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Mr. SESSIONS. Mr. President, I thank Chairman Murray for her good work. It has been 4 years since we have had a budget in the Senate. This is her first year as chair of the committee, and we have gotten a budget moved forward to the Senate floor. I congratulate her on that.
I note Senator Conrad, her predecessor, would have loved to have moved a budget forward, but the leadership somehow decided that was not the right thing to do. Indeed, they said it would be foolish to have a budget. So this is progress, and although we would have liked to have had more time in committee, Chairman Murray set up this system in a way that she was clear about, and gave us full time all day Thursday of last week to debate and make the points we believed were important, and so did our Democratic colleagues. They got to speak out. I thank her for having an open hearing and being respectful of those of us who had different views and were anxious to share them.
My colleague uses the phrase ``responsible and balanced.'' But what you have to know, I say to colleagues and friends and Americans, is that this budget is anything but balanced. It never comes close to balancing. It never balances over the entire lifetime. It does not put us on a trajectory that would ever balance. It is not a budget that in any sense balances the amount of money coming in with the amount of money going out. It just does not. And we need to talk about that.
I think the American people want a balanced budget. I believe they asked for that. I think they expect that of us, and will be disappointed to find out that the leadership in the Senate, unlike the leadership in the House, does not produce a budget that is balanced.
Today we begin debate on the budget resolution. This is the first budget resolution on the Senate floor in 4 years, crafted by our Democratic majority. We are required to produce a budget, but over the last 4 years, in violation of plain statutory law in the United States Code that requires the passage of a budget by April 15--by April 1 it should be produced in committee, we have not acted. It has been disappointing. I have had many of my constituents say: How can they not produce a budget when the law says you should have one?
Senator Reid said it would be foolish to have a budget. That was his excuse or reason for not bringing up one--foolish to have a budget when we have the largest deficit this Nation has ever seen, and we face the greatest systemic debt threat we have ever seen.
I do not think we can have a greater symbol of an arrogance of power than the refusal to produce a budget resolution over the last 4 years. It was a decision to place--as I have said before, and I have been clear on this--political ideas and values over the American interests.
Our friends in the majority speak of their deep concern for struggling Americans. Yet year after year there has been no plan produced that will actually help them. America has never been in a more perilous fiscal condition, never needed a sound budget plan more than today. So what has changed? Why are we moving forward? The answer is a simple one. The House of Representatives passed legislation. It said: No budget, no pay. So now we have a budget. Hopefully, we would have had one anyway, but I am glad that one is moving. Our colleagues probably like to get paid.
Today we know the Senate majority resisted offering a plan for these years. The budget before us today is a bankrupt vision that will bankrupt the country. It is a jaded tax-and-spend budget that surges the Nation's debt and achieves no reduction in our annual deficits. It is a budget that never balances--never.
I think this quote sums it up well:
In short, this document gives the voters no reason to believe that the Democrats have a viable plan for or even a responsible public assessment of the country's long-term fiscal predicament.
That is not my analysis but I agree with it. That comes from an editorial of the Washington Post after this budget was produced.
Senate Democrats have made no attempt to make the government leaner or more productive. Their proposal goes to extraordinary lengths to shield failing government programs from reform. Just add more money. It grows the government at the expense of growing the economy. It enriches the bureaucracy at the expense of the people. It has no plan to help discouraged workers move from dependency on the government to independence. Its surging debt and taxes will crush American workers, close American factories, and depress American wages.
I ask the American people to answer this question: Do you believe the government is wasteful; that it needs to do a better job of saving your money? If your answer to that question is yes, then consider this: The Democratic budget does not achieve a single penny in net savings. After 4 years they have failed to identify any way to save money through real reform of government spending, not a solitary cent.
So any Senator who votes for this budget apparently believes the budget is perfect and needs no reform. Any Senator who votes for this budget is saying to the American people: Washington is not the problem, you are the problem. They are saying: We have managed your money well, we have done it all right, we did nothing wrong. The problem, see, is you. You have not sent us enough money. In fact, this budget says: Send us another $1.5 trillion in more taxes. Send more money.
They also say: But don't worry, you will not have to pay those taxes. We are just closing loopholes. But closing loopholes does not come close to getting this many taxpayer dollars--it just does not. When they talk about the closing of loopholes, what that really means is it is slashing popular deductions to pay for more Washington spending--charitable deductions, home mortgage, or other exemptions. That is where the money is in the deductions. You will not raise much money with loopholes.
Let's take a moment to look at the numbers in this budget and what it claims to do. First, I would like to examine the claim that this budget reduces the deficit by $1.85 trillion. That is a significant sum of money. It is not nearly enough to balance our budget, but it is a significant sum of money--over 10 years, the claim is. When many Americans hear this they might think it means the budget authors are proposing to reduce America's debt by $1.85 trillion. Not so.
According to their own budget tables our Nation's debt will climb another $7.3 trillion over 10 years, passing the $24 trillion in total Federal gross debt that our Nation has accumulated. It does not reduce the debt, not even close. The Nation's debt grows by $7.3 trillion.
Their promotional materials, however, claim $1.85 trillion in deficit reduction--they claim that. This claim refers to an alleged reduction in the size of the projected debt increase. So the debt is going to increase, but we are going to reduce the increased rate of the debt--that is what we are going to do--by almost $2 trillion. But even that $1.85 trillion claim is totally false. It just is. It is a fabrication. It is not so. Several accounting tricks are used to create this number.
The biggest of these tricks is that their budget completely eliminates the savings that have been placed in law by the sequester, but it fails to count the elimination of the reduction in spending in the sequester as a spending increase. We voted 20 months ago--Congress did, August 2011--to reduce the growth of spending $2.1 trillion in order to obtain a raising of the debt limit by $2.1 trillion over 10 years. That is what it would be. And 60 percent of that $2.1 trillion--$1.2 trillion--is the sequester. They would eliminate the sequester but not count the fact that they have increased spending of the current law that is in place, and it is not going to be changed except to be modified so it is more rational in where the cuts fall. But they would wipe it out and not count that as increasing spending.
This is how the country goes broke. This is how America confuses what it is doing--I would say deliberately--to try to convince the American people they are acting responsibly when we are acting irresponsibly.
I asked Chairman Murray's fine staff about this at the hearing. They didn't want to talk about it, I have to say. But when pressed, like good staff people do, and the question was put to them plainly, they gave an answer--the correct answer, I think.
Sessions: Relative to current law, under your plan if it is enacted, how much deficit reduction will occur?
The staff answer:
Again, if you want to go straight to CBO baseline that we started when I was talking to Mr. Johnson it would be about $1.75 trillion. If you want to make the adjustments and take out the sequester--
And of course we should--and the disaster, yes, obviously it's much less. I think the total deficit reduction is about $700 billion in the plan.
Mr. President, $1.85 trillion claimed in reduction. If you count the sequester you are at $700 billion. $1.2 from $1.9 leaves $700 billion. But there are more gimmicks than that which take us down to zero deficit reduction, really.
So I asked this question again to the staff of the majority in the committee:
Can you honestly say that under this budget you can achieve $1.85 trillion in deficit reduction and eliminate the sequester with only $975 billion [you claim] in new taxes?
And the answer was, ``No.''
Of course you cannot, but that is basically what they were saying. That is what they said in their promotion of this budget, that it achieves $1.85 trillion in deficit reduction. Any American who heard that would assume it means we are going to reduce the amount of deficit being added by $1.85 trillion, relative to current law.
Once again, we have this obsession, it seems, in Congress. We are trying to maneuver numbers around so we can spend more money while claiming we are not.
They claim they are reducing the growth in our debt by almost $2 trillion, but it is not so. It does not happen under this budget. If anyone wishes to know more details, we will share those as time goes by.
There are other gimmicks in this budget too. The budget fails to account for the cost of continuing the stimulus tax credits and fails to offset the doc fix, as well as the physician payment fix, which we have to do just like we do every year. It should be scored. We know we are going to have to make that expenditure.
Chairman Murray's budget, which the committee voted on and passed, only includes $75 billion to fund the war on terror for 10 years. How much did President Obama say the War on Terror, when he submitted his last budget, would cost over 10 years? He said it would cost $494 billion. So they just waltz in and say: We will spend $75 billion in the first 2 years and zero on the War on Terror over the next 10 years.
The Ambassador was in my office this week. He negotiated an agreement for a reduction of forces in Afghanistan. We are planning to be there for years. We have drone attacks going on. We have special forces around the world fighting al-Qaida, with whom we are at war, and that is what has been funding that--this account--and they assume it is going to end. It is not going to end. But if we assume it is going to end, we save, according to the President's projection, some $400 billion. They can claim to save $400 billion by assuming we are not going to spend money that we are going to spend.
So if we add up all of these items--not scoring the sequester, the doc fix, the new stimulus money, the manipulation of the war costs--then there is zero deficit reduction. We raise $1.5 trillion in new taxes, and there is a zero-deficit reduction because spending has increased. So this budget also means there is a net spending increase above the projected growth of spending. We are on track to increase spending every year even with the Budget Control Act and the sequester--that is going up every year--but they want to spend even more than that. They want to increase the unsustainable debt course we are on now more than the current law calls for.
This budget breaks the spending limits we just signed into law with the Budget Control Act. We told the American people, who were reluctant to raise the debt ceiling--and a lot of Members of Congress were reluctant to raise the debt ceiling--because we were so irresponsible around this place. But an agreement was reached recognizing that it would be disruptive, to a significant degree, to raise the debt ceiling $2.1 trillion, that we would reduce spending over 10 years by $2.1 trillion.
We have already run up another $2.1 trillion in debt. We already hit that. In his budget last January, the President--less than 6 months after he signed the Budget Control Act and eliminated a little bit of the growth in spending--is proposing to eliminate the sequester part of it, which is $1.2 trillion, or 60 percent.
Here are some other figures the American people should know about this budget. It has a 60-percent spending increase over 10 years, which would increase spending by over 60 percent. It has over a $162 billion increase in spending next year--another stimulus bill. There will be $7.3 trillion in new Federal debt that will be added under this budget over the next 10 years; a $1.5 trillion tax increase; an 80-percent increase in Federal welfare and means-tested poverty spending. All the poverty programs--means-tested programs--would increase 80 percent. There is no reform for those programs, but a big increase.
So the question of whether to balance the budget is one of the central features of this debate that we are having now. If the American people take nothing else away from this debate, it should be that the party running the Senate--the Democratic Party--is spending taxpayers' dollars and refusing to ever balance the Federal budget.
By contrast, the Republican-led House, with Senator PAUL RYAN and his team, has a plan that they will vote on today which will balance the budget. They have passed a budget every year. Our colleagues in the Senate, while refusing to pass a budget, have delighted in complaining about the leadership and the responsible action of the House by blaming everything they can think of, and more, on unkind Paul Ryan who wants to push the old folks off the cliff, and that is not true. He has good plans; he has growth plans. What I would say to everyone is: This Senate has done nothing by being critical of everyone else. We have had several budgets come up, and I voted for several of them. My Democratic colleagues have voted for not one. They voted against the Ryan budget, they voted against the President's budget, they voted against the Toomey budget, and they voted against the Rand Paul budget. They voted against them all. Yet, they don't seem to be the least bit hesitant to attack everybody else.
