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Ensuring the Complete and Timely Payment of the Obligations of the United States Government

Floor Speech

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Date:
Location: Washington, DC

BREAK IN TRANSCRIPT

Mr. TOOMEY. Mr. President, I wish to address the substance of this amendment, but let me start with a little context on this underlying bill. The underlying bill, of course, suspends the debt ceiling from now until May 18. What that means is in the meantime, the administration will be able to borrow as much money as it wants within certain constraints, but a very large sum of money over the next 3 1/2 months, at which point the debt ceiling will be reinstituted at a higher level. We expect the government will probably borrow something on the order of $400 billion between now and such time as the debt ceiling is reestablished.

We have $16.4 trillion in debt today, so by the time the debt ceiling is reapplied, reimposed, it will be just under $17 trillion. At that point we will be right back to the standoff we were at very recently, a standoff over what to do about this massive amount of debt we already have and the massive amount of additional debt the administration would like to create. The administration's position is very clear: They want additional borrowing authority with no strings attached--no conditions, no limits on future spending. They just want to be able to keep borrowing. Some on our side of the aisle believe very strongly that any increase in the debt ceiling that authorizes still more borrowing needs to be accompanied with some measure of spending discipline so we can at some point begin to regain control over these out-of-control deficits and the debt.

In any case, what we know for sure is that this tension will reemerge and that we do not have a resolution in place now. If this measure passes, which very likely it will, and it will be signed into law, we have just kicked this can down the road until May--maybe June or July at the most--but we surely will be back at this point where we are having this argument.

Here is what else we know. We know that tax revenue, ongoing tax revenue coming into the Government's coffers, is going to be about 75 percent of all the money the Government is planning to spend in the coming year--or is likely to spend. Since 75 percent does not cover everything, the other 25 percent is meant to be borrowed. Therein lies the necessity of raising the debt ceiling, precisely to fund the difference between all the Government wants to spend and the tax revenue it is going to have.

It is important to note, by the way, that raising this debt ceiling is not about paying for past bills incurred. I know that is repeated around here all the time. It is totally untrue. We have a funding for the appropriations process that expires at the end of March. There is no appropriation that is in place going forward. The debt ceiling increase, the authority to borrow more money, is all about funding future spending, which is part of the reason why some of us think this is a very sensible moment to try to bring some discipline to that future spending.

What would happen if we do not raise the debt ceiling right away? If we do not, we would have to have a 25-percent cut in all government spending. That is pretty massive. That is pretty problematic. The administration and some actually go way overboard in the threats they attach to this. They threaten to inflict the maximum possible economic damage if the debt ceiling is not raised promptly upon the point at which they run out of their maneuvering room. So you hear threats about a default on our debt and senior citizens will not get their Social Security check and our military folks will not get paid. All kinds of the most disruptive, most damaging, and most dangerous kinds of outcomes are threatened by the administration. This is unnecessary. This is not true. This is not what would happen. But there is an incentive, of course, to try to scare and intimidate Republicans into giving the administration the unconditional ability to keep on borrowing and spending as they have been doing, and that is why we hear this.

My amendment is an attempt to absolutely minimize the disruption, the danger, and the drama. It is an attempt to get away from ``government by cliff'' and to have a sensible approach to bringing our spending under control. It is called the Full Faith and Credit Act. What it does is it says very simply, since none of us can guarantee the debt ceiling is going to be raised on any particular date--we all know how we are going to vote. We cannot control anyone else's vote. We certainly cannot control a single vote in the House and we cannot control what the President is going to do. Therefore, we can never know for sure whether and when and under what circumstances the debt limit will be raised.

My point is the sensible and prudent and responsible thing to do is have a plan to minimize the downside if the debt ceiling is not raised immediately upon reaching it. This has nothing to do, by the way, with the current circumstances of suspending the debt ceiling. This is all about the next time, in May or June or July, when we find ourselves facing these circumstances.

