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Public Statements

The National Debt

Floor Speech

Location: Washington, DC

Mr. GREGG. Mr. President, first, all of us express our deepest concern for what the Senator from Florida, the people of Florida, and those along the gulf coast are going through. It is an unconscionable situation going on down there. I think the Senator has correctly indicted the failure of the people responsible to bring the resources that are available on site in order to try to address at least the skimming of as much of the oil as possible. I appreciate his doing this on a daily basis until we can get something done. This is critical, obviously.

I want to speak today, however, about an issue that is equally threatening to our Nation--although not as ominous, in many ways--and that is our debt and the continued spending by this Congress in a way that ignores the fact that we are on the path to passing on to our children a nation which they will not be able to afford as a result of the massive debt which is being put on their backs.

We heard today from a number of Senators from the other side of the
aisle how we have to pass this extender bill. There is some irony in this, in that they are claiming that it is necessary in order to address what are significant stresses on Americans who find themselves confronted with this economic slowdown. What they do not address, of course, is the fact that in passing this bill in the way they have structured it, they are going to put even greater stress on the next generation of Americans by creating even more debt for them to pay off.

There are some legitimate ideas and programs in this extenders bill, but they should be paid for. They should all be paid for. They shouldn't simply be put on the credit card and passed on to the next generation. These are issues which address costs of today--unemployment insurance, the tax extenders. They are issues which affect today's spending and they should be paid for with today's dollars. We shouldn't borrow from the next generation in order to pay for this problem--the problems and the issues which this bill tries to address.

Yet that is the proposal that comes to us. Three times now they have brought these extender programs forward. Once they were going to add $79 billion--$79 billion--to the deficit, and it failed on a point of order brought by myself on the issue of budget fiscal responsibility.

Then they brought forward a proposal to spend $50 billion that was not paid for, and again it failed. Now we are going to get a third proposal today, and I suspect it will also be a deficit proposal where we add to the debt and pass the bill on to our kids for something we want to do today that is politically attractive.

But this is just a small tip of the iceberg for what has been happening around here. Since we passed pay-go legislation and we heard all these grandiose statements by the President and by the Democratic leadership of the Senate and the House that they were going to use pay-go to discipline spending around here so we would not be passing these bills on to our kids, since we passed that bill--now almost 2 months ago--we have spent or put in the pipeline to spend $200 billion--$200 billion of new spending that violates the pay-go rules, that adds to the debt of this country.

But that, again, is only a small tip of the iceberg. When we look at what is happening to the Federal debt, this is the line. This is where Federal debt is going as a percentage of gross national product. Historically, our Federal debts have been about 35 percent of gross national product. But since the Obama administration came into office and this Democratic Congress took control of fiscal policy in this country, that debt has gone right through the ceiling, and there is no stop to it. It is going up and up, to the point now where total debt as a percentage of GDP has passed the tipping point.

What is the tipping point? That is what Greece found. That is what Iceland found. That is what, regrettably, maybe Spain may be finding. It is when you get so much debt on the books that people stop believing you can really pay it back in an effective and efficient way. People in the world who are supposed to lend us this money--regrettably, it is other countries now: Saudi Arabia, China, Russia--they start asking themselves: Can they really pay that debt back? Shouldn't I charge a lot more to lend them money because I am not too sure they can pay the debt back? That tipping point is 60 percent of GDP. When your debt to the gross national product exceeds 60 percent of GDP, it is generally accepted in the world community that you passed the tipping point. When it gets up to around 90 percent of GDP, you are in junk bond status. You are on your way to bankruptcy. You are on your way to becoming Greece. We have an advantage over Greece. We can do something called monetizing our debt. But we still have the same problem.

We passed 60 percent this year. Why are we doing that? Because we are spending a lot of money we don't have on the extender program and on the other $200 billion of spending that has come to this floor on pay-go, on the stimulus package, on the health care bill. The health care bill expanded the size of this government by $2.5 trillion. All of that is an expense which grows the government at a rate we cannot afford.

Under the President's own budget as he sent it up here--and where is the budget, by the way? Did I miss something? Isn't the Congress of the United States supposed to do a budget? Isn't that what we are supposed to do as a responsible steward of our financial house and of the American taxpayers' dollars? Where is the budget? Under the desk here? Maybe it is down where that paper was that just fell. Nobody can find it. Why is that? Because the other side of the aisle does not want to show the American people what the deficits are, how much spending they are planning to do that they do not plan to pay for--not only in this year but for the next 10 years.

The President at least had the integrity--I guess under law he had to do it--to send up a budget. His own budget projects a $1.4 trillion deficit this year. That is 4 times larger--3.5 times larger than the biggest budget under the Bush administration--biggest budget deficit. It is the largest budget deficit in our history, $1.4 trillion. But that is not the end of it. For the next 10 years, the President's budget projects a $1 trillion deficit on average every year for the next 10 years. The practical effect of the President's own budget is that the debt of this country doubles in 5 years and triples in 10 years. These are staggering numbers. These are numbers that lead to bankruptcy of our Nation from the standpoint of fiscal policy. You don't have to look too far to see what these types of numbers mean. Just look at what is happening in Greece and other countries that have grossly overextended their debt. Doubling the debt in 5 years, tripling it in 10 years is an unacceptable action.

The numbers are so big, it is hard to put them in context. But to try to put them in some sort of context, if you take all the debt rung up by Presidents since the beginning of this country starting with George Washington through George W. Bush, that is $5.8 trillion. That is all the debt of all the Presidents who came before President Obama and this Democratic Congress. Under the budget sent up by the President, the debt that will be added will be three times that, almost three times that. The amount run up over all these 232 years we have been a nation--in 10 years, we will be adding more debt than occurred in the first 232 years by a factor of almost 2 1/2 --over 2 1/2 .