I think we have a moral duty to balance the budget. It is not right to continue to spend and enjoy borrowed money today that someone else will have to repay tomorrow. We also have an economic duty to balance the budget, and I wish to talk about that. We need to balance the budget to prevent a future financial crisis, as Erskine Bowles and Alan Simpson told the Budget Committee a couple of years ago. We are facing the most predictable financial crisis in our Nation's history if we don't get off this debt path. We need to act now to deal with the present danger that is occurring to our economy.
Our massive public gross debt is hurting growth today. Our economy today is being damaged by it. It is destroying jobs today. Massive Federal debt is creating poverty and joblessness right now. The debt is pulling down economic growth right now--not tomorrow, now. People are not getting jobs today because of this debt. People are not getting promotions, bonuses, and wage increases as a result of this debt that is hanging over the country.
Well, some might say: How do you prove that? The famed economists Rogoff and Reinhart testified before the Budget Committee a year or two ago. They released a paper last April that concludes when gross debt--not public debt, which is somewhat less--the $16-plus trillion that we see on the debt clock in public--reaches 90 percent of GDP, then the economy slows between 1 percent and 2 percent. The economy begins to slow. Our gross debt is now 103 percent of GDP. Some may not be aware--and my colleagues need to know this--that the International Monetary Fund, the Bank for International Settlements, and the European Central Bank have all independently done studies of this kind and reached very similar conclusions.
The other studies with different approaches all find that our current debt load in the United States--which is now almost $17 trillion--is causing a drag on our economy. A 1-percent decline in growth costs 1 million jobs, according to Christina Romer, who worked in the Obama White House as a top economic adviser.
We know that for the past 3 years, growth in America has fallen well below what our experts, the Congressional Budget Office, have predicted. These studies show our debt is hurting the economy now and that increased spending and more debt must end now. It cannot be contended any longer that it is good for America to borrow more and spend more. We cannot borrow more to spend more. Somebody compared that to taking a bucket in the deep end of the swimming pool, filling it up, and going to the shallow end and pouring it in. If truth be known, when you borrow to spend, you drop some along the way. We must grow the economy, not keep growing the government, and certainly not keep growing the debt.
I believe we all know this. I think the American people know it, and we in Congress have a responsibility to honestly confront this challenge and put our country on the right path. As we learned, we actually don't have to cut spending. All we really need to do is allow the spending to increase, but allow it to increase each year at 3.4 percent and not 5.4 percent. If we increase it at 3.4 percent, as Congressman Ryan has done in his budget, the budget balances in 10 years. We don't have to slash spending. We can even allow spending to increase, but we have to manage the growth of it. We can do this.
The recovery we are seeing from the 2007 recession is the slowest since the end of World War II and slow growth is expected to continue. The Commerce Department reported last month that the economy barely grew in the fourth quarter of 2012. We had virtually zero growth in the fourth quarter. That was a surprise. CBO expects the U.S. economy to limp along in 2013 at about 1.4 percent after inflation is taken out. That is a muddled, slow-growth, economy well below what they were predicting 2 years ago, which was a growth of about 4.6 percent, as I recall, for 2013. So no one disputes that this is the slowest recovery since 1945.
Why is it so slow? It certainly is not because the government has spent too little of the taxpayers' money. It is certainly not because we borrowed too little and spent too little. Total Federal spending has gone up 30 percent since 2007, and our annual deficit today is 7 times greater than the annual deficit was just 5 years ago. So as a consequence of huge annual deficits, our debt has grown by 73 percent since the beginning of the recession, over which time we added $6.6 trillion in new debt.
It seems quite clear that a substantial reason our recovery is slow is because of the depressing effect of high debt, big spending, a burdensome tax code, and regulations that are unnecessary. But every time Republicans have tried to reform the government, they meet the same response from our Democratic leaders--from the President to Senator Reid to Chairman Murray--attack the reformers.
Majority Leader Reid said of one Republican reform effort that it was ``a mean-spirited bill that would cut the heart out of the recovery we have in America today ..... it goes after little children, poor little boys and girls.''
I think that is an unkind thing to say. I don't think anybody proposed any legislation that would have that effect or ability or intent to do anything like that.
Chairman Murray said:
I will not agree to a deal that throws middle-class families under the bus .....
Well, we are not throwing middle-class families under the bus. We want economic growth. We want prosperity. The real truth is that the debt increases borrowing, and spending has not worked. The debt is already so high and we have irresponsibly run up so much that it is pulling down the economy because it is over 100 percent of GDP.
We don't need to be attacking people who disagree over solutions in harsh personal terms, but we do need people to focus honestly on the disagreements and the challenges we face.
The real victims we are seeing here today are the millions of people trapped in poverty by failed government programs. The real victims are Americans who are being denied help by those who would defend the Washington establishment at all costs and won't reform. The real victims of the left's rhetorical assaults are the communities out there that are thirsting for growth and opportunity but denied any policies that would create more jobs and actually create better and rising wages. The real victims are the millions who lost or can't get jobs, and they are out there--we have fewer working today than we had in 2000--or those who didn't get a pay raise because the debt has pulled down economic growth.
So I think this budget shows no really effective concern for Americans living in poverty, struggling to work, trapped in a stale bureaucratic welfare state. There is no reform that will actually work to help them. That is what I am concerned about.
Look at a city such as Detroit, governed by liberal policies for decades--a city once rich with business and commerce and opportunity. More than half of all Detroit children now live in poverty. Look at our Nation's Capital, another major city locally governed for decades by very liberal policies, a city filled with finance and deep-pocketed businesses. Washington, DC, is flowing with Federal funds. No city gets more from the Federal Government than Washington. Yet, despite this cash, one in three youths in our Nation's Capital lives in poverty. Two in three live in single-parent homes--two in three.
So this budget perpetuates the misguided policies that are causing social and economic harm in every State, in every region, in every part of this country. That is my view. Others may disagree, but I am prepared to defend it, and I think that empirical data and observations show it is correct. Compassion, if we care about people who are hurting, demands that we change, does it not?
We need to grow the economy, not the government, and do it for all Americans in every State and city.
We need to create rising wages and better jobs without just borrowing money and handing it out through some government check. That is not working. It is over. We need to understand that. We need an economic policy that provides our children with more jobs, not more debt. We need jobs. We don't need to be burdening our children for the rest of their lives with an unconscionable debt so we can live high today.
We need to reform and improve ineffective government programs so they help more Americans actually achieve their financial goals. How can we do this without running up the debt? Is there something we can do? Don't we have to have government investments? Don't we have to borrow more money? We don't have any. Any new money we spend is all borrowed. We are in debt. Aren't there some things we can do? Absolutely there is, and they are things that do not cost money. How about this: create a new tax reform system that creates growth, revenue-neutral but simpler, more pro growth-oriented and fairer. Can we do that? Yes.
What about more domestic American energy production? Produce more energy here instead of sending our money abroad, creating jobs here, creating tax revenue for our States, cities, and counties.
Let's make the welfare office--which gets from the Federal Government today hundreds of billions of dollars in spending--a place that restarts lives, that helps people rejoin the workforce, not trapping them in government benefit programs year after year.
Let's defend American workers from unfair foreign trade practices--and there are a lot of them. It is time we stood up to it.
Let's make government leaner and more productive. A leaner government, a more productive government is good for America. I don't see any reform effort there.
Let's eliminate every burdensome Federal regulation that isn't needed. Those are job-killers. If a regulation promotes safety and is economically viable, that is OK, but if it is not--and many are not--let's eliminate it. It is a drag on growth and prosperity.
Let's enforce Federal immigration laws, and let's protect American workers and legal immigrants from those who care only about importing more and more cheap labor.
Let's balance the Federal budget. As I said, balancing the budget and reducing the debt of America over time will get our debt down so it won't be a drag on the economy.
The American people have heard a lot of rhetoric from their elected officials and a lot of buzzwords about financial discipline this week. Rhetoric will be matched against reality. Every Senator will have to stand and be counted. I encourage the American people to tune in to C-SPAN and see where their Senator stands on the great issues of our time: Do we balance the Federal budget? Do we reform the bureaucracy or just keep spending more money? Do we keep sending even more money to Washington through more taxes? Do we embrace our great constitutional inheritance of freedom or do we let it slip away? These are questions of our time.
The budgets reflect where we stand on these issues. I would say the Democratic budget represents more government and less commitment to efficiency--not the kind of change and progress we need. We need to have a budget that balances, that is oriented toward growth and prosperity.
I look forward to the debate today. It will be an interesting challenge throughout the next couple of days. I have been very passionate here today, very frank here today, but I know we have great colleagues on both sides of the aisle.
In our debate in the Budget Committee, we had some great Senators on both sides of the aisle who have different views and expressed them ably. Chairman Murray is so articulate and wonderful to work with, but we do disagree.
It is time for change in this country. It is time to understand that our goal must be to promote prosperity and job creation and higher wages, not more government. That is what the debate is about. I urge my colleagues to be engaged in it, and let's begin to change the direction of our country and put it on the road to prosperity.
I thank the Chair and yield the floor.
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Mr. SESSIONS. Mr. President, I appreciate the opportunity to be with our colleague, Senator Stabenow, who serves on the Budget Committee.
Just briefly, and then I would yield to Senator Roberts, President Obama, on March 13 of this year, said:
And so--you know, my goal is not to chase a balanced budget for the sake of balance.
Now, my colleagues--and we have been counting--so far have used the word ``balanced'' at least 14, maybe 15 times already. They use the word ``balance,'' but their budget comes nowhere close to balancing. It never balances. It has no potential to balance. It is focused on spending and more taxes, not balancing the budget.
Senator Reid said: We want to pay down the debt. There is no plan whatsoever to get our deficit to zero so we can begin to pay down debt.
I believe Senator Stabenow used the phrase, ``a commonsense way to balance a budget.'' There is no plan to balance the budget. Let's be honest. Those words can be said repeatedly, over and over, but I really can't hear them. What I hear is the budget document itself, and it says: I am not balanced, I will never balance, and that is a fact.
It is great to have Senator Roberts of Kansas here, and I yield to Senator Roberts.
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Mr. SESSIONS. I thank the Senator from Kansas. He is an excellent member of the Finance Committee and he is experienced on these issues. I appreciate his insight. I would like to ask him a question.
He has noted this budget never ever balances. It doesn't come close to balancing. It has no intention of balancing. But we have been counting, I say to Senator Roberts, and our Democratic colleagues who have been promoting this budget have, I said earlier, about 14 times used the word ``balanced.'' Actually, already tonight they have used the word ``balanced'' 23 times in reference to a budget that never balances and never intends to balance.
I wonder if you thought that might reflect a guilty conscience on the part of those promoting this budget?
I am glad you will not be arrested for that device on the floor.
But I think it is pretty sad that we have such a use of that word.
