Family Smoking Prevention and Tobacco Control Act

Floor Speech

FAMILY SMOKING PREVENTION AND TOBACCO CONTROL ACT -- (Senate - June 10, 2009)

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PAY-GO

Mr. THUNE. Mr. President, there is a disturbing pattern emerging in Washington, DC, which I don't think is being lost on the American people. We have seen, since the beginning of this year, with the new administration coming into power, the new Congress taking control of the leadership in both the House and Senate, an enormous amount, an unprecedented amount of spending, borrowing, and taxing. To bear that out--this information has been used before--if you actually look at the numbers, you have to go back a long ways in American history, go back to the foundation of our country, go back to 1789, and you take it up to today, 2009, 220 years of American history, the total amount of debt that has been accumulated over that period of time, literally since the Presidency of George Washington through the Presidency of George Bush will be equaled in the next 5 years.

We will double the amount of Federal debt, public debt in this country in the next 5 years. We will triple it in 10 years. We are borrowing and spending money around here on a spree that literally is without precedent in American history.

It should be of concern to all Americans for the obvious reason. They have a share of that debt. In fact, according to USA Today, if you just take the amount of debt that has been accumulated since the beginning of this year, with the passage of the stimulus bill, with the new appropriations bill that passed, an 8.3-percent increase over the previous year, which was twice the rate of inflation, and all the other spending that is going on with the various bailout programs and whatnot, the average family's share of the debt this year alone is $55,000. The average family's share of the Federal debt is $55,000 per family in debt accumulated just since the beginning of this calendar year.

The amount of borrowing is without precedent. The amount of spending that is being done is without precedent. All under the guise of this is an emergency, and we have to react this way. But I think as more of this spending and more of this debt accumulates, the American people have become more convinced that the spending isn't solving the problem it was supposed to solve, which was we were going to create jobs, get the economy growing and expanding again. We haven't seen any of those effects.

What we have seen, of course, is more debt, more interest, and a bill that we will hand to future generations that is not fair to them because we should not be penalizing future generations and pushing them because we haven't been able to live within our means.

The most recent response to that by the administration was yesterday. They came out and announced they are going to implement pay-go. So we are going to have pay-go regulations or pay-go policies now in place with respect to the Federal budget and the way we operate in Congress. Incidentally, even when pay-go was in effect, it was not very effective because much of the budget, much of the spending that occurs in Washington is outside the realm or outside the net of pay-go.

In fact, if you look at what pay-go does in terms of its design, it exempts all discretionary spending, would allow all current entitlement programs, such as Social Security, Medicare, and Medicaid, to continue to grow on autopilot. It affects only new entitlements or tax cuts that may be created in the future. Pay-go also allows expiring entitlement programs to be extended without offsets but not expiring tax cuts.

So it is clearly biased in favor of higher spending and higher taxes. In fact, if it does not apply to discretionary spending and if, in fact, it does not in a meaningful way apply to entitlement reform--in other words, it simply puts sort of a cap on how much entitlements can grow, but it doesn't get at the fundamental issue that these programs continue to grow unabated--it is simply one thing: a statutory excuse to raise taxes. That is essentially what pay-go is.

The new administration came out with the news bulletin yesterday that this is somehow a bold, new step and that they are going to attack and take on this deficit and this debt we have. Of course, what they didn't tell us is--sort of the expression we use in my part of the country--it is like closing the barn door after the horse is already out of the barn because we have already got all this spending this year that wasn't covered by pay-go. The stimulus bill, which was $800 billion in new borrowing, was outside of pay-go. In fact, over the past several years now that the Democrats have been in power in the Congress, they have consistently violated the pay-go standard, about 15 times, to the tune of about $882 billion in all this new spending that was done outside of pay-go.

So now it is like all of a sudden coming to the conclusion and realization that now we are going to get serious about deficits, now we are going to get serious about spending, now we are going to somehow clamp down on all these new programs that are out there. Somehow, at least rhetorically, subscribing to pay-go as a concept is going to be the solution and the answer to that.

I think we all know better than that. As I mentioned, pay-go has been routinely sort of ignored in the past. Even if it were to apply, as I mentioned earlier, it does not capture much of the spending that goes on here in Washington. It is simply nothing more than a statutory excuse to raise taxes.

Having said that, I mentioned before much of the spending that has already occurred here in Washington. Yet the big-ticket items are still looming out there on the horizon in the future. By that I mean health care reform, which is a big priority of the administration. We are starting to see more details, get a little bit of a glimpse of what that might entail.

