mortgage, a student loan, a credit card debt for uninsured health care expenses, and an unpaid tab at the bar. They know that some debts are good investments or may be unavoidable. But some debts are irresponsible the result of spending more than you can afford on purchases you could postpone or do without.

The people I have met with know that you do not respond to emergencies by indiscriminately cutting all parts of the family budget. You make choices and forego luxuries before cutting back on essentials like food, heating, education, and healthcare. They understand that across the board cuts are neither fair nor responsible. Such cuts sound bold, but they represent a lack of leadership, not an example of it.

The American people also know that the whole family must share in sacrifice--it is not right to pick on any one member of the family, or any one State in our Union. We are in this together. Singling out Alaska's bridge projects or any one State's earmarked funds is the wrong approach. If Congress is going to eliminate frivolous pork projects, as we should to support the gulf coast, let's eliminate all of them, in all States, together.

Finally, the people I talk to understand that when you have massive costs coming down the road, you need to prepare for them. There is no excuse for ignoring the financial consequences of foreseeable expenses whether it is the rising costs of health care, the retirement of the baby boom generation, or the growing inequality of wealth in our society.

You don't have to be a deficit hawk to be disturbed by the growing gap between revenues and expenses. This makes sense to people because the same principles that apply to our national budget apply to their family budgets as well. Americans are willing to share in the hard choices required to get us back on track, as long as they know that everyone is pulling their weight and doing their fair share.

That is why it is so important that we reinstate pay-go in a way that meaningfully enforces the budget discipline both sides of the aisle need to honestly tackle our short-term and long-term fiscal challenges.

Mr. President, it is time for fiscal responsibility to return to Washington. Adult supervision must return to the budgeting process.

Pay-go provides a necessary tool at a necessary time. I urge my colleagues to support this amendment.

http://thomas.loc.gov/


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