The National Debt

THE NATIONAL DEBT -- (House of Representatives - October 04, 2004)

The SPEAKER pro tempore (Mr. Murphy). Under the Speaker's announced policy of January 7, 2003, the gentleman from Tennessee (Mr. Tanner) is recognized for 60 minutes as the designee of the minority leader.

Mr. TANNER. Mr. Speaker, I come here to the floor tonight to talk about something that is not very pleasant to think about, much less talk about, but as President Jimmy Carter once said, the highest office in this land of ours is that of citizen, because the citizen makes the determination as to the course that our country's leaders take. All of us are citizens, and therefore, all of us ought to be aware of what I consider to be a grave and growing danger, maybe second only to terrorism in our country tonight. The issue that I am referring to is our Nation's overwhelming Federal debt. I do not believe most of our citizens, the highest officeholders in this land, realize just how bad this debt and deficit is and how much it is rapidly deteriorating in terms of our Nation's financial balance sheet.

We have embarked for the last 4 years on an unprecedented and unsustainable borrowing binge that is going to place our citizens in hock not only from the standpoint of paying ever-increasing taxes just to service the debt, much like we do our credit card debt, but what we are doing to ourselves, to our country and to our children and grandchildren.

Let me talk to you a little bit about mind-numbing figures, numbers. I will try to limit that, but let me just try to explain. We hear two different debt numbers. We hear of our Federal debt being $7.3 trillion, and it is. That is the total obligation of our country vis-a-vis our deficits, our budgets and so on. About $3 trillion of that $7.3 trillion is money basically that we owe to each other; we owe to the Social Security trust fund that we have borrowed from; we owe to the veterans' organizational trust funds that we have; the airport trust fund; the highway trust fund; on and on. That $3 trillion is money that we the people, the citizens, owe to the various trustees, and we have to make good on that in the future. That is not the part of the $7.3 trillion I want to talk about tonight. I want to talk tonight about the $4.3 trillion that I call hard money, hard dollars that we have actually borrowed from individuals and corporations in this country and from around the world that we will talk about in a few minutes. I hope before you turn off listening to us, you will listen to what we have to say about that, because it is truly frightening.

I do not know, reading history, of any country that has managed to remain strong and free and bankrupt. My friends, my citizens, that is where this country is headed. The deterioration of the Federal balance sheet in the last 4 years is truly breathtaking. These numbers right here, we have borrowed in the last 45 months or so $1 trillion if we add all of this up, $1 trillion. I do not have to tell all of us, myself included, who have debt on our house, our car or our credit cards, what $1 trillion means. It means, at 5 percent interest, we have actually increased taxes on the American people in the last 45 months by $50 billion a year each and every year. That is called a debt tax that we will talk about later. It must come off the top. It must be paid. It cannot be repealed, and that is where we have put ourselves collectively in the last just 4 years.

This second chart shows how much the debt limit levels have increased just since 2001. In 2001, the debt ceiling was $5.9 trillion. In 2004, it will be $8.07 trillion, and by 2014, according to the Congressional Budget Office projection, that is assuming that everything stays the same, it will be $13 trillion. I suggest to you that, if you are in an airplane, you are in a death spiral financially on this chart right here. If you do not do something different, if we do not do something different, if you do not demand that the leaders of this country in this one-party government we have now do something different, we are going to hit the ground. There is no way this country can sustain and service this kind of debt.

I talked about servicing the debt. Last year, on this $4 trillion plus, we paid $159 billion in interest. We wrote checks for $159 billion. This will go on as we see under present law. By the end of 2008, we will be spending $1 trillion a year just to service our debt. It is clearly unsustainable. There is no way that you can take that much money out of our economy just to service debt for which we get no military prowess, no education, no health care, no highways, no bridges, no anything but just the privilege of paying taxes so we can pay debt.

At this point, I want to again emphasize, if you are just talking about debt, we are in an unprecedented and unsustainable headlong dive into bankruptcy. I want to ask my friend from Texas now to talk a little bit about what we do. But after he does, please stay tuned because we are going to talk about who owns it, and that is truly frightening. My friend from Texas (Mr. Stenholm) is one of the leaders here in the Congress for financial responsibility, for commonsense approaches to government in terms of what we can afford. He has been so for over 20 years. He is the father around here of the balanced budget amendment. He introduced it, I guess, as soon as he got here, and he is one who has unquestioned credibility and credentials on our Nation's debt, deficit, financial balance sheet, you name it. I am glad the gentleman has joined us tonight.