What my bill says is, if we get to that point, the Federal Government would be obligated to prioritize three categories of spending: That would be interest on our debt to make sure we do not default on our debt and create a financial crisis; it would be Social Security payments to everybody who qualifies for a Social Security payment so that no senior citizen has to worry and wait to get their check; and it would be Active-Duty Military personnel so that no soldier has to worry or wonder whether they are going to get paid.

By the way, what my bill does is it goes a step forward and says not only will the Federal Government have to prioritize those three categories, but it says in the event on any given day the tax revenues were not sufficient to cover those three payment obligations, the Treasury Secretary would be authorized to borrow additional amounts to ensure that those payments were made.

What does it do? It guarantees that it would be absolutely impossible, under any circumstances, to default on our debt, to miss a Social Security payment to anyone, or to be late with the military pay to anybody. That is what it would do. It would take a little bit of the drama and the risk and the uncertainty and the potential damage to the economy off the table and allow us to have an honest, sensible discussion about how we are going to get spending under control.

Mind you, these three categories of spending, if you add them all together, cumulatively account for about one-third of all the spending the government is scheduled to engage in over the course of this fiscal year. Ongoing tax revenue is about three-quarters of all the spending that is going to occur. So clearly there is far more than enough tax revenue to cover these items, but tax revenue comes in in a lumpy fashion. It doesn't come in smoothly and uniformly over the course of the year, hence the provision that allows the Treasury Secretary to borrow in the event that they needed to in the short run to smooth it out.

Let me say something that is of more fundamental importance. This amendment is not intended to be a replacement for raising the debt ceiling. Unfortunately, as long as we are running structural deficits, we are going to have to borrow money to fund them. This amendment, if it were to pass and be signed into law, does not mean we would not have to raise the debt ceiling at some point. Of course we are going to have to until we get to the point where we have balanced budgets and do not have to continue to run deficit spending.

By the way, I do not think it is desirable or optimal to cross into that threshold where we are living under the rules of prioritization, because it is very disruptive to not be paying all the other bills on time as we ought to. That is much better. But my point is, there is something even more important here and that is to fundamentally bring our spending and deficits under control. Trillion dollar deficits, a total debt that now exceeds the total economic output of our country--we have a disastrous fiscal situation on our hands. It is right now costing us jobs, economic growth today, and it is guaranteed to result in a full-blown fiscal crisis and a meltdown if we do not change the path we are on.

The only time we have ever been able to persuade this President to agree to significant spending reductions was the last time we argued over the debt limit and we did end up getting spending cuts as part of that. I think the urgency of getting our spending under control and getting our fiscal house in order so we can avoid a fiscal crisis and have the kind of economic recovery we need is what necessitates a prioritization bill so we can take the shrill excesses and the threats that some are claiming off the table and have a real discussion and real solutions about how we are going to get spending under control.

My strong hope is that we can bring an end to ``government by cliff.'' Senator Portman has an amendment, I believe, that he is going to introduce, which would prevent the danger of a government shutdown in the event that a CR, a continuing resolution, expires. It makes all the sense in the world. We should not find ourselves backed up against the wall at midnight on December 31 with a great calamity threatened if we do not pass some bill that nobody has ever seen. This is a terrible way to run the government and that is what we have been doing. What my bill does is it eliminates the risk of default and it creates the opportunity for us to bring some spending discipline associated with any future debt limit increase. The bill of Senator Portman will avert the risk of a government shutdown.

I fully support his other efforts to make sure we have a dollar in savings for every new dollar in debt we create. We have an obligation to do that. We have already have too big a debt burden. We have to begin curbing the problem that causes it, and that is too much spending.

I urge my colleagues to support this amendment. As I say, it will not have any effect on the specific bill under consideration to temporarily suspend the debt limit. It will make a much more manageable and a much less disruptive discussion when we address the debt limit once again in May or June--or when that day surely will arrive.

I yield the floor.

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