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Public Statements

Getting a Handle on Debt

Floor Speech

Location: Washington, DC

Mr. CARTER. Six months ago, a small businessman was called into a financial lending institution and asked to come in and talk to the officer in charge. He went into that office and the officer in charge told him, You have been a customer of this organization for quite a few years and we have constantly been giving you a line of credit every summer to continue your operation for the next year.

This year our examiners have noted for us and also through our board of directors we've examined your operation and your borrowing patterns. Here's what we've discovered: We've discovered that where you had a going facility and you were doing well and you were employing people and things were going well, we've started to see a trend in your business to where you are increasing your debt more and more and more. Not only were you spending our line of credit that this bank lent to you to continue your operations throughout the year, but outside of that line of credit, you were accumulating many, many, many credit cards. And now at this point in time, it is our understanding and the way we look at it is not only are you using our line of credit that we gave you but you also have maxed out every credit card you have got, and, quite honestly, we are amazed at the number of credit cards you actually have. We didn't really know anybody could have that many credit cards.

So we're just going to warn you, if you don't change the direction of the way you're operating your business, we very clearly believe that your business is going to go bankrupt. But even more importantly to this institution, this lending institution, we're concerned about the fact that our institution is going to be placed in a very tenuous position on any loans that we make to you; therefore, our position right now is that when you come to us next August, we're not going to lend you the money for your line of credit.

Yesterday, this same businessman walked into that same lending institution and said, My accountant and I have done the same analysis that you've done on the situation of our operation. We've looked at it, and we actually agree that we have gone in the wrong direction now for many, many years and we have spent more than we've made for many, many years. And we, quite frankly, got away from doing the needs of our company to doing the wants of our company.

Therefore, we are seriously in debt. I want to start off by saying I recognize that. And when you gave us our wake-up call, we sat down and analyzed what we could do to show you that we are changing the direction of our business. And here's what we propose to you:

First, we propose to you that, this year, here are the reductions we're going to make on our credit cards, and here are the places where we're going to cut back on the way we spend. That's for this year.

Now, we've also analyzed every section in the departments of our business, and we have determined that we're way over what we really need to function as a prosperous business, so we're going to offer to you that our business plan over the next 10 years is to put a ceiling on every department and every part of our business operation so that we will never rise above that ceiling; therefore, we will be continually reducing the level of our spending over the next 10 years.

Then, finally, we are making a pledge to you of everything not encumbered in our business that we will balance our budget, that we will prepare a budget and balance that budget every year and that, if at any time it doesn't, then immediately you will call every note we have.

This is a parable, but it's also the reality in the United States of America today for everybody but the Federal Government. That's why, today, the Republicans will offer that same plan of Cut, Cap, and Balance.

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