Conrad-Gregg Amendment

Floor Speech

Mr. CONRAD. Mr. President, tomorrow we are going to vote on the question of whether we establish a bipartisan debt commission, a commission empowered to come up with a plan, a plan if 14 of the 18 Members would agree, would come to the Senate for a vote.

This story ran recently in Newsweek. This was actually the cover of Newsweek:

How Great Powers Fall; Steep Debt, Slow Growth, and High Spending Kill Empires--And America Could Be Next.

Inside, the story reported:

This is how empires decline. It begins with a debt explosion. It ends with an inexorable reduction in the resources available for the Army, Navy and Air Force. ..... If the United States doesn't come up soon with a credible plan to restore the federal budget to balance over the next five to 10 years, the danger is very real that a debt crisis could lead to a major weakening of American power.

It is not hard to see how that could happen. Since 2000, the debt has exploded. In the previous administration the debt doubled. It has increased again with the economic downturn, and we are now on a course to have a gross debt that will be 114 percent of the gross domestic product of the United States.

That is the short term. We can handle a debt of 114 percent of the gross domestic product. We have done it before. We did it after World War II. Japan has a debt right now of 189 percent of their gross domestic product.

The real challenge confronting America is that, according to the Congressional Budget Office, we are on course to have a debt that will reach 400 percent of our gross domestic product over the next 50 years. Nobody believes that is a sustainable situation--not the head of the Congressional Budget Office, not the head of the Office of Management and Budget, not the former head of the General Accounting Office, not the head of the Federal Reserve, not the Secretary of Treasury--all of them have said a debt of that magnitude poses a systemic threat to the economic security of the United States.

The National Journal, in a recent article, on November 7, 2009, reported this:

Simply put, even alarmists may be underestimating the size of the (debt) problem, how quickly it will become unbearable, and how poorly prepared our political system is to deal with it.

That is not just the view of the National Journal or the view of Newsweek magazine in their cover story piece. This is the considered judgment of some of the budget experts in the country from both the Republican and Democratic side of the aisle.

Alan Greenspan, the former Federal Reserve Chairman, said:

The recommendation of Senators Conrad and Gregg for a bipartisan fiscal task force is an excellent idea. ..... I hope that you succeed.

Douglas Holtz-Eakin, who was the key economic adviser to Senator McCain in the last election said:

I am a reluctant convert. I have always felt that this is Congress' job, and, quite frankly, it ought to just do it. And that attitude has earned me no friends and has gotten us no action. So I've come around to the point where I'm in favor of something that is a special legislative procedure to get this legislation in front of Congress and passed.

Mr. Geithner, the current Secretary of Treasury, said this before the Senate Budget Committee on February 11 of last year:

..... [I]t is going to require a different approach if we're going to solve the [long-term fiscal imbalance]. ..... It's going to require a fundamental change in approach, because I don't see realistically how we're going to get there through the existing mechanisms.

Mr. Walker, the former head of the General Accounting Office, said:

I think the regular order is dysfunctional as it relates to these types of issues. And it's, quite frankly, understandable, because you're talking about putting together a package that crosses many different jurisdictions. ..... And the idea that that would end up emerging from the regular order I think is just totally unrealistic.

Leon Panetta, former chairman of the House Budget Committee, former Chief of Staff of President Clinton, said:

It'll never happen. The committees of jurisdiction will never take on the kind of challenges that are involved in this kind of effort. ..... If you just leave them under their own jurisdictions, that will never happen.

Senator Gregg, the ranking Republican on the committee, and I came to the same conclusion. Two years ago we started an effort to come up with a process that could assure a vote on a series of recommendations to meet the debt threat. All task force members are directly accountable to the American people. They are all elected Members of the Congress or, in the case of the Secretary of the Treasury, the representative of the administration. There are 18 Members: 10 Democrats--2 from the administration--and 8 Republicans. They are all currently serving Members of Congress selected by Democratic and Republican leaders and the Treasury Secretary and one other administration official who, I assume, would be the head of the Office of Management and Budget.

The bipartisan fiscal task force has broad coverage. Everything is on the table--spending and revenues. I hear some on the left saying spending should not be considered and some on the right saying revenues should not be considered. Both have to be considered. I do not know what could be more clear.

The green line shows revenues as a share of GDP since 1950. That is over the last 60 years. Revenue, the last 2 years, is the lowest it has been in 60 years. Let me repeat that: Revenue as a share of the gross domestic product is the lowest it has been in 60 years--a precipitous decline in revenue.

Look at expenditures. Expenditures are the highest they have been as a share of the gross domestic product in 60 years.

Whoever says: ``Well, you did not include revenue'' or ``you did not include spending,'' well, guess what, if you did not deal with spending and did not deal with revenue, you did not deal with the problem. Let's get serious. Let's get honest with the American people.

The current status of Social Security and Medicare trust funds are as follows: Social Security will be permanently cash negative in 2016. It is already cash negative today. Let me repeat that. Social Security is cash negative today. It will be permanently cash negative in 2016. That is 6 years away. It will be completely insolvent in 2037.

