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Mr. SESSIONS. Mr. President, the President submitted his budget today. It is very late. It was due February 4. It is the first time since the Budget Act was passed in 1974 that a President submitted a budget after the Senate has voted on one and after the House has voted on one and both passed budget resolutions. That was a disappointing event.
The President, as the Chief Executive, as any mayor, as any Governor normally that I have ever heard of, wants to be the one who lays out a financial plan for his city or State to advocate for what would make the State and city better and then encourage the members of the board of directors--the Senate and the House--to evaluate his plan and support it so they can put the country and the State and the city on a sound financial path. Once again, we have had a very irresponsible approach from the President on the question of budgeting.
A few weeks ago, this Senate passed a budget for the first time in 4 years. The law requires that the Senate bring up a budget in committee by April 1. It requires that it be brought to the floor and passed by April 15. This is the first time in 4 years that process has been completed; whereas, every year the House of Representatives has produced a budget, a responsible budget that would put America on a sound financial course.
This year the Senate passed a budget that was irresponsible, did not change the debt course of America, left an annual deficit virtually the same as if we had no budget at all. It did not improve current law. The Senate budget left us with a very substantial budget deficit in the 10th year of the budget.
On the other hand, the House, Congressman Paul Ryan, chairman of the Budget Committee, produced a budget that balances in 10 years. We have heard great complaints that his plan cuts spending too much. Do you know that plan did not cut spending? It allows spending to increase every year for 10 years. It allowed spending to increase at the rate of 3.4 percent a year, which is higher than the inflation rate is expected to be in America. Yet it balances.
The Senate budget, on the other hand, has a 5-percent-plus increase in spending every year, leaving us on an unsustainable debt path, leaving us increasing deficits every year, nowhere close to balancing the budget. That is not the right path.
What happened today when the President produced his budget? It is no better, maybe even worse, than the Senate bill. For example, in his budget it would add, over the 10-year period, $8.2 trillion in new debt to the Nation. We now have already $17 trillion in gross debt. This would add another $8.2 trillion to it; over $25 trillion will then be the debt of the United States. The 1-year interest in 2023, under the President's budget, would amount to $763 billion.
The base defense budget is about $540 billion; $763 billion exceeds Social Security--which is the largest expenditure. It exceeds Medicare in spending. It would be the largest single item in the budget and the fastest growing. It is still assuming relatively low interest rates, which are extraordinarily low at this moment but could surge in the future and would hurt us substantially.
How much is that? We now spend about $3.7 trillion, so $763 billion is a lot of money just to pay the interest. The Federal highway bill today is about $40 billion, a little over $40 billion. Interest on the debt would be $763 billion in 1 year.
Young people, we are indeed borrowing from their future to spend and live high today on the theory somehow it will be paid back in the future by the people there. How will it be paid back, interest of $763 billion in 1 year? This is not responsible. It is an unsustainable course.
Erskine Bowles, who was chosen by President Obama to head the fiscal commission, former President Bill Clinton's Chief of Staff, a successful businessman, he told us in the Budget Committee a couple years ago this Nation is on an unsustainable course. This Nation ``has never faced a more predictable financial crisis.''
What he is saying is that if we do not change the course we are on, it is guaranteed we are going to have a financial crisis and we should avoid that. We have the opportunity to avoid that. We do not have to slash spending, as Congressman Ryan has made clear in his budget. You can allow spending to increase faster than the growth of inflation and still balance the budget. But, oh no, not here, not the President of the United States, not the Members of this Senate, the majority. They say we cannot live with a 3.4-percent increase in spending every year. We will run the risk.
The President said recently he was not setting a balanced budget as a goal. That is absolutely true because his budget does not balance. It never comes close to balancing, has no intention of it balancing ever. They use the words ``sustainable balance,'' but it is not a responsible approach to the business of America. I will talk a minute about some of the dangers of this debt beyond just the fact that interest is going to suck huge amounts of money out of our annual budget that we ought to be using to invest in America.
How do they do it? When you eliminate the accounting gimmicks and honestly look at the budget presented by the President today, over 10 years, the net deficit reduction is only $119 billion. Each year that is about $12 billion in deficit reduction. The deficit last year, 2012, was 1,080 billion--1,000-plus billion, and we are going to average an $12 billion reduction in the deficit under this budget? That is virtually nothing. Properly accounted for, properly analyzed, based on the current law, I am correct in giving you those numbers. It is not an unfair number.
What about this year that we are in, 2013, that will end September 30? Does he cut anything from our spending level this year? No. Spending and debt increases. The debt is projected to increase, between now and September 30, by $61 billion, more than where it would be under current. So it increases the debt this year.
What about next year? Does it increase or reduce the deficit? It increases the deficit again by approximately $100 billion-plus--$100 billion. I believe that figure is correct. I might be incorrect on that figure, but it definitely increases the deficit this year by $61 billion.
Taxes go up by $1.1 trillion--$1,100 billion--in new taxes. So taxes go up $1.1 trillion, on top of the $650 billion in new taxes that were passed in January of this year and on top of the $1 trillion in new taxes passed as part of ObamaCare, the health care reform.
That is another huge tax increase. But we are told not to worry because this is a balanced plan. As we talked about the budget plan that was on the floor--and we had 50 hours of debate, a lot of amendments, a lot of discussion--our colleagues kept using the word ``balanced.'' They refer to their budget, the majority's--Democratic budget that they laid forward, they used ``balanced'' over and over again. I put up a chart. The numbers kept running up. We got to 100, 200 times the word ``balanced'' was used in 15 or 18 hours of debate on their side; ``balanced,'' over 200 times.
