Debt and Deficits

Floor Speech

DEBT AND DEFICITS -- (Senate - June 11, 2009)

Mr. THUNE. Madam President, one final point I wish to make is all of this sort of ties back to what I think is the pattern, the precedent we have seen so far in this Congress, and that is incredible amounts of spending, incredible amounts of borrowing. The stimulus bill started it off to the tune of about $800 billion. The budget we passed this year on the discretionary, nondefense domestic side was 8.9 percent more year over year than the previous year. The omnibus bill we passed--which was unfinished business from the last Congress--was 8.3 percent over the previous year, which, again, more than doubled the rate of inflation. We have all these Federal obligations and liabilities that are being created by virtue of these interventions in the marketplace. We have the TARP program; we have all this taxpayer exposure out there, all this spending, and this year we know we are going to have a $1.8 trillion deficit which dwarfs anything we have ever seen in history and as far as the eye can see. For the next decade, we are looking at about a $1 trillion, on average, annual deficit.

Our debt to GDP is headed to historically high levels if predictions are accurate. I think the predictions are optimistic in terms of what we are going to see in economic growth, unemployment, inflation, and interest rates. Even if the projections with respect to the economic indicators are accurate, we are going to see, 10 years from now, the public debt, as a percent of the GDP, reach over 80 percent--a rate we have not seen literally since the end of World War II.

These are very troubling signs. I think they should be warning flags, warning signs to the people in this country that this level of borrowing, the amount of spending, the amount of taxation, with the new obligations in the health care bill, is too much for our economy to bear and for the American taxpayer to bear.

What the President came out with earlier this week is a new announcement that, all of a sudden, we have gotten religion, and we are going to submit all of the new spending and all of these programs now to what is known as pay-go. I will submit for the Record an editorial from the Wall Street Journal from a couple days ago.

I ask unanimous consent that it be printed in the Record.

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

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Mr. THUNE. Mr. President, I will make a couple of observations they made in that editorial, as well as similar observations made by some of my colleagues in the Senate, since this announcement was made--that pay-go is going to now be enforced--statutory pay-go.

This editorial from the Wall Street Journal said:

The truth is that paygo is the kind of budget gimmick that gives gimmickry a bad name. As Mr. Obama knows but won't tell voters, paygo only applies to new or expanded entitlement programs, not to existing programs such as Medicare, which this year is growing at a 9.2 percent annual rate. Nor does paygo apply to discretionary spending, set to hit $1.4 trillion in fiscal year 2010, or 40 percent of the entire [Federal] budget.

Mr. President, the thing that strikes me about this announcement is, it seems it is, as is often said, too much, too little, too late. We already passed an $800 billion stimulus bill, which we financed by borrowing from the next generation. That wasn't subject to pay-go nor have many of the spending programs in the past couple of years been subject to pay-go.

When the Democrats took control of the Congress after the 2006 elections, it was announced by Speaker Pelosi that they were going to enact pay-go--saying pay-go is going to be the policy, the rule followed in terms of the spending done by the Federal Government. But that was quickly ignored. As I said before, if we look at the reality of what happened in the last few years, despite all the lipservice paid to pay-go, it doesn't apply all that much. It applies to new entitlement programs and to tax cuts, but as far as I can tell, it doesn't apply to discretionary spending, to current entitlement spending, which, as I said earlier, is growing--Medicare at about a 9.2-percent annual clip. So what is it really good for?

Well, it seems to me it is a statutory excuse to raise taxes. If we continue to exempt more and more things--one of the things we debated in the last year or two is whether an extension or exemption will be afforded to taxpayers from the AMT, which would capture more taxpayers, and whether it ought to be offset and paid for and the pay-go rules ought to apply to it.

Well, the President, in his announcement a couple days ago, went so far as to say he is going to exempt the AMT fix from pay-go. That is a $576 billion ticket item over a 10-year period. The AMT would be exempted. The physician fee fix would be exempted, which is something we have had to do recently in Congress on a regular basis to protect doctors from the cuts that would occur under statutes passed many years ago. So we come in and we do what we call a physician fee fix. That will be exempted from the pay-go rules.

So we would be carving out big chunks of Federal spending, of tax relief, and there were a couple of other exemptions that were mentioned that would be exempt from pay-go. If we take them off the table, and if we take entitlement spending off the table--at least current, present entitlement spending--and we take discretionary spending off the table, it seems to me all we have done is, again, created this gimmick that is trying to pull the wool over the eyes of the American people that we are really doing something serious about fiscal responsibility which, in fact, we all know is not the case.

Mr. President, I hope we get serious about fiscal responsibility here. It means we have to get our arms around spending. We cannot fix the fiscal problems in this country when we exempt everything and say we are going to continue to spend--in fact, the appropriations bill passed in the House of Representatives the other day; they passed one of their appropriations bills with a 12-percent increase over last year. How can we justify that when we have a $1.8 trillion deficit this year and an economy that is in recession? The Federal Government is supposed to be leading the way, setting the example, and we cannot even live within our means. We say we are going to implement pay-go and, boom, before the ink is even dry on whatever statement they may have signed, we have a House Appropriations subcommittee passing an appropriations bill with a 12-percent year-over-year increase. And, again, because discretionary spending is exempt from pay-go, what difference does this announcement on pay-go really make, other than to try to pull the wool over the eyes of the American people?

I hope the American people figure that out. I think they will. I certainly know, around here at least, we get new data all the time about the size of the deficit and what we are going to look at in the foreseeable future. It is a very disturbing picture. That is why I think it is so important we get spending under control, that we get the Federal Government out of the private ownership of American business, and let American business do what it does best: create jobs and make their own management decisions, not the Federal Government, because it controls such a big part of these businesses, intervening and trying to impose their political will on this decisionmaking process, and that we do everything we can to prevent a government takeover of our health care system, at a cost of somewhere between $1 trillion and $2 trillion, which will inevitably lead to much higher taxes.

Somebody has to pay. These things all have to be paid for or we can borrow it, which is what we did with the stimulus bill. So we can have higher taxes or more borrowing. I argue the spending has to stop. That is the only way we are going to get our fiscal house in order and make it clear to the American people we are serious in Washington about getting spending under control. I hope we get a vote on my exit plan, my bill. I think we need a plan to exit the scene and get government out of the ownership of large parts of the private economy and private businesses in this country. I hope we will do everything we can to prevent a government takeover of our health care system, which is one-sixth of our economy.

I also hope we will not fall for dumb gimmicks like pay-go, which do nothing to address, fundamentally, the financial and fiscal problems our country faces, but that we will get serious about getting spending under control and putting America on a fiscal path toward fiscal discipline that is fair and responsible to the people in this country, who pay these bills, the American taxpayers.

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

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