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Mr. SESSIONS. Mr. President, we began a markup on the budget today. It is the first time in 3 years the Budget Committee has actually met to begin to mark up a bill. We had opening statements today. We made opening statements before we saw the chairman's mark, and the mark was produced later after the opening statements were completed.
Tomorrow we will have a markup on the budget and it will be 1 day, and amendments will all be completed tomorrow. There will be several interruptions, but the determination is to finish, which, of course, is contrary to what we would like to have happen. The Republican members of the committee asked that we have a week set aside and we do opening statements beginning Monday or Tuesday and that we actually have amendments up during a normal process and be able to actually engage in the kind of debate I think would be helpful for the financial future of our country. The chair and the Democratic majority decided we would just do opening statements this afternoon and we would do all the amendments tomorrow and we will complete tomorrow regardless. So that is where we are.
I am glad we do have a budget being brought forward. If it is brought to the floor, it will be the first time in 4 years the Democratic majority has brought a budget to the floor. This is in violation of plain law, statutory code of the United States, 1974, requiring a budget be passed every year and brought forward. They refused to do so. The majority leader said it was foolish to bring a budget. What he meant was it was foolish politically. Surely he wouldn't contend it is foolish for America that the Democratic leadership in the Senate bring up a budget. Surely it would be good for the country to do this every year, as the law requires. But that is where we have been. So we are glad.
The House passed earlier this year a bill that said no budget, then no pay. It said, Congress, if you don't pass a budget, at least out of your own House, then you don't get paid. So that picked up the pace, apparently, and we have a budget, although the President has not submitted his budget. Amazingly, I think it is the first time in 90 years, somebody said--the first time certainly in my memory--the President of the United States, who is required by law to have the budget in by February 4, has waited for the House, which is marking up a budget today, and the Senate to do their budget first. That goes against what mayors and city councils do and Governors do. But that is where we are.
I will tell you one thing that we have learned in the short time we have had the budget that I think defines a lot about where our majority wants the country to go. Over 10 years, this budget--at a time of a dangerous fiscal crisis--spends more--$640-some-odd billion more--than the current law we passed about 20 months ago in August of 2011. We agreed to the Budget Control Act. We agreed to a certain amount of money that we would spend and no more. The President signed it and both parties in the House and Senate agreed to it. But what happens? Here we are with their proposing a budget that will spend more money than we agreed to spend just a few months ago.
The worst thing about this is that the Budget Control Act did not go far enough. We should have reduced spending more. In addition to that, it looks as though there will be about $1 trillion in new taxes in this budget. So it is tax more and spend more. It is the wrong direction for America.
People say: Well, that is just politics; what is the matter with you guys. Why can't you reach an agreement? It is hard to reach an agreement when the country is on an unsustainable debt path that puts us in danger of financial crisis; a path that is already slowing growth down in our country. Agreeing to a budget that continues down this path is not the right thing to do. So I am deeply disappointed that we are in this fix.
I wish we had had an opportunity in committee to really have a lot of discussion about it back and forth, because there are good Democratic members of our committee, talented members, good Republican members, talented members, who bring so much to the discussion. But it was just both sides talking today. Some good statements were made but not the kind of engagement we would like to have had. So that is a disappointment.
Under the current baseline we are on, according to the Congressional Budget Office, in the tenth year of this budget we are dealing with right now--the Budget Control Act--interest on our debt will be $850 billion--$850 billion in interest payments for 1 year on the money we have borrowed--the almost $17 trillion we have borrowed. This is why it is such a dangerous thing. The highway bill is $40 billion or $50 billion a year, aid to education may be $100 billion.
I am saying that in just a few years, because we have run up unnecessarily so much debt, that interest will be $900 billion. That will be more than the Defense Department by far. The Defense Department's base budget is about $540 billion, and it is actually being cut. Interest will be the largest growing item in the budget.
Food stamps went from $20 billion a decade ago to $80 billion. I just left my farmers, who came up from Alabama, and we were talking about that. The farm bill is about $100 billion a year. Of that farm bill, $80 billion of it is the food stamp budget. It has gone up four times. The $20 billion that goes to farmers, in aid and insurance, actually was cut this year, but nothing was cut out of food stamps. They resisted that, and rejected even a modest amendment I offered to end a clear abuse which wouldn't have hurt anybody. I guess what I am saying is we are in serious business here and we have to get off the debt course we are on.
