BREAK IN TRANSCRIPT
Mr. JOHNSON of Wisconsin. Madam President, I was allocated 15 to 20 minutes. I will try to keep it to 15 minutes to yield at the top of the hour.
BREAK IN TRANSCRIPT
Mr. JOHNSON of Wisconsin. Madam President, I ask that my time be used against our allocation on the resolution.
I wish to commend the Senator from Pennsylvania, who is absolutely right. I supplied the medical industry for over 31 years, and the medical device tax will do great harm to medical innovation.
I also wish to commend both the Senators from Florida and Pennsylvania about their great points on the importance of economic growth and how important it is that we concentrate all of our efforts here in Washington on economic growth.
I truly believe that every Member of this body, people serving in Congress, share the same goals, or the same goal: We want a prosperous America. We want every American to have the opportunity to build a good life for themselves and their family. But often folks on the other side of the aisle accuse Republicans--conservatives--of conducting a war on women or a war on the middle class. Nothing could be further from the truth. I will tell my colleagues what is the truth. It is that with all of our deficit spending here in
Washington, we are conducting a war on our children. Fortunately, I do not know of a parent or parents who would willingly drive up their own personal debt, who would max out their credit cards with absolutely no intention of ever paying those debts off, but fully intending to pass those debts on to their children and grandchildren and great-grandchildren. Again, fortunately, I don't know anybody who would do that. Yet, collectively as a Nation, that is exactly what we are doing. We are mortgaging our children's futures.
I ask all Americans to please consider what we are doing in terms of robbing future generations of the prosperity and the heritage and the type of opportunity that we should be handing over to them.
An awful lot of people don't quite understand the connection between our high levels of debt and economic growth. By the way, it is economic growth that actually strengthens middle-income Americans. But if we think about our own personal situations, if we in our own family budget have driven our debt levels up to the point where creditors are calling us all the time, how are we going to grow our own personal economy? In other words, how can we increase consumption when all of our extra dollars are going to pay off our debt, pay our creditors? We are under a great deal of pressure. The answer to the question is a person can't grow their personal economy, they can't grow their own personal consumption. That same economic fact applies to a nation as well. That is why these high levels of debt are harming economic growth and harming the very people all this government spending is purporting to try and help.
One way to take a look at this in terms of the harmful effect of all of the regulation, all the government debt, is economic growth. The fact of the matter is, on average, after 14 quarters, the American economy has grown, after post-World War II recessions, by 19.9 percent. Under Ronald Reagan, our economy grew 20.1 percent in the first 14 quarters. Under this President, our economy has grown by only 7.5 percent. Again, I would argue an awful lot of that has to do with regulations, but an awful lot of it has to do with the fact that we have increased our debt to unsustainable levels.
It is scaring consumers. It is scaring business people away from investing in capital and growing their businesses.
As Republicans, as conservatives, we want every American to pay their fair share. We actually want a balanced approach to deficit and debt reduction. We want more revenue flowing into the Federal Government, but we want to increase revenue the old-fashioned way: by growing our economy.
Just a couple of quick little facts. Even with the meager economic growth we have experienced from 2009 to 2012, revenue has increased to the Federal Government by a total of $344 billion per year. If we returned to an economy such as we had in 2007, when revenue to the Federal government was 18.5 percent of our economy--it was pretty close to the 50-year average--that would add another $435 billion per year of revenue.
The tax deal, the "punishing success'' tax increase that was part of the fiscal cliff, supposedly will raise $41 billion in the year 2014. So $41 billion versus $435 billion is a tenth as effective. The problem with that "punishing success'' scheme is it puts at risk the very growth that is far more effective at raising revenue.
So how do we get our fiscal house in order? Well, we actually have to put our Nation on a glide path toward a balanced budget. We have to return that level of certainty. Global creditors have to be able to look at the United States and say, I think they are getting this situation under control. The only way we can do that is by passing a budget in this body that actually shows a glide path to balance.
Of course, that is not what the Democratic Senate budget resolution will do. It never balances. As Senator Toomey was speaking about, we have to take a look at that first year. In comparison to the CBO estimate, it actually increases spending by $100 billion. It would increase our deficit by $75 billion. That is the primary thing we have to take a look at because these budget resolutions are only about as good as the paper they are written on, so we have to look at that first year.
The other point I want to make in terms of this budget resolution is the claims in terms of deficit reduction are patently dishonest. The claim to reduce the deficit by $1.85 trillion in comparison to the CBO baseline is not true. The only way we get that is by comparing apples to oranges. If we adjust the CBO baseline--for example, the $1 trillion--it counts in more spending, or the $300 billion of Hurricane Sandy extended spending, or the additional $200 billion of interest. If we compare apples to apples, this budget at most will reduce the deficit by $300 billion to $400 billion. Again, what we have to take a look at is what it does in that first year, which is actually increases the deficit and increases spending.