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Mr. SESSIONS. I thank the Senator. I note again the President said to George Stephanopoulos, live, on March 13, ``And, so--you know, my goal is not to chase--a balanced budget just for the sake of balance.''
I am also pleased the distinguished ranking member of the Finance Committee, senior, actually, member of the Budget Committee on the Republican side, Senator Chuck Grassley, who has been involved in these issues for many years and been a leader for many years, is with us.
I yield to Senator Grassley of Iowa.
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MR. SESSIONS. I thank the Senator and ask him to take as much time as he chooses. But I note, as ranking member on the Finance Committee and having been on it and having dealt with these issues for many years, the Senator knows what the political situation is and he has the staff to help him ascertain the correct numbers. I think this will be an important bit of information to share with us, and I look forward to it.
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Mr. SESSIONS. Mr. President, I thank the distinguished ranking member of the Finance Committee. That was a very fine presentation. I believe he is absolutely accurate. It is easy to say we are going to close loopholes and we are going to raise a trillion dollars-plus from closing loopholes. But the Senator just showed, based on the votes of our Democratic colleagues, and others too that it is much harder to harvest money from legitimate tax deductions and credits than a lot of people think.
Would that be fair to say?
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Mr. SESSIONS. So I guess the President here has said: Well, so you know my goal is not to chase a balanced budget just for the sake of balance. But when our colleagues talk about a balanced approach and they have a budget that does not actually balance--I guess what I am saying is that the Senator talks to his constituents more than any Senator here, I am sure. Does the Senator think they really believe we should have a balanced budget, revenue equaling outgo? I ask an accountant that question.
Mr. ENZI. The Wyoming people absolutely think there should be a balanced budget. They do not think it ought to take 10 years to get there. They know how they have to operate. These are just hard-working, ordinary people with big hearts and an interest in jobs and their families. They are not seeing jobs happening. They are not seeing the economy improving. They are seeing taxes rising and people just talking about raising taxes. That is not where they expect us to go. All of them can suggest someplace within their realm of work that there ought to be a change.
Most of them say the best way to improve the economy, the best way to do jobs is just to get the government out of our way. These are people sitting on a tractor, even working in government during the day, thinking of ways their job could be reinvented to maybe be a little bit better. That is how governments can improve. They come up with some commonsense suggestions. I haul it back here, but commonsense doesn't go very far around here. I will keep hauling it, continue talking to people and continue to see what their expectations are, and hopefully we can meet those expectations. It doesn't take an accountant to know we are overspending.
Mr. SESSIONS. The Senator mentioned--which it does seem to me we are doing here by this budget--if it were to pass, we don't have any plans to change what we are doing. The problem is that you haven't sent us enough money. As the Senator indicated, send us more money, and we will all be happy in Washington. That is not what my constituents are telling me they think we should do. What are yours saying?
Mr. ENZI. They are saying there should be quite a changeover back here until we have people who understand that you are not supposed to spend more than you take in. The answer is not charging them more in taxes every time we can't meet that expectation. They already think there are enough programs out here. Sometimes I have to agree with them.
When I started as the chairman of the Health, Education, Labor, and Pensions--HELP--Committee, within my jurisdiction was preschool programs. There were 119 preschool programs. We spent more on preschool than we did on K-12. Senator Kennedy and I were able to get those down to 69 programs. People wonder why we can't get it below 69 programs. Most of them aren't handled by the departments we work with. They are handled by Agriculture, Commerce, and other agencies. We don't get to dabble in those. There are ways we can eliminate duplication and save a little money, but we are not looking for that.
Mr. SESSIONS. Here is the GAO report I think the Senator referred to, the 2012 annual report: ``Opportunities to Reduce Duplication, Overlap and Fragmentation, Achieve Savings, and Enhance Revenue.'' I think my constituents would say this is exactly what you should do. Do yours?
Mr. ENZI. Absolutely. It looks like a tremendous manual. We have a thing called the Government Performance and Results Act, which is where every agency is supposed to list what they do and how we will know they completed it. At the end of the year, they are supposed to evaluate themselves to see if they did what they said they were going to do. Most of them don't report, and those that usually do fail, and that is a lot of what is in that report. The agency is saying: No, we didn't do what we are supposed to do.
Mr. SESSIONS. It is. It lists here on page 51 specific examples. The Senator mentioned duplication. This one is employment of people with disabilities--a very good goal. This is something we would like to see if we can facilitate and help them work. It states: ``Better coordination among 50 programs in nine Federal agencies that support employment of people with disabilities.'' There are 50 programs in 9 agencies. Does the Senator believe we could get more help for the disabled if those programs were consolidated and brought together in a single or a few programs?
Mr. ENZI. One of the things that happen with the programs is they usually get named after some Senator and he is very protective of his particular program. This is one of the things that make it very difficult to eliminate programs. Yes, if the duplication is eliminated, you may put the emphasis on the programs that are really working and that should succeed. That should make a bigger difference to everybody.
Mr. SESSIONS. That is common sense. I thank the Senator so much for his contributions. I do believe the American people have a right to say to us: You fix the duplication. You fix some of this waste. You quit throwing money at Solyndras and hot tubs in Las Vegas before you ask us for any more money.
We haven't done it.
I know fundamentally it is fair to say the Chief Executive of the United States is the person responsible for managing this bureaucracy. We are sort of like an active board of directors that monitors this.
Would the Senator not expect that a really committed President, Chief Executive of the United States, should be sending to us proposals on a regular basis that are based on reports of his Cabinet and sub-Cabinet people to eliminate waste, fraud, and abuse? Wouldn't that help us if we had more support from the President's side?
Mr. ENZI. That is probably the only way it can be done, is to have the President suggest this is leadership, this is management, this is what the White House is supposed to be in charge of and could do.
I also know that even if the President talks about eliminating a program, there will be the 10 good examples from across the United States that actually work that will come in and flood us with comments about how that program cannot be eliminated. This is why I have the penny plan--one cent of every dollar across the board. Then you don't run into that problem. As I said, that would balance in 3 years, not 10 years.
Mr. SESSIONS. If we reduce by 1 percent, one penny out of every dollar of spending for 3 years, the budget would balance
in 3 years, 4 years?
Mr. ENZI. Yes. These are the latest figures. After the sequestration and after the fiscal cliff, it came down to that. Before that, it would have taken us 5 years.
Mr. SESSIONS. I thank the Senator for sharing that and thank him for sharing his thoughts with us tonight.
Mr. ENZI. I thank the ranking member for the tremendous job he has done and the hours he and his staff have put into reviewing these things. This is not an easy thing to follow. The book we have is an actual manual. The bill we receive to work from is just a bunch of numbers. It is hard to put that all together, and I thank the Senator for the information he has provided.
Mr. SESSIONS. I thank the Senator.
I yield the floor.
BREAK IN TRANSCRIPT
Mr. SESSIONS. Mr. President, another thing that I think is important and that we do agree on is the concept that our plan should be to create growth, jobs, and prosperity. A budget-balancing exercise must be a part of that whole vision of how we make America a better, more prosperous place. What we are learning is that we can't borrow our way to prosperity.
I will never forget being in Evergreen, AL, a few years ago at a townhall meeting when a nice African-American gentleman stood up. He said, ``My daddy always told me you can't borrow your way out of debt.''
If you think about it, that is basically what we are saying we are going to do. We are saying it is not a spending problem. This is not the problem we have. The problem we have is that we don't have enough money.
We have two solutions: One is to borrow more money, and the other is to tax more, taking money from people who otherwise would use it in the economy to invest, expand businesses and the like, or raise--increase spending or borrow the money, adding to our debt.
Debt accumulates over time. Each billion dollars, trillion dollars that is added to the debt, we pay interest on. People lend us that money. A lot of people haven't thought about it much, but we have to pay interest on it. It is projected by the budget before us today that in 10 years we will be paying $800 billion--virtually $800 billion a year in interest. Think about this. Interest on our debt will be almost $800 billion a year. Under the CBO current baseline it is a similar number. The Defense Department budget, which is actually being reduced--one of our largest--is $500 billion, Social Security is about $750 billion, and Medicare is about the same or a little smaller. It would exceed every other budget item in our budget--interest on the debt--every year.
We have been wrestling, nickeling and diming, cobbling together money for a budget for our highways--$40 billion or so we could put together and have a program that doesn't cut our highway funding. We have more efficient cars, people are not buying as much gas, and taxes aren't as much as we projected they would be a number of years ago. It is getting to be a tight budget. We spend about $40 billion--maybe a little more now--on the highway budget every year. This is maybe 1.1 percent of the total Federal Government budget.
We will be spending $800 billion on interest each year. The money we spend on interest produces us nothing. All it does is help remind us of the good old high time we had back in 2008, 2009, 2010, 2011, 2012, 2013, when we were spending and borrowing. We can think back: Wasn't that a great time when interest rates were unbelievably, artificially low. They will not stay at that rate; they are going up. We have had a great time, but the piper is going to demand his due as the years go by. It is just a fact.
This is how countries get in trouble. Greece and all of those countries in trouble in Europe, their debt became so high, their interest rates started going up. People were afraid to lend them money, and they wouldn't lend them more money unless there was more interest. All of a sudden, their interest payments were so large that their whole economy and governments were threatened. I think this is a big deal.
We keep hearing that spending is not the problem. I would like to talk about this a little bit because it is very important.
Nancy Pelosi, minority leader in the House, said this earlier this year: ``So it is almost a false argument to say we have a spending problem.''
We don't have a spending problem. The American people need to send us more money, I guess is what she would say. No, don't look at these duplicative programs; don't look where we are wasting money. It is important. You can't have austerity and actually cancel a worthless government program. They somehow might lose their job and the country will sink into the ocean.
America will be better, our economy will be stronger, if we are leaner and more productive as a government. Surely, we can agree on that. Surely, we can't maintain, as Paul Krugman did the other day--unless he is advising the Democratic majority in the Senate--that even wasteful Defense Department spending shouldn't be cut because we want to stimulate the economy with borrowed money, throwing money at programs that are no good. That is no way to do business.
Steny Hoyer, one of the Democratic leaders in the House, says: Does the country have a spending problem? The country has a paying-for problem. We don't pay enough, Mr. Hoyer says. Mr. Hoyer says we need to pay more to Washington so Washington can keep spending.
We are not changing. It is the American people's fault. Don't you know, we are investing for you. Give us more money so we can invest. Don't you think all these programs work? Aren't they doing great? No, we are not going to reform them. We can't cut a single one--children will be thrown into the streets; old people won't have drugs for their health care. And all of this because of a modest reduction in the growth of spending?
Congressman Ryan has demonstrated, and the numbers are absolutely clear, that we can increase spending by 3.4 percent a year, and the budget will balance in 10 years. We don't even have to cut spending. We have to reduce the rate of growth in spending from around 5.4 percent to 3.4 percent and the budget balances. But President Obama says he is not interested in balancing the budget. My goal is not to chase a balanced budget, he says.