Medicare went cash negative in 2008. It will be insolvent, according to the trustees, in 8 years. Anybody who says we do not have to do anything, we can just keep on doing what we are doing, has their head in the sand. Social Security and Medicare are both cash negative today. They are both headed for insolvency. Those who say we do not have to do anything, they are guaranteeing a disaster. Some say: Well, the health care reform bill shows we can do this through the regular order. No, that is not what it showed. It shows the opposite. It shows we will not do this through the regular order because here is the long-term debt trajectory we are on. While the bill that passed the Senate will help a little bit, it is only a little bit. It does not fundamentally change the trajectory we are on. That is the reality. That is the fact.

A bipartisan fiscal task force promises an expedited process, with recommendations to be submitted after the 2010 election, with fast-track consideration in the Senate and the House, no amendments, with a final vote before the 111th Congress adjourns and a requirement, before you ever get to that point, of a supermajority necessary of the 18 members to even report a plan.

It would require 14 of the 18 members to even report a plan. If the plan is reported, then it takes 60 votes in the Senate, it takes 60 percent of the House of Representatives, and the President reserves and preserves his ability to veto. So anybody who says this is somehow unconstitutional, it is fully constitutional. Anybody who says we are farming out the responsibility to come up with a plan, that is what we always do. We always have committees come up with plans that then come to a vote of the Congress.

If you look at fiscal crises, such as the one we are in today and the one that is rapidly approaching that will be far more serious than the one we are in today, we have always had a special process, whether it was Andrews Air Force Base in the 1990s or whether it was the Greenspan Commission in the 1980s. We have repeatedly, when we faced a fiscal crisis, resorted to a special procedure.

The Bipartisan Fiscal Task Force, as I have indicated, requires a bipartisan outcome: 14 of the 18 task force members must agree to the recommendations. The final passage requires supermajorities in both the Senate and the House.

This weekend, the President endorsed this, the plan we will vote on tomorrow. This weekend, the President released this statement.

The serious fiscal situation that our country faces reflects not only the severe economic downturn we inherited, but also years of failing to pay for new policies, including a new entitlement program and large tax cuts that most benefited the well-off and well-connected. The result was that the surpluses projected at the beginning of the last administration were transformed into trillions of dollars in deficits that threaten future job creation and economic growth.

These deficits did not happen overnight and they won't be solved overnight. We not only need to change how we pay for policies, but we also need to change how Washington works. The only way to solve our long-term fiscal challenge is to solve it together, Democrats and Republicans.

That's why I [the President] strongly support legislation currently under consideration to create a bipartisan, fiscal commission to come up with a set of solutions to tackle our nation's fiscal challenges, and call on Senators from both parties to vote for the creation of a statutory, bipartisan fiscal commission.

With tough choices made together, a commitment to pay for what we spend, and responsible stewardship of our economy, we will be able to lay the foundation for sustainable job creation and economic growth while restoring fiscal sustainability to our nation.

The President got it right. He is also representing the views of the American people. When asked: Would you favor or oppose creating a bipartisan commission as a way of reviewing and addressing our Federal budget problems, 70 percent of the American people said they would. Twenty-five percent were in opposition. Five percent were not certain.

This is a poll taken by Peter D. Hart Research, a well-known pollster, a well-regarded pollster, taken November 16 to November 18 of 2009. There is no doubt in my mind that if this poll were taken today, these numbers would be even stronger with respect to the need for a bipartisan fiscal commission.

Let me close, in the time remaining to me, to thank my colleague, Senator Gregg, the ranking Republican on the committee. We have a group of cosponsors for this bill, about 30 in number, about equally divided between Republicans and Democrats.

Senator Gregg and I have not always agreed on every fiscal issue, and we have debated those issues sometimes in a way that is animated, full of energy. But this is one place we are in absolute agreement. I have served here now 23 years. I am absolutely persuaded that if we do not adopt a special procedure such as the one we have proposed, the chances of facing up to this debt threat in a timely way is remote.

This is our chance. Tomorrow will be a defining vote. Are we going to take on this question of the looming debt, the threat it imposes to the economic security of the country? Let me be quick to say, that does not mean I believe we should raise taxes or cut spending in the midst of an economic downturn. That would be unwise. But it would also be unwise, once recovery has presented itself and is firmly rooted, for us to fail to face up to the greatest economic threat this country faces, a runaway debt, one increasingly financed from abroad.

Last year, a substantial portion of our new debt was financed by foreign entities: China, Japan, the oil-exporting nations. They have told us, publicly and privately, we are on an unsustainable course and they will not long continue to extend trillions of dollars of credit to us, absent our taking action. The warning is clear. The time is now. I urge my colleagues to support our effort tomorrow.

I wish to, again, thank my colleague, Senator Gregg, the ranking Republican on the committee, for his leadership in this matter. He has spent 2 years on this effort. We could not have a better partner.

I yield the floor.

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