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Mr. HATCH. Mr. President, today, as we debate proposals for avoiding the so-called sequester, we find ourselves in a uniquely awkward position. Not only is there general disagreement about what brought us here, who is responsible, who is to blame, et cetera, but we also disagree about where ``here'' is to begin with.
President Obama has been touring the country giving speeches describing just how bad the sequester will be and why Republicans are to blame for it. This is, of course, par for the course for this President, whose motto seems to be: Why solve a problem when you can campaign on it? You would think, after having won the election, the President would be the first to acknowledge the election is over. But nearly 4 months after election day, the President's campaign road show continues.
The problem with the President's sequestration campaign is that, once again, his claims are at odds with the facts. Everyone in Washington knows that, despite the President's efforts to put the blame on Republicans, the sequester was his idea to begin with. The record is clear and it is not in dispute. The idea for the sequester was pitched by the President's then-OMB Director Jack Lew as a negotiating tactic to get Republicans to vote in favor of raising the debt ceiling. Not only did the idea originate in the White House, the President threatened to veto House-passed legislation designed to replace the sequester.
Moreover, in these final weeks leading up to the March 1 deadline, the President spent more time on his national sequestration campaign than he has in sitting down with Republicans to reach an agreement on a replacement package. So if the sequester goes into effect--and at this point it appears it will--the American people should not blame Republicans in Congress, who have been working in earnest to replace it. No, the blame should fall squarely on President Obama, who proposed the idea in the first place and has refused to work on a passable solution.
So that is how we got here. The bigger, more complicated problem is determining where ``here'' actually is. The President and his allies have spent a lot of time misleading the American people on that as well.
If you describe the sequester using the worst possible numbers, it is an $85 billion reduction from $3.5 trillion of yearly Federal outlays--yes, that is $85 billion out of $3.500 trillion. When all is said and done, it is a reduction of less than 2.5 percent from overall Federal spending. And, as the Congressional Budget Office has made clear, not all of the $85 billion in reduction will even take the form of reduced spending this year. Even if it did, keep in mind that $85 billion would represent less than 9 days of Federal spending, based on the rate of spending last year. Once again, that is if you describe it in the worst possible terms.
For a moment, let's go with those numbers.
The President would have the American people believe that a 2.4-percent reduction in Federal spending out of $3.6 trillion will cripple our government and irreparably damage our economy, even an economy that the President must have felt was strong enough to absorb a $600 billion tax hike back on New Year's Day. The ramifications of the 2.4-percent spending reduction are so great, according to the President and his allies here in Congress, that the only alternative is to raise taxes yet again.
I will be the first to admit there are better, more responsible ways to reduce the deficit than the President's indiscriminate sequester. But these scare tactics don't even pass the laugh test. Does the President really expect the American people to believe our government is so fragile it cannot absorb a 2.4-percent spending cut--less than 9 days' worth of Federal spending--without inflicting massive damage on the American people and our economy? Apparently so.
Once again, I am describing the sequester in the worst possible terms just to demonstrate the outlandish nature of the President's arguments. However, when you look at whether the sequester even represents a reduction in spending, you find the claims are even more absurd. In fact, when you look at whether we are cutting spending at all relative to past periods, you can easily see we are not, even with the sequester.
The so-called spending cuts in the sequester are measured against 2010 spending levels. We should all remember that in fiscal year 2010, spending levels were highly elevated as a result of the President's stimulus and other ``temporary'' spending measures passed in response to the financial crisis and recession. So, in other words, the sequester reduces spending only if you are measuring against an extremely high baseline that was, at that time, supposed to be temporary.
Whether something is an increase or decrease depends on what you are measuring against. If you measure relative to a big number--such as the Democrat-fueled spending of 2010--then proposed spending looks like a cut. But if you look at spending levels relative to more reasonable spending baselines, you will find that future spending will actually be up even with the sequester in place. For example, you will see what post-sequestration spending looks like relative to a more reasonable baseline.