We know, for one thing, based upon the statements that have been made by the President and by the Democratic leaders in the Congress, they want it to include a government plan, purely and simply. They want a government plan, which means one thing; that is, that the government takes over health care in this country. Because you cannot maintain a private insurance program, you cannot maintain a private-sector delivery system, a market-based health care system in this country if you are going to have a government plan.

The government plan is where everybody, according to studies that have been done, eventually would end up going. They would gravitate there. More and more small businesses either would be forced to pay fines, if they did not have insurance themselves or offer insurance. The suggestion is--and I think it is a fair one based upon the analysis that has been done by a lot of the independent outside groups--you will see more and more small businesses giving up their health care coverage and having their employees move and transition into the government plan. The government plan will become the repository for all the employees who are currently covered in employer-provided health care plans in this country.

So the government component of this will continue to grow, and eventually you will have a system that very much models or is very similar to what we see in other places around the world. Some people talk about Canada, some people talk about Europe and all these great systems. But the reality is, a lot of the people in those countries come to the United States. The reason they come here is because we have the highest quality care and because they can get access to it.

The one thing that happens when the government runs health care is the government decides what procedures are covered. The government decides what treatments are going to be part of the coverage. The government will decide how soon you can get access to those treatments. What you find in other countries around the world are long lines, long waits, and that is fairly typical of the countries I mentioned.

The thing that makes the American system so unique in all the world is its dependence upon and its foundation upon a market-based system. It has led to incredible innovation. It has led to incredible research and development, new treatments, new therapies, and has provided all kinds of opportunities for people of this country to receive health care, and, frankly, as I mentioned before, for people from other countries who come here to get their health care.

So why we would want to throw out that part of our health care system that is so good and replace it with a government-run system--which, frankly, again, the government is going to get in the middle of the decision between the consumer of health care or the patient and their provider, the physician, and make those decisions. It seems to me that is not a model we want to emulate in the United States.

As I said, we have a system that needs reform. We have flaws in the way our current system works. But the fact is, it is the very best health care system in the world, and I think it would be a big mistake for us to go down a path that shifts and moves more and more people into a government-run, government-controlled system, where the government decides what procedures are going to be covered and how soon you are going to have access to them.

I think it does one thing: It obviously would lead to a rationing of health care. By that I mean, simply again, that the government would have to try the clamp down on costs, limit the access of people to have certain types of therapies, certain types of treatments, and I think you would find less and less choice available in health care in this country. That is what I think a government-run system would give you in the end.

Most of us on this side have laid out a number of proposals, alternatives to a government-run system. Everybody says: Well, come up with a plan of your own. We have a number of them out there. We have a Coburn-Burr plan that has been introduced. Senator Gregg from New Hampshire has a plan that has been introduced. There is a Bennett-Wyden bill, which is a bipartisan bill, that has been introduced out there. But there are a number of alternatives that have been put forward by Republicans.

To date, we have only seen little sort of generalities about the Democrat plan. All we simply know is they are going to insist upon a government-run component to that. Again, it simply is nothing more and nothing less than a government takeover of health care, which is going to lead to all kinds of outcomes that I do not think most people in this country are prepared for and, frankly, if they had the opportunity, would not support.

But they have entrusted us with the responsibility to look for ways to make health care more affordable in this country. There are lots of good suggestions which, as I said before, Republicans are putting forward. But it is going to be very difficult if the bright red line that is put forward by the Democrats in the Senate and in the House of Representatives is a government-run program, a government-run plan or else. I certainly am not going to subscribe to that sort of a solution for America's health care system. Nor do I think it is going to be in the best interests of patients and consumers around this country or providers, for that matter, to do that.

So health care debate is one debate that is out there. The reason I raised that issue is because it ties back into my point earlier that the amount of spending and borrowing and taxing that is going on here is--if you look back at what has already been done, it is enormous, it is enormous by any comparative standard in American history. But the big-ticket items are still out there because the health care plan, as we understand it--again, it has only been conceptual. We have not seen the details emerge from any of the Democrats' ideas. They are starting to roll more of it out. But one thing is clear: It is going to have a huge price tag. We are talking about anywhere from $1 trillion to $1.5 trillion to $2 trillion. Of course, if they are going to adhere to the newly announced pay-go standard, that means this new entitlement program has to be paid for.

