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Mr. PORTMAN. Mr. President, today, finally, we are going to see the President's budget--so we are told. When we look over the history of the last few decades, never has there been a budget submitted so late. The budget is due in February, as we know. With the exception of the first year of a President's term, when a new President comes in, when we give that new administration some time to put together its own budget, this will be the latest budget submission in decades.
I hope the wait will have been worth it. In other words, I hope what the President submits today is something serious, that helps us address the central challenge of our time. I see there are some young pages on the floor. I also met with lots of young people from the Ohio State University this morning. I told them the same thing I will say today, which is their future is at stake.
It is about our economy, but it is also truly about the future. Are we going to get control of the record debt and deficits and begin to turn our country toward the America that has been something we so much have taken for granted over the past century, which is an America that is growing, that is prospering, where wages are going up, where we have the ability to chart our own course and are a beacon of hope and opportunity for the rest of the world? Or, are we going to continue the slide we are on now, where wages have actually gone down, where America's deficit and debt continue to grow at unacceptable levels, where we risk a financial crisis as we have seen in Southern Europe, in countries such as Greece, places where they did not watch what was happening in terms of their fiscal house.
These countries allowed their debts and deficits to grow to such a large extent that they became as large as the entire economy of those countries. Guess what? As of this year, we are told our debt--our gross debt in this country--is now the size of our entire economy. There are studies out there that indicate that when we get to that kind of a level, there is a big impact on economic growth. We are certainly seeing it, are we not?
We are living through the weakest economic recovery since the Great Depression, whether it is measured in terms of our economic growth or whether it is measured in terms of jobs. We just had a very disappointing report last month on the jobs front showing that we only gained about 88,000 jobs, disappointing all the projections.
But significantly, one-half million people--almost 500,000 people left the workforce. We now have the lowest labor participation rate--meaning that as a percentage of people working or seeking work--that we have had since the days of Jimmy Carter. That is over three decades. In some ways, the policies of Jimmy Carter have been replicated over the last few years in the sense of larger government, more taxes, more regulations.
What we are seeing is, frankly, an economy that is starting to resemble what happened back in the Carter days. That is unacceptable. We need to provide opportunities for Americans who are on that first rung of the economic ladder to get to the second and to the third and to the fourth. Those are the folks who are being hurt the worst with this economic malaise we have with this anemic economic growth, with these job numbers that are so disappointing.
They do relate back to the budget deficit and debt. There is a study by a couple economists named Rogoff and Reinhart that indicate we would have about 1 million more jobs this year alone if we did not have debt at these incredibly high levels.
This year we are told we can expect a deficit of $1 trillion again or more. This is the fourth year in a row. Never in the history of our country have we had debts and annual deficits of $1 trillion. Yet the President's budget, it appears, will not fundamentally change the course we are on. I think from what I have heard from the media reports and so on, it is likely to add about $7 trillion to our debt over the next 10 years, putting our debt that is already at over $16 trillion, again, at a level where it is at the entire size of our economy, where we have unfortunately continued economic doldrums because we cannot get out of this huge overhang of debts and deficits.
It is time to make a change. It is a moment for truth. It is an opportunity to address the challenge. My fear is the President's budget will not be adequate to meet the challenge.
There are some things in the budget I think will be positive. I want to say that. I understand the President is likely to propose a more accurate measure of inflation, when we are talking about how to adjust for cost of living and our programs, including the important and vital but unsustainable program Social Security.
Social Security this year is actually in deficit, meaning that $77 billion is projected to be spent for benefits in Social Security greater than the amount of payroll taxes coming in. So people who say Social Security is OK, it is in fine shape--a $77 billion shortfall is not OK. Also, we are told the disability trust fund will be insolvent, bankrupt, belly up by 2016. That is just a few years from now. More people have gone on disability, unfortunately, than have been added to the work rolls in the last 4 years. Yet this trust fund is going bankrupt in just a few years.
Even if we include all the IOUs in the trust fund for the Old-Age and Survivors Trust Fund, the fundamental trust fund for Social Security, that will be insolvent by 2033. That is not that long from now. Folks who are retiring today, many of whom are likely to live to that point, in other words, for retirees today, they are looking at the possibility of this trust fund going bankrupt.