According to the Congressional Budget Office, baseline estimates for post-sequester discretionary budget authority total $978 billion for fiscal year 2013. The average during the Bush years, in inflation-adjusted fiscal year 2013 dollars, was $957 billion. Neither of these figures includes spending on wars or emergencies, so this is an apples-to-apples comparison.
In adjusted current dollar terms, post-sequester spending this year will be more than $20 billion higher than the average during the Bush years. Someone may have to refresh my memory, but I don't believe the government ceased to function during the Bush years. I certainly don't remember hearing anyone express concern about the elimination of basic governmental services. In fact, I don't think anyone remembers the Bush years as being a time of spending restraint here in Washington. Indeed, we have all heard President Obama claim it was the extravagant spending of the Bush administration that, in part, caused our current budget woes. Yet now the President is telling the American people that a return to those spending levels will devastate our country, leaving children hungry and our border unprotected.
Not surprisingly, the President and the Democratic leadership's solution to this problem is more tax hikes, which makes these claims about the impact of sequestration all the more transparent. Indeed, it appears that the President's current campaign on the sequester is less about reaching an agreement to replace the sequester than it is about satisfying his drive to once again raise Americans' taxes while also serving his desire to vilify Republicans, no matter what the costs to the American people.
I don't want to minimize the negative impact the sequester may have in some areas. I think there are very few of us who would not like to see the President's indiscriminate sequester replaced with more responsible spending reduction alternatives. There are alternatives to the approach we are debating today. But whatever we do, we should do it through regular order.
Today we are yet again debating a bill that has bypassed the relevant committees of jurisdiction. Regular order has become the exception rather than the rule around here, which is extremely frustrating I think to both sides. There are consequences to skipping the established committee process. If legislation does not go through the relevant committee, it is not studied and vetted. It simply shows up out of the majority leader's office before anyone has a chance to even look it over. Bypassing regular order is simply shortsighted. Yes, short-circuiting the committee process prevents Members from having to take tough votes in committee. But taking tough votes to enact legislation is part of being in the Senate--or at least it used to be. These days, no one in the majority has to take a difficult vote. The majority leader has made sure of that.
I have a chart that has the title ``Honest Leadership and Open Government.'' You can see the large letters at the top and the small letters right against the podium Senator Reid is at. My friends on the other side of the aisle won the Senate majority in the 2006 elections by campaigning on this theme. Unfortunately, in the 6 years since they have been running things here in the Senate, things have gone exactly the other way. Backroom deals are the rule, regular order is the exception, open government is the casualty, and committees are ignored with aplomb.
I have and will continue to urge my colleagues to support the restoration of regular order here in the Senate because, in the end, it yields better legislative results, and it is a much more fair way to legislate and involves everybody, not just a few people in one office.
Despite the fact that the President and congressional Democrats just got over $600 billion in tax increases out of the fiscal cliff deal, the Democratic leadership's bill that we are debating today contains even more tax increases.
The Congressional Budget Office wrote earlier this month that over the next 10 years, revenues as a percent of GDP will average 18.9 percent. Over the last 40 years, according to CBO, revenues have averaged 17.9 percent of GDP. So over the next 10 years, Federal revenues are set to exceed the historical average.
At the same time, government spending, which is projected by CBO to reach about 23 percent of GDP in 2023--an historical average--will be on an upward trajectory and will remain far in excess of the 40-year average of 21 percent. So the problem is not that the American people are undertaxed, it is that Washington is overspending.
Given this basic point, I have filed a motion to commit the Democratic leadership's bill to the Finance Committee to strike all the revenue increases and replace them with spending cuts. And to help further the process, I have prepared a menu of spending cut options to select from. These proposals come from Dr. Tom Coburn's book, ``Back in Black: A Deficit Reduction Plan.''
During the 2008 campaign, the President promised to find spending cuts by going through the budget, line by line. Dr. Coburn has done what the President promised but failed to do. Today, I am drawing from a small body of Dr. Coburn's hard work.