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Mr. TANNER. Mr. Speaker, reclaiming my time, I thank the gentleman for his comments.

I hope that we have communicated the breathtaking magnitude of this federal debt, $7.3 trillion in a $10 trillion economy. We cannot sustain that. It is like, if one makes $50,000 a year and they owe 70 percent of that in debt, they are in deep trouble, and I will talk about that in a minute. But the gentleman from Washington has joined us.

Mr. Speaker, would he like to say something before I get into whom we owe?

Mr. McDERMOTT. Mr. Speaker, will the gentleman yield?

Mr. TANNER. I yield to the gentleman from Washington.

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Mr. TANNER. Mr. Speaker, reclaiming my time, I thank the gentleman for joining us. I got interested in this, it has been 2 years ago now, and I have learned more about the Nation's debt structure and so forth than I ever thought I would. And the more I think about it, the more concerned I become. And we are talking about this gross federal debt.

Let me try to boil it down. Of the last year, we paid gross interest on the $7.3 trillion of $318 billion. If we do the math, that is, 17.8 percent of every dollar that comes into this town is going out in interest. That is a 17.8 percent mortgage on our country. If we just talk about the $4 trillion, the hard dollars, and take away the money we owe each other, we have got almost a 9 percent mortgage on the country now, and it is going up every single day.

Mr. McDERMOTT. Mr. Speaker, who is financing it?

Mr. TANNER. Mr. Speaker, I am going to answer that question, and I guess now is as good a time as any. The foreign-held debt in January of 2001 was $1.01 trillion. The foreign-held debt in July of this year was $1.81 trillion. That is a difference of $800 billion since 2001, a 79 percent increase in what foreigners hold.

If we look at this chart, in 1980, of our debt foreigners held 17 percent of it. Last year, they held 37 percent of it. That is over a 23-year period.

But look at this one. In just 1 year, through July of 2004, it has gone from 37 to 42. That is what I am talking about when, on page 2 of the story, we will hear this, oh, well, this deficit is not any greater than it has been in times gone by as a percentage of the gross domestic product. That may be true, but what they do not tell us is that, in those times before, it was Americans buying war bonds. It was Americans buying T-bills and Americans buying notes. That is not true any longer. We are now dependent on the infusion of foreign capital to buy our notes, our T-bills and our bonds to finance this government. This is a recipe for financial disaster. It has to be.

One of the heart-breaking things about this is that people just do not focus on it and do not understand the magnitude of the problem. We think about the foreign aid bill. Do my colleagues realize that this year we will ship overseas four times the amount of the foreign aid bill in interest alone? Eighty-four billion dollars we are shipping out of this country to foreign-held debt. This is something that I think people ought to be aware of.

And this chart will show who owns our debt. In July of 2004, we owed the Japanese $695.8 billion. We owe mainland China $166.9 billion; United Kingdom, $130.4 billion; Caribbean banking centers, $90.9 billion; Korea, $61.5 billion; Taiwan, $57.6 billion; Hong Kong, $50.4 billion; Germany, $49 billion; Switzerland, $48 billion. We owe OPEC $43.9 billion. We owe Mexico $34.1 billion; Canada, $33.3 billion; Singapore, $26.1 billion. We owe Luxembourg $26 billion; Ireland, $18.2 billion; Brazil, $16.2 billion; Italy, $15.7 billion; Turkey, $15 billion; India, $14.9 billion; the Netherlands, $14.6 billion; Belgium, $14.6 billion; Thailand, $14.3 billion; Israel, $13.8 billion; France, $13.6 billion; Spain, $11.9 billion; Sweden, $10.4 billion; Australia, $9.7 billion; others, $7.5 billion. We owe $1.813.1 trillion out of the $4 trillion to people who are not Americans and who may not see the world as we see it in the future. And therein lies, I think, an unacceptable risk that we are putting our country in. We are creating a financial risk to our country that is, in my view, unacceptable.

The percentage of debt that was in foreign-held hands when President Bush took office has gone up, as I said, $800 billion. And the percentage of the 2003 deficit last year that we had, do my colleagues know what happened? Seventy percent of our deficit last year was financed by foreigners.

Not us. We are not paying for it. We are not paying for anything. Foreigners are financing our deficit spending. And if you do not think that is dangerous, then you have not studied history.

I yield further to the gentleman from Texas (Mr. Stenholm).

