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Public Statements

The Debt Ceiling

Floor Speech

Location: Washington, DC

Mr. President, Senate majority leader Harry Reid has presented a plan to address our deficits and to end the debt ceiling impasse that threatens to cripple our economy.

The Treasury is projected to run out of money next week and time is running short. Senator Reid has shown great leadership with his pragmatic package. Leader Reid's proposal would give the Treasury the authority to ensure the United States does not default on its debt, while at the same time cutting $2.7 trillion from our budget.

The unprecedented set of cuts would have a significant effect in balancing our budget and restoring fiscal sustainability to the Federal Government. I wish to highlight one key fact. Unlike the House Republican budget and unlike the so-called cut, cap, and balance plan, Leader Reid's plan will preserve Social Security, Medicare, and Medicaid.

Protecting Social Security and Medicare benefits is particularly important. The Republicans have long coveted Social Security and wanted to turn it over to Wall Street. George Bush tried and failed to do this because the American people wanted none of it, but they tried.

The House Republican budget attacked Medicare, effectively turning it over to the private health insurance industry in 10 years. When the American people found out this was hidden in the Republican budget, they wanted none of it. Huge majorities of the American public disapproved of the Republican budget attack on Medicare.

But instead of relenting, the Republicans came back with cut, cap, and balance. Hidden behind that slogan was an even worse attack on Medicare. The House budget would have raised senior's costs more than $6,000 a year. Cut, cap, and balance would have gone $2,500 beyond that. Cut, cap, and kill Medicare was a better name for it.

Against that relentless Republican effort to go against the will of the American people and kill off Medicare, Leader Reid's proposal protects this vital program and the freedom and security it provides to American families.

Make no mistake about it, our deficit reduction plan will not be easy. It will cut discretionary spending by $1.2 trillion over the next decade. These budget reductions will require some tough but necessary choices. The plan would also count for an accelerated wind-down of U.S. forces in Iraq and Afghanistan, saving $1 trillion in the process.

Our troops in the Middle East deserve our admiration and praise for so successfully carrying out their missions. We must, however, continue to press for a strategy that will bring our troops home as soon as we safely can.

The Reid deficit plan would find an additional $40 billion savings by cutting fraud and abuse in tax compliance and a number of nondefense Federal programs and $60 billion in other savings, including cutting unnecessary spending on agricultural subsidies and auctioning off electromagnetic spectrum that the government currently holds.

Finally, by cutting the budget by over $2 trillion, we will have to borrow less money than anticipated, and that will save an additional $400 billion in projected interest costs. In total, the Senate Democratic plan on which we will vote would cut the deficit by $2.7 trillion over the next 10 years.

While Senator Reid's proposal would not address the tax gimmicks and loopholes throughout our Tax Code that help favor the well-connected, this omission does not mean Democrats have given up on ensuring that there is shared sacrifice as we work to balance the budget.

Instead, this package acknowledges the political realities of the moment. Many House Republicans have flatly refused to entertain raising any revenue: not one tax loophole, no cutting of taxpayer subsidies to profitable oil companies, no closing down of offshore tax havens. That is wrong. The Reid package reserves the tax side of budget reform for another day.

We look forward to a robust discussion in the weeks and months ahead over Republican priorities that put special interest loopholes ahead of the interests of American families and ahead of the interests of the American economy.

The Reid plan would establish a bipartisan commission to recommend budget changes and those recommendations would then be guaranteed an up-or-down vote in both Houses of Congress before the end of the year. These recommendations should focus on cutting the unjustifiable tax giveaways--the tax earmarks--that allow profitable companies to avoid taxes entirely and permit megamillionaires and billionaires to pay lower effective tax rates than do middle-class families.

The Reid plan meets the Republicans' initial demands in the debt ceiling negotiations. It cuts $2.7 trillion from

the budget--greater than the amount by which the debt limit would be increased--and leaves tax reform for the next round of budget reform. But it does not yield to the Republican attack on Social Security, Medicare or Medicaid.

I hope Republicans in the Senate and the House will appreciate the balance of Senator Reid's approach and support it. But what if they do not? The House is in disarray. The Speaker does not appear to have the votes. Some of the extremists will not take yes for an answer, and some of the most extreme appear to relish the prospect of America's economy colliding with the debt ceiling.

Let's consider what should occur if Congress fails to lift the debt ceiling. Congress will have sent President Obama three different messages, and they create an irreconcilable conflict. Think about it. Message 1 is: We want him to spend money on all these things. We want him to conduct our wars and our national defense. We want him to send out Social Security checks. We want him to pay the doctors and the hospitals that provide Medicare services. We want him to keep guards on our borders and in our prisons, keep air traffic controllers in the towers, run the rest of the Federal Government.

We tell the President to do that by passing laws. It is by law that the President does these things. Message 2 that we send is: Here is the money we will allow him to collect for the Treasury to pay for all those things. Again, it is by law that we authorize the President to collect that money for the Treasury--by law.

There is a slight problem. The things we have instructed the President to do by law add up to a lot more expense than the money by law we allow him--the executive branch--to collect. So the executive branch has had to borrow--and borrow they have--up to $14 trillion.

