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Default Prevention Act of 2013--Motion to Proceed--Continued

Floor Speech

Location: Washington, DC


Mr. COBURN. I rise to speak about the issue in front of us. I want to spend a few minutes putting things in context. I won't repeat things I have said routinely on the floor, but I think it is important for the American people to understand where we are in our country.

Using generally accepted accounting principles--these aren't my numbers--we have almost $126 trillion in unfunded liabilities and we have $17 trillion worth of debt. We have a lot of obligations in front of us. If we add up every asset in the United States--all the bank accounts, all the lands, all the possessions, everything we own, plus what we own outside of the United States--it comes to $94 trillion. In essence, we are almost $50 trillion in the hole. That is called a negative net worth.

I appreciate the comments of my colleague from Delaware. I have the greatest admiration for him. I am not one of those who think we should be in shutdown. I also am not one of those who think we should just, without any solution to our problem, raise the debt limit.

I would also note that we don't have to have a budget right now in the Senate because we agreed to the Budget Control Act, which sets the discretionary spending levels for the next 10 years in this country. They are set by law. What is important is that appropriations bills come through the committees--the House first and the Senate second--so that we can address the issues. We didn't do that in the Senate. They did about half of them in the House. We wouldn't have a continuing resolution--which, by the way, I think all of us agree is very difficult for our Federal employees to operate under.

But I wanted to make a couple of points. One is that in July of 2011, after 7 years of oversight, I put out $9 trillion of what I think are commonsense eliminations and changes we could make that today would put us at a $200 billion surplus instead of a $750 billion deficit. Those savings were $3 trillion total in discretionary spending, $1 trillion in defense spending, $2.7 trillion in terms of modernization of our health entitlement programs, and $1 trillion from the Tax Code. We actually have earmarks in the Tax Code for those who are well-heeled and well-connected--a benefit--and the average American gets nothing. There are interest payment savings of $1.3 trillion
and a 75-year solvency for the Social Security. That was put out 2 1/2 years ago. Very little of it has been used. As a matter of fact, most people haven't read it. It was put out in a binder. We didn't print many binders because I am so tight, I don't want to print that many binders, but this is what it looks like. It is online. People may read it and see if it makes common sense. Most people won't.

I am going to spend some time outlining some of the things that came from that and some of the excesses of the Federal Government.

Most Americans know we are not efficient. They understand that we are not doing a good job spending their money, but they have no idea how bad it really is. I have actually spent the last 9 years in oversight of almost every segment of the Federal Government. None of us can be proud of the way we spend the money. Most of it is very well intentioned, honorably intentioned, with minimal oversight, minimal control, with over $150 billion of fraud every year, and I am talking pure fraud, and with $250 billion of real duplication--programs that do exactly the same thing, run by different agencies, with no consideration to streamline those.

None of those things have been considered.

We won't even do tax reform to get rid of unemployment for millionaires. What people don't realize is we paid $60 million out over the last 2 years to people who were making $1 million a year. We are paying them unemployment. They hardly need the unemployment check. Yet we won't even regulate those kinds of things.

I think we have failed to do our job, and that is a Republican and Democratic thing. That is us. That is not a partisan statement.

The last time the President signed an individual spending bill into law--an individual appropriations bill--was 4 years ago. Four years ago was the last time he signed an independent appropriations bill into law. That tells you Congress hasn't done its job. We haven't passed them.

According to studies, if you poll the American people in terms of the sequester, less than one in four felt any impact at all from the sequester. And I think the sequester is a terrible way to determine spending. I voted against the Budget Control Act for that very reason, because we are not responsible enough to do the management and the oversight. But most Americans see no impact from it, and that is because in what we do there is so much waste and mismanagement. There is so much duplication, there is so much error that we could easily take that out and most people wouldn't notice it. They haven't noticed it.

Some of our Federal employees have noticed it, but the average American, 76 percent of them have never felt any impact from it whatsoever. They do not even know it happened. There has been no impact on their daily life. Increasing the debt limit and passing another CR isn't going to do a thing to eliminate government waste, fraud, or duplication.

