Patent Reform Act of 2011--Continued

Floor Speech

Mr. President, it is a great privilege and honor for me to be able to represent the big, wonderful, diverse Commonwealth of Pennsylvania in the Senate. Pennsylvania is a wonderful State. It has a terrific range of great attributes. It has big, bustling cities such as Philadelphia and Pittsburgh at opposite ends; has all throughout the Commonwealth beautiful, historical boroughs such as Emmaus and Gettysburg. We go from the banks of the Delaware all the way to the shores of Lake Erie.

In a State this big, of course, we have a wide range of very vital industries. We have old industries that we have had for a long time and are still very important employers: agriculture, coal, steel, and many others. We are a big manufacturing State, manufacturing goods of all kinds. We have a huge service sector, especially in the fields of education, medicine, finance, tourism, and many others. We have some relatively new and very exciting industries in our Commonwealth that I am very hopeful will lead to an acceleration of job growth soon. I am thinking in particular of the natural gas and the Marcellus shale. I am thinking of the life sciences, all across the Commonwealth, especially in greater Philadelphia and greater Pittsburgh as well as in points in between. The medical device sector and pharmaceutical industries are offering some of the most exciting opportunities for economic growth anywhere in the Commonwealth.

So when I think about the diversity and the strength of our Commonwealth, I am convinced that Pennsylvania's best days are ahead of us.

That said, despite all of the underlying strengths and advantages we have, we have an economy that is struggling. We have job creation that is far too slow. As I said repeatedly throughout my campaign for the Senate seat and as I have said since then, I think there are two vital priorities that we need to focus on first and foremost here in Washington. The first is economic growth and the job creation that comes with it, and the second is restoring fiscal discipline to a government that has lost all sense of fiscal discipline. These two, of course, are closely related. We will never have the kind of job growth we need and we deserve until we get our fiscal house in order.

But I look at them as separate issues. I think they should be at the top of our priority list. I am absolutely convinced we can have terrific economic growth, terrific job growth. We can have the prosperity we have been looking for.

In fact, it is actually inevitable if the Federal Government follows the right policies, remembering first and foremost that prosperity comes from the private sector, it does not come from government itself, but that government creates an environment in which the private sector can thrive and create the jobs we so badly need. I would argue that the government does that by doing four things and doing them well.

The first is to make sure we have a legal system that respects property rights, because the clear title and ownership and ability to use private property is the cornerstone of a free enterprise system.

It requires, second, that the government establish sensible regulations that are not excessive, because excessive regulation--and frankly we have seen a lot of excessive regulation recently--too much regulation always has unintended consequences that curb our ability to create the jobs we need.

A third thing a government always needs to do is provide a stable currency, sound money, because debasing one's currency is the way to ruin, not the way to prosperity.

Fourth, governments need to live within their means. They cannot be spending too much money and they cannot have taxes at too high a level.

It is so important that government spending remain limited and, frankly, much less than we have today, for several reasons. One, of course, government spending is the political allocation of capital rather than the allocation of free people and a free economy. The political allocation is always less efficient than that of men and women engaging in free enterprise.

Secondly, the reason too much spending is problematic is because it ultimately always has to be paid for with higher taxes. Higher taxes clearly impede economic growth and prevent job creation. They do that in many ways, not the least of which is diminishing the incentives to make investments, to take risks, to launch new enterprises, to hire new workers.

I would argue that of these four priorities, the government is not doing such a great job. The failure is most egregious when it comes to the level of spending that has recently developed in this town. The recent surge in spending amounts to about a 25-percent increase in the size of the government virtually overnight.

The government is now spending--this Federal Government alone--fully 25 percent of our entire economic output. Frankly, this huge surge in spending has not worked. The unemployment rate has stayed near to 10 percent, our deficits are now over $1 1/2 trillion in a single year. That is more than 10 percent of our entire economy.