Erskine Bowles, who was appointed by President Obama to head the fiscal commission, along with Alan Simpson--the Simpson-Bowles Commission--said this Nation has never faced a more predictable financial crisis. What he was saying was, if we don't get off the debt path we are on, we are going to have a financial collapse. They didn't say exactly what, but something like Greece, something like we had in 2007, throwing our country back into a recession, which would be a very dangerous thing. It was a bipartisan warning to us that we needed to act, and we haven't acted since then, and that was over 2 years ago.
We haven't done anything. So a lot of people are saying and you have heard it said that we have to act because we are worried about our children and our grandchildren. And we should be worried about the debt that is out there for our children and grandchildren.
Senator Kelly Ayotte from New Hampshire put a picture up in our Budget Committee today of her two children, ages 5 and 8, and she had one with $1,100,000 on that child's picture, and the younger one had $1,300,000 on her picture. That is what was calculated will be the share of the Nation's debt that they will carry when they are adults. This is wrong. We should not--must not--do this to our children and grandchildren. It was not done to us. Our parents left us with a country much more responsibly managed than this.
We have never, ever had a situation in which we have had four consecutive years of deficits amounting to $1.2 trillion a year. Never. Oh, President Bush spent too much. Yes, he did. He deserves some criticism. I think he does deserve some criticism. The year before he left office, his deficit was $161 billion; his last year was $470 billion. For the last 4 years, we have averaged $1.2 trillion, and it is systemic and it is deep and it has to be changed.
Now, there is one more thing I really would like for my colleagues to focus on, and I will wrap up with this point, but it is really important. The question is: When you have debt equal to $17 trillion, does it impact the economy now? Yes. It puts us at risk for some sort of fiscal crisis. If there is a collapse in Europe, a collapse in Japan, a collapse in China, it could kick us off into a major financial disaster in the United States. It is a very fragile situation.
But the question is: Does the debt we have now slow growth today? I think that is a really important issue, and so we have done the research.
The issue was originally raised by Rogoff and Reinhart. They have done a number of studies and wrote a big book about all the nations that have gone into default and have had a debt crisis over the last 200 years. It is a thoroughly respected work of two highly competent and proven, respected economists. What they concluded was that when debt reaches 90 percent of the size of your economy, you slow economic growth by 1 to 2 percent.
Where are we now? A lot of people have been using the ``public debt of the United States.'' That is one way to calculate it, and our public debt represents about 76 percent of our gross domestic product. But the other debt that we use, the one you have seen most often, is the $16 trillion figure that has the numbers spinning on it--$16 trillion is what is called the gross debt. A lot of people seem to think we are not in danger because Rogoff and Reinhart were talking about the public debt. That is not so. We have examined their work, and we have examined their footnotes and their reports and analysis. It is the gross debt. That is what they were using; that is what they calculated. We are at 104 percent gross debt, so we are well over the 90.
I would contend that the reason our economy has failed to meet, for the last 3 years, the growth expectations that were out there is because our debt is dragging us down now. And there are hundreds of thousands--millions of Americans who are probably out of work today because of the debt drag.
We need to get off this path, and the budget the majority moves in our committee gets us nowhere off this path. It never brings our gross debt below 90 percent or 94 percent of GDP, and we haven't finished the analysis of it.
In addition, the International Monetary Fund, the European Central Bank, the International Settlements Bank--all three have done similar studies with a little different approach, and they all reach the same conclusion. What they have concluded is that however you calculate the debt, the United States is already above the line where growth is slowed.
I think it was 2 years ago that the Congressional Budget Office--our nonpartisan group who makes projections for our debt and finances in the future--calculated that this year, 2013, we would have 4.6 percent growth. They predicted a much higher growth last year than the 2.2 percent we got the year before that, and they missed the previous year. They missed 3 consecutive years, predicting higher growth than occurred. And growth means a lot.