It is time we kind of reassess where we are. One of the reasons I am against a debt limit increase is because it takes the pressure off Members of Congress to make the hard choices. If we raise the debt limit, that means we don't have to make the hard choices and we will run a deficit again and again. Toward the end of this decade, just 7 years from now, the deficits start climbing well above $1 trillion again--$1 trillion a year. Our deficit is growing twice as fast as our economy is--our debt is. It is growing twice as fast as our economy is. So we are going down in a hole.

We ought to be about--Democrats and Republicans--holding hands and saying let's stop this nonsense. Let's put some brakes on ourselves. Let's put in some limitations so we don't continue to fall prey to ducking the very difficult decisions facing this country. Households do that, businesses do it all the time. They assess where they are, they assess how deep the hole is, because nobody gives them the ability to say: You don't have to make those hard choices, we will give you more borrowing power. What they do is make those hard choices. We refuse to do so.

Another example. We just finished year end and there is this syndrome in Washington called ``use it or lose it.''

Mr. President, I ask unanimous consent to have printed in the Record an article from the Washington Post with the lead-in ``As Congress fights over the budget, agencies go on their `use it or lose it' shopping sprees.''

There being no objection, the material was ordered to be printed in the RECORD, as follows:

[From the Washington Post, Sept. 28, 2013]
As Congress Fights Over the Budget, Agencies Go on Their ``Use It or Lose It'' Shopping Sprees

(By David A. Fahrenthold)
This past week, the Department of Veterans Affairs bought $562,000 worth of artwork.

In a single day, the Agriculture Department spent $144,000 on toner cartridges.

And, in a single purchase, the Coast Guard spent $178,000 on ``Cubicle Furniture Rehab.''

This string of big-ticket purchases was an unmistakable sign: It was ``use it or lose it'' season again in Washington.

All week, while Congress fought over next year's budget, federal workers were immersed in a separate frantic drama. They were trying to spend the rest of this year's budget before it is too late.

The reason for their haste is a system set up by Congress that, in many cases, requires agencies to spend all their allotted funds by Sept. 30.

If they don't, the money becomes worthless to them on Oct. 1. And--even worse--if they fail to spend the money now, Congress could dock their funding in future years. The incentive, as always, is to spend.

So they spent. It was the return of one of Washington's oldest bad habits: a blitz of expensive decisions, made by agencies with little incentive to save.

Private contractors--worried that sequestration would result in a smaller spending rush this year--brought in food to keep salespeople at their desks. Federal workers quizzed harried colleagues in the hallways, asking if they had spent it all yet.

``The way we budget [money] sets it up,'' said Sen. Tom Coburn (R-Okla.). ``Because instead of being praised for not spending all your money, you get cut for not spending all your money. And so we've got a perverse incentive in there.'' But, Coburn said, ``nobody's talking about it but me and you.''

Coburn said he had meant to mention it in his floor speech Wednesday. Then, when he got to the podium, he forgot.

``Use it or lose it'' season is not marked on any official government calendars. But in Washington, it is as real as Christmas. And as lucrative.

And--it appears--about as permanent. ``We cannot expect our employees to believe that cost reduction efforts are serious if they see evidence of opportunistic spending in the last days of the Fiscal Year,'' President Lyndon B. Johnson wrote to underlings in May 1965. Even then, Johnson said an end-of-year binge was ``an ancient practice--but that does not justify it or excuse it.''

Today, government spending on contracts still spikes at the end of the fiscal year on Sept. 30.

In 2012, for instance, the government spent $45 billion on contracts in the last week of September, according to calculations by the fiscal-conservative group Public Notice. That was more than any other week--9 percent of the year's contract spending money, spent in 2 percent of the year.

Much of it is spent smartly, on projects that had already gone through an extensive review.

But not all of it.

In 2010, for instance, the Internal Revenue Service had millions left over in an account to hire new personnel. The money would expire at year's end. Its solution was not a smart one.

The IRS spent the money on a lavish conference. Which included a ``Star Trek'' parody video starring IRS managers. Which was filmed on a ``Star Trek'' set that the IRS paid to build. (Sample dialogue: ``We've received a distress call from the planet NoTax.'')