So where does that $1.5 trillion or $2 trillion come from? Well, obviously, it is going to come from some revenues raised from some part of our economy. That means a lot of hard-working Americans are going to see their taxes go up to finance this new government takeover of health care, which is going to give them fewer options, and get in the way of the patient-doctor relationship and cost them a lot more in the form of higher taxes.

I think even though much of the spending I have already referred to is in our rearview mirror--all that is left is to pay the bill for that. We still have to pay the bill. We are borrowing, which means somebody is going to pay the bill. We are going to hand off the bill to the next generation of Americans because, obviously, when you borrow $1 trillion, someday it has to be paid back. In the meantime, when you continue to rack up that kind of borrowing and when you continue to do all the other things we are doing in our economy in terms of interventions, whether it is with regard to financial institutions or auto manufacturers--you can kind of go down the list--insurance companies now that the government actually has an ownership interest in that--we are acquiring enormous amounts of exposure and debt for the taxpayers of this country.

The health care plan is going to be another $1.5 trillion or $2 trillion on top of that. When you borrow that amount of money, you do have to pay it back. By the way, I should mention, too, the interest on the amount of debt we are going to rack up in the next 10 years alone is about $5 trillion. Think about that. That is just to pay the finance charge on the debt we have in this country. Think about the enormous burden that places on the American taxpayers and the American economy.

What generally happens in a case such as that is, when you borrow that much money, there is a lot more pressure out there, and the people who are buying that debt are, at some point, going to start demanding a higher interest rate. When interest rates go up, with the higher return on their investment, generally inflation follows with it. So you have all kinds of economic problems that are created by the level of borrowing we have already incurred. And we are going to add a new health care entitlement on top of that. It literally is breathtaking the amount of intervention we are seeing in the private marketplace today.

I talked about some of the spending and some of the borrowing that has been done. But in the taxes that are going to be associated with health care--and I could go down a list. There is a three-page list of the various, what we call pay-fors or ways of raising revenue to help finance health care. But there is also another big tax looming on the horizon, and that is the carbon tax, what we call the national sales tax on energy. If this climate change bill, which is currently moving through the House of Representatives, reaches the Senate, and if it does, in fact, pass the Congress this year, that, too, will entail an incredible amount of taxation, because there is no way in this country you can attach, essentially, a cost to carbon per ton and force companies that emit to buy the credits that would be associated with that without them passing it on. They are going to pass it on. Everybody admits that. The President has admitted that. The leadership on the other side has admitted that. All the utility companies in the country will tell you that.

A carbon tax, a national sales tax on energy, would hit places such as where I am from in the Midwest the hardest because we are, by and large, proportionately more dependent upon coal-fired power than are many other areas in the country. We have a sparse population, which means we have a ``higher carbon footprint,'' which means people in the Midwest, in States such as mine, are going to pay way more for energy under any kind of a climate change bill or what we call a cap-and-trade bill or cap-and-tax bill.

However you want to refer to it, there is no way of getting around the fact that it is going to cost an enormous amount every single year for families in this country, for businesses in this country, for industrial users, for school districts. I have seen the statistics from school districts in my State, from commercial users, from residential users about what those costs are going to be. They are stunning.

So that is another tax that is still out there. Add that to the health care tax that will come with whatever health care bill is passed through here, and the amount of taxation is going to start to rival the amount of spending and borrowing that is going on in Washington.

But it brings me to my final point, and that is what I am concerned about and what I am starting to hear more and more from people in my State of South Dakota--in many cases unsolicited--who come up to me and raise this issue of the amount of government ownership of our private economy. We are seeing, again, unprecedented levels. If there is one bedrock principle in American history, it is the adherence to the ideals of private enterprise.

In recent months, however, the United States has substantially deviated from this historical pattern, and the Federal Government now owns substantial shares of major U.S. corporations. We own--the taxpayers; I mean you and I and all of us here--we are now shareholders in a lot of major U.S. corporations. The taxpayers--the Federal Government--own 79 percent of AIG, 75 percent of General Motors, 10 percent of Chrysler, 36 percent of Citibank, 80 percent of Freddie Mac and Fannie Mae. And it goes on and on and on.

So we have all this spending, borrowing and taxing and now, on top of that, increasing the amount of government ownership of America's private economy. If there is one thing Americans are clear on, it is that the government should not be taking over bigger and bigger shares of the American economy.

