Fiscal Recklessness

Floor Speech

Mr. ENSIGN. Mr. President, I rise to discuss the tax extenders legislation and the consequences of our fiscal recklessness. I cannot stress enough that our spending is completely out of control. It seems every week this body passes more legislation and spends more money and adds more debt onto the backs of our children. Unfortunately, the Democratic majority continues to sing from the same old sheet of music--more debt, more spending, and more fiscal recklessness. Last week the nonpartisan CBO provided their analysis of President Obama's budget, and it is nothing short of a fiscal train wreck and a roadmap to banana republic status. It pains me to stand on the floor of the Senate and tell the American people that President Obama is leading us down a path of bankruptcy.

I believe this budget is simply reckless, with enormous budget deficits as far as the eye can see. This year, the government has overspent by more than trillion dollars; the same amount last year. We are passing trillions of dollars in debt onto our children and grandchildren. Nevadans and people across the country are facing very hard economic times. For the Federal Government to be spending this much money is an insult to American families everywhere.

In 2020, the last year of the President's budget, our Nation's credit card bill will account for 90 percent of the economy. What does this mean in terms real people can understand? Because these numbers are so large and enormous, it is difficult to put them in perspective. Let me talk in terms of the consequences of this fiscal recklessness. At a certain point, foreign countries will not buy our IOUs, our bonds, or they will demand higher interest rates because they are riskier. Our standard of living will decrease. Actually for the first time in American history, future generations will be worse off than prior generations. As to the American dream of owning a home as a young adult, one will have to wait until their 40s or 50s to buy a home. Families, in order to maintain a similar standard of living, will have to become smaller. With a less dynamic economy, we will enjoy less of the fruits of innovation and technological progress.

I know this is hard to hear, but one day, if we continue down the current path, this scenario will become a reality. We cannot keep spending and spending and spending without consequences. Democrats claim we need to spend money because our economy is sluggish. We need stimulus after stimulus to put us back on the right track.

We are not on the right track. Unemployment in my State is still 13 percent. There isn't much light on the horizon. We have lost our way and have wandered down a path of fiscal crisis. More spending doesn't fix the economic crisis.

I wish to talk about the depression of 1920 to 1921. Shortly after the end of World War I, we went into economic crisis. The Department of Commerce estimates the economy declined by nearly 7 percent during that period. Unemployment rose sharply during the recession. Estimates are the rate of unemployment went from around 5 to almost 12 percent. From May of 1920 to July of 1921, automobile production declined by 60 percent, and total industrial production across the country decreased by 30 percent. Stocks also fell dramatically. The Dow Jones Industrials was cut by almost half. Business failures tripled between 1919 and 1922.

But instead of ``fiscal stimulus,'' here is what President Harding did. He cut the government's budget nearly in half between 1920 and 1922. Marginal tax rates were slashed across all income groups. So he cut taxes and cut government spending at the same time. This encouraged businesses to grow and to add jobs in the private sector. The national debt was reduced by one-third.

In the 1920 acceptance speech for the Republican nomination, Harding said:

We will attempt intelligent and courageous deflation, and strike a government borrowing which enlarges the evil, and we will attack the high cost of government with every energy and facility which attend Republican capacity.

We promise that relief which will attend the halting of waste and extravagance, and the renewal of the practice of public economy, not alone because it will relieve tax burdens but because it will be an example to stimulate thrift and economy in private life.

You see, Harding's laissez-faire economic policies, rapid government downsizing, and low tax rates spurred a private market recovery and led to a readjustment in investment and consumption for a peacetime economy.

The unemployment rate went from almost 12 percent in a little over a year to less than 2 percent. Let me repeat that. The unemployment rate went from almost 12 percent to under 2 percent. I do not think that is what is happening today.

This episode in history provides a counterexample to the argument that we need massive government spending to stimulate our Nation's economy. You see, we do not hear about the Great Depression of 1920. Instead, we hear about the Roaring Twenties because sound fiscal policy, cutting tax rates, cutting spending led to economic resurgence.

This is an example that shows when the burden of government is lessened through less spending, less taxes, and less debt, the private sector will respond with investment and job creation, which lead to economic growth.

So why is the legislation on the floor today not the answer? If creating jobs is priority No. 1--and it should be for this body--why is the majority party letting tax incentives for job-creating businesses expire? These noncontroversial provisions expired 3 months ago. Why is helping businesses an afterthought for the majority?

The tax extender portion of this bill could have passed by unanimous consent months ago. But the majority did not want to bother with that. It will have to be extended again later this year because the provisions will again expire on December 31.

This is not the right policy for creating a stable and certain environment for employers who are wanting to hire more employees. The tax extender provisions of the bill amount to only $25 billion of this massive $144 billion bill.

The tax extenders are good. They include energy production credits, research credits, accelerated depreciation for certain businesses, State and local sales tax deductions, and low-income housing tax credits.

I have said these are good provisions. But we should have done much more. Foremost, we should be cutting individual and corporate income tax rates so people and businesses could use their money to get the economy moving again and could invest in job creation and wealth-creating enterprises. But, at the same time, we need to cut government spending so we are not massively increasing the debt. You see, I hate to break it to you, but America is falling behind other countries in that regard. Tax relief is wrongly criticized by those across the aisle. They have been arguing for job creation, but their policies are making it tougher on private businesses.

In order to help these businesses find a stable footing once again, we need to make tax relief permanent and not wait for these extensions to expire again and again.

Let me conclude. To get this economy moving, we do not need to pass a bill that is going to add over $100 billion to our deficit and our debt. That is what the bill before us today does. It adds over $100 billion to our deficit and our debt.

A few years ago, $100 billion was a lot of money around this place. We throw that amount around here like it is nothing anymore. That is debt that is adding to the coming fiscal crisis this country is going to be facing.

I believe the prescription to get this economy going is to cut taxes, cut government spending. I believe in the spirit of the American people and the American entrepreneurs instead of creating jobs here in Washington, DC. I do not know if the American people know that over 100,000 jobs were created in this city last year--over 100,000 jobs in Washington, DC. That is about as many jobs as my State lost. That is not the prescription for economic prosperity.

Government jobs have to be sustained with tax dollars year after year. When the private sector creates those jobs, the whole economy grows and feeds off itself, and you do not need taxpayer dollars to continue to subsidize those jobs. As a matter of fact, they feed in money to the Federal Treasury.

The bill before us today, I think, is fiscally irresponsible. It is the exact opposite direction we should be going. What we should be doing is acting in accord as Americans--not as Republicans, not as Democrats--but let's look at history and learn from it and get this economy going by focusing on actually what has worked in the past and what will work in the future.

Mr. President, I yield the floor.

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