The Budget

Floor Speech

THE BUDGET -- (Senate - March 03, 2008)

Mr. CORNYN. Mr. President, next week we will be marking up and working on the budget for the Federal Government for fiscal year 2009. I wish to take a few minutes to talk a little bit about the budget we passed last year and to highlight a few areas of caution where I hope we will not repeat the mistakes this year in the budget we pass like we did in the budget we passed last year.

First of all, in the fiscal year 2008 budget, the budget anticipated an increase in revenue--which is Washington speak for a tax increase--of $736 billion that would be needed in order to meet the demands of that budget. Of course, we all know whom those tax hikes fall on. It is the middle-class families, the farmers, the entrepreneurs, the people we need in this country to remain productive and remain incentivized to keep our economy and job creation humming.

Considering the economic situation we are in today, the last thing the Federal Government should do is increase taxes and create a wet blanket of deterrence on those very entrepreneurs and people who create the jobs.

One example is, last year you will recall that Congress waited until the last possible moment to pass temporary tax relief, relieving the middle class from the alternative minimum tax--a tax that more and more middle-class families will soon pay. As a matter of fact, I think this is a perfect paradigm for what I have heard here as ``tax schemes designed to tax only the wealthy.''

You will recall that the alternative minimum tax, as originally conceived,
was designed to tax only 155 taxpayers who were not otherwise paying Federal tax. But true to form for Washington, DC, and for, unfortunately, the Federal Government, this tax-the-wealthy scheme this last year affected 6 million taxpayers, and because it is not indexed for inflation, would have affected, if Congress had not acted, 23 million taxpayers--from 155 to 6 million to 23 million. But because Congress waited until the last possible moment to pass a 1-year patch or relief from the alternative minimum tax for the middle class, millions of taxpayers will see a delay in getting their refunds--money that belongs to them, after all, and not to Uncle Sam.

We also saw, unfortunately, in last year's budget an attempt rebuffed; a bipartisan vote that would make it more difficult to pass tax increases. Last year, I offered an amendment that received a strong bipartisan vote that created a 60-vote budget point of order against any legislation that raised income taxes. Even though this amendment found broad bipartisan support here in the light of day, behind closed doors in the conference, this amendment was stripped out of the conference report and summarily buried.

This amendment could have sent a strong message to the taxpayers that their Federal Government was more interested in ending wasteful spending than it was in picking their pockets. Unfortunately, as a result of the summary execution and burial of this amendment behind closed doors in the conference committee, the opposite message was sent: that Congress is more interested in getting their hands on the hard-earned money taxpayers earn and spending it on bigger and bigger Government--obviously, the wrong message and one that a bipartisan group of Senators was unwilling to support in the light of day but, unfortunately, the conference, behind closed doors, was willing to embrace.

American taxpayers got a budget that would have spent $23 billion above the President's request last year. Now, a friend of mine in Texas likes to remind me from time to time how much a billion is because we throw numbers around up here--a million here, a billion there. A billion seconds ago it was 1976. A billion seconds ago it was 1976. We do not even seem to flinch at a budget that Congress passed that exceeded the President's request by $23 billion.

In fact, over the next 5 years, the majority budgeted $205 billion over the President's request. Whatever happened to being good stewards of the taxpayers' money and trying to control Government spending so it does not run amok? Thankfully, we were able to stop this unwarranted expansion, and we were able to remain within the President's top line number for the current fiscal year. At the last minute, we were able to do that in December.

When it comes to entitlement reform--something the majority promised to make a top priority when they took power--they did absolutely nothing to rein in the $66 trillion long-term entitlement crisis we are facing. It is no secret to anybody in this institution that entitlements are quickly eating more and more of the budget and will continue to gobble up more and more of our economic resources.

As a matter of fact, I have in my hand a PowerPoint by the U.S. Government Accountability Office called ``Saving Our Future Requires Tough Choices Today,'' pointing out that in 1966, for example, 67 percent of the budget was discretionary spending. Today, it is 38 percent. That is because of the growth of entitlement spending from 26 percent in 1966 to 53 percent of the budget today. Mandatory spending, together with interest on the debt, amounts to 62 percent of the Federal budget today.

If we do not do anything about it, by the year 2030, this Federal Government will be unable to fund anything else other than Medicaid, Medicare, Social Security, and interest on the debt.

So I believe it is very important for us to avoid this fiscal meltdown--as entitlements kick in for the baby boom generation, and in a way that will make Government unaffordable for our children and our grandchildren.

This story, as bad as it is, is even worse when you consider the fact that $185 billion in Social Security surpluses is spent for general Treasury items today. In other words, we are taking the money wage earners are paying into Social Security that is not currently needed to meet the obligations of Social Security and spending it for other purposes, making it even more likely that when our children and grandchildren come of age, they will not have any social safety net available to them through Social Security or Medicare.

When you look further at this report of the Government Accountability Office, for fiscal year 2006 and 2007 deficits, you see that the deficit increases dramatically. If we do not begin to deal with reining in the entitlement spending crisis in this country, it will get nothing but worse.

But while the news media tends to focus on deficits on an annual basis, the real crisis is the growing fiscal exposure due to long-term commitments, such as future Social Security benefits, future Medicare Part A benefits, future Medicare Part B benefits, future Medicare Part D benefits--our prescription drug provisions we passed a couple years ago. These lead to an ultimate liability for the American taxpayer of $52.7 trillion.

So I talked about a million dollars. I talked about a billion dollars. Now we are talking about trillions of dollars--something that is nearly impossible for the human mind to conceive of, the number is so big.

But let me give you a number you can understand, we can conceive of. Unless we deal with the growing entitlement crisis of Medicare and Social Security, not only will they run out of money, but the burden on each person in this country--the financial burden--will amount to $175,000 a person. So not only will we be unable to pay our young men and women who are working today the Social Security and Medicare benefits they should receive when they come of age, we will also burden them with a $175,000-per-person share of the Federal debt in the process. This is an IOU we will never repay.

Of course, if the Federal budget continues to grow in terms of its requirement of paying entitlements--Medicare, Medicaid, Social Security and interest on the debt--as I said, by 2030 there will be no money for anything else. We would not have the resources for other important priorities, including national defense, securing our borders, immigration enforcement, veterans health care, or education.

Unfortunately, the budget that passed last year allowed the debt to increase by $2.5 trillion over the next 5 years. In other words, the message is consistent: We spend now and the next generations pick up the tab later on.

I can only beg my colleagues not to follow the example they set last year. We cannot afford to take more money out of the hands of hard-working Americans in order to grease the gears of bigger and bigger Government. I fear the next budget will only be more of the same. We should not raise taxes on working families and small businesses. We should not wash our hands, as we did last year, of the entitlement tsunami we all know is approaching and threatening to engulf us, and we should not allow the debt to continue to grow so that the $175,000 share per person of the debt will continue to get bigger and bigger.

I know we can do better, and we must do better. As the Budget Committee takes up the 2009 budget tomorrow in the committee and on Thursday when we will actually mark up the budget, and when it comes to the floor next week, I hope all of us will work together to make sure we don't continue to increase taxes and further dampen and soften the economy in a way that hastens a recession rather than avoids it. I hope we will step up and accept the responsibility each of us has to make sure we don't spend money today to impose a financial burden on our children and grandchildren tomorrow. We can do better and we must do better.

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