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Public Statements

America's Debt

Floor Speech

By:
Date:
Location: Washington, DC

Mr. ROKITA. Mr. Speaker, I rise today to talk about the most important issue of our time in this country, and really the world.

We are nearly $17 trillion in debt and $100 trillion in debt in unfunded promises to our children and grandchildren that they stand to inherit if we fail to act. This is an issue that my colleagues and I on the Budget Committee take very seriously, and I know that most Members of this body take very seriously.

To that end, we view our role as not only legislators, but educators. And in our great State of Indiana, I talk about this issue almost in a nauseating fashion to some, but I think it's very important that we as people, as Americans, Mr. Speaker, understand what the situation really is because at the end of the day, I am very optimistic that when given the facts, the people of this country, as President Reagan observed several years ago, will right the ship, will do the right thing. We'll start to live within our means again, and they will take control of the situation.

I don't think ultimately, Mr. Speaker, that the reform that is needed to solve this problem will actually start or come from this floor or the floor of our colleagues that we have on the other side of the rotunda. The reform and the solution to this problem will come from Main Street, will come from the farm fields and the businesses and the kitchen tables of the great patriots across this land.

So it's in that vein, Mr. Speaker, that I want to make a presentation here on the floor of the House. I also make this presentation because of the current situation that we're in with regard to our budgeting process.

As I speak with you here on the floor tonight, Mr. Speaker, we have a budget that passed the House of Representatives, we have a budget that passed the United States Senate, and after 2 months of being late, as it has been nearly every year that this current President has been in office, we finally have a budget from our President.

The main difference--well, there are several differences--but the main difference I want to point out tonight between these budgets is that the budget that came out of this House is the only one that balances. Why is that important? It's important because if you never present and pass a budget that balances--and let me remind you that a balanced approach isn't a balanced budget. Someone's opinion of a balanced approach, like our President's, doesn't mean that the budget balances, no matter how many times he or House Democrats say that.

The reason it's so important that a budget balances is because it shows your intent; it shows your intent to finally start paying off the debt. Because like everyone knows, you can't possibly start paying nearly $17 trillion in debt until you get to a balanced budget so that you have a surplus, hopefully, and then, in fact, use that surplus to pay down the debt.

So if you present and pass a budget that never balances, you intend by what you're saying and doing there to never pay off the debt. And I would submit that when you do that, you can't call it debt any more because what you're doing is stealing. You're stealing from future Americans. You're stealing from the children of tomorrow, children that don't exist yet and therefore have no voice in the matter because they can't vote. What an easy target they are.

So when you pass and you vote for budgets that never balance, that's what you're doing, you're stealing. Let's call it what it is, Mr. Speaker.

Now, I want to be clear, this isn't a partisan set of remarks because it's not a partisan issue. In fact, it's very bipartisan, and this chart here shows that.

Going from beyond Kennedy--but I just started tracking from President Kennedy on--every one of our presidents, who represented both parties since the 1960s, have accrued increasing levels of debt. Even Mr. Clinton, with the help of this Republican House who had technically balanced budgets, I think, four times in his 8 years, still overall ran up a very slight debt.

I want to be clear that our debt problems did not start on January 20, 2009, with the inauguration of President Obama. But as this chart also shows, our debt problems have been increasingly and drastically exacerbated since that time, and we need to get this under control.

Let's take a look at exactly how much we're borrowing and what's causing this debt. And I'm grateful tonight for the help of my staff member, Zach Zagar, who is on the floor with me to help get me through these slides a little bit quicker.

We are borrowing 31 cents of every dollar the Federal Government is spending. Now, I'll admit to you, Mr. Speaker, that has actually improved. When I started making this presentation about a year and a half ago, 2 years ago, we were borrowing 42 cents of every dollar we spend. But thanks to some good revenue forecasts and especially leadership right here in the House of Representatives, we've already been able to make some sensible cuts and rein in spending that has decreased some of that spending. But again, until we stop borrowing, we cannot begin to start paying down this debt: 31 cents of every dollar, Mr. Speaker.

Let's also be honest. We've been in debt before as a country, and the question then arises, why should we worry so much now. Well, we should worry now. Let me explain why we should worry by going back to the last time that this country was in this kind of debt, when our debt level, if you include the Social Security trust fund, reached nearly and over 100 percent of gross domestic product. That time was right at the end of World War II.

So what makes our situation so different now than the last time we were in so much debt? Well, number one, the cause of our debt back at the end of World War II was much different than now. The cause of our debt back then was, in fact, the war, and it was a one-time event. One way or another, even back then, we knew it was going to end. If it ended well for us, if we won, which we did, we would have a good economy coming out of that war, we would become creditor to the world and we would begin paying down that debt. In fact, that's exactly what happened. If we had lost World War II, I guess it wouldn't really matter how much debt we had because we would all be speaking perhaps a different language. This country might not even exist.

The drivers of our debt today, however, have absolutely no intention of ending as they currently stand. I'll get to that in a little bit. The drivers of our debt today are the social entitlement programs and the interest that we continually owe ourselves and other countries.

