American Jobs and Closing Tax Loopholes Act of 2010--Continued

Floor Speech

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Mr. CORNYN. Madam President, I won't detain the Senate long, but I did want to call up this important amendment early on in considering this underlying legislation.

This amendment would improve transparency in reporting of foreign holdings of our debt, providing taxpayers with more information about which countries are financing our deficit spending. This amendment is based on legislation Senator Kyl and I introduced in April called the Foreign-Held Debt Transparency and Threat Assessment Act. This legislation would require the President to provide Congress with quarterly risk assessments on the national security and economic hazards posed by current levels of foreign holdings of our debt. It would require the President, in the event that risk level was too high, to submit a plan of action to the Congress to bring down the risk in a way that reduces Federal spending.

Regarding the national debt itself, the bill instructs the GAO to provide Congress with an annual risk assessment on national security and economic hazards posed by the national debt as well as recommendations for reducing Federal spending.

We know the President's budget puts this Nation on a roadmap for doubling the national debt in 5 years and tripling it in 10 years. The interest payments alone will reach $900 billion in 10 years, which is more than the United States currently spends on education and national defense combined. In addition, according to the nonpartisan Congressional Budget Office, the pending legislation will add almost $80 billion to the deficit.

While the President likes to say he inherited the Nation's debt from his predecessor, the fact is, from the day President Obama took office until the last day of fiscal year 2010, the debt held by the public will have grown by $2.3 trillion, according to the White House Office of Management and Budget.

It is important to note that the explosion in the Nation's debt is being financed by foreign investors who, unsurprisingly, may not always have our best interests at heart. The more we need to borrow from foreign investors, concerns about our Nation's fiscal health increase.

The chairman of the Budget Committee noted at a hearing last February that last year, 68 percent of the new debt financing came from abroad, with China now the biggest funder of the United States. We have had the Chinese warn us publicly and privately that they are increasingly reluctant to finance that debt.

In fact, it is worse than that. Chinese Government officials have threatened to use their debt holdings to retaliate against U.S. policies they oppose. In a recent response to a U.S. decision to sell defensive weapons to Taiwan, an official of China's People's Liberation Army warned that China might sanction the United States by dumping U.S. Government bonds.

Many believe a rapid Chinese divestment of U.S. debt holdings would have a destabilizing effect on the U.S. economy.

For all these reasons, I ask my colleagues to support this amendment.

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

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