Departments Of Transportation And Housing And Urban Development, And Related Agencies Appropriations Act, 2010--Conference Report

Floor Speech

DEPARTMENTS OF TRANSPORTATION AND HOUSING AND URBAN DEVELOPMENT, AND RELATED AGENCIES APPROPRIATIONS ACT, 2010--CONFERENCE REPORT -- (Senate - December 12, 2009)

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Mr. CORNYN. Madam President, we are now considering a bill that represents a dramatic expansion in government spending, as the Senator from Arizona has so eloquently stated. This Omnibus appropriations bill represents a 12-percent increase over last year--a fiscal year that ended with the largest deficit in American history of $1.4 trillion.

I do not know of any other area in the economy where people are spending 12 percent over what they spent last year. Certainly no family budget in America, no business in America is spending 12 percent more this year than they did last year--while we see 10 percent of our people unemployed.

Millions of families across the country and small businesses are, in fact, tightening their budgets. But the budgets of these Federal agencies and of the Federal Government itself keep expanding. There is a 33-percent increase in spending for foreign operations, a 23-percent increase in Transportation, Housing, and Urban Development.

One of the worst things this spending is doing is creating tremendous uncertainty, both here at home and in other places such as China which are buying our debt, about whether we are ever going to get serious about our fiscal responsibility.

The President asked last week why job creators were not stepping up and creating jobs. Well, the fact is, people are watching what we are doing in Congress, and they do not know what the rules will be 6 months from now or a year from now or whether Congress will ever recover from this binge it has been on when it comes to spending.

But it is clear we cannot spend--we cannot spend--our way out of this recession. Job creators are scared. They are scared, and they are sitting on the sidelines because all of the spending, all of the tax increases, all of the government takeovers coming out of Washington, DC, these days leave them with the sense that they do not know what the rules are going to be. And why in the world would you want to create a job, expand your business, or make an investment when the very premise upon which you did so would change because of all the chaos in Washington?

The facts of our debt crisis are not in dispute. The total public debt stands at about $12 trillion. We have, in 2009, a $1.4 trillion fiscal deficit. In other words, we have spent more than $1.4 trillion than the Treasury brought in in fiscal year 2009. Then we are accumulating debt even faster during this year than we did last year.

According to the Treasury Department, the deficit for the first 2 months--2 months--of the new fiscal year was almost $300 billion--$300 billion for 2 months--a total larger than the full-year deficits in 2002, 2006, or 2007. So in 2 months, the deficit was worse than it was for the entire years of 2002, 2006, and 2007.

Our deficits will average nearly $1 trillion every year for the next decade--$1 trillion every year for the next decade--according to the administration. This ought to be a shot across our bow.

Moody's Investors Service said its debt rating on U.S. Treasury securities may ``test the Triple-A boundaries.'' The translation of that is they are beginning to doubt whether at some point the U.S. Government will be able to pay its bills or will default on those bills at some point hopefully not any time soon. But this is the sort of pressure we are putting not only on our ability to create jobs but on our future and particularly on our children's future, if we cause Moody's Investors Service and others to rate U.S. Treasury securities less than a Triple-A rating.

Well, we know soon our colleagues on the other side of the aisle are going to ask Congress to vote to lift the debt ceiling. In other words, this is like the credit limit on your credit card. Once Congress is bumped up against that $12 trillion debt ceiling, Congress is going to have a vote on whether to ask the American people and people buying our debt whether we can increase the limit of our credit card because we have maxed it out.

Media reports indicate that the majority intends to slip this provision into a bill on funding our troops in Afghanistan because, frankly, they are embarrassed to have a stand-alone vote on raising the debt ceiling, especially because they know there are many of us on both sides of the aisle who will insist on some measure to effect some discipline on this spending binge as a condition to voting on the debt ceiling. But whatever the vehicle the majority leader decides upon, they cannot hide the fact that we are borrowing money so fast that we will have to raise the debt ceiling another 15 percent.

Conveniently, this increase will get the government through the next midterm elections, it is reported according to some experts. Not a coincidence. No one, particularly those in control of the Congress, wants to have another vote on lifting the debt ceiling or asking the American people to raise the credit card limit before the next election because they know the American people are increasingly angry and frightened by the spending binge they see here, and particularly the accumulating debt.

That is not even getting to the financial crisis that entitlement programs are facing, such as Medicare and Social Security. We know Medicare's unfunded liabilities are roughly $38 trillion. I realize that number is so big that there are perhaps none of us who can fully comprehend how much money that is--but $38 trillion in unfunded liabilities for Medicare alone. Yet the proposed Medicare ``compromise'' among 10 Democrats would roughly double the burden of Medicare and not fix it but actually make things worse.

Well, I want to mention one other item of fiscal irresponsibility I have witnessed. I think we need to cancel one of the credit cards that has been used by the administration--not just this administration but the past administration--and Congress for purposes Congress never intended when it authorized this program, the Troubled Asset Relief Program or TARP.

I know the Senator from South Dakota is on the Senate floor. He has been one of the leaders in this effort because he believes, I think, as I do, that we cannot amend it, so we need to end it. We need to cut out this revolving credit account that is being used for inappropriate purposes known as TARP, the Troubled Asset Relief Program.