``That is a major problem,'' acting IRS commissioner Daniel I. Werfel told Congress in June, explaining the role of ``use it or lose it'' in that debacle.

Other end-of-year mistakes are less spectacular--but they still cause problems. One recent study, for instance, found that information technology contracts signed at year's end often produced noticeably worse results than those signed in calmer times.

And late-September waste also weighs on its witnesses, federal workers. After President Obama set up an online suggestion box for federal workers, many asked to get rid of the ``use it or lose it'' system. They suggested ``rolling over'' money for use in the next year. And they listed dumb things they had seen bought: three years' worth of staples. Portable generators that never got used. One said the National Guard bought so much ammunition that firing it all became a chore.

``When you get BORED from shooting MACHINE GUNS, there is a problem,'' an anonymous employee wrote.

``People want to do the right thing,'' said Dean Sinclair, a former State Department employee who is crusading to change the system. ``It's not that the federal workforce is filled with bad people. The system sort of forces them to make bad decisions.''

He suggests giving bonuses to managers who return leftover money to the Treasury at year's end. ``It takes time and effort to waste money,'' Sinclair said. ``Remember that.''

Obama, like presidents before him, has exhorted agencies to plan better and avoid rushed decisions at year's end. But the White House says Congress is making that job harder.

``Twenty-five percent of my business, right, will happen in this month. Twenty-five percent of my year,'' said Art Richer, the president of ImmixGroup, a contractor in Tysons Corner that helps software and computing companies seeking government business.

September in Washington used to be a time for selling face to face. Contractors visited the Pentagon. Small-town mayors queued up in the hallways at the Commerce Department, waiting to make a late-night pitch for grants.

But those buildings are off-limits now. So you sell from your desk. You sell with your voice. You sell with empathy, for the poor harried bureaucrat on the other end of the line. ``Answer the phone smiling,'' Richer tells his people.

Of course, the feds were stressed.

``We see them in the hallway, and you go, `How much money are we going to lose?' '' one Army officer said this past week. That officer was involved in setting budgets for future years, and the meaning was clear: How much money are you not going to spend? Whatever that number was, it would be taken out of budgets for fiscal 2015, too.

This is not normal math. But this was not a normal time in Washington: You didn't save money to spend it later. You spent now, to spend later. ``They know they're under the gun,'' the officer said, who spoke anonymously to talk about internal budgeting discussions.

On Monday, Immix began bringing its sales team three catered meals a day. If workers walked to Subway, they might lose a sale. On that day, Immix handled $16 million in business. A normal Monday is about $2 million.

Across the government, agencies were making big-ticket purchases--buying things with this year's money that could be used next year.

On Monday, VA paid $27,000 for an order of photographs showing sunsets, mountain peaks and country roads. They would go into a new center serving homeless veterans in Los Angeles; a spokeswoman described the art as ``motivational and calming, professionally designed to enhance clinical operations.''

On Tuesday, the USDA bought $127,000 worth of toner cartridges (``end of year,'' the order explained). VA spent another $220,000 on artwork for its hospitals.

On Wednesday, the Coast Guard paid $178,000 for cubicle furniture, replacing high-walled cubes with low-walled ones to improve the air flow in a large office area.

``Other higher-priority projects were not able to be executed, so they moved [money] to this lower-priority project'' before the year's end, said Coast Guard spokesman Carlos Diaz. ``The money was going to be spent anyway.''

On Thursday, VA was buying art again. It spent $216,000 on artwork for a facility in Florida. In all, preliminary data showed that the agency made at least 18 percent of all its art purchases for the year in this one week. One-sixth of the buying in one-52nd of the year.

On Friday, the end was in sight.

``I feel good. Four days, right?'' said Corey Forshee, a contracting officer at Joint Base Andrews in Maryland. Forshee was part of a team at Andrews that had done its best to beat the September rush.

The commander, trying to avoid a last-week rush, set his own deadline of Sept. 20. The pizza came early. The chaplain's office visited early (``use it or lose it'' season is traditionally stressful enough to get the chaplain involved). The buying was nearly done.

