Debt Limit Increase

DEBT LIMIT INCREASE -- (Senate - November 18, 2004)

Mr. DODD. Mr. President, I speak about the vote that took place yesterday to raise the statutory limit of our
Nation's indebtedness. It is terribly unfortunate that for the third time in three years this administration has run up against the Federal debt limit, thereby forcing once again an increase in the National debt from $7.384 trillion to $8.184 trillion.

I think it is a mistake for this body to give the administration what is essentially an $800 billion check to continue its irresponsible fiscal policies.

For quite some time now, the Treasury Department has been forced to halt payments owed to federal retirement accounts and take other extraordinary measures in order to keep the government from defaulting. And now we are in a position where the Treasury Department has said that Congress must increase the debt ceiling by the end of this week or the government will default on its obligations. What this says is that the government is living far beyond its means.

Just several years ago, when President Clinton was President, the National debt was shrinking, not growing. In 1997, the debt held by the public was $3.745 trillion. By FY2001, it decreased by more than $400 billion to $3.296 trillion. Former President Clinton made it a goal to pay off the debt by 2013, so that America would be debt free for the first time since 1835. He recognized that eliminating the debt would strengthen our economy, allow investments in education and other critical priorities, and ensure that Social Security could meet the challenges to come when the baby boomers retire.

By contrast, under the Bush administration, the debt limit was raised by $450 billion in 2002 and $984 billion in 2003. And now, this year, in 2004 it will increase by $800 billion. I find it astounding that just four years ago we were having compelling conversations in the Senate Banking Committee with Federal Reserve Chairman Alan Greenspan about what would happen if we paid off the debt too quickly. And now, here we are about to pass another increase of $800 billion to the National debt.

This new increase will bring the grand total to more than $2 trillion under President Bush-the largest total debt limit increase recorded under any President. Now instead of being eliminated, we are expecting the debt held by the public to reach $6.5 trillion by 2011.

When President Bush first came to office he assured the nation that if we adopted his tax cuts, we would not only see job growth, but we would still be able to eliminate the publicly held debt by 2008. Instead, we have seen 1.5 million private-sector jobs lost, making this the first Administration since Herbert Hoover to actually lose jobs. In just 4 years, we have gone from a projected 10-year surplus of $5.6 trillion to a 10-year deficit of over $3 trillion. And now we are about to once again, for the third year in a row, increase the debt.

If additional debt is going to be accumulated, the administration and the majority could at the minimum ensure that we are adequately investing in our children's education, the country's infrastructure, health care, the solvency of Social Security, and other vital national priorities. But that does not appear to be the case considering that we are seeing across the board cuts in the upcoming omnibus bill, and this Administration continues to push for policies that push us further in the red without any real results.

The administration's reckless policies will pass the burden of paying for them onto future generations, and unfortunately, the administration has shown absolutely no regard for the hardship this will cause. We often discuss the so-called "death tax", this administration's reckless fiscal policies are forcing a "birth tax" on every child born today.

What do I mean by the term "birth tax"? Simply this: a child born today is born owing his or her country $25,000. That is that child's share of the national debt. This is unconscionable. We have a responsibility as lawmakers to leave our country better off tomorrow than it is today. With policies like this, I am afraid that this administration and its supporters are failing to meet this fundamental moral responsibility to our country and to future generations.

Also deeply troubling is that in order to cover increased borrowing, the U.S. is going deeper into debt to foreign countries. Japan, China, the United Kingdom, and Caribbean Banking Centers are now the largest foreign holders of U.S. Treasury Debt.

We have borrowed over $720 billion from Japan, over $174 billion from China, and even tens of billions of dollars from South Korea. During the term of the President's first four years, we have seen our foreign debt holdings increase 83 percent from just over $1 trillion to over $1.8 trillion. This is especially dangerous because these countries can collect their debt when it suits them, which could potentially puts our nation in a very difficult economic situation.

I find it astounding that the administration and the majority of this Congress have not put forward any plan to reduce the alarming increase in our nation's debt-an increase largely caused by their reckless tax and budget policies. Indeed, their only known plans to permanently extend tax breaks for the affluent and drain at least $1 trillion from Social Security-would only make our current problems worse.

I strongly believe that increasing the debt limit once again without a plan is a big mistake. We owe it to future generations to do more to ensure that their future is economically sound. I hope that this Administration, and the majority of the Congress begin to enact more responsible fiscal policies before it truly is too late.

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