The Debt Ceiling

Floor Speech

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I thank the Senator from Wyoming. It is my pleasure to be on the Senate floor with him and to talk about my experience in dealing with the reality of a balanced budget amendment.

As I said a couple of weeks ago when I spoke on the floor about this issue, I heard many come to the floor who said: This is a bad idea. This is bad policy. Some have even gone so far as to describe it as almost kind of a radical approach. I have lived with a balanced budget amendment. I have to say I did not find it to be a radical approach whatsoever.

In the State of Nebraska where I was Governor for 6 years, and actually prior to that when I was mayor of the State capital, the community of Lincoln, I had to balance the budget. I had no choice whatsoever about that. In fact, in Nebraska, we had an additional provision. Decades and decades ago, when those who wrote the Nebraska Constitution started thinking about what kind of State they wanted, I think they wisely realized that at some point the politicians would try to hand off or give away the State treasury and promise everything to everybody for obvious reasons: to get elected, to get reelected.

So in the State constitution they said we can't borrow over $100,000. So we had two requirements. One was that on an annual basis the budget had to be balanced, and the spending could not exceed the revenues. The second requirement was that we couldn't issue any bonds or debt to balance that budget and, in fact, we go so far as to not have any debt whatsoever, really. We have a few lease-purchase agreements on some equipment, but that is it. We don't even have debt for our highways. We don't lay a mile of concrete for a highway if we don't have the money to pay for it.

So for those who have described this as sort of a radical approach, let me describe to them how this approach has worked in our State.

Today in our State, our unemployment rate is 4.1 percent--4.1 percent. I will go across the State very soon and do townhall meetings in large communities--from the largest, Omaha, to some of our very smallest. I can almost assure my colleagues that one of the comments I will hear in our rural communities where they are working hard to be business friendly and grow jobs and opportunities for their residents, they will say to me: One of the challenges we have, Mike, is finding the skill of labor we need to fill the jobs we are creating.

I will also share with my colleagues that this experiment--this radical approach that some have described--has resulted in a legislative session that ended early this year, that balanced the budget, and did not borrow any money. I will also share with my colleagues that our pensions are funded. There are no stories about Nebraska pensions are underfunded; that they have been borrowing out of the pensions so someday when somebody retires the pension will not be there for them.

I will wrap up my comments by drawing the contrast. The contrast with the government that I find here is this: For over 800 days we haven't had a budget. Under the leadership of my friends on the other side of the aisle, the Democrats, we have not had a budget for now going on 3 years. We are being asked to approve the largest debt increase in our Nation's history. That is what this debate is all about.

In addition, we are closing in on $15 trillion worth of debt. The projection is that in about 4 or 5 years from now we will owe $20 trillion of debt.

My colleague mentioned I was in the Cabinet. When I came to join the President's Cabinet as the Secretary of Agriculture and I shook the Lieutenant Governor's hand who has now been the Governor for 8 years--he is now the President of the National Governors Association--I wished him well. I did not have to say to him: I am very sorry about all the debt I have taken on, because there was none. The bills were paid, the budget was balanced, the pensions were funded, the unemployment rate was low, and he has continued that conservative legacy.

By comparison, when Barack Obama leaves the Presidency, he will tell his successor: I ran up the largest debt in our Nation's history--larger than any President in front of me. That is the legacy he will leave behind for his children and his grandchildren and ours, and that is the sobering reality of today's debate.

Mr. BARRASSO. Mr. President, I appreciate the comments of the Senator from Nebraska. I think about the fact that he had to use honest figures, honest accounting.

I see now a proposal by the majority leader that, to me, seems to be full of accounting gimmicks, tricks, things such as using money as savings that was never intended to be spent at all, saying we will save all of this money by not being at war in Iraq or Afghanistan for the next 10 years and counting $1 trillion in savings when there was never even an intention to spend that in the first place. I don't think anyone in this body or on Capitol Hill believes we will be at surge levels for the next 10 years in 2 wars, Afghanistan and Iraq.

So I ask my colleague from Nebraska--and we are also joined by our colleague from South Dakota--he couldn't have done something like that in balancing his budget in Nebraska?

Mr. JOHANNS. Mr. President, we would never have done that. Had I walked into the unicameral for my State of the State Address and done things such as are being proposed here today, I literally would have been run out. The State senators would have looked at the Governor and said: We need a new Governor. And I think they would have joined in a very bipartisan response to that kind of approach.

My colleague is absolutely right. I looked through the proposal, and I have to say, in all due respect to the majority leader, this isn't going to get the support I think he hopes for. It isn't going to happen. It is going to be voted down. It will not go to the finish line because people just can't support it.