Let's go back and look at why TARP was authorized by Congress in October of 2008. It is important to remember what the situation was at that time. Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke had many conversations with legislators on both ends of the Capitol on both sides of the aisle, and they said in their public testimony--on September 23, Secretary Paulson said that Congress must act ``in order to avoid a continuing series of financial institution failures and frozen credit markets that threaten ..... the very health of our economy.''

In private, their diagnosis was even more dire. We were told ``that we're literally maybe days away from a complete [financial] meltdown of our financial system'' in the United States unless Congress acts to authorize the Troubled Asset Relief Program.

Many of us, including myself, voted for TARP because we were told by the smartest people on the planet that unless we did this, our economy would suffer an economic meltdown. But I must tell you, I am extremely disappointed that the very nature of the program was changed after Congress authorized it. For example, we were told by Secretary Paulson and others that the money would be used for one purpose, and one purpose only; that is, to purchase toxic assets.

Well, there is a saying that says: ``Fool me once, shame on you. Fool me twice, shame on me.'' And we were fooled into believing that the TARP would be used to purchase these toxic assets and get them off the books as a way of protecting pensions, savings, and investments of hard-working American taxpayers.

Unfortunately, the very people who promised us and told us what purpose the TARP would be used for misled us because two administrations now--the previous administration and this administration--have used TARP as if it were a big government slush fund. They ignored the clear language of the TARP legislation, and they have repeatedly defied the will of Congress.

Let me briefly mention how the TARP funds have been used in a way that Congress never authorized and never intended.

Only weeks after TARP was enacted, the Bush administration abandoned this stated goal of purchasing toxic assets. Instead, the administration funneled billions of dollars directly into some of the Nation's largest financial institutions, making huge purchases of stock and warrants of some of the Nation's largest financial institutions.

The Federal Government, in other words, began acquiring ownership, stakes in banks, financial institutions, and, yes, even car manufacturers, with the full support of the Obama administration. In fact, the Obama administration has even gone so far as to use TARP to set executive pay at several companies. During the reorganization of General Motors, the Obama administration has used that leverage to benefit its union allies over the rights of secured bondholders who had loaned their money to these companies. I have been a vocal opponent of this misuse of TARP by both administrations.

In December 2008, I joined my colleagues in voting against the government bailout of the auto industry, a vote ignored by both the previous administration and the current administration.

Earlier this year, I supported a TARP disapproval resolution that would have stopped the program dead in its tracks because of this misrepresentation of the purpose for which these funds would be used. I have also supported several initiatives that would have increased TARP transparency and congressional oversight.

Then, in September, I joined many of our colleagues in sending a letter to Secretary Tim Geithner, at Treasury, asking him not to extend his TARP authority beyond the end of this year, as the law allows him to do. This would have eliminated the need for the government to borrow more money through this program. But, unfortunately, Secretary Geithner notified Congress that he has extended TARP authority until next October.

Now we read that the administration is proposing using repaid TARP funds; that is, money that was loaned to these large financial institutions that is now being repaid--that Treasury anticipates using this for a second stimulus plan. Well, I guess that is because they think the first stimulus plan worked so well.

You will recall, the stated objective was to hold unemployment below 8 percent. Well, it has gone above 10 percent and, frankly, I think we need to learn from our mistakes as well as things we have done right. It would be a mistake to put more money, particularly TARP money, into a new stimulus plan and have it work so ineffectively, as the first stimulus plan did.

Repaid TARP dollars cannot pay for anything. TARP is like a credit card. Every dollar spent is a borrowed dollar, adding up additional deficits, additional debt. Using TARP on new spending would break the promise the President made when he voted for TARP in this very Chamber. At that time, then-Senator Obama said:

[I]f American taxpayers are financing this solution, then they have to be treated like investors. They should get every penny of their tax dollars back once the economy recovers.

That was then-Senator Obama, now President of the United States.

I would just conclude by saying, Congress should help the President keep his promises, even when it seems he has changed his mind now, by suggesting that we extend TARP and use TARP on a purpose that Congress has never authorized and never intended.

It seems like the bad ideas never end when it comes to spending and debt out of Washington, DC, these days. In addition to all of these other problems I have mentioned, I have not talked about this health care bill, which would exacerbate and make much worse the deficits and debt situation, and not make it better--all the time while not bending the cost curve down but making things worse, raising premiums, raising taxes, cutting Medicare.

We need to end TARP because, frankly, it is being misused in ways that Congress has never authorized and never intended and, indeed, over the very objections of Congress. We need to learn from our mistakes. Frankly, the stimulus spending, which I voted against because I thought it was based on an academic theory which had not been proven, which was that Congress knew better than the American people how to get the economy working again--by direct spending, by spending borrowed money, the $1.1 trillion in the stimulus plan--we need to end these free-spending ways and show some fiscal responsibility. The best way we could do that, in my opinion, would be to end this program which has been the subject of so much abuse and misuse.

I ask unanimous consent that the following letter, dated January 15, 2009, from then-Director-Designate of the National Economic Council, Lawrence H. Summers, 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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