Ms. STABENOW. Would the Senator yield for a question?
Mr. CRUZ. I am happy to yield to my friend for a question.
Ms. STABENOW. Through the Chair to the Senator from Texas, I am wondering if his motion includes the full funding of the VA medical system, which is a completely government-run, government-controlled health care system?
Mr. CRUZ. I thank my friend for that question. As I said, I would readily support legislation fully funding the VA, because the VA is a vital government system. It is a promise we have made. It is unrelated to ObamaCare. My principal complaint this past week has been that the Democratic majority in this body is holding programs unrelated to ObamaCare hostage in order to force ObamaCare on everyone. We agreed for active-duty military.
Ms. STABENOW. Mr. President, if I might, just to clarify so that I understand, because the Senator from Texas has, in fact, made the ending of a private sector competitive health care system for up to 30 million Americans part of what he wants to stop, I wanted to be clear that the fully government-funded, government-run, with government doctors system through the Veterans' Administration is something the Senator is advocating that we continue to fund through the Federal Government?
Mr. CRUZ. I thank my friend from Michigan for that question. Yet again, the answer is yes. I believe we should fully fund the VA. The two questions I would promulgate----
Mr. REID. Regular order.
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Ms. STABENOW. Madam President, first I apologize for the hoarse voice. I have been recovering from a cold. But it is important for me to have the opportunity to speak on behalf of the people from Michigan about what is happening, as everyone at home is scratching their head trying to figure out why, in the greatest country in the world, we have seen government services now shut down and why there are those who think it is all right for us not to pay our bills and default on the full faith and credit of the United States of America, and why folks aren't willing to just open the government, pay our bills, and then negotiate.
In fact, we have been negotiating. We have negotiated on a lot. I am proud to say we negotiated a successful bipartisan farm bill not that long ago, a real deficit reduction proposal which actually passed the Senate with over a two-thirds vote. So we certainly are willing to negotiate.
Our leader Senator Reid was willing to negotiate and in fact did negotiate with the Speaker of the House. As we all know, the Speaker called him in September and indicated he would like to see a 6-week extension of the current funding levels for the government while we were negotiating something more broadly on a budget. It was at a funding level which we don't believe is the right one in terms of investing in education, innovation, and creating jobs, but it was 6 weeks. After talking with us, our leader said that in the interest of negotiating and compromising, we would be willing to do that.
As we know now from Republican colleagues in the House who said that was the intent, unfortunately the Speaker could not follow through on the agreement he had negotiated.
That is because a minority of the minority in the House that is extremely intent on--and in fact has successfully achieved one of the goals they ran on--shutting down the government. But we have negotiated.
We also have negotiated on the big picture. We know that a few years ago with the Bowles-Simpson Commission, with others, that $4 trillion in deficit reduction over 10 years was picked as an important goal to be able to rightsize and bring down our long-term debt. The good news is that not only have we cut the annual deficit in half, but of that $4 trillion we have already agreed to $2.5 trillion of that in deficit reduction over the next 10 years. So over half of that has already been achieved.
When my friends on the other side of the aisle act as if nothing is happening, I have to say the deficit has been cut in half and, second, over half of a long-term goal on the debt has been achieved. We need to keep going. We don't need to shut down the government to do that. We do not need to default on our debts as the greatest country in the world to do that. We just need to work together to do that. That is why we would say we need to open the government, pay our bills, and continue to negotiate. Let's negotiate, but it is a continuation of negotiating.
In fact, weakening the full faith and credit of the United States of America--think of that, the greatest country in the world, the full faith and credit of the United States of America, that has been the highest standard in the world, when you say the full faith and credit of the United States of America--right now there are folks playing Russian roulette with that who are willing to weaken that and undermine our recovery, if not take us over another horrible economic cliff and cost billions of dollars for American consumers.
Given the seriousness of it and the fact that we are very close to having that happen and the fact that we are the world's leader, 30 years ago President Ronald Reagan warned about the consequences of the richest, most powerful nation in the world suddenly running out of money to pay its bills. He said:
The full consequences of a default--or even the serious prospect of a default--
As people are flippantly discussing these days--
by the United States of America are impossible to predict and awesome to contemplate.