Now, they had to wait for the last act of the last act: the ``fall-out money.''

This was cash that other parts of the Air Force had not been able to spend. It would be redistributed to this office at the last minute.

``We're waiting for money for that,'' Forshee said, going down a list of unfunded projects. A roof for the workout area. A bathroom renovation. ``Just waiting for money,'' he repeated.

Across Washington, everybody had to wait.

``It's going to come down to Monday,'' said Richer, at ImmixGroup. On Friday, he said his sales had been about equal to last year's, despite worries about sequestration.

On Monday, Richer's people will sell until midnight. Then they will keep selling. ``Money rolls across the continent,'' the feds say. Cash not spent in Washington might be spent by federal offices in California in the three hours before it is midnight there.

When it is midnight in California--3 a.m. in Washington--they will keep on. There are federal offices in Hawaii, after all. And it will still be three hours until midnight there.

Mr. COBURN. Let me give the American people a little taste of what we spent in the last week.

In the last week, the State Department spent $5 million on new glassware for all our embassies. Was that something we needed to do? No. Was it an absolute requirement that we couldn't operate our embassies without another $5 million worth of glassware? No. The State Department had $5 million, and if they didn't spend it, they would be accused of not needing all their money. So they spent $5 million on something that was not absolutely necessary.

In the last week, VA spent more than $560,000 on artwork. As a matter of fact, in the last 2 days. I mean, we are bankrupt. We are running three-quarters of a trillion dollar deficit and we are going to buy a half million dollars worth of artwork because if we don't spend it on something we won't get it next year? Where does that fit in with any common sense? Where does that fit with the integrity or the honor that will preserve the future of our country? It doesn't. We have to change that.

We have not done things that incentivize Federal employees not to spend it and we will give you part of it next year for your budget and the rest of it against the debt our kids will have.

The Coast Guard, in the last day, spent $178,000 on cubicle furniture rehab. They signed a contract on the last day and sent the check out the door. It may be it needed to be rehabbed, but they made sure they got it in this year to consume the money.

The Agriculture Department, in 1 day, spent $144,000 on toner cartridges. Think about it--$144,000. These are all small amounts relative to Washington numbers, but the principle is exactly the same.

On the night before the government closed, the last day of the fiscal year, the Pentagon awarded 94 contracts right before midnight. I can't get the information on what they were yet, but I will. I will find out if they were necessary, if it is something that we needed to have in light of our debt and our dysfunction.

They also spent $5 billion on everything from robot submarines, Finnish hand grenades only hours before the closing of the fiscal year. So they spent the money, not saying it was a priority, other than it was a priority to spend all the money we have because we are afraid we might not get enough money next year.

The Defense Logistics Agency spent $65 million for military helmets on the last day, $24 million for traveling wave tubes to amplify radio signals.

How do we think the hundreds of thousands of people who are furloughed right now feel about us spending money that way when that could be paying them and they could be working?

We are sick. We need a wakeup call.

Let me cite a couple others from the Department of Defense just to show you how parochialism plays into this. Twelve brandnew--brandnew--airplanes, C-27J Spartans, were delivered right before the end of the year. Guess where they are. They are in mothballs in Arizona in the desert because we don't need them. But we spent $567 million for something we didn't need. So what do we do? We store them in the desert because the humidity is so low. So we take them right off the manufacturing line and fly them right to storage. They are not needed.

We have the same problem on the C-27As in Afghanistan. We spent $596 million for those. We finally canceled the contracts because the supplier couldn't supply the spare parts. And you know what the military is getting ready to do, rather than bringing them home or giving them to somebody else? They are getting ready to cut them into pieces in Afghanistan--$ 1/2 billion worth of airplanes.

Where is common sense in this country? Why wouldn't we think about maybe selling them to somebody else and getting some of our value back? But we are thinking about cutting them up.

Then there is the M1A1 Abrams tank. We had testimony from Secretary of the Army John McHugh saying this is the most modern piece of equipment the military has. Its average age is less than 2 1/2 years old. We don't need any more M1A1 Abrams tanks, but they are still being produced this year to the tune of $3 billion so we can keep people employed in a factory making something we don't need.

