American Jobs and Closing Tax Loopholes Act of 2010

Floor Speech

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Mr. CORNYN. Mr. President, according to the nonpartisan Congressional Budget Office, the pending legislation before the Senate will add $80 billion to the Federal deficit. The Treasury Department, in a report to Congress last week, projects that by 2015 the national debt will reach $19.6 trillion.

My amendment represents a modest attempt to ensure that Congress is kept informed on the economic and national security implications of two important matters: first, the ballooning national debt; and, secondly, the foreign financing of our deficit spending.

I believe it is only prudent for Congress to get regular analyses on these issues, ones as critical as these.

My amendment has two components. First, it requires the General Accounting Office to provide Congress with an annual risk assessment on the national security and economic hazards posed by the national debt. Secondly, it 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. In the event the risk level is found to be too high, the President would have to put together and then execute a plan to mitigate that risk in a way that reduces Federal spending.

It is the worst kept secret in the world that our deficit spending is being financed by foreign investors who may not always have our Nation's best interests at heart. We need to be thinking openly and clearly about the potential consequences of this, as well as the consequences of allowing our national debt to reach such massive proportions.

The chairman of the Finance Committee apparently opposes my amendment and will offer an alternate based closely on mine. I regret to say, though, his amendment makes changes to the legislative language that could potentially result in tax increases on American taxpayers, which could not come at a worse time.

Under my amendment, the Government Accountability Office would be required to recommend to Congress ways to bring down the security and economic risks posed by the huge national debt. These recommendations would be required to focus on spending reductions, not tax increases. By contrast, under the Baucus amendment, this limitation is deleted, effectively paving the way for the GAO to recommend that Congress raise taxes rather than cut spending.

Similarly, in cases where foreign holdings of our debt pose unacceptable risks to our security and economy, my amendment would require the President of the United States to formulate and execute a plan to mitigate those risks. His plan would have to reduce Federal spending. The Baucus amendment deletes that limitation, opening the door for the President's plan to include tax hikes on the American taxpayer.

The Baucus amendment also substantially weakens the requirements for the two types of debt risk assessments. First, it cuts the frequency of the President's reporting requirements on the risks posed by foreign debt holdings, making them annual rather than quarterly, and it also shifts the requirement over to the Secretary of the Treasury. It makes the reports more vague and, as a result, less useful to Members of Congress who need this information.

Perhaps most puzzling, the Baucus amendment eliminates the requirement for the GAO to determine whether our country can sustain the security and economic risks posed by growing national debt. I recognize it may be unpleasant--or even inconvenient--to think about this, but it is a risk to our country, and it is an important question that needs transparency and our best thinking.

We have an obligation to think openly and honestly about what effect Congress's runaway spending may have on our Nation's future which, of course, is the purpose of my amendment.

Mr. President, I ask my colleagues to oppose the Baucus amendment and to support mine.

I yield the floor and reserve the remainder of my time.

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Mr. CORNYN. Mr. President, I will respond briefly.

The reason why we require, in my amendment, the President of the United States to make the report on the risks to our national security and our financial system is because only the President can command all of the resources of the U.S. Government, including that of our intelligence services, which may have something to say about the national security risks associated with countries such as China owning so much of our debt. We know that, for example, leaders in the Chinese military have threatened retaliation in exchange for the United States selling defensive weapons to the country of Taiwan. I would think the Treasury Department, which in the Baucus amendment would be required to make that report, would not have access to the intelligence and the other information necessary--or from the Department of Defense--in dealing with China.

The Senator from Montana also says we should not rock the boat. We ought to go steady as she goes. The problem is our boat is going to sink and go to the bottom of an ocean of debt if we do not change our ways. This is a first step to try to provide additional transparency to let the American people assess for themselves whether they think this is a good idea or whether their elected representatives in Congress should do something about rising debt and runaway spending.

I understand the Senator from Montana saying we don't want to single out special countries. It is true that some of our closest allies such as Japan and the United Kingdom also purchased large amounts of our debt, but, frankly, I am not as worried about those allies of the United States as I am the intention of China, which is not an ally, which is a rival, to say the least, and one whose actions we need to be appropriately skeptical about and discerning.

So unfortunately, I think the alternative amendment offered by the Senator from Montana waters down this important amendment, and I think it would obscure the facts from the American people and policymakers here in Congress. So I ask my colleagues to vote against the Baucus alternative and vote for the Cornyn amendment.

Mr. President, I yield the floor and reserve the remainder of my time.

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Mr. CORNYN. Mr. President, I urge my colleagues to support the Cornyn amendment. This is a transparency amendment. It just gives the American people and Congress the information we need in order to make a determination of whether Third World countries owning our debt poses a national security or a financial risk to the United States. I ask for your support.

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