I know my colleagues have used the word ``balanced.'' I said earlier they used the word ``balanced'' tonight 14 times, but I have been corrected. It is 24 times already tonight that my colleagues have used the word ``balanced'' in relation to this budget that never balances and never will balance because they are not concerned about balancing the budget. That is not what it is about with them. They think bringing the budget into balance, as most States have to do, as all cities and counties have to do, is austerity. Oh, we can't have austerity. That might hurt the government. Somebody might lose their job. They no longer would be paid to do some worthless job that doesn't produce anything. We have to keep paying them anyway because it would be austere to cut that out.
Senator Harkin said in February: We have the richest Nation in the world. If we are so rich, why are we so broke? Is it a spending problem? No, it's because we have a misallocation of capital, a misallocation of wealth. If we are so rich, why are we broke, he says. Is it a spending problem? No, it is because we have a misallocation of capital, a misallocation of wealth.
What he means is the government hasn't taken enough wealth from the American people who worked hard and earned it, so they can distribute it around. That is what he means; that we are entitled to more of it from the economy, and we can extract more of it and then we can pass it out and we can tell all the people who get our checks how much we did for them. By the way, we ask them to vote for us while we are at it. See what I sent you? I need your vote now. By the way, these awful Republicans, they are talking about taking those checks away. You might not get all that money now, or you might get $98 instead of $100, and I am going to protect you.
So this is the politics of this thing. It is clear we have a mentality around here that is not healthy, and the mentality is that it is not a spending problem and we don't have to cut spending and the Democratic budget increases spending over the baseline we are on. It raises taxes. We will submit a document for the record that we think shows we have $1.5 trillion in tax increases in this bill. But whether it is $1.5 trillion or $1 trillion, the deal is that spending goes up, and there is virtually no alteration in the debt course of America over the next 10 years.
So why is it that it is a spending problem? Let me explain it. It actually came to me more clearly during a hearing recently where Mr. Elmendorf, who is the Director of CBO, the Congressional Budget Office--and a very smart man and a decent individual--was talking about the growth in spending and taxes and the tax increases that just occurred and that sort of thing. This is the story.
I asked him this: If we raised enough taxes to balance the budget today, and if the economy is growing at 2 percent, would the taxes grow at about 2 percent a year?
He said: Yes. They work hard to figure out what kind of tax growth it is, but taxes basically grow with the economy. As more people are working, the economy grows, and they pay more taxes. If they grow at 4 percent, the government takes in more money than if it grows at 2 percent.
But the question was, What if spending is growing at 5 percent? Even if we raise enough money today to close the $1.2 billion deficit we had last year to zero, and the economy is growing at 2 percent, and spending is growing at 5 percent, we will immediately start off on an unsustainable debt course.
So I asked him: Well, then, that is the definition of an unsustainable course, isn't it; that you are on a path to raise spending more than you are on a path to have revenue come up?
And that is where we are. We can't keep raising taxes and keep allowing our spending rate to increase beyond what the economy will sustain. This economy, this government, this America that has produced the greatest wealth, the greatest freedom, the greatest prosperity, the greatest growth, the greatest innovation the world has ever known was not built on a state-dominated economy. It is not a socialist government state; it is not a European economy. It is a growth economy. We will make a mistake that we will regret, and it will be a colossal error for the future of this country if we alter that great characteristic of this fabulous country of which we are a part.
We are a government of limited powers, a constitutionally controlled government. It does not dominate our economy. It does not dominate the people's lives. People are free, and they should be encouraged to be independent and resourceful and to take care of themselves and their families. When they have a hard time, we need to help them. We have programs that spend $750 billion a year. I kid you not.
If you cobble together all the means-tested welfare programs that go to some--well, Medicaid. Medicaid is a free program for people whose income is below a certain level. Medicaid is a means-tested welfare social program, and there are a lot of them. It is the biggest. But you put all those together and it amounts to $750 billion a year in expenses or outflow. There are at least 83 of these programs, which are not brought together. They have independence, an independent management, different and independent departments of our government. They are not coordinated.
What we need to do when a person is hurting and they have lost their job and they need food stamps and TANF and unemployment compensation and other benefits that they are entitled to, and will get--and will continue to get, at least that kind of compensation--we need to be producing a system where these programs are brought together. We need to meet with that person--perhaps a single mom who has lost her job, maybe a young person who hasn't been able to find work--and we need to use some of those monies instead of just sending aid out and a person comes in every month and signs up and gets a benefit to help that person. What kind of skills do they need? Do they need an automobile to go to work? How can we help them move from dependency to independence? How can we help them create a healthy life for themselves, their family and their future? That is where we need to focus, and we are not doing that. We are not even close to that.
The 1996 welfare reform accomplished a lot of that. The number of children in poverty dropped dramatically. They did a lot of reform. The welfare office became an employment office in many areas of the country. It helped people move into an advanced lifestyle and away from dependency. But we have gradually drifted through the Bush years and into the Obama years to where those qualities of that program have been undermined, and President Obama is overtly advocating relaxing some of the rules that mandate work requirements for some of the people involved. He is retreating, too, and that is the wrong way to go.
We have a group of our excellent Senators--fine people--meeting in secret. Maybe they are down the hall now. I don't know where they are, but they are plotting right now on how to pass an immigration plan. We just can't wait to see what it is so we can just vote for whatever they decide we ought to have. You know what they tell us? We can't get workers. We have to have foreign workers. Yet we have never had more people on welfare, never had more people on food stamps.
In 2001 we spent $20 billion on food stamps. Last year we spent $80 billion on food stamps. It has gone up fourfold, but we are told there are not enough Americans to do work. Somehow this welfare office needs to be dealing with this problem, and we need to have a consolidated program. But there is no plan in this budget, and no plan that has been offered on the floor.
Any time anybody makes a suggestion that we make reform, they get attacked. I have been attacked. I offered an amendment when the Agriculture bill was moving last year and we were on track to spend $800 billion over 10 years on food stamps. We found there was a categorical eligibility provision that was being abused substantially, allowing people who basically did not qualify for food stamps under the program to get the food stamps. So I proposed to close it. It would have saved $10 billion. We would spend $790 billion over 10 years rather than $800 billion. And I was attacked. I was kind of shocked, really. It was said that I was trying to balance the budget on the backs of hungry people. I wasn't trying to balance the budget on hungry people, I was trying to close an abuse of the program and, actually, thankfully, would have saved $10 billion--$1 billion a year over 10 years.
So this is where we are. We have a firm resistance to reform throughout the system, and it is not a little bit of money. These 80-some-odd welfare programs--hold your hat--over the next 10 years are supposed to grow, as predicted by the Congressional Budget Office, by 80 percent--80 percent.
My fine budget staff has looked at those numbers and they have concluded if we could improve those 83 programs and let them grow at 60 percent instead of 80 percent, we could save the taxpayers $1 trillion over 10 years.
I kid you not, $1 trillion. This goes a long way toward balancing our budget and helps us in a lot of different ways. If it is done right, it will be better for the people who need help than the present 83 disjointed programs that have no coherence and no focus on helping poor people actually improve their lives.
I grew up in the country. I grew up with poor people. I was poor. We didn't have central heating. I have no doubt our income was below the poverty line most of the time I was growing up. We had a garden. My daddy had a country store. We got by. But we didn't have any money. I remember when we got our first air conditioner--and it gets hot in Alabama. We moved from one room to the other when you turned it off. You didn't want to pay for electricity you didn't need. We had a fireplace in the living room. That was the only heat we had. The fireplace burned in the winter all the time. We cut our own wood. I worked construction in the summers both summers I was going to college, saving a few bucks being a carpenter's helper and working out in the Alabama heat. It didn't hurt me. And this idea that people aren't willing to work and we have to import foreign labor and we have to give people welfare because we can't find them a job, while businesses say we don't have enough workers, is somehow a messed-up idea. This is not helping. We have got to confront this problem. There is no plan to confront this problem or talk about it in any realistic way. It is time for us to be honest about this country's problems.
We do have a spending problem. Spending is going up faster than the economy is growing, and it will always create a deficit. You can't create something out of nothing. Julie Andrews sang, ``Nothing comes from nothing. Nothing ever could.'' That is so true. So we need to have a government that is leaner, that is more productive, that does more for the American people than it is doing now for less money.
My office has been spending less than we are allocated every year. I believe this year the Senate has reduced its budget about 10 percent over the last couple of years. I am down about 20 percent. This idea that you can't cut spending throughout this government is one of the most ridiculous ideas that has ever been raised.
I was a U.S. Attorney. I managed an office of lawyers and staff. When Ronald Reagan came in and we didn't have any money, we watched every dime we spent. The former Deputy Attorney General of the United States, Larry Thompson, was from Atlanta and I was U.S. Attorney in Alabama. We were such dyed-in-the-wool frugal Reagan hawks, when we were made U.S. Attorney we came to a conference and we roomed together, in separate beds, but we thought it was cheaper and saved money for the taxpayers. This is the kind of mentality that needs to get back into what we are doing, and I would say that it is time for us to confront this.
The vision of the Members of this side, and I think a lot of Members of that side, is not that far apart. But I want to be clear about a couple things. This budget needs to be put on a path to balance. It can be done without cutting spending in any dramatic way. All you have to do is reduce the rate of growth in spending. The budget will balance in 10 years. We need to do that. We need to plan to do that. As I explained before, the debt is already pulling down economic growth in America. It is pulling down the growth we have. The debt has reached such a level, 104 percent of GDP, that it is above the limit and the level that the International Monetary Fund, the Bank for International Settlements, the European Central Bank, and the Rogoff-Reinhart study say begins to pull down growth. We are losing jobs, we are losing promotions, we are losing pay raises as a result of this debt right now.
We share the view on both sides of the aisle that we need to be looking to create growth. Our colleagues say, Let's keep doing what we have been doing the last number of years. We have another stimulus package, we have another $100 billion, and we are going to borrow this money because we are already in debt, and to spend an additional $100 billion requires borrowing an additional $100 billion, so we are going to borrow $100 billion and we are going to spend it, and this is going to make the economy stronger. Sorry. We have been there, done that. We say no. We have got to end this mentality. We need to make this government leaner and more productive. We need to have this government do things that create growth and jobs that do not add to the debt.
What are some of those things? Simplified taxes, eliminate unnecessary regulations, more American energy. Those are the kinds of things we can do that don't cost money that create jobs. Complete the Keystone Pipeline. Don't keep sending money to Venezuela or Saudi Arabia. Create jobs in America. Ask the people in North Dakota; they have got growth and prosperity as a result of energy production. These are the kinds of things we can do and we believe in and will continue to work for.
I would say that maybe, even though we have a big difference--and this budget will be quite different from the House budget--I don't say it is impossible that in conference some sort of more global agreement could be reached to put America on a sound path. We will have to deal with the entitlements. Entitlements represent half of the spending--and, with interest, more than half of the spending. Medicare, Social Security, those are growing well above the inflation rate and their growth level needs to be contained a little bit. We can make them sound, and people can retire and know that Medicare will be there for them, it won't fail, and that Social Security
will be there for them, it won't fail. And we are going to stop adding to our debt until it reaches such a level that it could not only slow growth but could cause a financial crisis, as we had in 2007, and as they are having now in some of the European countries and that so many countries have had over the years.