What happens under law when that goes bankrupt? There is a 25-percent cut in benefits. That is the law. So with this hemorrhaging every year, this year again about $77 billion with these trust funds heading toward insolvency, Social Security does have to be addressed. I commend the President for saying let's use the right measure of inflation. It also happens to affect the benefit side and the tax side. So it actually increases taxes as well because there will not be the same adjustment for the rates for indexing on the income tax side. So there is both revenue gained through this proposal and also there are some savings on the programmatic side because the more accurate measure of inflation is used.
This is a controversial issue among some folks. I understand that. Again, I commend the President for putting it in the budget, as I am told he will. But having said that, this is just one step in the right direction.
Unfortunately, even with that proposal, Social Security will continue to have these enormous shortfalls. On the health care side, I am told the President may make a proposal to reduce some spending in health care. That is a good thing but again not adequate to the task before us. I am told it will be $400 billion. We can argue about where that $400 billion comes from.
But it looks like most of it will come out of providers; in other words, the people who are providing health care to lower their reimbursement at a time when more and more providers are saying, we are not interested in providing care under Medicare and Medicaid because the reimbursement is already too low.
So we need to be careful how it is done. But let's assume we could agree on the $400 billion. What would that mean? That would mean that instead of rising 110 percent over the next ten years, Federal health care expenses would go up 100 percent.
The point is we have a challenge in front of us that requires a much more aggressive approach. It requires us to be honest with the American people. It requires us to tell the American people: things are not going well. We are not turning the corner because these incredible debts and deficits do not enable us to do that. It is a shadow over the economy. It is a wet blanket on the economy today. Unfortunately, for the young people listening today, it is going to affect their futures in very significant ways if we do not address the problem.
We will see what happens with this budget proposal today. I am hopeful it will have more in terms of savings than has been suggested in the media. Those savings that are in there, I think we ought to support, as Republicans and Democrats alike, and then encourage the President to work with us on taking it to the next level, to truly address this challenge.
On the tax side, we are told the President is likely to recommend additional increases in tax. Remember, taxes were increased about $620 billion already this year, just a few months ago. So the ink is barely dry on that huge tax increase--some would argue the largest tax increase in the history of our country. Yet the President is apparently likely to recommend taxes at about that level again, $600 billion or more. Some say it is more like $1.5 trillion, which was in the Democratic one offered on the Senate floor. But I am told maybe it is more like $600 billion. But whatever it is, we have to acknowledge that increasing taxes again is going to hurt the economy. There is no question about it. The question is whether it is appropriate to have a higher level of taxation in our economy.
Let's think about that for a moment. We are told by the Congressional Budget Office, which is the nonpartisan group that analyzes all these budget proposals, that currently we have taxes as a percent of our economy, which is probably how you ought to look at it, at levels in 2015 which would be below our historic average. So in a few short years, we are looking at taxes that they say are 19.1 percent of the economy. What does that mean? Typically, it is about 18.3 percent. So it is higher than the average. We are already, under current law, looking at higher taxes, partly because of the fiscal cliff agreement and the $620 billion in new taxes that were raised over 10 years.
The spending, on the other hand, which is already at levels higher than the historic average--which is about 20 percent, today it is at about 23 percent--is projected to go up and up and up. In fact, over the next three decades, according to the Congressional Budget Office, it goes from 20 percent to, on an average over the last 50 years, about 39 percent.
Then, frankly, they stop counting because they cannot imagine spending at that level because we have no sense of how to get revenue at that level. No one is talking about taxes that would be increased that high. It would be tripling the taxes, at least. So these are issues we need to talk about as a country. How much taxation do we want to have on our economy? How much spending do we want to have? I think what we ought to do is come up with a plan. Ten years from now, where do we want to be? Republicans are calling for a balanced budget. We think true balance means we balance the budget. We stop spending more than we take in. Democrats would like to see more taxes and fewer spending reductions.
We need to come up with something that makes sense for the American people. We need to acknowledge the fact that our issue is not the revenue.
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Mr. PORTMAN. Instead, it is the spending. That must be addressed. I say to my colleagues on both sides of the aisle, let's work together to get America back on track, to solve this problem which, if we do not deal with it, will not allow our economy to prosper. It will not allow America to continue to be that beacon of hope and opportunity for the rest of the world.
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