S. Con. Res. 41, H. Con. Res. 112, S. Con. Res. 37, S. Con. Res. 42, S. Con. Res. 44 En Bloc--Motions to Proceed

Floor Speech

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Mr. JOHNSON of Wisconsin. Mr. President, before I start talking a bit about the budget of my friend Senator Lee, I want to respond to the comments of the Senator from Iowa in terms of interest rates.

Instead of talking about student rates, let me talk a little about America's average borrowing cost. Certainly, what I have done is delved into the budget and taken a look at the history, and from 1970 to 1999--over that 30-year period--the average borrowing cost in the United States was 5.3 percent. By the way, that was when America was a far more creditworthy nation, when our debt-to-GDP ratio ranged from about 40 percent to 67 percent. Now our debt-to-GDP ratio is over 100 percent.

Over the last 3 years our average borrowing cost has been kept artificially low, at 1.5 percent. So my concern is by not seriously addressing the problem, by not actually passing a real budget that starts reining in the growth in government, we are going to go from that 1.5 percent and revert back to that average mean borrowing cost of 5.3 percent. If we do, that 3.8-percent differential would add $600 billion to $700 billion per year to America's interest expense, and that would crowd out 60 to 70 percent of all discretionary spending. That is the interest rate that I am concerned about.

That is the day of reckoning I am concerned about, when global investors look at the United States and say: You know what. We are not going to loan you any more money. Or what is more likely to occur, they will say: We will loan you money but at a far higher rate.

Having made that statement, I would like to talk a little about the budget of my friend, Senator Lee, and the things I like about it. One of the things I like to do is take a look at history. I know a lot of us say we don't have a tax problem, and we don't. It is not that we tax the American public too little, it is that we spend too much. And this is some pretty graphic proof.

This reflects our 10-year spending levels. From 1992 to 2000, the Federal Government spent a total of $16 trillion over that 10-year period. Over the last 10 years, from 2002 to 2011, the Federal Government spent $28 trillion.

Now, the debate moving forward is--according to the just released Obama budget--the President would like to spend $47 trillion over the next 10 years. The House budget would spend $40 trillion. I guess what I like about Senator Lee's budget is that he would come in and spend about $37 trillion and put us on a more aggressive path toward fiscal sanity. While we hear about Draconian cuts all the time, one doesn't have to be a math major to realize that moving to $37 trillion, $40 trillion, or $47 trillion is not a cut from $28 trillion. All we are trying to do is reduce the rate of growth.

The other thing I like about Senator Lee's budget can be illustrated in terms of this chart, which shows the total Federal debt. I started this chart in 1987, the tail end of Ronald Reagan's administration, when our total Federal debt was $2.3 trillion. I want to point out that it took us 200 years to incur $2.3 trillion. Of course, last year, in the debt ceiling agreement, this Congress gave the President the authority to increase our debt ceiling by $2.1 trillion. We will go through that in less than 2 years. That is a problem.

Of course, if we take a look at President Obama's budget, we can see how quickly our national debt has increased. But according to President Obama's budget, in the year 2022 our total Federal debt would be $25.9 trillion, up $10 trillion from what it is today. Senator Lee's budget would result in a total debt of about $19.1 trillion. Even more importantly, he stabilizes and then reduces a very important metric, our overall debt-to-GDP ratio. That is what investors take a look at in terms of our creditworthiness.

The other thing I like about Senator Lee's budget is by 2022 it will reduce Federal spending to 17.8 percent of the size of our economy. If you are like me and you think the root cause of our economic problem is the size, the scope, and all the rules and regulations, all of government's intrusion into our lives and the resulting cost of government, this is the key metric: How large is the Federal Government in relationship to the size of our economy?

Currently, the Federal Government takes 24 cents of every dollar that is generated by our economy. If we add in State and local governments, total government in the United States consumes 39.2 percent. Put another way, 39 cents of every dollar filters through some level of government.

I don't know about anyone else, but I don't find government particularly effective or efficient. To put that in perspective, for example, the cost of government for Norway last year--one of the European-style socialist nations--was 40 percent. For Greece, it was 47 percent. Anybody hear of Greece recently? That economic model is collapsing.

This is why Senator Lee's proposal is important. If we take a look at spending and revenue generation over the last 50 years, we can see spending from 1959 through 2008 averaged 20.2 percent. Over the last 3 years we have increased that to 24 percent. Revenue generation has been 18.1 percent over that same time period.

By the way, as much as our friends on the other side of the aisle want to punish success and increase the top marginal tax rates, the problem with that is it simply doesn't work. During my lifeline, the top marginal tax rates have been 90 percent, 70 percent to 50 percent to 28 percent, 35 percent, 39.6 percent, and now back to 35 percent. In all that time period the average tax receipts--the maximum amount the Federal Government could extract from our economy--has averaged very tightly around that mean of 18.1 percent.

If we ever have any chance of living within our means, we better get Federal spending down to about that level. That is what Senator Lee's budget does.

So, again, I thank my friend Senator Lee, as well as Senator Toomey, and Senator Paul for putting forward serious proposals. I thank all Republicans in Congress who are actually voting for something because, Mr. President, Republicans are proving we are willing to be held accountable to the American people by putting a plan on the table and showing the American people what we would do to try to get our fiscal house in order.

With that, Mr. President, I yield the floor.

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