Balanced Budget Amendment

Floor Speech

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Mr. CORNYN. Madam President, I join my colleagues from Kentucky and the junior Senator from Utah in recognizing the leadership of the senior Senator from Utah, Mr. Hatch, on this even more compelling issue today than it was even back in 1997, the balanced budget amendment.

I couldn't help but be struck by the figures the senior Senator from Utah mentioned earlier when he said that in 1997, the House of Representatives passed the balanced budget amendment. It came to the Senate and failed by one vote. The deficit in 1997 was roughly $107 billion. Today, it is $1.5 trillion. The national debt in 1997, if I recall what the Senator said--and he can correct me if I am wrong--today it is roughly $14.3 trillion, approaching $15 trillion. Back in 1997, it was $5 trillion. Did I get those figures roughly correct?

Mr. HATCH. The Senator did. Back in 1997, we lost by one vote. I was leading the fight on the floor. We had 67 votes and one of our Senators flipped on us at the last minute and we lost it by one vote.

Mr. CORNYN. I agree with the Senator from Kentucky who says this is not a partisan issue. As a matter of fact, back in 1997 a lot of our Democratic colleagues joined Republicans to vote in favor of a balanced budget amendment. If there is an issue that threatens not only the economy but also our national security today more than the national debt, I don't know what it is.

The Chairman of the Joint Chiefs of Staff, Admiral Mullen, said the single largest threat to our national security is the debt. Secretary of State Hillary Clinton said the debt sends a message of weakness internationally.

I was just over at the Heritage Foundation giving a speech. They are studying the role of China in the world, the rise of China, but particularly what I was concerned about, and the subject of my remarks, was the fact that the Treasury Department estimates that $1.1 trillion of U.S. debt is held by the Communist Chinese Government. That is one-third of all our outstanding debt. We know that at least on one occasion, a retired Chinese general said that if we didn't do what China wanted, they would then threaten to disrupt our economy by selling off the debt they own. So my colleagues may care to comment.

Larry Lindsey, the renowned economist, wrote an article recently where we cited three things that worry him the most about high unemployment and the lassitude of the private sector. He said it is slow economic growth, of course, because many in the private sector are discouraged--the entrepreneurs who create jobs, the job creators who would otherwise expand--and slow economic growth concerns him. I think in the first quarter it was 1.8 of our gross domestic product. It is not enough to generate jobs to get people back to work and one reason for our high unemployment.

He said the other two issues that worry him the most are, one, the interest payments on our national debt. He points out that because of the Federal Reserve policy, the interest rates on our national debt are at below historic norms. He points out, for example, if inflation were to kick in or the Federal Reserve, for some reason, should decide to tighten its policy and raise interest rates, what it would do to balloon the interest payments alone on our national debt in a way that would threaten our ability to fund national defense or other issues as well.

Two, he also points out the exploding costs of the health care bill, with more and more employees incentivized to dump people onto the State-based exchanges subsidized by taxpayers as opposed to their employers.

I wonder if any of my colleagues--I see the Senator from Kentucky--may have some comments about the interest on the debt and what he views as a threat to our economy and our security.

Mr. PAUL. From that same article, it is interesting that he talks about what happens if interest rates rise. For every point of an interest rate rising, it adds $140 billion. So he talks about getting back to the historic average of 5.4 percent, that over 10 years it would add $4.9 trillion to our debt problem. But here is the rub. We are having discussions where people are saying we are going to cut $2.5 trillion over 10 years. Senator Hatch points out we cannot bind future Congresses. Senator Lee said the same thing. So when they promise us that they are going to cut $2.5 trillion, compare that to what happens if interest rates rise. One, we can't bind future Congresses, but if interest rates rise, all of a sudden we have $5 trillion in extra expenses.

We must bind future Congresses and we must bind ourselves by amending the Constitution.

Mr. CORNYN. Madam President, I couldn't agree more with the Senator from Kentucky. This is the silent but potentially deadly threat to our whole economy. If interest rates were to go up, if China purchases more of our debt, they are not going to buy it at current rates; we are going to have to offer a better rate of return.

The ACTING PRESIDENT pro tempore. The Senator has consumed 5 minutes.

Mr. CORNYN. So I join my colleagues in supporting the balanced budget amendment. I look forward to the vote on this amendment--sometime during the week of July 18 I think we are shooting for. We invite our colleagues on the other side to join us. The reason we are here today is because it is important to let the people across the country know what we are doing, the solution we are proposing, and to ask them to encourage other Senators and Congressmen to support it because this is the single most important thing we could do to get our economy back on track and to save generations in the future.

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