We are excited to have a budget on the floor for the first time in 4 years. It does provide an opportunity for the American people--as our chair, Senator Murray, said--to compare the visions for America. It also provides an opportunity for our Members to learn about what things cost, how much you can get through tax increases, what kind of spending cuts are required, whether we have to cut or how much we can grow spending and still balance the budget. These kinds of things are learned when a bill actually goes to the floor.
Mr. President, I yield the floor and I suggest the absence of a quorum.
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Mr. SESSIONS. Mr. President, President Obama, being interviewed on ABC by George Stephanopoulos, not only said ``my goal is not to chase--a balanced budget'' but he also said, ``we don't have an immediate crisis in terms of debt,'' and ``in fact, for the next 10 years, it's gonna be in a sustainable place.''
I would say two things about that. He appointed Mr. Erskine Bowles to be chairman of the fiscal commission. They spent quite a lot of time working on this debt question. They took testimony from experts, they examined documents, and they did what a good, public, spirited group would do. Mr. Bowles was Chief of Staff for President Clinton and a very successful businessman. Alan Simpson, his Cochair, was a former Republican Senator from Wyoming.
That is not what they told us. In the committee, 2 years ago, in the Budget Committee--maybe a little over 2 years now--they gave a joint statement in which they said this Nation has never faced a more predictable financial crisis.
What they were saying was the level of debt we are operating on, the unsustainability of the debt path, was so great that we will have some sort of fiscal crisis.
I remember about that same time, the Chairman of the Fed, Mr. Bernanke, testified that we have all these outyears and we talk about the debt numbers and all that, but we don't have to worry about them. I am paraphrasing, but this was pretty close to what he said. I think these were his exact words: But it will never happen.
What he basically told us was there would be a fiscal crisis before we get this far down the road--the demographics, the aging population, fewer workers, greater debt every year--mushrooming in the outyears.
I am troubled the President thinks that as a matter of fact, the next 10 years is going to be in a sustainable place. I don't believe he knows that. I will tell my colleagues a couple reasons why. Senator Stabenow had a chart about how great the economy or the fiscal situation of the country looked about the time President Bush took office. The last month of President Clinton's term in office was negative growth. I think that was the first month of negative growth in maybe 8 years. In fact, when President Clinton took office, he didn't inherit a recession, regardless of what the myth is around here. Former President Bush did have a recession in his second year or so of his term and he took action and the economy bounced back. About the time President Clinton took office, the economy was growing and it continued to grow through the decade. We don't know all the forces. We talk about it. We play politics about it. But nobody knows precisely what moves an economy, whether it was something 10 years ago or something 10 months ago that caused the difficulty. We make guesses and we do our best judgment.
So here we go. In early 2000, I am on the Budget Committee and Mr. Greenspan testified--the maestro, the guru, the Federal Reserve Chairman, the greatest we had ever had; the economy had long years of growth. He told the committee we are going to have surpluses as far as the eye can see. He discussed with the Budget Committee what would happen when we had all these surpluses and we would pay down the entire debt of the United States of America. Then he asked us what we would do. What is the Federal Government going to do with the extra money? Are they going to buy the bonds of Venezuela? Does it buy British bonds? What does it do with its money? Does it buy property? This was the mindset in early 2000, and he was the Federal Reserve Chairman. Didn't he see the demographics? Didn't he recognize--there was a little caution in his statement, but he was very positive.
I went back and read it again recently, because it teaches me that this man, at the peak of his powers--one of the greatest economic minds in history; at least it was so felt at that time--completely missed it, I have to tell my colleagues. He didn't think we had a problem in the future with debt. He didn't say by 2009 we are going to be running trillion-dollar deficits, right? So this makes me a bit humble about our ability to predict.
Mr. Bowles said we are on a path to a debt crisis. That is what he told us in the committee. I believe Chairman Conrad or ranking member Judd Gregg asked him: When?
He said: I think about 2 years.
Two years came and we didn't have a debt crisis. So now the President of the United States is saying we can continue for 10 years, no problem, no worries. I am happy. You are happy. We don't have to cut spending. We need to keep borrowing. We need to keep running up debt because we absolutely don't want to have austerity. We don't want to have austerity. We want to be happy and spend. So that is the deal.
I am telling my colleagues, nobody knows. It can happen just that quick. Kent Conrad told me--we were standing right over there--he said the rate we are heading is coming off that wall like a rubber ball at warp speed. He was on the debt commission, the fiscal commission. He was worried about the fact of our unsustainability on the debt course.
Things look good. The Sun is shining out there today. We don't want to talk about that. Who wants to be negative? Who wants to be Dr. Doom? Do my colleagues remember Dr. Doom or Nouriel Roubini, who said: We were going to have a debt crisis in 2005 or 2006. I am not sure when he predicted that. He said: The banks are borrowing too much money. It is unsustainable. We are going to have a crisis.
Months went by and we didn't have a crisis. One year went by, we didn't have a crisis. They mocked him. They called him Dr. Gloom. After 2007, when the bottom fell out and we had the worst recession since World War II, the reasons it happened were just what Mr. Roubini said. People said: Dr. Gloom wasn't so wrong after all. Maybe we should have listened to him.
I am just telling my colleagues, I believe we have a responsibility as men and women of public service, managing the finances of the United States of America, and we have a President who is in denial.
I think it is time for this Congress to assert itself and say we are not going to risk this country. I believe our debt is already too high. I believe it without a doubt. It is a fact. The Rogoff and Reinhart study was based on public debt, and our public debt is now over 100 percent of GDP. It is greater than the entire economy. That means we pull down and we place our country at risk because we are slowing growth, as I indicated earlier.
But this is what Secretary Geithner said in 2011 before the Budget Committee. I asked him what did he think about the Rogoff and Reinhart study, because it was troubling to the committee. Everybody on the committee knew about it. The fiscal commission people had consulted about it. We had Carmen Reinhart testify before the committee and then again a little later. So I asked him about it. This was his answer to my question to him, as I recall:
It's an excellent study. And you could say in some ways what you summarize from it, understates the risks, because it's not just that governments or countries that live with very high debt-to-GDP ratios are consigned to weaker growth.
As I have been contending throughout the day--
They're consigned to the damage that comes from periodic financial crises as well.
February 17, 2011, Secretary Geithner, President Obama's own Secretary.
So he was warning us that when the debt gets this high, we are in a danger zone.
We know there are some countries that have more difficult problems than we. There was an article recently from the CATO Institute talking about some of the countries in the world. Japan is one of the most dangerous. What if the third, fourth largest economy in the world, Japan--one of our key trading partners--was to have an economic collapse such as Greece? Do my colleagues think it can't happen? I don't think it can't happen. I don't know. They are running way too high a debt-to-GDP ratio. Their population is aging even more quickly than ours.
Then we have France and Spain and Italy. Any one of those countries had an economy so large they can't be bailed out like Greece. What would happen if Europe were to go into turmoil? I am not predicting that to happen, but I am telling my colleagues we are on a path where I don't believe any responsible person can say it couldn't happen to us, and we could be embroiled in this too. The worst thing that could happen to us is we have to face a fiscal crisis where we get our debt under control at a time when the country is in a recession as a result of financial mismanagement. It would make it be an utter nightmare. As many experts have said, we have shifted a lot of debt from the private sector to the government. The government picked up liabilities it had no business picking up and the result is it has increased its debt substantially.
I am very concerned that we not treat this lightly. I am very unhappy the President of the United States who, to my knowledge, never had an economics course in his entire life--a community organizer--is going on national television when the needle of our debt is in the red zone, by any estimation, and he blithely says: We don't have an immediate crisis in terms of debt. In fact, for the next 10 years, it is going to be in a sustainable place.
I don't believe he is correct to say that. I have not heard any economists say that with full authority, certainly not a lot of them, and I am worried about where we are.
There is another chart I wanted to show about the question of taxes. This is a chart that I saw in Barron's magazine just a few weeks ago. Gene Epstein did this chart. On the cover of Barron's was a picture of the President, having made his State of the Union Address, and the caption on the front of the newspaper was ``The way to Greece'' or something like that, and it was a very serious analysis of the deep, systemic debt problems this Nation has, and a plea for us to act, to move forward and avoid the risks we are now undertaking.
One part of what they did was to actually analyze what we could do with more taxes, particularly taxes on upper income people, and they ran the numbers. I believe this is an accurate run of the numbers. On the left side, it has the public debt as a percentage of the GDP and on the right at the bottom are the years over time. Mr. Epstein ran it based on increasing taxes and increasing taxes a lot.
His first run was the purple line, how much the debt would go up; how much the debt would go up if the current tax rate stayed in effect. This is the purple line. It grows a little faster than the green line and the red line. It grows a little faster because the taxes are a little lower than his next two estimates.
Then he estimated for the wealthy people who were raised from 35 to 40 percent, what if they were raised to 50 percent? In Alabama, it is about average. We have a 5-percent income tax in our State. So for the wealthy, making it 50 percent, plus paying 5 percent to the State, he is paying a pretty big chunk of his money right off the top. But let's assume it went up there. It has almost no impact on the debt course of America according to the Barron's analysis.
The third one, the red one is based on raising the tax rate of upper income people to 50 percent and then rolling back all the tax cuts President Bush had for the lower income people, the middle-class people who got substantial reductions in their rates and we have been operating that for about 13 years now and we made those permanent.
President Bush was attacked for having tax cuts, but I am pleased to see my Democratic colleagues are joining with the Republicans to make 99 percent of those tax rates permanent. It must not have been so evil if everybody overwhelmingly voted to make them permanent. So if we raised all those rates and had a 50-percent tax increase on the wealthy, we still hadn't changed the debt course of America.
What does that say? It says the debt problem in America is a spending problem, and a big part of that spending problem is the huge mandatory programs we have.
I am a lawyer. What is a mandatory program? It means when you reach 66, 67, you walk in and ask for your Social Security check and they have to pay you whether there is any money in the bank or not, whether the government has any money or not. The government has to borrow the money and pay your check because you are entitled to it as a matter of law at a certain age you qualify. Many of our entitlement programs are based on income. If your income is below a certain level, you are entitled to the money whether Uncle Sam has it or not, and that is based on law. That is based on legislation Congress passed that entitled people under certain circumstances to obtain Federal money and get it as a matter of entitlement.
When those programs are surging at 6 percent a year--Medicaid, the poor person's insurance program is projected to grow 8 percent a year over the next decade, 117 percent over the next 10 years--when those programs are growing at that rate and the economy is growing at 2 percent, you have a problem. You do not have to go to the Harvard Business School to know that. You really do not have to go to Harvard to know that.
