Senator John Kerry (D-Mass.) today spoke on the Senate floor to argue in favor of a balanced approach to raise the debt ceiling and cut the deficit.
"We need to reach across the aisle and come together on a deal before an obstinate ideological rigidity does even more harm to the fragile economy. We need to put an end to the time clocks displaying how long until default. And in a global economy where we know everything and every market is interconnected, this is not the message that the United States should be sending around the world," Senator Kerry said.
The full text of Senator Kerry's remarks, as prepared for delivery, is below:
Mr. President, with the deadline for default of August 2nd just a week away, if anyone in Washington was still under the illusion that this ugly political process is without consequence, they should read today's article in the Boston Globe with the headline "Uncertainty has Mass. Firms wary of hiring." The articles states "Still cautious from the last recession, many business owners worry that government leaders will be unable to reach an agreement, while others are concerned about exactly the opposite: that any agreement will invariably include spending cuts and weaken an already lackluster recovery."
Mr. President, this is no way to provide economic stewardship and it is no way to run a government.
We need to reach across the aisle and come together on a deal before an obstinate ideological rigidity does even more harm to the fragile economy. We need to put an end to the time clocks displaying how long until default. And in a global economy where we know everything and every market is interconnected, this is not the message that the United States should be sending around the world.
Back in 1983, President Reagan wrote that "Denigration of the full faith and credit of the United States would have substantial effects on the domestic financial markets and on the value of the dollar on the exchange markets. The Nation can ill afford to allow such a result".
Almost 30 years later, some House Republicans have turned their back on the legacy of Ronald Reagan. Instead, they are playing a cynical game of chicken with the President, the Congress and the American people by refusing to negotiate a compromise agreement to extend the debt limit. Their negotiating strategy: don't negotiate -- do what we say no matter how dangerous or ill thought out.
In taking this extreme approach, the House Republicans have made a dirty word out of the basic tenet of American democracy -- compromise. Let's be clear. The House Republican Party has taken this approach even though they know and agree that what Ronald Reagan said then is true today. Our nation cannot afford to default on our debts.
"Experts say that even a short-term crisis could lead to a permanent stain on Treasuries. It could prove particularly damaging to the willingness of foreign investors to buy Treasuries If foreign investors start to shy away from Treasuries, they will become much less liquid. "You could never get that liquidity premium back if you create a precedent,' says Lou Crandall, chief economist at Wrightson ICAP. "That's the thing that would be irreparable." The end result of such a scenario: higher interest rates in the U.S."
Why are they taking this extreme approach? Because they want to cut federal spending and cut entitlement spending without increasing any revenues. They know there are not enough votes to pass the House budget so a group of extremists are trying any way possible to get their unrealistic budget passed.
The Boehner plan would require draconian entitlement policy changes. To meet the $1.8 trillion in cuts over the next decade without any increase in revenues, policymakers would likely be forced to cut Social Security and Medicare benefits for current retirees or eviscerate the safety net for low-income children, parents, senior citizens, and people with disabilities.
The Boehner plan would require another vote to extend the Debt Limit in just six months. A short-term plan is neither necessary nor wise and most importantly would not provide the certainty our financial markets need to create jobs. It risks a downgrade of our nation's credit rating which would increase interest rates and impose an automatic tax increase for every American with a mortgage, car loan, student loan or credit card.
Mr. President, no one knows the consequences to our economy that would come from a downgrade of our nation's credit rating. At a time when the global economy is still facing huge problems, any downgrade of our nation's credit rating could have disastrous effects for our financial system and the global finance system. Not doing all that we can to avoid a downgrade is an unacceptable risk to take.
The Boehner plan isn't supported on Wall Street, "From the markets' point of view, a two-stage plan is a non-starter because we now know it is amateur hour on Capitol Hill and we don't want to be painted in this corner again," said Christian Cooper, head of U.S. dollar derivatives trading in New York at Jefferies & Co. "There is significant risk of a downgrade with a deal that ties further cuts to another vote only a few months down the road given the significant resistance to do the right thing now," Cooper said.
The President will veto the Speaker's plan. So Senators: It is time to stop discussing proposals that will go nowhere.
In an effort to forge a bipartisan compromise, Majority Leader Reid has developed a proposal are providing a solution that will cut spending to meet or exceed the amount of the debt-ceiling increase through 2012 and it will not include revenues. The spending cuts included in the Reid amendment are only those that Republicans have previously agreed to.
The Reid proposal would give our economy the certainty it needs to create jobs today, not six months from now. My Republican colleagues like to talk about how important it is for us to give businesses certainty. So let me ask, how could businesses possibly feel certain about the future when they look at this chaotic debate? Small business confidence has been dropping for the last three months. Is this really the signal we want to send them?
Just last week, Speaker Boehner was discussing with the President a "grand bargain" that included $800 billion in increased revenues. It was a step towards a balanced approach. Less than one week later, Speaker Boehner's proposal like Majority Leader Reid's proposal includes the creation of a Joint Select Committee on Deficit Reduction, but it leaves revenues off the table. It provides an unbalanced approached.
The Majority Leader's proposal includes the following duty for the new Joint Committee "may include recommendations and legislative language on tax reform" In addition, it includes the following: "As a part of developing the joint committee's recommendations and legislation, the joint committee shall consider existing bipartisan plans to reduce the deficit, including plans developed by Senators or Members of the House."
The Speaker's approach includes no such language. This is a snub to the hard work of the "Gang of Six" and other bipartisan plans. The Deficit Commission was co-chaired by former Republican Senator Alan Simpson. All this work is being ignored because it takes the realistic approach that to resolve the deficit, a balance approach which includes revenues is needed.
Over the last year, we have seen may bipartisan plans put forward on the debt limit. The Gang of Six continues the tradition of the Senate where a group of members reach across the aisle and tackle the tough issues. This is how we got a budget deal in 1990 and 1997. We will not be able to resolve the current impasse until my colleagues on the other side of the aisle and particularly those in the other chamber decide to put aside their ideologies and decide what is best for the country.
We need to put politics aside. This should not be a debate about who wins the next election. It should be a debate about how we build an America that is capable of out-innovating, out-educating, and out-building the rest of the globe. The world is watching to see if we can rise to the occasion and behave like serious lawmakers in these serious times. We must be responsible about our debt limit and not let political posturing jeopardize the national and economic security of our country.
But Mr. President, we can't be responsible if we don't first get serious. Too much is at stake for the senate to do anything less than the senate was intended to do at moments like this, which is focus and get the job done that we were sent here to do.