Isn't that wonderful? Isn't that a great way to steal the future of your kids? But I am sure the politicians where they are made are very happy we are continuing to buy something we don't need because it helps the economy in their area.

Despite the sequester, the National Science Foundation is still funding hundreds of products and studies that do not fit with common sense or a priority. Even if they fit with common sense, they do not fit the priority of where we find ourselves financially.

The Department of Agriculture grants that were announced in the last week before we shut down, before we went to the next fiscal year and don't have a continuing CR--let me read this and see if you think this is how we should be spending our money: 35 wine-tasting projects, wine trail smart phone apps. We are going to supply the money for these. The Federal Government is going to supply the money for these so you can have a good time when you go to whatever vineyard it is. We are going to take Federal taxpayer money.

Those are private businesses. Yet we are spending our grandchildren's money on that?

Four Christmas tree initiatives: Virginia Christmas trees, Michigan Christmas trees; training seminars on how you sell Christmas trees.

You know, Christmas trees are in pretty good demand around Christmas. I am not sure you are going to markedly increase the demand for Christmas trees by learning how to sell them better.

The USA pear road show to China; social media for apples, radio advertisements--paid for by the Federal Government--for blueberries from New Jersey, strawberries, organizing a maple weekend in the state of our Presiding Officer--Massachusetts.

We are spending our grandkids' money, money we are borrowing, to do things that are not a priority. They may be a priority to those folks who get the money, but in terms of our national priorities, they are not anywhere close.

Other examples of ongoing government waste and duplication not eliminated but instead funded by the CR: $30 billion for 47 job training programs that aren't working. They are not working. The GAO says they are not working, we know they are not working, and all of them duplicate one another except for three. But we are continuing to spend $30 billion a year on them.

The House has passed a skills act which consolidated all of them. We won't even take it up over here. We won't even look at it. It would save us about $7 billion or $8 billion a year. They read the GAO report, they acted on it, but we won't.

We have 20 Federal programs across 12 different Federal agencies and offices for the study of invasive species. I think we ought to study invasive species, but I don't think we need 12 different Federal agencies involved in it. And I don't think we need 20 programs on it.

I mentioned the unemployment for millionaires. That is in the CR. We didn't do anything to fix that.

There is $30 million for 15 different financial literacy programs at 15 different agencies. We just created a new one at the Consumer Financial Protection Bureau. Rather than eliminate the ones that are not working, we are creating more of them.

There is $947,000 in the NASA budget to talk about foods that can be eaten on Mars. We are 30 years away from going to Mars. Yet we are going to spend $1 million of taxpayer money we don't have to think about foods we might eat 30 years from now on Mars? I don't think that is a priority for us right now.

There is $3 billion on 209 science, technology, engineering, and math programs at 13 different agencies. Think about that. We all know we need to get it together when it comes to education in our technical and scientific areas. But why would we have this many--209--programs, with 209 different sets of administrators and 209 sets of reporting?

There is billions of dollars in bonuses and Federal payments to contractors who fail to pay their own taxes. We have tried to pass in here multiple times that if you are a contractor with the Federal Government and you are not paying your taxes, you are either going to lose your contract or that tax debt is going to be reduced from what we pay you. But we can't get that through. So people who aren't carrying their fair share are still reaping the benefits of contracting with the Federal Government even though they are tax cheats.

Here is one small one, but this one really gets me. It is bigger than you would think. We have an agency that spends $66 million a year. It is the NTIS. I asked GAO to study them. They studied them. In their report this year, GAO explained there is an office in the Department of Commerce, which is this office, that sells reports to other agencies.

When we had GAO study this, we found 74 percent of the reports they sell to other agencies you can get from this one Web site for free. Their budget hasn't gone down, it has expanded. But the need for the agency is going away. So why are we continuing to spend $66 million--which is what we directly spend and doesn't count what they collect from all the other agencies--for only 26 percent of the information that is not available other than at Google? It makes no sense. It is called the National Technical Information Service, and it was established in 1950, tasked with collecting and distributing certain reports.