When I talk to the American people, they understand it fully. They expect that we are going to have to make tough choices in this country to get the country on the right path, and they are girding themselves to support such tough choices, but they want them fair. They are willing to tighten their belt, but they do not want somebody who never works and lays around and watches TV all day, the soap operas, to have an advantage over people who are out working hard every day. But, anyway, people are prepared for that. The good news is, that as the economy grows, we do not have to cut spending, we just have to reduce the rate of growth in spending. This is not a myth I am talking about. This is absolute fact. You can spend more. This government can spend more every year. We can spend more at the rate of 3.4 percent, instead of increasing it at 5.4 percent, and the budget balances over 10 years. How much better is that? Most people think we have to have cuts across the board.
Now some programs are going to have to be cut. And let's be frank. What is the real challenge for us? Social Security and Medicare are great programs that our seniors depend on, and can grow steadily, can grow more than 3.4 percent, really. But those programs have a double problem. Not only do we want to see a cost of living occur for our seniors, but we have more seniors on the program every year. So this makes the numbers harder to deal with.
So you can say: Well, Social Security is just going to grow 4 percent instead of 5.5 percent and people will not lose much money. They will get a $4 increase instead of a $5.5 increase. No, no, it is more complicated than that because since you have more people on Social Security and Medicare, because of the age of the population that we have, it will be a larger impact than that--not disastrous, sustainable.
And we can do other things. We can say: Well, we want to work a little longer. We want to change the rate of the increase, the inflation index that most experts tell us should be altered under a new system that would save some money on the inflation index. So that is the kind of thing people have been talking about. The Gang of 6 talked about it. The President talked about it. Vice President Biden talked about it. The debt commission talked about it. The gang, the 12 people, in the Budget Control Act, tried to talk about a serious alteration of our spending path in which we fix Social Security and put it on a sound path, we fix Medicare and put it on a sound path, and we fix the entire budget of the United States in a way that is sustainable.
I would say people I talk to in the business community, people I talk to who testify before the committee, experts and just common people, tell me repeatedly: If you guys put this country on a sound path, so we knew we could see what the future is, we could plan for the future, and we would know our finances are getting better and moving to a balanced budget instead of getting worse. We believe people would not lose money, they would spend more money. We would have more growth. More people would be working and not drawing welfare and unemployment insurance, and the budget of the United States would start improving right there because more people would pay taxes and fewer people would need help from the government.
That is the spiral we need to be on. We are now still muddling through with exceedingly low growth, and they are still predicting low inflation. So you consider Social Security, maybe increasing it 6 percent a year, and inflation is just 2 percent. The Congressional Budget Office is predicting that inflation will be 2.2 percent, I think, a year, equaling almost 25 percent over 10 years. That is how much inflation will add over 10 years. Who knows? But we have kept low rates longer than anybody thought. The economy is not moving. If the economy actually jumped 4 percent or 5 percent growth for 2 or 3 years, you probably would have a jump in inflation. Obviously, CBO is not expecting that. They are expecting only slow growth over the next 10 years, and I think that is consistent with the consensus of independent analysts. So I wanted to share that thought.
The question before the House is--and all our colleagues need to confront it honestly--is this budget the kind of budget that puts America on a sound path? Is it what we need to do at this moment in history to change the debt course of America, to create confidence, to create the kind of growth that will increase that 2-percent growth, to get it to 3, 3.5, 4 percent?
Just 2 years ago, the Congressional Budget Office projected growth for 2013--the year we are in--would be 4.6 percent. The year before that, they predicted, last year, 2012, that we would have over 3 percent, 3.6 percent, something like that, growth. We have fallen way below that both years. I think the reason is the debt is pulling down growth, at least that is part of the reason. But regardless, the truth is, we are having to adjust ourselves to what Bill Gross at PIMCO, the largest bond group in the world, would call a new normal. The new normal is, we are not likely to see 5, 6-percent growth even in really great times in the next 10 or 15 years--maybe the next 20 or 30 years. We are just not likely to, for a lot of reasons. Of course, nobody knows. Mr. Greenspan thought we were going to have surpluses, and we did not. And we could have growth we are not expecting. Nobody knows. But we just have to make the best judgment we have, and the best judgment we have is that we are not on a sound path.
So we are responsible leaders, and we have to ask ourselves, is the budget here going to do the right thing? We must remember and can never forget who will suffer the most if we have a fiscal crisis. Won't it be the poor? Won't it be the people in the most fragile working environments? Won't it be the people with less skills? Won't they be the ones who would suffer the most? Don't we have an obligation as a Senate to reach out to the House and say: We get it. This is dangerous. We do not know for sure where we are going. But we know. Shame on us if we allow decent, hard-working people--struggling to get by right now--to get hammered by another fiscal crisis that Erskine Bowles and Alan Simpson virtually guaranteed was on the way?
I think we have a duty. I think we have a responsibility. I think when the American people find out it is not going to take massive slashing of spending, as our colleagues say--a lot of the programs can be more efficient than they have ever been, and we get just as much benefit, even if they do not get as much money. There has not been any reform, any management improvements in this government in decades.
I will just say politically, I thought that was the greatest offer Governor Romney had. He was a very good manager. In my opinion, we have had enough speechmakers, we have had enough war Presidents, we have had enough grand and glorious stuff. We need somebody to run this government, like the Presiding Officer ran the State of Virginia. It takes hard work, and you
have to stay on top of it. It would have been great for us to have had a real top management, so that every Cabinet person, when they are hired, understands they have a duty to produce more for less for the American people, and every subcabinet and subcabinet and subcabinet person, and every department head gets the message, from top leadership on down: You are expected--as Larry Thompson and I did--to share a hotel room if need be to save running up debt in the U.S. Government.
This budget does not do it. I think we quoted earlier what the Washington Post said on March 15:
In short, this [budget] document gives voters no reason to believe that Democrats have a viable plan for--or even a responsible public assessment of--the country's long-term fiscal predicament.
That is a serious condemnation.
What about USA Today, I guess maybe the widest read publication of its kind in the country? A USA Today editorial:
The plan produced by the Senate Budget Committee Chairman Patty Murray ..... is a disappointing document. It is a namby-pamby plan that underwhelms at every turn. The Murray budget neither balances the budget nor reins in entitlements ..... the nation would be helped if Democrats were to embrace Ryan's goal of a balanced budget.
That is USA Today. They are not a rightwing publication, but they have written some good material on the budget. So has the Washington Post. Both of those have covered the budget situation more than most publications--both of them--and they have been trying to say to the Congress and to the President: You guys need to get together and do something. So both these editorials reflect a very informed judgment by two independent publications of national repute that the Senate--which they have been watching--has failed to produce a budget that puts the country on a sound path. I just have to tell you, I think they are totally correct. I wish it were not so.
Investor's Business Daily:
[An] IBD review of the budget data shows that the Senate vastly overstates the size of its spending cuts.
Boy, that is correct. They vastly overstate how much spending is cut in this bill. It goes on to say:
In fact, it could be that the Senate [budget] would, if enacted, increase federal spending by hundreds of billions of dollars.
Was Investor's Business Daily correct? Yes. Spending increases under this budget. Spending is not decreased at all under this budget, although we are told that it does. And we are told 20-some-odd times it is a balanced plan. They even go so far as to say it is a balanced budget. They have said it is a balanced plan so much, they started saying it is a balanced budget. It is nothing nowhere close to being a balanced budget. What they mean by ``balanced'' is, they promised that there will be $1 trillion in tax increases and $1 trillion in spending reductions. And it increases spending. Give me a break. There is not a one-to-one. It increases spending. There is no cut in spending off the current law we are now on.
They tried to claim credit for the Budget Control Act almost 2 years ago. President Obama resisted that. You remember how he just threatened the whole government was going to sink into the ocean? Why? Because we would not raise the debt ceiling. The Republicans said: We have to have some cuts, Mr. President. We have to do something about the debt course. We cannot continue. We are not going to allow you to continue running with the credit card of the people of America if you do not show that you are changing your habits and you are containing some of your lust to spend.
So, finally, an agreement. He hated it worse than anything. Finally, an agreement was done. He signed it. I agree if you will raise my debt ceiling right now, for $2.1 trillion, I promise in the future that I will cut spending $2.1 trillion. Over 10 years. If you let me do it over 10 years, OK, I will sign it. But I have to have my debt ceiling now.
Less than 2 years later we have already increased the debt ceiling $2.1 trillion. We are right up there again having to raise the debt ceiling again. It will be a matter of weeks that this has to be confronted again. Well, what about the spending cuts?
Before the ink was dry on that agreement signed by the President himself--I have the document right here. In blue ink, ``Barack Obama'' right there, agree to cut $2.1 trillion in spending over 10 years. This was not a big cut. If spending were flat for 10 years, we would have spent $37 trillion. As I recall, if under the baseline then in effect we were expected to grow to $49 trillion over 10 years--$49 trillion. This would have reduced it to $47 trillion.
So we reduced the growth of spending from $37 trillion to $47 trillion instead of $49 trillion. You would have thought we were throwing the sink in the country into the ocean. But in January, 6 months later, he proposes a budget which wipes out 60 percent of that agreement, those savings. So I am just going to tell you the way I felt. I have talked to my Republican colleagues. You know, we all--none of us are perfect. Sometimes we make improvident promises. We cannot just fulfill them. We cannot honor them. I try not to do that, but I have done it. Any person who is honest knows they have had to face those choices. But I am not voting to change the sequester. I am prepared to change it, and I support totally the spreading out of the cuts. They are too much on the Defense Department. I can explain how much it hammers the Defense Department. It is not acceptable.
But I am going to tell you, I told the American people that the Congress of the United States agreed to cut $2.1 trillion in exchange for raising the debt ceiling $2.1 trillion. And 6 months later, I am not changing; 18 months later, I am not changing. If we give up on that, we have no credibility whatsoever. The American people should never trust this Congress again. They ought to vote all of us out of office.
That was a solemn promise made before the whole world that we would sustain these cuts. President Obama has not stopped trying to eliminate them. This budget does just that. It eliminates 60 percent of the Budget Control Act cuts. It eliminates the sequester entirely. It is absolutely unacceptable. It will not happen. I do not know why anybody would want to vote for the budget. A vote for this budget is a vote to go back on a promise that was made in August 2011 to act a little bit responsibly when the debt ceiling of the country was raised.
The Wall Street Journal, March 15, right after the budget comes out. They have been very critical. This is just one of them. Well, first, Politico, March 17. A Washington beltway publication, Politico--they like to dig up stuff. This is what they said, ``To win over her caucus, Murray begins from the left of Obama himself.''
Apparently, Politico's conclusion is that the budget that came through committee was driven by people to the left of President Obama. I know this: Last year the chairman of the Budget Committee, Kent Conrad, was prepared to bring a budget to the floor. My staff and I spent weeks preparing for the markup. They met in a Democratic conference. Some of the more liberal members hollered they could not accept Kent Conrad's budget, the Democratic budget he was going to set forth. So they, basically, refused to let him mark up a budget in the Budget Committee and refused to bring it to the floor of the Senate even though U.S. law called for the Budget Committee to have hearings and called for a bill to be brought to the floor. They just refused to do it in violation of plain law.
So the Wall Street Journal said: The bill manages the unique achievement of offering no net nondefense spending cuts and no entitlement reform worth the name, while proposing to raise $1.5 trillion in new tax revenue in such a way that would ruin the prospects for bipartisan tax reform.