If we do not lift the debt ceiling, we send message 3: Do not borrow any more. We do not change message 1, and we do not change message 2. We just add message 3: Do not borrow any more.

As anyone can see, there is no way to reconcile those three instructions. One, by law, we tell the executive branch to send out all these checks and make payments; two, by law, we appropriate too little money to pay for what we have told the executive branch to do; and, three, by law, we would tell the executive branch of government they cannot borrow the difference.

That creates an irreconcilably mixed signal. Do this, but there is not enough money, and do not borrow. This is irresponsible and it is bad government. If Congress wants to stop paying the troops, stop sending out Social Security checks, shutter agencies of the Federal Government or defund Medicare, we should have a proper debate and say so and be responsible for it.

But we have not, and that failure creates an impossible situation for the executive branch under our constitutional principles of separation of powers. Remember why officials in the executive branch pay the soldiers and contractors who support our war efforts. Because Congress has told them to. Congress has the power of the purse.

Remember why the executive branch sends out Social Security checks and payments to doctors and hospitals for providing Medicare services. Because Congress has told them to. Congress has the power of the purse. Remember why the President pays the salaries of Border Patrol agents and prison guards and air traffic controllers and FBI agents and staff in our veterans hospital. Because Congress has told him to do that. Congress holds the power of the purse.

Who is responsible for not giving the President enough money to pay for all of this, for forcing the Treasury to borrow? Congress has set how much the executive branch can collect because Congress has that power of the purse.

Now we are telling the President to do all we have told him to do but without enough money and do not borrow. We all learned in civics that Congress has the power to make laws and the power of the purse. We learned that the President has the solemn obligation to faithfully execute the laws Congress has passed. That is the basic structure of American Government.

Outside of a few narrow and specific areas that are assigned exclusively to the executive or judicial authority by our Constitution, the constitutional rule is clear: Congress instructs the President by law what to do, and the President faithfully executes those laws.

But what happens if Congress will not instruct clearly? What happens under our Constitution when faithfully executing one law Congress has passed requires the President to fail to faithfully execute another law? How can the President faithfully execute irreconcilably conflicting instructions from Congress?

As a matter of constitutional principle, there is only one logical resolution I can see to this constitutional predicament which Congress has created.

When the matter is sufficiently grave to merit the President's attention, and when Congress sends irreconcilable messages for the President to faithfully execute, a zone of executive discretion must necessarily open to allow the President to make the best decisions for the American people in the area where Congress has sent those irreconcilable mixed signals.

Of course, the instant Congress resolves its conflicting signals, stops speaking out of both sides of its mouth, and sends a clear direction, that zone of executive discretion disappears. Congress has the power. Congress makes the laws. Congress controls the purse. Whatever fiscal path Congress instructs the President to embark on, he must faithfully execute that instruction from Congress.

But Congress can't put the President in the untenable position of having to fail in the ``faithful execution'' of one set of laws in order to ``faithfully execute'' another. That is exactly where it seems to me we would put the President if we failed to lift the debt ceiling.

The damage to the country from such failure would be profound. At least 40 cents of every Federal dollar would suddenly stop flowing into the economy. Considering what would have to be done with the remaining 60 cents, it is not very likely that the Federal regulatory process would keep running. That means every job in the country, depending on a Federal permit or Federal approval or a Federal grant or a Federal contract, would likely grind to a halt.

There would be a jump in interest rates that would hit Federal, State, municipal, corporate, and family budgets. A lot of other stuff might also go wrong, but those three are a bare minimum, and they alone would constitute a brutal shock to our struggling economy. The damage would be grave.

Bad enough if Congress instructed the President to do this kind of damage, but do we really expect him to do that sort of damage without our clear instruction? The scale of this damage lights up in sharp contrast to the constitutional predicament Congress would create through Congress's failure and inaction to send clear direction.

The 14th amendment provision, that the public debt of the United States of America ``shall not be questioned,'' may or may not be controlling here. That specific amendment is not my point. My point is a more basic one: How, under our separated powers, when Congress gives conflicting directives, does the President ``faithfully execute'' those conflicting directives? The conflicting directives problem is ultimately a problem for Congress to solve. But until Congress sorts itself out and gives a clear directive, all that can be constitutionally expected of the President is to do the best he can for the country. He cannot ``faithfully execute'' conflicting directives.

In a sense, conflicting directives by Congress are a form of abdication by Congress--an abdication of the duty imposed on Congress by article I of the Constitution to make and pass laws. It is only reasonable and proper to infer that the constitutional duty of Congress to make and pass laws implies that the Congress will make and pass laws that are capable of faithful execution by the executive.

A Congress that cannot meet that standard is in no position to complain that the executive branch has usurped its authority. More to the point, the constitutional cure is always right in Congress's hands: Sort out your differences; give the executive branch the direction it is Congress's duty to provide.

To me, at least, this is a reading of the separation of powers in the U.S. Constitution that makes sense, that is consistent with the underlying principles of that great document, that is practical and workable, and that allows for governance rather than paralysis in circumstances when congressional dysfunction deprives the President of the clear legislative direction that by clear implication is Congress's duty to provide.

I hope before we pitch over the looming fiscal precipice, the executive branch gives these views thoughtful consideration.

I yield the floor.

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