This idea that somehow we are going to get a savings because we are not going to be funding the surge levels in Afghanistan, well, no one was going to do that. The President wasn't asking for it. That money was never requested. So to grab that out, as somebody pointed out--and I wish I could remember who--in a column today, they said that is like trying to grab a savings based upon the fact that we will not be invading Canada this year.

Well, yes, we are not going to invade Canada, but that is not budget savings, and it is not a budget savings to somehow claim we are not going to fund the Afghanistan war for the next 10 years at surge levels because that was never anticipated.

I want to solve this problem, but we have to be real with the American people about how we are solving this problem--with real savings. I know it is painful. My goodness, I have been there. I have cut budgets before. I have had to lay off people. But I think we have to just be straight with the American people and say this is what it is going to take to get there.

Mr. BARRASSO. Mr. President, my colleague from South Dakota is here, and he has been a Member of this body longer than I have. To me, this debt ceiling increase seems to be the largest in history by any standard, whether we include inflation or not. I think the previous largest one was $1.9 trillion, and that was also with this President.

So when we think about this President and what he inherited and where we are now, it seems to me--I would ask my colleague from South Dakota to respond--it just seems he is making it worse.

Mr. THUNE. Mr. President, I certainly echo what has been said by my neighbors, my colleagues from Nebraska and Wyoming. Their States, as well as mine, all have a balanced budget amendment that requires our States to live within our means. Our States do it. They do it the old-fashioned way. They do it by--in our case, in the State of South Dakota, this year--having to make some hard decisions about spending. But they balanced their budget, and they did it without raising taxes, which I think is a great model for what we ought to be doing in Washington, DC.

As the Senator from Wyoming has pointed out, this is the largest requested increase in the debt ceiling in history. At $2.4 trillion--and, of course, I think we are going to be asked at some point to vote on the Democratic leader's proposal, which, as both of my colleagues have pointed out, doesn't get us there.

If we even use the standard I think everybody realizes makes a lot of sense--and that is if we are going to increase the debt limit by $2.4 trillion, we also ought to look at how we reduce spending by $2.4 trillion. That way we are getting a dollar-for-dollar reduction in spending, and we are fundamentally addressing the real issue, which isn't the debt limit, it is the debt.

We all talk about the debt limit, and it is looming, looking us right in the eye right now. But the real issue is the fact that year over year over year we continue to spend more than we take in.

We are not living within our means. Both Senators have talked about a balanced budget amendment. I was here as a freshman Congressman in 1997, the last time that was voted on. It was voted on in the Senate. It never made it to the House because it needed a two-thirds vote, and it got 66 votes in the Senate. Had it been able to pass here and come to the House, I think we would have passed it.

I cannot help but think how much better our fiscal situation would be today had we been able to do that back in 1997, because at that time the overall Federal debt was $5 trillion. Today it is $14 trillion. So there has been a $9 trillion increase in the Federal debt in that short amount of time.

It is important we tackle this issue. It is important we do it in a way so the American people know we are serious--that this is not gimmicks, this is not smoke and mirrors and all the things that I think make people in this country so cynical about the way Washington, DC, operates.

As the Senator mentioned, the Reid proposal on the debt limit essentially counts over $1 trillion in savings that were never going to be spent in the first place. So it is a gimmick and it is not real. It is phony. We all know that.

We have to get real. We have to put forward a serious effort if, one, we are going to convince the American people we are serious about this, but, more importantly, if we are going to do something meaningful about getting this spending and debt situation under control.

I hope we will be able to defeat that when it comes to the floor and actually do something, if we can get the House bill over here, which has not only spending cuts in the near term but also a process whereby we can get some entitlement reform that deals with the big drivers of Federal spending; that is, Medicare, Medicaid, Social Security, and then also get a vote on a balanced budget amendment such as all of our States have on the books and which has enabled our States to live within their means, not spend money they do not have, and continue to, in spite of this down economy, perform above the average.

I think of all of our States, probably in terms of unemployment, in terms of economic performance--if you look at them relative to other areas around the country--living within their means. It is a good model if you want to have a good, strong economy and create jobs for the people in your States. That is something we ought to be doing at the Federal level, and that is why it is so important we take the right approach. The bill that will come over from the House of Representatives does that. The bill that has been proposed by the Senate Democratic leader does not.

Mr. BARRASSO. It is interesting because my colleague from South Dakota mentioned this figure, this two point some trillion dollars. People in Wyoming last week said: How do they come up with that number? Like the Senator, I agree that for every $1 they want to increase the debt limit, they should say we should find $1 of real savings, honest savings, savings you can point to, as the Senator needed to do as Governor, and as we believe here.