GAO noticed this 10 years ago; they noticed it again now. Congress has done nothing. What GAO estimates is 621,917 of the 841,000 reports this agency puts out are available for free on the Internet. Go to Google and every American can find it for free. All the agencies that are paying can find it for free. But we haven't eliminated this agency.

I will stop with that, and I will make a couple points.

It is wonderful that we have a difference of opinion in the Congress, but we can't have a difference of opinion about where this country is headed. We are bankrupt. People don't like to say that word. This is America; we couldn't be bankrupt. But from a balance sheet standpoint and from an income sheet standpoint, we are bankrupt.

So what are the American people to do about this? Are we to continue to spend money every year to the tune of $500 billion to $1 trillion and not make the tough choices or should we do something about it? Should there be a resolution to this addiction of spending money we don't have on things we don't need?

As a physician, for every person I have ever encountered who had an addiction, the first step in confronting that addiction is to recognize the reality of the addiction. Quite frankly, Members of Congress haven't done that. The American people have. They are figuring it out.

The reason I know we haven't recognized the addiction and we are not worried--we can say our debt can be such a percentage of GDP. We don't have to live within our means. We can handle it as long as we don't get above a certain percentage. That is the rationalization of an enabler in a family who allows somebody to continue to be addicted.

Every addiction needs a 12-step program, and the first step is recognizing that we are addicted. And we are. So one of the things the American people are starting to ask about us, given that we can't even pass a CR--and we are going to pass a debt limit increase and not make any of the hard choices. They won't be made this year. They won't be made next year. The only time we are going to make the hard choices is when the international financial community forces us to make those.

But what Americans are asking now, the confidence is so low, is who decides? Do we really represent their thoughts about spending, about priorities, about waste?

If we recognize that all this is there--these trillions and trillions of dollars over 10 years that could be changed without any marked impact on America, and we don't do anything about it--what they are asking is who is deciding? Who decides? Do I represent my constituents if I won't try to change these things?

The confidence level in us, as reflected in the polls, and when you talk to anybody, is they don't have any confidence in us because we won't admit to our addiction, come together, get on the wagon and solve the addiction.

A long time ago in this body I said there was a rumble out in America. It wasn't long after that the tea party came along. I know they are thought about with some disdain. They are not crazy. What they have done is lost confidence and they want something changed. But it is not just the tea party anymore. It doesn't matter your
political persuasion. They think we don't get it, that we are not willing to make the sacrifices of our own political careers to solve the problems. What we need to be doing, in my opinion--and my prescription for us is, American people, don't let us get out of the box by letting us raise again the shackles that are going to be increased by increasing the debt in this country. Because if we do--and we will--what will happen is we won't perform. We won't make the tough decisions. We won't make the sacrifices. There will be no sacrificial leadership on the part of Members of Congress. Their sacrifice will be, How do I get reelected, rather than I don't care if I lose; our country needs to be fixed, and we need to be about addressing that even if it costs me a political position.

When it is all said and done and America has blown through and we see the real results of our profligate spending and the hyperinflation and the marked decrease in the standard of living in this country, what they are going to remember about us is there was a challenge and we didn't rise to it. We didn't rise to the occasion. We saw short term and we forgot and ignored the long-term consequences of our actions.

My hope is that will change on both sides of the aisle; that we would truly embrace a long-term picture and recognize the tremendous difficulty. We have heard all this talk about how we have to raise the debt limit; otherwise, we are going to default. We are not going to default on our bonds, ever. It requires less than 7 percent of our total cashflow that comes into this country. We use that as a scare tactic.

I am not saying we should necessarily not increase the debt ceiling, but we sure shouldn't increase it until we have made a commitment that we are going to solve the problem, because we will be back here in 1 1/2 years doing exactly the same thing with exactly the same excuses that say why we can't.

What America is wanting to hear from us is why we can. They are not wanting to hear about division. They are wanting to hear about unity. They are wanting to hear about what pulls our country together rather than tear it down. The best way to show them is that we are serious about solving this problem. I hope that is so.

Mr. President, I yield the floor and I suggest the absence of a quorum.


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