For instance, instead of the latest incarnation of the Buffett tax, we could, according to ``Back in Black,'' save $71 billion over 10 years by instituting a 5-year freeze on locality pay adjustments for Federal workers or we could reduce travel budgets of Federal agencies. That would save just over $43 billion over 10 years.
Another revenue increase in the majority leader's bill that could be replaced with a spending cut is the elimination of what some Democrats have described as a tax break for shipping jobs overseas. Indeed, we have seen this proposal pop up several times over the last few years.
However, as some may recall, the Chief of Staff of the Joint Committee on Taxation wrote a letter to Senator Stabenow and Representative Pascrell, the authors of a bill to close this so-called loophole, that stated,
Under present law, there are no specific tax credits or disallowances of deductions solely for locating jobs in the United States or overseas.
I previously challenged my colleagues to come and point out to me if they thought that was incorrect. To date, no one has tried to meet that challenge. Yet efforts continue to raise a tax under the guise of closing a loophole where no loophole exists.
One spending cut from Dr. Coburn's book that could be used as a substitute for closing the Democrats' phantom loophole is to reduce the Federal limousine fleet back to the level it was in 2008. According to Dr. Coburn's book, the government owned 238 limousines in 2008. By 2010, that number had grown to 412. What changed in government between 2008 and 2010 that required an increase of over 73 percent in the number of limousines needed to shuttle bureaucrats? If anyone knows, please let the American people know. Going back to the 2008 level of Federal limousines would save the government $115.5 million over 10 years.
There are numerous other places where we can cut spending immediately. Instead of pursuing the Democrats' tax hike strategy or the President's indiscriminate sequester, we should instead sensibly restrain spending through proposals such as these.
I anticipate that some of my friends on the other side will argue we should pursue these spending cuts in addition to passing more tax hikes. My response is that we should be saving all of these revenue raisers for future tax reform efforts.
There is a growing bipartisan consensus here in Congress in favor of comprehensive tax reform. The leaders in both the tax-writing committees are committed to this effort, and I believe we have a real opportunity to accomplish something on tax reform this year. However, if we start closing loopholes and eliminating preferences now in order to raise revenue to avoid the sequester, they won't be there to help us lower marginal tax rates later on when we are working on tax reform, which will make an already difficult process that much harder.
Ultimately, if we follow the path my Democratic colleagues want us to take, we will be raising taxes on the American people while at the same time hampering future tax reform efforts. This is simply not the way to go, particularly when there are perfectly reasonable spending cuts available to replace the President's sequester.
As I said, whatever we do, we ought to do it through regular order. That is why I have filed this motion to commit and why I hope my colleagues will support it.
While I am waiting for someone to represent the majority, because I am going to have a unanimous consent request that I understand will be objected to and I want to protect the majority's right to do that, as much as I don't agree with it. I know there is an agreement in place for consideration of the sequestration bill and I don't want to stand in the way. But at some point we need to have a real bipartisan conversation about a return to regular order. For too long we have been avoiding the committee process here in the Senate and I think the results speak for themselves.
I want to work with my colleagues on both sides of the aisle to find a way to restore the deliberative traditions of the Senate by allowing the committees to do its work. If we can return to regular order, the words ``honest leadership and open government'' will be more than a campaign slogan. The American people should expect nothing else.
I understand my unanimous consent will be objected to, and so I ask unanimous consent that I be immediately recognized to make this unanimous consent as soon as the distinguished chairman of the Finance Committee arrives.
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Mr. HATCH. I thank my colleague for his courtesy. I appreciate it.
Madam President, I ask unanimous consent that following the two cloture votes today, it be in order for me to make a motion to commit S. 388 to the Finance Committee, the text of which is at the desk, and the Senate proceed immediately to vote on the motion without intervening action or debate.
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Mr. HATCH. Look, this place is not being run on regular order. The committees are being ignored. The committees are established to be able to intentionally look at these matters and hear both sides and hear the top experts in the country. I feel very badly that this simple motion has to be objected to. I feel badly because I know neither of the amendments that will be filed, that will be heard or voted on, are going to pass. One reason they will not is because we have not followed the regular order.
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