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Increasing the Statutory Limit on the Public Debt

By:
Date:
Location: Washington, DC

INCREASING THE STATUTORY LIMIT ON THE PUBLIC DEBT

Mr. KERRY. Mr. President, since December 2002, the Treasury Department has made three requests to Congress for an unspecified increase in the debt limit. Last year, the administration asked for a $700 billion increase, but Congress wisely trimmed it to $450 billion. The $984 billion increase we will pass today will be the largest increase in the debt limit ever, and it is twice as high as the average for the last five increases. This level of increase represents about $3,400 for every man, woman and child in the United States—or more than 17 times what the median American family will receive in tax cuts
under the conference agreement passed earlier today by one vote.

We need to be clear about a few things here in the Senate. The economy is growing very slowly, and every American has experienced the current slowdown in very personal ways: 2.5 million jobs have been lost, long-term unemployment has skyrocketed; lifetime savings have been wiped out by greed, bad judgment, and criminal activity; personal debt has increased and bankruptcies are up; and the stock market has plunged more than 30 percent. Record budget surpluses have turned into deficits as far as the eye can see—nearly $500 billion this fiscal year alone when Social Security is excluded, the largest deficit in history. We have seen the weakest level of economic growth and business investment in 50 years. We are spending the entire Social Security surplus in every year of the President's budget plan and failing to make necessary investments in education, infrastructure, and homeland security. Yet we have the money to drastically cut the tax on stock dividends, giving millionaires an average annual tax cut of about $90,000. It makes no sense given the current state of the economy and the world. We are governing based on ideology rather than pragmatism.

President Bush, who inherited large and rising surpluses totaling $5.6 trillion over 10 years, likes to say that the change in the budget picture—and frequent requests for increases in the statutory debt limit—are a result of a slow economy and September 11. Those factors undoubtedly play a role, but every single independent analysis shows that the largest factor behind the long-term change in the budget outlook is the President's tax policies. The rising deficits and debt that will result in higher taxes on our children can be laid squarely at his feet, because most Republicans in Congress are too afraid to say no to this President.

If there are any doubts, just add up the numbers. Not including interest, President Bush has proposed nearly $3 trillion in tax cuts over 13 years since taking office. It is worth pointing out that more than half of this total—$1.63 trillion—was proposed this year, after the budget returned to perpetual deficits. Adding interest, the total jumps to $3.8 trillion. What happened to the promise not to spend the Social Security surplus? We are borrowing from our children for every dollar of these tax cuts—tax cuts that will go predominantly to those earning more than $200,000 per year. And the tax cut we passed today, because of its gimmicky phase-outs that future Congresses may not allow to happen, is really a trillion-dollar tax bill. The Speaker of the House admitted as much. When do we admit that we are cutting taxes too much? What happened to the Republican Party of the 1980s, that railed against deficits and insisted on balanced budgets? What happened to the true conservatives, those who look to cut spending and taxes in order to stand for "less government"? Where is the principle, when almost every Republican in the Senate votes for every spending increase and every tax cut? We should call it what it is: borrow-and-spend economics. And our kids will pay for it for decades to come.

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