The second difference between the last time that we had this level of debt and now is who we owe this debt to. Back then, during World War II, we owed the debt to ourselves, nearly 100 percent. Remember the war bond posters, Mr. Speaker? Remember when Americans stood up, bought those bonds and we financed World War II?

Increasingly, as this chart shows, our debt is owed to other countries, the largest of which right now is China. It's getting to the point where the debt we owe to other countries is nearly half our total debt. So we increasingly have creditors who, by definition, don't have our best interests at heart, not like we did as individual Americans buying those war bonds, and that's a problem. It's such a problem that it has become a national security issue, and that needs to be addressed as well.

Think about this, Mr. Speaker: with the interest that we pay China alone on the credit they issue to us by buying our Treasury bonds, et cetera, China with that interest payment every week can buy three new joint strike fighters if we let them, if those were in production. They can finance their military operations just on the money we give them. And in this increasingly complex world, changing every day, new threats, new risks, that is a particularly vulnerable place to be, and we are doing it to ourselves because of our refusal to balance budgets and otherwise live within our means, to put more on our plates now at the expense of our national security and at the expense of the children of tomorrow, people who don't exist yet and therefore have no voice in the matter.

I have to tell you, it is hard for me even as a Budget Committee member to visualize what $17 trillion really looks like, what it means; and I certainly can't understand or visualize what I said earlier about the $100 trillion that's on the way, specifically over the next 50 to 75 years, representing the promises that we've made under the social entitlement programs. That's what's coming. In fact, our country will be bankrupt, I'm sure, and we'll be off the world's reserve currency long before we reach the $100 trillion, but it's coming and it's real.

So what I like to do is take actual budget numbers and break off eight zeros from them so I get them in a more manageable fashion. The President has said, I've heard him reference the Federal Government as some kind of Federal family. Well, I don't know if I'd take it that far, but let's assume for purposes of this debt discussion that the Federal Government acted as a family. Here's what our Federal budget picture looks like.

Our annual family income, $25,000. Those are the tax receipts, the revenue we get from the people of this country, their property that we confiscate to run the Federal Government, some of it necessary, most of it increasingly not necessary. Our annual family spending, $36,000. That is eight zeroes lopped off, a rounded real number, leaving us an annual debt that we have to put onto one family credit card of $11,000.

So we're a family. We're making $25,000. We're spending $36,000, a deficit of $11,000. It goes on a credit card, the one family credit card that already has a balance of $168,000. Future purchases on that credit card, the promises that we made to the wife and the kids over the years, if they were to be put on that credit card now, $1 million.

But wait a minute. Remember I said borrowing has gone down. We're spending a little less. We have this drastic, incoherent, ham-fisted--whatever the adjectives we're hearing lately--sequester that simply cut 2 percent out of Federal spending. Gee, cutting 2 percent out of Federal spending, can you imagine what the other 98 percent of government does if all this stuff is supposed to happen on just 2 percent? Anyway, we save some money. In this example, it would come out to $310.

Now I will give the microphone, I will yield to any gentleman or gentlewoman, Member of the House, here tonight that wants to get up here and defend this and defend these numbers. I didn't think so.

That's all right, Mr. Speaker. I will note for the record that there are very few Members here.

My next chart, this is what your Federal Government spends its money on. Now, I took the liberty of taking two pieces of the pie and pulling them out. The reason I did that was because I want everyone to understand that when we vote for budgets, the line items we vote on really only represent those two pieces of the Federal spending pie. So our votes every year when we pass a budget only concern spending, quite honestly, on those two pieces. That's non-defense discretionary and defense discretionary. That's why we call it discretionary, because we actually have discretion on dialing up defense or dialing it down, or some of the non-defense programs, like the 167 agencies or so that are under the discretionary budget. That would be the Department of Energy, Department of Education, and all of the ones in between.

But if you look at this, Mr. Speaker, most of the pie is mandatory spending, meaning it doesn't really come through the normal budget process because it can't, because these were promises that were made in the underlying law. They cannot be changed unless you change the underlying law. I can't, as Representative Rokita, decide how much Americans who qualify for Social Security will get in their Social Security check. The law sets that out. I don't get to decide in a budget document what services you get under Medicare. That's set in the underlying law. Medicaid, the same way.

Of course, interest is a contractual agreement. We agree to pay interest to our bondholders. That can't be changed. And then a smorgasbord of other mandatory spending rounds out what really is over two-thirds of our spending. So two-thirds of your Federal spending is on autopilot. It's not adjusted year to year. It's not as simple as just cutting or lowering budget figures. If we're going to get out of debt, in order to lower this debt, we have to reform the underlying causes of our debt, and that's our social entitlement programs.

Now, about this time, many Members are about to get up and claim 30 minutes in response on behalf of their constituents who say, Wait, I paid into those social entitlement programs. That's not the government's money; that's my money. Week after week, out of my paycheck, money went into Medicare and money went into the Social Security account, for example. I paid in; therefore, I get out.