Of course, when you run annual deficits where you are spending more than you bring in, that shortfall is made up for with new borrowings. So we have been adding to our debt at what I think is an alarming pace. I would argue that this mounting debt is already today costing us job growth. It is costing us jobs because it creates a tremendous uncertainty in our economic future when we are not on a sustainable fiscal path. That uncertainty itself discourages entrepreneurs and job creators from doing the kinds of things we need.

The risks are very real. History is replete with examples of countries that have accumulated too much debt. Frankly, it never ends well. Very often it leads to very high rates of inflation. It can lead to much higher interest rates, which can have a crippling effect on job growth. It can even lead to financial disruptions which can be very harmful, as we have recently seen.

With the recent acceleration in the size of our deficits and the increase in our debts, we are now rapidly closing in on the statutory limit to the amount of money that the Federal Government is permitted to borrow under law. That is an amount of over $14 trillion, but the truth is we are rapidly closing in on that limit. We will get there fairly soon.

The administration has suggested that we ought to, here in Congress, vote to raise that limit with no conditions attached. I have to tell you I think it is a very bad idea. This brings to mind the case of a family that is routinely living beyond their means. They routinely are spending more than their income and making up for the difference by running up to the limit on their credit cards. When this family reaches the limit on all of the credit cards they have, who thinks it is a good idea to give them another credit card?

I think most folks in Pennsylvania think it is probably time to reexamine the spending and look at the real problem that has gotten the family in this situation. I think that is where we are as a government. I think we need to fundamentally reexamine the spending we have been engaged in.

I will say clearly, I think failure to raise the debt limit promptly upon reaching it is not optimal and it would be very disruptive. I hope that does not come to pass. But I happen to think the most irresponsible thing we could do is simply raise this debt limit and run up even more debt without making changes to the problems that got us into this fix.

Specifically what I think we need to do is have real cuts in spending--now, not later, not at some distant hypothetical point in time in the future but now. That is one.

Second, I think we need real reform in the spending process, reform in the way Congress goes about its business, because the process is part of what has gotten us here.

I wish to see a balanced budget amendment, one with real teeth, one that requires our books to be balanced, one that limits the total spending to a reasonable percentage of our economy, and one that makes it harder to raise taxes. I think that would be a very good development. But that will take several years, at best, if we can get that implemented. Of course, all of the States have to agree.

In the meantime, I would hope we could have statutory spending caps, limits to how much the Federal Government can spend, and a mechanism that would redress the problem if for some reason we exceeded those limits.

As we have had this debate over whether we should attach these conditions to raising the debt limit, some have suggested this is a very dangerous discussion to have, because failure to immediately raise the debt limit, some have suggested, amounts to a default on our Treasury securities, on the borrowings we have already incurred.

That is not true. I think it is irresponsible to suggest that. The fact is the ongoing revenue from taxes that will be collected whether or not we immediately raise the debt limit--the ongoing revenue is more than 10 times all the money needed to stay current on our debt service. In fact, in the last 20 years, there have been four occasions when we have reached the debt limit without immediately raising it, and we never defaulted on our debt. This country never will. So I do not think we should have a discussion about something that is not going to happen. But since some in the administration have raised the specter of a default, I have introduced legislation that would clearly take that risk off the table entirely. My bill is called the Full Faith and Credit Act. It simply says, in the event we reach the debt limit without having raised it, it instructs the Treasury to make sure the debt service is the top priority. This guarantees that we would not default on our Treasuries, we would not create a financial crisis of any kind, and maybe, more importantly, it would be a great reassurance to the millions of Americans who have lent this government their money, the millions of Americans who hold Treasury bonds in their IRAs, their 401(k)s, their pension plans.

The retirees who live in Allentown, PA, who have lived modestly, saved money, and with their retirement savings have invested in the U.S. Treasury, I think those folks deserve the peace of mind of knowing that the first priority is going to make sure we honor the obligations and stay current on our debts.