Let me stop right there. Our colleagues keep saying we are going to close loopholes and we are going to raise revenue and nobody is going to have to pay more. Well, these loopholes, as Senator Grassley showed us from the Finance Committee chart, these are real serious deductions. They are programs that are deeply entrenched, and many of them our Democratic colleagues have protected and expanded with great tenacity. They will never vote to give them up probably unless some epiphany occurs around here. So how are we going to get tax reform?
Last week at the Budget Committee hearing the chief Democratic witness testified that he believes the corporate tax rate in America was unacceptably high, that we now have the highest corporate tax rate in the developed world, and that 35 percent is not acceptable. He said it needs to be the mid-twenties. This is not the Republican witness, but the Republican witness agreed with him. Most Republicans agreed with this approach. Many of the Democrats did.
So he said: You close loopholes on corporations, make the tax simpler, more growth oriented, you can bring the tax rate down to 25 percent without in any way losing revenue. You can make it revenue neutral. So that was an interesting thing.
I asked him as a followup: But if you close the loopholes on corporations, if you close the loopholes on corporations and raise revenue, do you not need that money so you can reduce the rate from 35 to 25?
He said: Yes. All of it should be dedicated to rate reduction. We have Senator Ron Wyden, a Democratic Senator, Senator Max Baucus, the chairman of the Finance Committee, all believe this needs to be done.
A lot of work has been done on this for several years. The President has even indicated that this is the kind of approach that is worthwhile. But our colleagues, claiming they are going to close loopholes, do not save the money for tax reduction. They want to take the new revenue raised from closing loopholes and spend it. Then it is not available for the bipartisan tax reform to which the Wall Street Journal made a reference.
That is when I asked the witness: Do you not have to save this money to reduce rates at the end of the year?
He said: Yes, you have to save these loopholes, these
deductions--really most of them are perfectly legitimate deductions that businesses use. But they are going to take them away from them, in effect raising the amount of taxes they pay. But they were going to bring the rates down.
That is the bipartisan plan that was in the works for a long time. Mr. Kleinbard is our witness. This is what he said: Corporate income tax statutory rate of 35 percent is today far outside world norms. The rate needs to come down. I, therefore, conceive of corporate tax reform as a roughly revenue-neutral undertaking in which the corporate tax base will be broadened through closing business tax expenditures and loopholes and the resulting revenues used to pay down the corporate rate.
That was March 5 in our committee. I know a lot of Senators, Democrats on the committee, agreed with that. If we look at the budget, the new revenue obtained from closing loopholes, really closing deductions and some tax expenditures--liberals have started calling deductions tax expenditures. So if you have a charitable deduction or you have an interest deduction or you have some sort of depreciation as a business, those are not deductions anymore. They have become tax expenditures. So it is like the United States Government is mad at you because you did not send enough money.
But the truth is, it is the corporate person's money or the corporation's money or the private individual's money. When you eliminate his deductions, you make him or her pay more taxes. So Mr. Kleinbard was crystal clear. This is what the bipartisan discussions have been. The Wall Street Journal is exactly right. If you spend that money that you raised from closing loopholes, expenditures, and deductions, you do not have it to reduce rates. You cannot fix the tax reform.
The Wall Street Journal goes on to say:
As a statement of governing principles, the Senate Democratic budget shows that if they get the chance, they would govern like they did in 2009 and 2010. Much higher taxes to fund much higher spending to finance a much bigger government. It is the status quo only more so.
I have to say, I think that is correct. Hard for me to understand how anybody can dispute that. Next. I have been saying--I have not heard much pushback--that the sequester elimination which allows the expenditure of $1.2 trillion more than we are presently on a path to extend, that this elimination of the sequester was not scored in the Democratic budget.
When I asked the staff members, he said: Well, you know, we never did intend to make that permanent. It was always temporary. Then he said: Well, we got billions of dollars in Paul Ryan's budgets over here.
I said: No, no. I am talking about this budget. You claim you are not scoring, as an increase in spending, $1.2 trillion, which you allowed to occur by eliminating the reduction in spending required in current law that is part of the law of the United States today and will not be changed?
This is baloney. Surely, Congress will never change this. Surely, we will not go back on the promise we made in 2011 when we raised the debt ceiling. But, anyway, this is what the Associated Press said about it: Because the Democrats want to restore $1.2 trillion in automatic spending cuts over the same period, cuts imposed by Washington's failure to reach a broader budget pact--the committee did not reach an agreement, so these automatic cuts occurred--Murray's blueprint increases spending slightly when compared with current policy.
So you take the $1.2 trillion there, and you have tax increases over here, but the increases in spending are greater than the taxes. They conclude that it increases spending overall, increases spending overall.
The chairman, and probably the Budget Committee Members who support this, want to assert somehow this is a one-for-one budget, a balanced plan, a balanced budget amendment. You have $1 trillion in tax increases and $1 trillion in spending cuts, but they are not there.
This chart is a very important chart on the subject I am talking about. It is, I believe, pretty much not disputable. I don't like to raise this, but I am not going to take it.
Mr. Lew came before our committee, the Director of the Office of Management and Budget, and he said our budget will not add to the debt, spends only money we have and puts us on a path to pay down the deficit.
I asked Mr. Lew--he said it on national television, CNN with Candy Crowley. He said it with other networks too when he announced his budget. Three days later, he was at the Budget Committee. I asked him was that accurate. He said it was accurate.
It absolutely was not accurate. His budget never produced a single year in which the deficit fell below $600 billion. Yet he told the American people squarely in the eye his budget would stop adding to the debt, spend only money we have, and allow us to pay down the debt.
This is one of the greatest misrepresentations in history. We are never going to have bipartisan agreement in this Congress until we learn to be honest about numbers. This budget is not honest about numbers, I need to tell you.
They claim a big savings and big reduction in spending and totally overlook this. Where is the deficit? They claim they reduce the deficit by $ 1.85 trillion, $1.850 billion. Let's look at that number. What about the sequester I have been talking about? They eliminate sequester and spending goes up $1.223 trillion.
Was this scored in their number? No. They tell us we have 1.85, and we have to take off 1.2 because they didn't score the obvious increase in spending that their budget plan for the next 10 years includes. Take that off. We have looked at it more carefully. It took us a while to find this and took a while to get these in the budget numbers, but we have a good staff.
They found out, unlike what we thought at first, there was no pay-for for the doctors. For the last number of years, we found the payment schedule for doctors is totally inadequate based on a law passed in the nineties which has cut their payment to a degree that if we cut them another 20-some-odd percent, they would quit taking patients. They couldn't operate.
We put the money in every year because we need to put the money in or else they will not treat our patients. They can't afford to. Everybody, Republicans and Democrats, we hate it. We wish it weren't so, but it is every year we need to confront this thing which should have long been made a permanent fix. Every year it hasn't been, so every year we need to find the money.
We also found the 2009 stimulus extension in the bill which continued more borrowing and spending for a stimulus was not accounted for. You add those, and there is another $348 billion which ought to be scored. It leaves us with a subtotal of $279 billion. That sounds nice, but that is not correct.
Where are we next? Is there anything in this budget we have found that is not sound, gimmicky, which misrepresents the facts? Yes, there is, a big one. That is the war spending.
President Obama has long been very late in producing his budget. It should have been here in the Senate February 4, and it still hasn't been produced. It is one of the oddest things I have ever seen. He basically punted to the Congress and refused to lay out the budget the law requires him to submit. He violates it all the time.
People ask me all the time, why does the President not follow the law? It is a very bad thing. He should follow the law. He sets a bad example. Children around this country, adults around this country, when they find out the President ignores law, the Senate ignores law, it is not good for America. We are a nation of laws.
The President, the last budget he sent, last January of 1 year ago, he laid out what he projected the costs would be for the war on terror. He is bringing those costs down dramatically, some say too fast, some say not fast enough, but they are coming down dramatically. He projects, however, we are still going to have military efforts against our enemy with whom we are at war, al-Qaida, for the next 10 years.
That costs money. He projected the cost over 10 years for the war on terror would be $467 billion. I think that is pretty close to accurate. You could give or take a little bit, but apparently we are not stopping drone attacks.
I just met with our Ambassador who is negotiating an agreement with Afghanistan. We are projecting to have troops over there for a long time. More and more are in the support role, but it is an expense to maintain the war against terror.
We are free to attack al-Qaida wherever they are. We have people in Iraq, Yemen, Mali, and different places throughout the world where our interests have been threatened, and that costs money.
What did our good friends on the Senate Budget Committee do? They needed more money in savings. They wanted to say they cut spending. They came up with a clever idea; we will just cut all the war spending and pretend we will not spend it. That is it. OK. We will just pretend we are not going to spend that much.
One year from that, the total amount they say we are going to spend over 10 years is not $467 billion, it is 75. The last 8 years will be zero, so we spend 75 over 2 years, and we will not spend any more money. There will be peace in the world, we will not have to chase al-Qaida, we will not need drones, troops, and special forces operating around the world. We will be completely out of Iraq and Afghanistan. Won't that be great? Let's just play it that way.
I have to tell you, they know that is not going to happen. Even President Obama is projecting substantial reductions.
If you take that down, what we find is the budget doesn't reduce the deficit at all. The budget increases the deficit based on the course we are on today, apples to apples, oranges to oranges.
We are not playing around with different baselines to gimmick it up. This is the right way to analyze the situation.
I just have to say, the American people need to know the budget before us does not do what it says it will do. Even what it says it will do is insufficient, but it doesn't come close to doing what it says, and it is not close to doing what is needed. It will never balance the budget, not in 10 years, not in any time. It makes no changes, none, to the deeply troubling surging growth of our entitlement programs, welfare programs, of Medicaid; the 83 means-tested welfare programs which are expected to grow 80 percent over the next 10 years, there are no changes.
There is no reform there we believe in. I am disappointed. Presumably, we may see it pass out of the Senate on a party-line vote, go to the House, and we will see what happens in conference. Could anything come out of conference? It is possible. I am not overconfident, particularly if we can't get Members of the Senate to lay out good numbers.
How can we negotiate with a person such as Paul Ryan, who absolutely knows what is up and what is down? There is not a person in America who knows the numbers better than Paul Ryan.
He has integrity. He works hard. He has dedicated himself to mastering this subject. He has mastered it, and he has laid out a plan. I am not saying I agree with everything in his plan. It is not before us. He has laid out a plan. He is prepared to negotiate, to discuss with people who are willing to discuss how to reach some compromise and some consensus on some of the things we need to do. It is very hard to do that if you are putting up bogus numbers such as this.
What about The Hill, another one of the inside Washington publications. On March 13, The Hill reported:
Murray argues that her budget cuts $1.85 trillion from deficits over 10 years. But once the sequester cuts are turned off, Murray's budget appears to reduce deficits by about $800 billion, using the Congressional Budget Office's baseline. The Murray budget does not contain net spending cuts with the sequester turned off.