I want to acknowledge here on the floor of the House of Representatives that that is true. You have paid in. We have paid in. We continue to pay in. But it's not the whole truth, as this chart indicates. You see on average, if you made $71,000 a year, you and your spouse through your working lives, you will have paid in--and this is an example for Medicare--about 35 percent of what you're getting; 35 percent of what you're getting. And that 65 percent difference, quite honestly, is paid for by the children of tomorrow, almost all of it. Again, they don't have any voice in the matter because they don't exist yet.

So the moral question that we have as a country is: How much more does a future generation have to pay so we can have more on our plate now? And when you have budgets that do not balance, you are happy to say, when you vote for budgets that don't balance, you are happy to say that we're letting them pay the load. And that's different. That's the first time, this is the first time in American history as I know it, that we have basically said, We don't care. We don't care that our future generations, that the next generation, will be worse off than us at our very expense. But that's exactly what we are doing when we don't pass balanced budgets.

Like I mentioned earlier about the $100 trillion example, it's not just the current debt load that we carry; it's what's coming. And that's what is depicted by the red line here that you notice is going nearly vertical.

It's on a trajectory that we may not be able to arrest, that we might not be able to bend back down again if we don't get ahold of it now.

This is what happens when 10,000 people a day retire into programs that go unreformed. And that's a problem. That's a big problem. And that's why it's so important to get ahold of this problem now, to make these reforms now, before we turn into Greece. And in our case, when that happens, it will be a lot worse, not just for us but for the entire world.

These figures do not lie. By the way, most of these figures that I present tonight don't come from Todd Rokita's office. They come from the Budget Committee. The good Democratic members of the Budget Committee don't disagree with the numbers. I imagine there's disagreement, and we have seen disagreement certainly on the committee about how to solve the problems that the data present. I am increasingly shocked and awed to hear Members on the other side say that there really isn't a problem with the data, with the issue that the data present, but nonetheless the data is the data and the data does not lie.

There have been offered some false solutions, I would say, to our problem of this debt. I would quickly like to dispel some of them, and I'd like a point of order asking the Speaker how many more minutes I have.

BREAK IN TRANSCRIPT

Mr. ROKITA. Thank you, Mr. Speaker.

The first false solution: We need more tax revenue; we're not taxing ourselves enough, and only if we tax more, especially from the, quote-unquote, rich--those who haven't paid their fair share, quote-unquote--we'd solve this debt problem.

Let me address that for a minute. This is one of the slides that doesn't come from the Budget Committee; it comes from the IRS. I have no reason to dispute it. I saw it in The Wall Street Journal a couple of years ago. The bars represent where the money in this country is, the taxable revenue, where people's property is, and it's divided along income groups. If you look at the far right of this chart, you'll see that the furthest right bars represent Americans who have taxable revenue of anywhere from $1 million to $10 million. And the largest, the highest bars, where the middle is, represent Americans who have taxable revenue of anywhere from $75,000 to $500,000 a year. The point of this slide is, you can take all the millionaires' money if you wanted, really make them pay their fair share, take a hundred percent of what they earn, and you'll have to assume two things: that they would continue producing, which of course they wouldn't, and you'd have to assume that they would continue living in the country, which I assume they wouldn't. Look at the mass exodus going on in France now with a 75 percent marginal tax rate.

But let's assume for the sake of discussion that you take a hundred percent of what they earn. You're not going to get enough revenue to pay off the debt. There are not enough Oprah Winfreys--or when I'm in Lafayette I like to say Purdue football coaches--to pay off this debt. If people are saying, like our President, that more revenue is needed to pay off the debt, they're coming for the middle class. They're coming for where the property is, where the money is, and that's in people who make anywhere from $50,000, $75,000, to $500,000.

The next slide reflects another false solution: let's just get rid of all that foreign aid. And I'm the first to say we've really got to examine who we give foreign aid to. I would say this, also: we don't give foreign aid necessarily to other countries so that they can thank us. We do it because there's a strategic reason to do it, like our national security, but let's assume we cut out all foreign aid. You're only addressing about 2 percent of our Federal spending. This is not something that you can solve the debt problem with.

Some say let's cut out defense. I will also be the first to say, there is tremendous waste, fraud and abuse in the military, so much that they can't even be audited, not because there's a statute preventing it; they are so big and so sloppy and so leaderless in this fashion that they cannot get themselves to an audit table, and that is wrong. We should be maximizing every dollar we can to our warfighters who protect us, and we're not doing that now.

But, Mr. Speaker, having said that, defense--if we had no defense, if we had no military--would only be a 20 percent cut in our overall spending. Not enough to balance the budget. Not enough to solve this debt problem.

We have several solutions to this, starting with the House Republican budget: reform Medicare, reform Medicaid, reform Social Security, not cut people who are in or on these programs right now because we don't have to. We have the luxury if we act now to reform these programs now, Mr. Speaker. You can go to rokita.house.gov to learn more. Only if you were born in 1958 or after are we offering a restructured program so that it's around for you, so that it's around for all Americans, future generations, and so that we don't have to hurt the people that are on them now.

I'm out of time, Mr. Speaker, to go through all those right now. I'd like to come back at some point and pick up that discussion.

With that, I yield back the balance of my time.


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