That is what the approach they are dealing with in the House does. They have come up with a way to raise the debt ceiling, deal with avoiding a default, and they extend this for a number of months.

People say: Well, how do you get this $2.4 trillion number? The President had a White House press conference last week, on July 22, and he said--it is astonishing. The President of the United States told the country:

The only bottom line that I have is that we have to extend this debt ceiling through the next election, into 2013.

Not extend the debt ceiling so we can avoid default, not so we can focus on jobs and the economy and the overall debt and the spending, but so that--as he said, his bottom line, the only bottom line, is that we have to extend it beyond the next election.

Then the Treasury Secretary was on one of the television shows on July 24, and he said:

Most important, we have to lift this threat of default ..... for the next 18 months. We have to take that threat off the table through the election. .....

This debt is the threat. This debt of nearly $15 trillion, going to over $20 trillion in the next couple years, to me is the threat. The elections can take care of themselves. I think the American people will be shocked, astonished, and disappointed to hear that is the President's only bottom line.

I do not know what the Senator's comments or thoughts are on that, but I am expecting better.

Mr. THUNE. If you think about what this debate ought to be about, it ought to be about America's economic security. It ought to be about making sure we are putting the country on a sustainable fiscal path and creating the conditions for economic growth, and I would argue there is a direct correlation between those two. If we do not get spending and debt under control, I think we are going to bankrupt the country, we are going to increase interest rates, we are going to make it more difficult and more expensive for businesses in this country to create jobs. So clearly there is a direct correlation between the issue of spending and debt and the economy. But the economy and the implications of what we do here on the economy ought to animate everything we do. We ought to be thinking about: How is this going to impact the economy? We should not be thinking about politics. That is why it was disturbing to hear the President say his prerequisite in all this is that we get through the next election. To me, that was a statement that was profoundly about politics and certainly not about America's economic security, which ought to be first and foremost in our minds.

Subsequent to that, even yesterday, you had members of the President's team suggesting this might somehow disrupt the Christmas vacation. I thought: You know, of all the things we ought to be thinking about right now, the next election, the next holiday--those probably are not going to be consequential if we do not take steps to address the issue before us today; that is, this massive increase in our Federal debt, the year-over-year deficits we continue to run, the fact that we continue to live way outside of our means. That is what I think the American people want to see us focused on. I think that is what the people of South Dakota certainly want to see us focused on as well.

Mr. JOHANNS. That is exactly what the people of Nebraska want to see us focused on.

The debate that is occurring now absolutely is one of the most important debates we have had literally in the history of this country. It was encapsulized in a statement in a column today that I read from a man I have a lot of respect for, Charles Krauthammer. He said this about this debate. He said:

We're in the midst of a great four-year national debate on the size and reach of government, the future of the welfare state, indeed, the nature of the social contract between citizen and state. The distinctive visions of the two parties--social-democratic vs. limited-government--have underlain every debate on every issue since Barack Obama's inauguration: the stimulus, the auto bailouts, health-care reform, financial regulation, deficit spending. Everything. The debt ceiling is but the latest focus of this fundamental divide.

He could not be more right. This is a debate that must occur, as uncomfortable as it may be. Think of where we have been as a nation in the last year and a half. Literally, when the President came to office, the first thing he wanted us to do was to pass a trillion-dollar stimulus plan, if you factor in the interest that was going to be paid, on promises that it was going to fix the economy and employ people, that unemployment would not go over 8 percent.

What happened? Unemployment shot beyond that. Today we see the growth of our economy is literally pitiful. There is no way this economic growth can deal with employing more people.

Then what was the next thing? A health care bill that, quite honestly, the vast majority of Americans did not want. And by the day, story after story, analysis after analysis comes out and says all the promises made during this health care debate by the President and the Democrats will not be fulfilled. There was a story yesterday that this is not going to bring health care costs down. This increases health care costs, and it is one thing after another thing after another thing.

The American people spoke loudly and clearly in November. They said: Get the fiscal condition of the United States under control. I will say this. I do not think anybody is expecting miracles. It took us decades to get in this position. It is going to take concerted, conservative effort to get out of this position over a period of time. But it is on debates such as this where this must start. It is on debates such as this where we must force this government to be smaller, to be more efficient; otherwise, the legacy we leave behind for our children and our grandchildren is $20 trillion of debt in 4 more short years. They will have their own wars to fight. I wish they would be free of war. But they will have their own wars to fight, their own flu pandemics to deal with, their own items on their agenda--education or health care, whatever, that they want to improve--and where will they begin? They will begin with a $20 trillion debt in 4 years. That, as a nation, should be unacceptable to us. That is why we need to do everything we can at every stage to turn this around and start this Nation on the right course.

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