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Mr. COBURN. Mr. President, I listened to part of what Senator Reid had to say as we opened the Senate today. I was struck by the fact that so many people are unemployed and our economy is still barely growing, that there probably is not any firm objection to trying to alleviate some of the pain by continuing a process where we lessen the tax burden through a decline in the Social Security tax. I don't think that is going to be the issue with many Senators.
The question is, do we do that by raising taxes on other people or by getting rid of waste. I had an interesting phone call today with somebody I trust and have been talking to for 3 years, who actually predicted everything that has happened so far. He predicted what is going to happen in Europe, and he predicted the fact that ultimately there will be default in Europe on government bonds. There is no way they grow themselves out of it or no way we loan them enough money to buy them enough time to get out of it. The only way is to trim their spending, which they should have started 2 1/2 or 3 years ago.
The same lesson applies to us. I think some things that are factual ought to be brought up. We had, over this past week, the inability of the committee to come to an agreement on $1.2 trillion. Therefore, there is going to be a sequestration. The interesting thing, on the way to the
farm, is that when you have the sequestration carried out, there will actually be no decrease in spending in the Federal Government. This is the important thing I want the American people to hear. They think we are cutting spending. Defense will rise 16 percent with sequestration; nondefense discretionary will rise 6 percent; Medicare will still rise 71 percent; and net interest will rise 160 percent with the sequestration. So it is dishonest--to put it mildly--to say that we are cutting anything in Washington. And there begs the problem.
The problem is that the political elite in this country are failing to make the adjustments we have to make or we are going to end up like Greece, Portugal, Spain, Italy, and ultimately France. We have to do that. The sooner we do it the less pain we are going to have. The first thing we ought to do is be honest with the American people. Nobody has done anything in Washington yet to cut any spending, because it is still going to rise in discretionary, defense, Medicare, Medicaid, Social Security, and interest. It is still going to rise. So we have to go back to the fundamental problem.
What President Obama is proposing costs about $240 billion for next year. I think he would get great support from many of us if he said I want to do this to help people out there, and I want to do it by getting rid of some of the waste, fraud, abuse, and duplication we have. I would be the first to help him. But that is not what is going to be proposed. Instead of playing the political game, why don't we solve the problem?
We had a GAO report that came out in March that showed massive duplication throughout the Federal Government--massive. My estimate is close to $200 billion a year. That is not theirs, that is mine. But at a minimum, $100 billion a year could be saved by consolidating programs and eliminating duplication. We have not done anything or made any attempt to do that. Senator Warner and I offered an amendment to eliminate $5 billion of it. The bill it was riding on was withdrawn. We haven't had an opportunity in all the bills that came before to offer an amendment to eliminate duplication. Before we ask anybody to pay more taxes to offset the taxes we are going to decrease for the businesses under $50 million, and for the decline in the payment of Social Security tax of 3.1 percent for business and 2 percent for the individual, we ought to get our house in order first. We are doing exactly what the European countries refuse to do.
Now we hear over the weekend that we are about to participate, through the IMF, in socializing the debt of Europe, of which we are required, through the IMF, to absorb 26 percent of the cost. We are not going to let that happen, because what we are going to do is exactly the same thing we are doing in the cities--delaying the onset of the time to make the hard choices.
Here is the growth curve on this chart. In the red is sequestration. The blue line is without sequestration. Spending is still going up. We are going to be at a $5.4 trillion annual budget in 2021, 9 years from now. No spending has been cut. We need to quit lying to the American people about what we are doing. A 9-percent approval rating is well earned as long as we are dishonest with the American people about what we are actually doing. They understand the problem. We are broke.
If you don't think that is the case, look at this chart. Medicare is broke, no question about it. Medicaid is broke. The census is broke. Fannie and Freddie are broke. Now FHA has 0.2 percent of the capital they need when they have a minimum statutory requirement of 3 percent. FHA is broke. Social Security is broke. There is $2.6 trillion in the trust fund. We put $105 billion from the Treasury in to offset what we did last year. Now we are going to pay for it twice because there was no decrease in the IOU. For that $105 billion, our children and grandchildren will pay back $210 billion. With the new program, they are going to pay back $280 billion. The U.S. Post Office is dead broke. We won't even pass a bill that allows it to be fixed. We just delay the time of its demise. Cash for Clunkers was broke. The highway trust fund was broke. We are passing bills for the highway trust fund, which is $13 billion short. We don't know where the money will come from because the trust fund is broke. Government-run health care--we don't know, but it is likely to be broke before it starts.