There was a survey recently by Rasmussen that said 75 percent of Americans agree the Federal Government should not take over the U.S. banking system. That was a poll done in February. More recently, 60 percent say that the bailout loans given to GM and Chrysler were a bad idea. That was an April 21 poll. A new poll, done on May 31, just recently, shows that 67 percent of Americans are opposed to providing General Motors with $50 billion and giving the government a 70-percent ownership interest in GM. Mr. President, 56 percent of voters said it would be better to let GM go out of business. None of us want to see that. But I think none of us, at least most Americans do not want to see the government owning more and more of American companies.

The Federal Government is inevitably going to use that ownership stake to push its own agenda.

In a moment of extreme candor, former Labor Secretary Robert Reich declared that if the government is an active shareholder, they should ``push management to take actions that are not necessarily geared toward higher shareholder return.''

Think about that statement. The government owns more and more of American businesses. They should ``push management to take actions that are not necessarily geared toward higher shareholder return.'' In other words, the government should use its newly acquired power in formerly private companies to further its own agenda.

Both the political process and the free markets are going to be distorted if that happens. In fact, in the New Republic, Noam Scheiber recently wrote that ``government ownership invariably politicizes management decisions which could be a fiasco.'' The article notes that a coalition of unions is lobbying against providing bailout dollars to Principal Financial Group because of its opposition to ``card check.'' You find more and more of these pressures on now because the government has a bigger and bigger stake in the government dictating day-to-day management decisions in American business. That is not a path I would argue we want to go down.

The Economist commented on the government-forced Chrysler bankruptcy:

In its haste it has vilified creditors and ridden roughshod over their legitimate claims over the carmaker's assets. At a time when many businesses must raise new borrowing to survive, that is a big mistake. ..... The Treasury has also put a gun to the heads of GM's lenders.

In a recent Bloomberg article, Bradley Keoun warns of some of the problems that Citigroup--and other banks incur in accepting bailout money--may encounter as a result of the partial government ownership. Among them he cites government pressure for stricter compensation rules, directives to focus on ``State-approved social objectives,'' instead of increasing earnings, scrutiny of advising or being forced to ``exit risk-taking businesses that are profitable competitors.''

I think there is plenty of thought out there from people who understand the economy and the importance of the private market, its tradition, its contribution to the success of the American economy, and the prosperity we enjoy today, as well as lots of anecdotal and other evidence that when the government gets into these particular situations where it is trying to influence the day-to-day decisions of private business in this country, those who are trying to manage our private businesses in this country, leads to all kinds of fiascos and disaster.

I would mention one other point and that is, according to Bloomberg, after demands from lawmakers, Citigroup consented to support cramdown legislation, even though this policy was opposed by others in the banking industry.

It is pretty clear these types of interventions into the private marketplace, into the free market economy in this country, lead us down a path that is not good for the American taxpayer, not good for the American economy, and that it stifles innovation and entrepreneurship. In fact, I would argue it kills the entrepreneurial spirit in this country to have government taking bigger and bigger ownership interests, bigger and bigger ownership stakes in the American economy, and further dictating the decisions, the day-to-day decisions which American businesses make that are designed to grow their companies, to get a better return for their shareholders, to become more profitable, to make America more prosperous, to raise our standard of living, and to deliver more benefits to their employees--all these things that have driven this economy and made it the envy of the world. I don't think we want to go down a path or stay down a path that gets us deeper and deeper into ownership of the private economy.

I am going to be introducing and filing a piece of legislation tomorrow which addresses this issue and which provides an exit strategy for the Federal Government and for the taxpayers to begin to get out of all these ownership interests they have in the American economy, and I will have the opportunity on the floor to talk more about that at a later time. But this afternoon, I wished to touch on these issues as we begin the debate which has sort of captured this city and the Congress and the administration and I think very soon will engage the American public over health care reform and the trillions of dollars of new taxes and revenues that are going to be necessary to finance the proposal the new administration has for health care reform and how that takes us even further down the path of government intervention and a level of nationalization of our private economy--in this case health care--and that pattern that just seems to be continuing and which I think more and more Americans are reacting to and more and more Americans, I believe, are going to become engaged in.

Members of Congress on both sides are going to be hearing from their constituents about what they perceive to be a real threat to the long-term viability, the long-term prosperity, and the long-term protection of the taxpayers' interests.

I hope they will become more engaged. I certainly hope we will be able to defeat proposals that come before the Senate that call for greater governmental ownership, greater governmental intervention, greater expansion of governmental powers in Washington that will limit the choices of Americans, limit their access to health care opportunities, health care therapies, health care treatments that all too often are lost, I believe, in a system where the government rations care.

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

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