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Mr. TANNER. Mr. Speaker, I see our friend from Mississippi (Mr. Taylor) has joined us. I thank the gentleman for coming down. Some of us sometimes feel like a canary in a coal mine. They send a canary in a coal mine to see if it can live because of the gases and so forth. We have been talking about this, the Blue Dogs and others, for at least a year.

I think maybe with the gentleman from Texas (Mr. Stenholm), what he said about USA Today, maybe we are getting through now and people are beginning to see. As I said earlier, the citizens of this country need to know this. I do not think they really fully know, because nobody has talked that much about it, but we are on a road to financial Armageddon. What we are doing around here is just plain wrong.

I thank the gentleman from Mississippi for joining us tonight.

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Mr. TANNER. Or just pay the interest on it and let them pay it off.

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Mr. TANNER. I yield to the gentleman from Texas (Mr. Stenholm).

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Mr. TANNER. Mr. Speaker, if this has not depressed us enough, this year, so far, in 2004, the increase in the privately held debt is $380 billion. The increase in foreign-held debt is $370 billion. Ninety-seven percent of the increase in privately held debt is in the hands of foreigners.

There is a fellow, Alan Sloan, who wrote not long ago in The Washington Post about us financing our government with borrowed money from anywhere on Earth where people will let us have some in exchange for our IOU, and he said this: "Whose bread I eat, his song I sing." What of course he was talking about is, as the gentleman from Mississippi (Mr. Taylor) pointed out, when you are in hock all over the world, but particularly to Beijing, and look at what they have done; I cannot believe that this is just happenstance.

Just since 2000, they have increased their holdings of our debt 119 percent. Now, there is a reason for that, and it is not because they see the world the same way the United States does every day. I am not bashing China, other than to say, we are creating a financial liability, a financial vulnerability that is tantamount to a national security issue. There is no other way we can say it. To point that out, there is a former official of the People's Bank of China, the country's central bank, who was recently quoted and said the U.S. dollar is now at the mercy of Asian governments.

I want to tell my colleagues, we not only have a horrendous balance of trade situation with Asia but, if this is true, then we are no longer the architects of our own destiny financially. There is no way this country can be strong and free and put in the position we are in, in hock all over the world, getting worse by the day. Mr. Speaker, 97 percent of the privately held debt this year increased by foreigners.

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Mr. TANNER. And if they stop, we have a crisis.

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Mr. TANNER. Mr. Speaker, I yield to the gentleman from Mississippi (Mr. Taylor).

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Mr. TANNER. Mr. Speaker, I want to thank my colleagues for coming, and we will wrap this up. But there are three things that I hope people who have listened to this tonight will come away with. Number one, we are in an unprecedented spiral of debt. We are borrowing money now faster than this country has ever borrowed it. There is not a reputable economist in this land that thinks that growth can catch up to this debt curve that is plunging us into bankruptcy. Not one reputable economist will say that growth will catch up with this.

As I said earlier at the top of the hour, we are in an airplane; and if we do not do something different, we are in a death spiral. It is going to hit the ground. It is that simple. No question about that.

The second thing is I hope people will realize that as bad as this is, what is worse is who is financing it. Back in World War II, back in World War I, back any time we had a national crisis in this country and we had to raise money through borrowing, we did it with war bonds and so forth, and people in this country invested in the good of the Nation. That is not happening. We are now mortgaging our country, 90 percent this year. It has gone up 79 percent in the last 4 years. We are borrowing from people who do not have America's best interests at heart. I hope that is the second lesson that comes out of this tonight. Please, if you think that is important, if you know, as I do, that we are creating a financial vulnerability second only as a matter of national security to the war on terrorism, because we will lose control of our own financial destiny, control of our economy if this is not quickly reversed.

And third, the way to reverse it is to immediately establish the rules of pay-as-you-go. Every family does it. If I want to spend some money over here, I have to cut somewhere over here. It is that simple. We all do it. They refuse, the Republican leadership here refuses to put what we call PAYGO rules back in. They work. If you have a good idea, that is fine. How are you going to pay for it? You have to cut somewhere else to do it. We ought to demand, the citizens, the highest officeholders in our land must demand financial accountability that has been sadly and, in my judgment, heart-breakingly absent here. I yield to the gentleman from Mississippi.

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Mr. TANNER. Mr. Speaker, we want to thank the staff. We apologize for keeping them here this late. This is a message that we hope people will begin to think about.