I want to take a moment to thank Senator Vitter, because yesterday he came down to the floor and introduced my legislation as an amendment to the current patent reform bill. I hope we will be able to soon pass my amendment. I hope we will soon get to a vote here on the Senate floor. The real reason is, I want to remove this false specter of a default on our debt, so we can have an honest debate over how we are going to get spending under control--what kind of spending cuts we are going to have right now, and what kind of reforms we are going to make to the process going forward.

I do not think we can kick this can down the road anymore. We have been doing that for a long time. As I said earlier, it never ends well when governments continue taking on too much debt. Nobody here that I know wants to see a government shutdown. Nobody wants to see the disruption that would come from failing to raise the debt limit at some point. But nor can we proceed with business as usual.

All across Pennsylvania I hear every day when I am back home how important it is that this government learn to live within its means as Pennsylvania businesses and families have done.

Let me close by saying I still remain absolutely convinced we can have a terrific economic recovery. We can have a booming economic growth and the tremendous job creation that goes with it. It is overdue, but it can still arrive if we pass the kind of policies that create the right environment.

I am convinced the 21st century will be another great American century and Pennsylvania will be at the forefront.

I yield the floor.

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Madam President, I thank my colleague for yielding. I would say that as soon as we can work out the specifics with the staff, that is exactly the intention that Senator Vitter and I came to. So a single vote on the merger of two amendments.

I would take a moment to thank Senator Vitter for his help. Senator Vitter was kind enough to offer the text of my legislation as an amendment to the patent reform bill. What he is adding is suggesting that the legislation should require the Treasury to prioritize not only the debt service so we can avoid under all circumstances a default by the U.S. Government, but also making sure Social Security payments get the priority they deserve.

The fact is, in the unlikely--and I would say certainly unfortunate--event that we were to reach the debt limit without having raised it, the Federal Government would still take in more than enough revenue to pay all of the interest service on the debt and all Social Security benefits. It is entirely manageable from an operational and functional point of view. Total revenue to the government from taxes alone is on the order of 70 percent of all expected expenditures. Debt service is only about 6 percent.

I appreciate the help of the Senator from Louisiana. By combining this, what we do--if we can pass this legislation, which I hope we will--is take off the table the specter of a default. We can take off the table the specter of any senior citizen not getting their Social Security payment. What we can then do is have an honest discussion about how are we going to reform a process that has gotten us into this fix--gotten us to the point where we are running a deficit of 10 percent of GDP, where our total debt is screaming toward totally unsustainable levels.

I can tell my colleagues, the folks in Pennsylvania know very well we cannot continue living beyond our means as this government has been. I see this as a very constructive, important opportunity to begin to have this discussion about how we are going to get this process under control.

I appreciate the help from Senator Vitter, and I yield.

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Madam President, I wish to thank Senator Vitter for yielding his time and for his help on this effort. I want to be very clear. First, I am not aware of anybody in this body or anybody I know who wants to see a government shutdown. I am not aware of anybody who wants to see the disruption that would result from failing to raise the debt ceiling at the appropriate time. But I also feel strongly it is critical we take this opportunity to begin to address the structural problems we have.

The fact is we have a burden of debt right now that is costing us jobs in this country today. The uncertainty it creates, the cost of financing this, the question of whether and for how long we can roll this over, the extent to which inflation becomes a problem, all of these risk factors are already weighing on our economy and our ability to create jobs now. For the future, it is an even bigger risk.

Senator Vitter and I have taken this step so we can have an honest discussion about how we are going to bring this spending under control and the process reforms we are going to make so we can hopefully get off this unsustainable path and get on a sustainable trajectory for the economic growth we need. That is ultimately what this measure is all about. It simply says that in the event we reach the debt limit without having raised it first--and let's face it, we have been there before. This has happened in the past. In the last 20 years, it has happened on several occasions. So it is entirely possible that, despite the best efforts of those of us who want to avoid it, it could happen again.

If it were to happen again, we want to make sure that we have no default on our debt, that interest is paid, and that Social Security checks go to the recipients as they should. There will be plenty of resources from ongoing tax revenue to make sure that happens, and anything less would be very irresponsible.

I urge my colleagues to vote in favor of this amendment.

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