We score here about 700 after you take that--645. They estimated 8, but essentially they are making the same point. The budget the Democrats produced did not score the sequester.
As we wrestle with these issues, talking about spending and how we create growth in our economy--and all of us want growth--we just contend growth is better achieved through progrowth policies than by borrowing and spending.
I wish to say there is academic research which validates that opinion. Senator Murray's budget, the Democratic budget, proposes yet more stimulus and proposes a 60-percent increase in spending over the next 10 years, a $162 billion increase over next year alone.
This is an increase in spending next year, not a reduction, of 162 next year. It is a fair criticism around here that the only budget that counts is the next year. It does tend to control next year, but it often normally gets altered before the second, third, fourth, fifth, sixth, seventh, eighth, ninth, and tenth, but it doesn't tell us a plan.
I contend reducing excessive spending without increasing taxes makes the economy stronger, not weaker. Let's look at this. Real evidence supports this. It shows reducing spending can help an economy which has too much debt. A Harvard University study which I think all of us have seen, the OECD, developed nations, looked at 107 different periods of fiscal adjustments in these nations.
This is what they have found:
Spending cuts are much more effective than tax increases in stabilizing the debt and avoiding economic downturn.
I believe that is accurate. If it is, that is very important for us to know. Many countries have reduced spending and had large increases in job growth thereafter.
You would hear our Members say: Oh, you can't cut spending; it will hurt job growth. You could have something in the short term, but these countries have had substantial increases in job growth after cutting spending--Austria, Denmark, Finland, Estonia, Netherlands, Norway, Sweden. This chart gives some of that insight: ``Job Gains 5 years After Successful Spending Reductions.'' Look at these again. Japan in 1987 had an 8.6-percent growth; Canada in 1997 had 11.1 percent; Netherlands in 1997, 9.5 percent; United States in 1997, after spending reductions, 5.2 percent. That is when we were on the path to balance the budget.
That was when Newt Gingrich and the House Republicans met with President Clinton and negotiated and fought and wrestled and shut the government down and cut spending and the economy grew. And then Sweden, in 1998, had 6.5 percent growth. The average job growth over these five countries was 8 percent after cutting spending.
One I noticed on here is really something we should consider; that is, the small country of Estonia, which was part of the Soviet Union, dominated by Russia and the Communists. It is a great little country in the Baltics. I was there 2 years ago. Senator Jon Kyl took us there. They had just suffered through the same financial catastrophe in 2007 to 2008 that we had, but it hit them worse. They had a larger drop in GDP than we did, and it was very damaging. They had to decide what to do about it, so they began to consider what to do about it, and they didn't go for this idea that they had to borrow, borrow, borrow so they could keep spending because the revenue had dropped so much and they were going to keep spending at the same level. That isn't what the Estonians decided to do. This new democracy, this free enterprise, this free country, so excited about their future, do you know what they did? They cut spending. They cut spending big time--big time.
This is what a Cabinet member told me. We had dinner, a group of us, and he said Cabinet people had their pay cut 40 percent. He said their pay was cut 40 percent, and he said: But I can tell you who is really mad and giving me a hard time.
I said: Who is that?
He said: My wife. She is a doctor. We hammered them too.
So Estonia hardly had a debt increase at all. Now Estonia has been showing some of the fastest growth of any country in Europe, maybe any country in the developed world. So cutting spending, making their government leaner, more productive, and people taking pay cuts did not destroy their economy. It allowed them to bounce back quite successfully. I am so proud to see their numbers continue to be great economically because they were courageous. The first thing their leaders did was take pay cuts themselves.
Other countries have not followed this path. Other countries haven't tightened their belts or they have relied too heavily on tax increases to reduce deficits. These countries have not fared as well. Greece, Portugal, the United Kingdom and Spain all have had big tax increases as part of their deficit reduction plans, and these results are confirmed by studies at the International Monetary Fund, the University of Chicago, and the University of California.
So we spent $830 billion on stimulus in early 2009. That passed through here without my vote, and I opposed it at the time vigorously. But it was passed, and every dime of it was borrowed. We didn't have the money. We were in debt. But the geniuses said we have to stimulate the economy. Oh, if we don't borrow money and spend it, we will sink into oblivion. It wasn't what Estonia did, but we did that. We spent the money, and we haven't seen the growth we needed. We helped surge our debt.
We continue to spend substantially. We continue to run up debt the likes of which we have never seen before. I believe that debt right now is slowing economic growth and that debt right now could be a threat to our financial security in the future. It is sad to see us go in that direction.
Spending reductions are doable. We can do this. A lot of people think it is not possible. They get depressed, and every time someone talks about spending reductions, people start whining: It can't be done. It can't be done. We will hurt the Defense Department because the cuts on the Defense Department were too great.
But the Defense Department will still be there if we don't fix it the way these cuts are imposed. It will still be there--and who knows, it could be stronger.
I am worried about it. In fact, the way the sequester was crafted, at the request of the President, one-half of all the cuts in the entire $1.2 trillion in cuts fell on the Defense Department, which makes up one-sixth of the Federal Government. So these cuts fell on the Defense Department disproportionately. Medicaid was increasing at 8 percent a year, no cuts; food stamps had gone up from $20 billion to $80 billion in 11 years--fourfold--but got no cuts; and, of course, Social Security had no cuts. There was a 2-percent maximum reduction trim on Medicare providers, which are the doctors and hospitals. They had a minor cut. So a huge portion of the budget had none, but the Defense Department took a huge, huge cut. It was not smart the way we did it, but the amount of cuts, if properly allocated across the entire government's spending, would have little impact on reducing growth but would really begin to solidify public confidence that we have a smart plan to get out of this debt.
If we just slow the spending growth to 3.4 percent a year over the next 10 years, we could balance this budget without raising taxes. You have heard that said. It is true. This is true. We do not have to have substantial spending cuts; we can do it and still have growth.
Some programs need to be cut. Some programs have to be cut. Some programs are growing much faster than 3.4 percent. Medicaid is growing at 8 percent. It needs to be reformed. We can't sustain that kind of increase year after year after year.
Most Americans know the old story about the rule of seven. If you increase something at 7 percent a year on your savings account, it doubles in 10 years. So if you have 8 percent, you are seeing a 117-percent increase in spending over 10 years.
So if we allow 3.4 percent a year in spending growth, that means we would spend $11,000 per person in 2022, 10 years out--$11,000 per person by the Federal Government. That is a higher rate of spending per person than we had in 2007. Yet we are going broke.
We can reduce spending without affecting services. We can. Federal programs--many of them--are very wasteful, very inefficient, duplicative, and subject to fraud. I just held up the GAO 2012 report that listed a pile--page after page--of programs that are wasteful, duplicative, and so forth. We have social service, domestic disaster assistance, Internal Revenue Service enforcement efforts that all have duplicative gaps and are not properly managed. They talk about how the programs are duplicative, how the programs are mismanaged, how they need to be tightened up, and there is a whole list of these things. There are about 50 different major programs--51--that need reform. We haven't done any of that.
What does Congress say to the American people? Well, we don't have time to execute, carry out, or study GAO's
report. That is too much work. Just send us more money. No, we don't have time to do this. You don't understand--these little programs, they do not save much money. They do not make any difference. We don't have to focus on them. Send us more money. You have to send us more money.
I think the American people may be getting tired of this.
Nine different agencies, according to GAO, run over 50 job-training programs for people with disabilities. This budget proposes to create more. We had an amendment offered at the Budget Committee that would create another job program. I mean, we have them all over the place. It sounded like a good idea. Something good happened in some State, so we have a plan to offer Federal legislation to do it here or expand it.
Last year alone, Washington paid out $44 billion to people who, through deceit or error, did not deserve Medicare payments. Let me repeat. Forty-four billion dollars was paid out to people who, through deceit or error, did not deserve Medicare payments. That is more money than we spend running our national parks, the FBI, the Federal Aviation Administration, the Army Corps of Engineers' civil works projects, and the Internal Revenue Service combined. Forty-four billion is a lot. That is just about what the Federal highway budget is--$44 billion. Fraud, deceit, and error out the door in Medicare alone.
Well, Mr. President, we have been at it a long time. I am very unhappy that the budget process has been shifted to the end of the week. I am very unhappy that we are at a point where we are not going to have as full a debate because people are going to be stressed, they are going to be here at night and maybe into the weekend. Somebody may say: Well, Sessions, it is your fault. Why don't you just yield back this time? But it would take every Senator here to yield back the time. And if I did, I am sure somebody would object. And I am not yielding back time now.
We have problems. We can yield, we can work through the night, we can compromise tonight and maybe save a few hours, or we can work to be as accommodating to our colleagues as we can. I am willing to do that. But I just have to say that this budget should have been up earlier. We should have reached an agreement with Senators Moran and Ayotte and given them amendments early in the week or last week, and we could have had the budget up Monday. We wouldn't have had all this fuss. We would have had Monday, Tuesday, Wednesday, Thursday, and we would have had a full day, completed all amendments, and been out of here. But, oh no, I think there is something to the fact that it was considered to be a good idea just to carry this budget over to the end of the week and that Senators would want to leave and we would just wrap it all up, do it in the dead of night so the American people wouldn't see, perhaps, what is going to be done, wouldn't pay much attention to the votes, and we could get out of here and do the least possible public discussion of this bad budget that we can.
Now, some might say: Well, that is really not so.
I think it is so. We haven't had a budget on the floor for 4 years. Why? Senator Reid said publicly that it is foolish to have a budget. Why did he say that? He meant it was foolish politically. I have said this before. He knows how I feel about it.
He said it was foolish--politically, basically--to have a budget. Why? Because writing a budget requires a party to lay out their vision for the future, to be prepared to defend it in public debate, and to have amendments on it. He has been controlling this Senate to a degree no majority leader has ever controlled the Senate, and the one thing he is not able to control is the budget process: You have 50 hours and virtually unlimited amendments. He didn't want to do that. So he was willing to violate the law of the United States and not bring up a budget so he wouldn't have to do this.
Finally, this year the House got fed up. They have been passing an honest budget that lays out a future plan for America. They have defended it publicly. They have taken unfair attacks and abuse for doing their duty every year--like they are supposed to do.
So they sent over a bill this year. It said: No budget, no pay, Congress. If you don't bring up your budget, you don't get paid. So now we have a budget for the first time in 4 years. Maybe the House should be given a medal for that.
But I am not happy. I don't believe we are doing this right. I was disappointed that for the first time in 3 years, when a budget was brought up in the Senate committee, we had statements made one afternoon for a few hours before we even saw the chairman's mark. It was produced after that, and we had 1 day--the next day--to offer amendments. That wasn't a very good process, in my view.
If we really want to deal with the debt--the greatest danger of our time--and deal with it properly, why wouldn't we want to have an open public hearing? Why wouldn't we have had expert witnesses all year to help talk to us? We had a few hearings, but we could have had a lot more because this has complex questions for us to decide. We should have had more time in committee, and we should have had full time on the floor of the Senate. So I don't make any bones about it. I wish we had done it differently.
Mr. President, I suggest the absence of a quorum.
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