How do we solve the problem?
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Mr. COBURN. Yes, and the recommendation of the President of the United States. What about duplication? Is there not someplace we can find the $240 billion that President Obama wants to put into the economy for helping those of the middle and lower income levels make it through this tough time? Sure there is.
We have 100-plus surface transportation programs that can be consolidated into about 20 programs. We have 82 Federal teacher quality programs. Not one has the metric on it, and we don't know if they work.
Economic development programs--we have 88. Transportation assistance programs, outside surface transportation--we have 80 of those. We have 56 financial literacy programs. We have 47 job-training programs, at $18 billion a year. All but three of those overlap one another, and not one has a metric to say it works. Homelessness prevention and assistance--there are 20 separate programs. There is nothing wrong with that goal, but why do we need 20? Food for the hungry--we have 18 different programs. Couldn't we do that through one Federal program? Why do we need to have 18? Disaster response and preparedness in FEMA has 17 different programs.
We have taken a ``stupid'' pill, and now we sit bankrupt. We are physically bankrupt--fiscally and physically bankrupt at this moment, except we just haven't recognized it, and what is happening in Europe is going to happen to us in less than a year. The price we pay for our bond interest is going to go up. The price differential between a German and Italian bond in the last 10 days has risen 270 basis points--a spread of 270. Germany couldn't even sell all its bonds Friday.
What is happening? It is a lack of confidence. So we have to restore confidence, and the way we do that is by actually paying for the good we need to do by putting forth commonsense solutions for elimination of programs that are duplicative.
I will finish with just a couple other points, just some ideas.
If you started now, you could put the 2020 census online and save $2 billion. If we increased the paperless transactions at the Treasury Department, we could save $1 billion. These are per year, by the way--per year. We need to gradually increase fees for GSE securities. President Obama has started that, but it needs to be accelerated. Move the core functions of the Election Assistance Commission to the FEC. That is $161 million. We could consolidate that. We could do some commonsense things. We could combine the SEC and the CFTC and save $2.8 billion. We could move the SBA disaster loans to FEMA. You have to go through FEMA anyway before you ever qualify for one, so why not let them do it? Why do we have two separate programs? Why do you have to go through two doors? It would be like getting your license where you bought the car, but then you had to go somewhere else to get it, and then you had to go somewhere else. We could eliminate that. The National Drug Intelligence Center--it doesn't do anything. It is an earmark we have spent $488 million on in the last 10 years. It does nothing of concrete value to anybody in the intelligence network, but it is an earmark gone crazy.
So what do we do? Well, we put together a shopping list that could be used. You don't have to agree with any of this, but over the next 10 years, if you just agreed with one-third of it, you could find the third and save $3.3 trillion. That is $85 billion more--if we just did one-tenth of it this year--than what the President would like to do with this jobs stimulus program.
None of this is hard. There certainly can be some debate over what we fund and don't fund in defense, but most of it is common sense. Will people squeal? Yes. Everybody is going to have to squeal if we are to get out of the problem we have in this country.
I will conclude with this: I think we ought to continue, until our economy is back on keel, with a Social Security tax cut, but I think the only way we should do that is by eliminating some of the $350 billion a year of waste, of duplication, and of fraud in the Federal Government. And if we can't do that, we shouldn't be here. None of us should be here.
The fact that the politics of the next election is crippling this country says we deserve the 9-percent rating the American people are giving us. All we have to do is change that. What we have to do is grow a backbone, stand, and say no to people. We have to say it to everyone. We have to do this. It is for our future and for our kids' future. And these are the things that are least painful.
Here is what happens if we don't. The very people we say we don't want to harm by eliminating the multitude of duplication in all these programs, eliminating all this waste, all these feel-good things that part of the time accomplish good things, are the very people who are going to suffer significantly more because of our inaction.
It is time for us to act. It is time for us to do what is necessary to put our country back in the right direction and on a healthy diet of fiscal prudence, smart tax policy, and get out of the rut we are in. That requires leadership--and not just by the President but by all of us.
It means you have to take some hits. When I put ``Back in Black'' out, I got some terribly nasty letters from all sorts of people. I understand. They are getting something, and some of that is put at risk, so therefore you can't represent them. But everybody is going to have to give, and if everybody doesn't give, we won't have a country left. That is what is coming--default. We are broke now; we just are not in the reality of it. But what is coming is default of American bonds if we do not act now. It can't wait 2 years. It can't wait for the next Presidential election. We have to do it now.
With that, I yield the floor.
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