Denigration of the full faith and credit of the United States of America [would cause] incalculable damage.
This is President Ronald Reagan.
President Reagan reminded Congress:
Never before in our history has the Federal Government failed to honor its financial obligations. To fail to do so now would be an outrage.
The Congress must understand this and bear full responsibility.
We know if the United States defaults on its obligations, if we don't pay our bills, the result will be a financial crisis worse than what we went through in 2008. Frankly, I don't want any part of that. I know what happened in Michigan in 2008, 2009. I know our Presiding Officer, the distinguished Senator from Massachusetts, understands that as well, what happened to families and businesses all across America. To even come close to that is irresponsible.
If that were to happen, 57.5 million Americans could very well not get their Social Security checks on time.
My mom called me the other night. She is 87 years old, doing great. She said I was at church on Sunday and my friends were asking: That couldn't really happen, could it?
I didn't know what to tell her. No, Mom, it should not happen. It has not happened before. But I can't promise, given the words of people on the other side of the aisle who believe it is no big deal or of what is being said by the Speaker and by the tea party Republicans in the House--I couldn't absolutely say to her don't worry about that.
Madam President, 3.4 million veterans might not get their disability benefits on time. We have just been debating whether we should make sure, as we must, that the VA is fully funded. Yet next week if we do not back up the full faith and credit of the United States of America, veterans could very easily be in a situation of not getting disability checks or seniors' Social Security, Medicare. Children, families, communities, businesses, farmers, that is who will pay the cost of this default. Middle-class families will pay the cost of this.
It will be catastrophic in terms of interest rate increases and loss of jobs if we do not stand together as Republicans and Democrats in the Congress of the United States and back up the full faith and credit of the United States of America.
According to Goldman Sachs, if we adopt the ``China first'' model of only paying the interest on our debt, which has been proposed by the House, where we pay some of our debts but not others, the drag on our economy would be massive. They estimate we would lose 4.2 percent of our gross domestic product. To put that in perspective, when the recession hit bottom in 2009 we lost 4.1 percent of GDP, from the peak in 2007. That was the worst recession in our lifetime.
This is not a game. This is serious.
Even more concerning to me is that this would drive up borrowing costs for families, for small businesses, for our manufacturers who are back on their feet now and roaring and bringing back our economy. For every 1-percent increase in interest rates, we are told Americans will pay $75 billion--$75 billion lost to the economy. When Republicans in the House took us to the brink of default 2 years ago, which resulted in the lowering of America's credit rating for the first time in history--even though we didn't default, just talk of default ended up lowering our credit rating for the first time in America's history--it cost the average family buying a home at the time about $100 every month for the life of their mortgage in higher interest rates; $100 a month for the life of the mortgage. That is outrageous and irresponsible.
That same default crisis in 2011 cost taxpayers $19 billion in additional interest when our credit rating fell and interest rates went up. Where did that $19 billion go? Right back on top of the national debt, not only adding to the national debt, it threatens to erase America's retirement savings. In 2011, over $800 billion was lost in retirement accounts after the House Republicans played politics with the full faith and credit of the United States of America.
If I might just take 1 more minute, I ask unanimous consent.
The PRESIDING OFFICER. Without objection, it is so ordered.
Ms. STABENOW. This time, if we actually default, the fall could be even worse and the damage could be permanent. This is the greatest, wealthiest, most powerful country in the world and it is outrageous that this would even be considered.
I ask unanimous consent to have printed in the Record a letter from the National Association of Manufacturers, expressing their deep concern about the possibility of default.
I will share, finally, remarks of the chairman of AT&T.
It is unthinkable that the United States could default on its financial commitments and it would be the height of irresponsibility for any public official to consider such a course.
Our country deserves better. The people of this country deserve better. We have to do better for them.
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Ms. STABENOW. I yield the floor.
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