Continued Financing Of Government Operations
Floor Speech
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Mr. ENZI. Mr. President, we have debated whether to increase the amount of money the Federal Government can borrow at the same time that we created a massive new entitlement program that will cost the Federal taxpayer trillions of dollars over the coming decade.
Sponsors of the Reid bill have claimed that their bill would reduce the deficit and extend the solvency of the Medicare trust fund. We heard today from the nonpartisan Congressional Budget Office that these claims are false.
In reviewing the Reid bill, CBO stated that claims that the bill would both improve the government's ability to pay future Medicare benefits and financing new spending outside of Medicare would double count a large share of those savings and overstate the improvement in the government's fiscal position.
My Republican colleagues and I have argued for 3 weeks now that the Reid bill takes money from Medicare and spends it on a new, unsustainable health care entitlement. Instead of strengthening the Medicare Program, today we received confirmation that the Reid bill robs Medicare to the tune of nearly $ 1/2 trillion and threatens its solvency.
CBO has said that this robbery does not really strengthen the solvency of the Medicare Program. Instead the bill uses government accounting gimmicks to merely make it look like it is doing something to help the Medicare Program.
The Reid bill cuts $470 billion from the Medicare Program. Rather than reserving those monies to pay for future Medicare benefits, the bill spends those monies to pay for a new program to provide health insurance for the uninsured.
But because of government accounting rules, any savings are assumed to be used to purchase government bonds that will be saved to pay for future expenses. That allows sponsors of the bill to claim that they are extending the solvency of the Medicare trust fund.
As the only accountant in the Senate, I find it disturbing to see the government using its accounting rules to allow it to spend these savings twice. The sponsors of the Reid bill are counting the savings towards the Medicare Program at the same time those monies are being spent to pay for other Federal spending.
This would constitute fraud in the private sector. If they had to come under the same laws as private business, the administration and Congress would go to jail.
If there is any doubt, listen to what the Congressional Budget Office said:
Unified budget accounting shows that the majority of the [Medicare] trust fund savings would be used to pay for other spending under the [Reid bill] and would not enhance the ability of the government to redeem the bonds credited to the trust fund to pay for future Medicare benefits.
This means the claim that the Reid bill strengthens Medicare is false. The bill robs Medicare to pay for new spending.
Unfortunately this example of government accounting is just one example of the growing problems that our Nation faces. Our Nation's debt is now more than $12 trillion and our deficit for fiscal year 2009 was over $1.4 trillion. As a percentage of the economy, our deficit is 10 percent of GDP--the highest it has been since the Second World War. We are faced with increasing the debt limit at a time when our Nation's credit card is maxed out.
I worry about the country that I am leaving for my children and grandchildren. Our Nation is being buried under a mountain of debt, which poses a deadly threat to the future of our Nation.
The government will make up the current deficit by borrowing more money, mostly from China and other foreign governments. These levels of debt are not sustainable. The Chinese Government already made it very clear that they are growing apprehensive about our ability to pay these debts.
As China's apprehension grows, the interest rates we pay on our debt will grow. That means that it will soon cost us considerably more to allow Washington to continue to borrow the money it needs to fund its current spending binge.
As the Chinese Government grows concerned about financing Washington's appetite for rampant spending, it should give everyone in this Chamber pause. Our most fundamental duty as Members of Congress is to wisely manage the power of the purse for our Nation. Congress is currently failing to carry out this obligation.
According to David Walker, the former head of the GAO, at the end of fiscal 2000, the Federal Government had about $20.4 trillion in total liabilities, commitments, and unfunded promises for Social Security and Medicare. That number rose to $56.4 trillion at the end of fiscal 2008--a 176-percent increase in just 8 years. By the end of this year, that number is expected to have risen to $63 trillion.
On January 15 of this year, the Senate Budget Committee held a hearing on the long-term outlook for Federal debt. We heard testimony from a bipartisan panel of experts, including Dr. Richard Berner, chief global economist for Morgan Stanley; Dr. Allen Sinai, president and chief global economist/strategist for Decision Economics, Inc.; and Dr. Douglas Holtz-Eakin, former Director of the Congressional Budget Office.
Some of these economists were Democrats and some were Republicans, yet all three agreed that the long-term outlook for U.S. debt was grim and that our Nation's creditworthiness was at risk without a plan to address the costs of future entitlements and the multiple bailout/stimulus proposals Congress has passed.
All three panelists endorsed bipartisan commission concepts to address entitlement spending such as the one sponsored by Senators CONRAD and GREGG. And the experts all agreed that the current budget process needs to be reformed to remove incentives to deficit spend. Yet none of those recommendations are evident in the legislation we are voting on today.
Dr. Sinai--one of the Democrat's invited witnesses from that day--testified that we have exceeded several tipping points in creditworthiness in the U.S. economy, but the only reason we don't feel the effects of it now is because ``everyone else is drowning too'' and investors are fleeing to quality. But how long can that continue?
Further, Dr. Sinai states:
The deficit and debt prospects under almost any scenario are daunting, with deficit-to-GDP and debt-to-GDP ratios not seen before in a G-7 country. This territory is uncharted with no real historical analogue to this kind of financial situation for a major global economic power..... The answer to whether the U.S. can afford all of the initiatives on its wish list--economic, societal, defense, and otherwise--is no.
Dr. Holtz-Eakin echoed similar statements from other panelists and strongly urged Congress to adopt a plan that conveys to markets a clear path for stabilizing and reducing the debt burden.
That panel appeared before us in January, but we still lack any coherent plan to stabilize our debt. Just last week on Tuesday, Dec. 14, the Peterson-Pew Commission released its first report, Red Ink Rising: A Call to Action to Stem the Mounting Federal Debt, which encourages lawmakers to act immediately to stabilize the national debt.
Crafted over the past year by former heads of the CBO, OMB, GAO, and the congressional budget committees, the report strongly urges Congress and the President to commit immediately to stabilize the debt at 60 percent of GDP by 2018 and develop a specific and credible debt stabilization package in 2010. But there is nothing in this debt limit bill that does either of these things.
Some Senators will argue today that raising the debt ceiling is the only fiscally responsible choice before us. I disagree. A vote to raise the debt ceiling is merely a vote to raise taxes on our children and grandchildren.
This cycle of kicking our responsibilities to the next generation must stop and it must stop today. In my view, the only fiscally responsible choice is to live within our means and balance our Federal budget.
A newspaper columnist, Diane Badget from Lovell, WY, said it best when she wrote how her mother would react to what is happening in Washington today. Diane wrote, ``Momma always said, `If you don't have enough money to buy a quart of milk you don't take someone else's hard-earned cash and buy ice cream.' ''
If we fail to heed that warning, we will be responsible for passing along unsustainable costs and obligations to our children and grandchildren. That is where the Reid bill is taking our country.
The only remaining question is whether we will have the courage to stop this process and preserve our Nation's strength for future generations.
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