My staff went back and reviewed the numbers and it was 230 times. What do they mean by the word ``balanced''? Why did they use the word ``balanced''? Because some pollster somewhere, some political consultant, said people like to hear that. They want a balanced budget.
Their budget didn't balance, nowhere close. So they had several spins on it,--first, they wanted a lot of people who were not following closely to hear the word ``balanced'' and believed they had a balanced budget when they didn't come close to having a budget that balanced. They never said the budget balanced because they knew that was not true. They had deficits every year, $400 billion-plus every year. So a balanced approach was what I think people who kind of kept up with things believed--that we would raise taxes by $1 trillion, we would cut spending by $1 trillion, and this would be a balanced approach. This is the way to reduce our debt and deficit: raise taxes and cut spending. That is the responsible balanced approach to getting our fiscal house in order.
But that is not what the budget did. The budget increased taxes by $1.1 trillion--$1,100 billion--but it increased spending by $964 billion. It did not cut spending at all. It increased spending. Basically, we ended up with only $119 billion in deficit reduction over 10 years--zero, basically, an insignificant amount. So it increases taxes and increases spending. It is the classic Democratic weakness, I have to say: Tax; spend. Tax more; spend more. Don't worry about the deficit.
But somebody needs to be worrying about the deficit because it is a very important matter and we have to deal with it. This morning at the Budget Committee we had a new nominee, Ms. Sylvia Burwell, for the Director of the Office of Management and Budget, one of the most important positions in the entire government. She is a delightful lady and I know she wants to do well. She held a position in that office some time ago under President Clinton, a deputy position, and she had some experience in it, but it is a tough job. We need somebody who can whip these agencies and departments into shape. The OMB is the one who answers to the President. The OMB is the one who says: Mr. Secretary of the Interior, Mr. Secretary of Defense, we don't have that much money. You can't spend that much money. I send your budget back to you. Take another $10 billion, take another $5 billion out of it. They are the heavies. So she is asking for a tough job, no doubt about it.
At that hearing, I talked a little bit about a great concern of mine. My concern is that our debt is so large now that it is pulling down economic growth in America. Let me repeat that. Our debt is so high it is pulling down economic growth, and slow growth means fewer jobs created. The difference between 2 percent growth and 3 percent growth is 1 million jobs, according to Christina Romer, who served President Obama in the White House: So the more growth we have, the more jobs are created. The less growth we have, fewer jobs are created.
We had a disastrous jobs report last Friday. It was terrible and deeply disappointing. What it said was we added 88,000 jobs when they were predicting we would add about 200,000. But more significantly, 486,000 people dropped out of the labor force, had given up finding work--almost one-half million, and less than 100,000 got a job. That was a very dangerous trend.
It comes around to this question: Is our debt so high that it adversely impacts economic growth? Let me explain it this way. The Rogoff-Reinhart study and book that they wrote analyzes debt in America and it calculated it and over the world. They examined economies worldwide. What they found was that when debt reaches 90 percent of the size of your economy, 90 percent of GDP, growth begins to slow. It slows a median amount of 1 percent, on average much more, as much as 2 percent. Growth--GDP growth begins to slow when debt reaches that high a level.
What kind of debt level is it we are dealing with? Many people think, and the President keeps saying, our debt-to-GDP ratio is 77 percent.
We have examined the Rogoff and Reinhart study. Rogoff and Reinhart used a higher figure because they compared countries from around the world, and those were the numbers they had. When the gross debt reaches 90 percent of GDP, we begin to have an economic decline. Our percentage of gross debt to GDP is 104 percent.
I contend and I believe that the projections for growth for the last 4 years have all been higher than the growth we have actually seen. In fact, it has been much lower than projected--even by the President and the Congressional Budget Office. It appears to me that the gross debt figure being over 100 percent is indicative of a slowing growth.
Rogoff and Reinhart are not the only ones who have done studies. Others have done studies as well. Europe has high debt rates. Per capita, we have more debt than any country in Europe and even more than Greece.
There have been studies in Europe. The International Monetary Fund, the European Central Bank, and the Bank for International Settlements all have economists, and they are concerned about high debt in Europe. They have also been analyzing these figures. All three of those, through an independent process of analyzing the impact of high debt on economic growth--studies indicated that high debt slows growth. Well, how much? Looking at each one of those three studies, the U.S. debt is in the range that pulls down growth.
I say to my colleagues today, please be aware that there is a cost to borrowing and spending and adding debt.
The budget the President submitted today would add $8.2 trillion in debt. It would take us from $17 trillion to $25 trillion in debt. Even with a growing economy, we would still remain well over 90 percent GDP to debt, and that is an unacceptable figure.
It is deeply disappointing that we do not have leadership in the White House that would lead us to get off of this path.
Mr. President, I see the majority leader is here. I know he has extraordinary duties and challenges in his busy life, and I will just wrap up and say that I am disappointed in the President's budget. It does not change the debt course of America in any way. It is not a responsible plan for the future. It does not balance the budget ever and has no intention of ever balancing the budget. All he talks about is some sort of sustainable debt course. We cannot continue on that course, as Mr. Erskine Bowles, his own fiscal commission chairman, has told us.
I yield the floor.
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