It is incredible. Yet nobody around here says anything or does anything about it on the other side of the aisle. What we hear from the other side of the aisle: Let's bring out another bill. Let's game the entitlements. Let's game the pay-go rules one more time, as the extender bill does--or tries to do--and let's spend some more money we don't have and add it to the deficit and the debt. Bill after bill is brought to this floor to do that--spend money we don't have and add it to the debt.

What does it mean in real terms? Children born at the beginning of President Obama's administration and this Democratic Congress, this liberal Congress--it should not even be called a democratic Congress because it is so liberal--had an $85,000 debt on their backs--think of that--when they were born. However, as of today they have a $114,000 debt on their backs. That means kids born just 4 years ago--not even 4 years ago; 1 1/2 years ago--have had added to their burden--and they are going to have to bear this burden. This is not theoretical. This debt is owed. It is owed to China. It is owed to Russia. It is owed to Saudi Arabia. This debt has to be paid back by these people, our children. Just in the last 1 1/2 years, it has gone up by almost $30,000. By the end of this Presidency, should the President be reelected--or even a little bit past that--by the end of the budget projected by this President, that debt on these children will be $196,000. That is what they will have to pay. How are they supposed to buy a home, buy a car, send their kids to college if they have to pay off this debt, which they will have to do through the tax burden? It is inexcusable what we are doing.

Then you have to couple it with the larger picture. Is anything being done to improve this situation? Here are the President's own numbers. Historically, taxes have been about 18 percent of GDP. You will hear a lot of people on the other side of the aisle say we just need to raise taxes more. Under the President's own budget, they are projecting that taxes are going to go up rather dramatically, to almost 20 percent of GDP. What they don't tell you
is that spending has historically been about 20 percent of GDP. If we had the tax revenues they are projecting, we wouldn't have hardly a deficit at all. We would be in pretty good shape.

But that is not what is happening here. As a result of the President's programs--note here how this line goes up sharply during the depression. It is estimated to come back down because of the stimulus being taken out of the spending stream--a very badly flawed decision, by the way, to pass the stimulus in the form it was passed--but then it goes straight back up. If we were to extend this line, it is way up here. What is that caused by? That is caused by the health care bill, $2.5 trillion of new spending, and by the aging of the population. There is no attempt to take this line and bring it down where it should be going, so we close that figure.

No, this area in here is a structural deficit that has been grossly--not structural. It is a created deficit that has been grossly aggravated by the policies of this administration and is being aggravated by the policies of this Congress, as we have seen more and more bills brought forward which are unpaid for and end up adding to this red line going up. It is not a tax issue. It is not a revenue issue. The President's own budget--these are the President's own budget numbers--shows that it is not a revenue issue. Revenues, they project, will be very robust and will be well above the historic highs fairly soon.

Why would they do this? Why would people be doing this to our Nation, running us into bankruptcy like this, putting this burden on the next generation that is so extraordinary? I think there is a philosophy here. The philosophy is pretty simple: This administration is very committed to moving the American model. They want to take us down the road of a European-style social welfare state democracy where you actually have cradle-to-grave coverage of all sorts of social concerns and you have an ever-expanding, dramatically expanding public sector. The President is very honest about this. He said that the way you create prosperity is to grow the government. I don't think anybody ever believed he would grow it quite this much, but he was honest about it, at least. But the implications of it are that because of the fact that we do not have the capacity to pay for this government, we are driving ourselves right into a ditch as a nation. We are putting ourselves into a totally unstable situation which will inevitably lead to some sort of fiscal crisis which will be cataclysmic for our country and will lead to a lower standard of living. That is what this inevitably leads to--a lower standard of living, not a higher standard of living for the next generation.

The European model is not a good model for us to pursue. It simply is not. Look at what is happening in Europe--anemic growth, lack of creativity in the area of economic growth, very little productivity, and basically countries wallowing in a debt structure they cannot get out from under because they are not willing to make the tough decisions. Are we going to take that path also? It appears that way. Under this administration, in this Congress, that appears to be the choice. But it is the wrong choice.

There are ways to address this. To begin with, we could stop spending--very simple. Stop spending money we don't have. Stop bringing bills to the floor that have high deficits attached to them.

We need to address the entitlement programs and recognize that they are, in their present structure, not affordable.

We need to address our tax laws, which are not structured in order to create an incentive for productivity and capital formation but are instead replete with special benefits to special interest groups. We can reduce the rates on all Americans, and especially we can reduce the rates on the productive side of the ledger, on our corporate rates which are now the second highest in the world, and still generate significantly more revenues if we do a total tax reform along the lines of what Senator Wyden and I have actually proposed.

We need to change our energy policy. We have to stop shipping all this money overseas and buying energy. We need American production of energy. We need more nuclear; we need more natural gas; we obviously need more conservation; we need better cars--hybrids, electric; and sure, we need renewables, but renewables are not going to solve the problem. It is in production of American energy that we need to solve the problem, primarily, and in conservation.

Most important, we need to abandon this idea that we should follow the European model because it stifles productivity, entrepreneurship, risk taking. We need a model that says to the American people: Be creative. That has been at the essence of what has made us strong as a nation.

It has always been one of our unique advantages over the rest of the world--willing to take a risk, willing to make an investment, willing to go out and push the envelope. As a result, they have created jobs in the most prosperous Nation in the history of the world. But that is all at risk now because we decided to depart on this path of massive deficit and debt in order to recreate the European form of government: a social welfare state, which is, first, not sustainable, and, secondly, is not a model for prosperity.

It is time to change, and let's begin the change right here right now by rejecting any extender bill that comes to this floor that is not fully paid for.

I yield the floor.

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