This is basically not an honest budget. So my first amendment that I will be offering is a simple amendment. It would establish a point of order subject to a 60-vote waiver or appeal that simply requires a balanced budget in the year 2023. Pretty reasonable. I think the American public actually expects us to live within our means far before that date, but this would be a responsible glide path. I think it is an eminently reasonable amendment, and I certainly hope my colleagues here in the Senate will support a very commonsense approach to providing some level of fiscal discipline to our Federal situation.
The second amendment I wish to offer has to do with the financial situation of States and local governments. Far too many cities are already going bankrupt. We have a chart here that shows a number of cities that have already declared bankruptcy and are going through that process. I think it is extremely important that we here in Congress put States and local governments on notice that they cannot come to the Federal Government looking for a bailout. They need to get their own fiscal house in order. We are not picking on anybody, but it is amazing when we take a look at the unfunded liability that some of these State and local governments are facing right now.
The city of Chicago, for example, has an unfunded liability per household of close to $42,000. I said $42,000 per person. New York City is about $39,000, and San Francisco is about $35,000.
The point of this amendment is to put State and local governments on notice that the Federal Government will not be here to bail them out. They need to get their own fiscal house in order.
The third amendment I intend to offer has to do with recognizing the truth of the situation with our entitlement programs. At the current level, at the current path, neither Social Security nor Medicare is sustainable. So this amendment is also a very simple amendment. It establishes a point of order that requires in any budget resolution that we reform both Social Security and Medicare to create a 75-year solvency. Again, I think that is pretty reasonable. Let me describe why I think it is so important. I frequently hear all kinds of people claim Social Security is solvent to the year 2035 or the year 2038. It is a moving target. Let's take a look at the true picture in terms of the Social Security financial balance sheet. This comes right from the Social Security Administration. This is looking ahead to the year 2032, a mere 20 years' worth of deficits.
It is true that Social Security actually was running surpluses for decades. It built up a trust fund of--we will talk about that later--about $2.5 trillion, $2.6 trillion. But in 2010, that situation turned around. Now Social Security is paying out more in benefits than it is taking in, in terms of dedicated revenue to the payroll tax. Over the next 20 years, that total cash deficit will equal $5.1 trillion.
How could anybody, looking at these facts and figures, possibly claim Social Security is solvent? Well, it is because of the fiction--and it is fiction--of the Social Security trust fund. I have a couple of quotes here from the Office of Management and Budget. Talking about the Social Security trust fund, they say:
These balances are available for future benefit payments and other trust fund expenditures, but only in a bookkeeping sense. The holdings of the trust funds are not assets of the government as a whole that can be drawn down in the future to fund benefits. Instead, they are claims on the Treasury.
In other words, they are claims against the Federal Government.
The existence of large trust fund balances, therefore, does not, by itself, increase the government's ability to pay benefits. Put differently, these trust fund balances are assets of the program agencies and corresponding liabilities of the Treasury.
In other words, we have assets worth $2.6 trillion, we have liabilities of $2.6 trillion, netting to zero.
One of the analogies I use to describe the trust fund is very similar to this: If a person has $20 and spends it--by the way, this money is spent; it is gone--and then that person writes him- or herself a note for $20 and stuffs it in their pocket and says, Hey, I have 20 bucks, they really don't. They have a promissory note they will have to give somebody else to purchase so they can have the real $20 to spend. That is basically what we have in the Social Security trust fund.
It does exist. It is just worth zero.
But here, ladies and gentlemen of America, as shown in this picture, is the Social Security trust fund. It is a file cabinet. It is locked. That is kind of funny because they are actually nonmarketable securities, but there you go. That is $2.6 trillion worth of value that supposedly makes Social Security solvent to the year 2035. It is a fiction. It is false. And until everybody here in Washington starts truthfully describing the extent of our problem with not only Social Security but also Medicare--I was part of that group of Senators who had the privilege of having dinner with the President a couple weeks ago. I found it very interesting that President Obama accurately described the problem in reforming Medicare. He said the problem is that Americans pay in $1 but they get $3 worth of benefits. He also went on to say we have a problem because most Americans do not understand that.
Well, today I am asking the President, I am asking Members on the other side of the aisle to join with Republicans to honestly describe the problem to the American public. You do not solve a problem until you first define it and then secondly admit you have the problem. We have severe problems with Social Security, with Medicare, with other mandatory spending, with our budget. Until we come to terms with that, until we are honest with the American people--stop pulling the wool over their eyes--we have no chance whatsoever of solving these very severe problems.
So with that, I yield back my time.
BREAK IN TRANSCRIPT