White House economic expert Christina Romer has estimated that a 1-percent growth in the economy--a difference between 2 and 3 percent--means you would create 1 million jobs to have 3 percent growth rather than 2 percent growth. That is what growth does to job creation, to wages, the possibility of getting raises, getting more wages, more overtime, perhaps, more bonuses, because the economy is growing. And if it is not growing, our workers are hurting.
So in our vision--I think the members of the Republican side of this Budget Committee--we are united in the belief that we can bring this budget under control and we can balance it.
Now, I have to tell you, the budget Chairman Murray produced tonight does not balance ever. It never balances. They say it is a balanced approach. They even said a couple times that it is a balanced budget, in our hearing. All they were trying to do was use the word ``balance,'' I think maybe--surely not but perhaps--they were hoping people would hear them say they have a balanced budget, which comes nowhere close to balance. With $500 billion, $600 billion, $700 billion of deficit out there for years and years, it never balances. Congressman Ryan made his budget public, openly, a day before he commenced his hearing, and it balances in 10 years.
This is the deal. There is good and bad news in what I am saying. The good news is that we can increase spending every year by 3.4 percent and the budget will balance. The path we are on, the CBO current baseline projects us increasing spending each year at 5.4 or 5.6 percent. So if you reduce that growth instead of growing at that level, you grow at 3.4 percent, the budget will balance. And 3.4 percent is higher than what the Congressional Budget Office says inflation will be. They say it is about 2.2 percent; it will be about 25 percent over 10 years. So you can increase spending over 10 years by 40 percent above the inflation rate, and the budget will balance. You just can't keep increasing it by 5.4 or 5.6 percent.
It is critical for America that we get on the right course. So this is deeply troubling to me. I know we can do this. It is not that hard.
But here is the bad news and why it is painful a bit to get there; that is, because more than half of our budget now is the entitlement programs and interest. As I said, interest on the debt--you have to pay it. You really can't cut the interest except by reducing your debt. And there is no balanced budget in the short-term future, so the interest is going up at a solid rate.
Then you have our big entitlement programs. You have Medicare, you have Social Security, and then you have some large ones--Medicaid, which is a surging program growing at 8 percent a year, projected to increase by 117 percent over 10 years, and then food stamps is considered to be an entitlement. You put all those entitlements together and you have a problem. Those are in law. And ``entitlement'' means that if your income is at a certain level, your age is a certain age, you are entitled to the benefit that the law gives you whether the government has any money or not. Congress doesn't have to appropriate it. The government has to go out and borrow the money if they don't change the law.
So we need a plan to change Medicare, Social Security, food stamps, and some of the other entitlement programs in a way that saves them from the financial disaster they are headed toward, puts them on a sound path, and actually begin to restore the finances of America.
There is still waste, fraud, and abuse in the remaining part of the government. There are still programs that don't do any good for the money they get. There is still money spent on projects that should never have money spent on them from Washington, DC, and they ought to be eliminated. But to slow growth from 5.4 percent a year to 3.4 percent a year, we need to touch a little bit of everything. And spending will still go up. That is the good news. We can still spend more, but we just can't spend it quite at the increased rate we are on.
Some people say: Why don't you balance it now? Why are you talking about waiting 10 years?
We probably should do it sooner than 10 years. But I think it is a realistic appeal to Democrats and Republicans alike--let's get on this path, this path that is not too hard to achieve what would be fabulous for America.
Two things. First, I believe that if we were to pass a budget that would be on the path to balance in 10 years, we would feel some economic growth that we have never felt before. Investors worldwide, investors in the United States, and businesses would feel so much better about our country. I really think that is true. Second, we would reduce the huge debt hanging over us that is already slowing down growth. Those two things we can accomplish.
I don't know where we will go. We will pass a budget out of committee, I am sure, on a party-line vote. Maybe it will pass here on the Senate floor by a party-line vote, and then it will go to conference. I don't know, maybe Speaker Boehner or Chairman Ryan's budget will match up with the Democratic budget out of the Senate, and maybe something good will happen for America and we can reach some sort of agreement. But we cannot tax our way out of this. We can't keep increasing spending, for heaven's sake. We need to reduce the growth of spending to a level that is reasonable and can put us on a path to balance.
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