Shared Sacrifice in Resolving the Budget Deficit

Floor Speech

Mr. THUNE. Madam President, I want to echo some of the remarks made by my colleague from Alabama regarding a budget. He is the ranking Republican member on our side on the Budget Committee.

It is ironic that we are on the floor of the Senate this week, as we were last week, debating a nonbinding sense-of-the-Senate bill that states ``those earning $1 million or more per year make a more meaningful contribution to the deficit reduction effort.''

It doesn't specify what that is. It doesn't say there should be tax increases or spending cuts that should have an impact on these high-income earners. I echo what was stated by my colleague, which is that this is no substitute for a budget. Congress's job is to pass a budget. That is why we are here. That is why the taxpayers elected us. It is to set priorities and make decisions about where we are going to allocate their hard-earned tax dollars.

The Democrats have not passed a budget for 805 days. Now, this sense-of-the-Senate bill--which is vague, ambiguous, and meaningless--does not do anything to address the fiscal challenges our country faces or achieve any level of budgetary savings.

Mr. SESSIONS. Will the Senator yield for a question?

Mr. THUNE. I am happy to yield for a question.

Mr. SESSIONS. The Senator from South Dakota is an experienced member of the Budget Committee and a member of the leadership on the Republican side in the Senate. Isn't it true that we had more interest from Members wanting to join the Budget Committee this year, particularly new Members who had gotten elected and talked to their constituents about their fear of America's debt and they wanted to be on the Budget Committee, and only a few could be selected out of the group who wanted to be on it?

What has been the Senator's observation as to how they have reacted to the fact that no budget has been presented; that the committee has never met or even marked up and held hearings as the United States Code requires? Maybe the Senator can share how they feel about this.

Mr. THUNE. My colleague is absolutely right. There was tremendous interest this year. If we look at the last election, the 2010 election, a lot of the people who were elected in the House and Senate were elected because they ran on a message to their constituents of getting America's fiscal house in order, getting spending and debt under control.

Where does that start? It starts with a budget. So they got here and tried to get on the Senate Budget Committee. We have all these bright new Members of the Senate who have a lot to contribute and who have had no opportunity to do that because we haven't had a budget, a markup, and we haven't done the necessary things in order to move the budget process forward.

I am completely in agreement with the Senator from Alabama when it comes to what the priorities should be. It ought to be doing a budget that actually focuses on cutting spending and getting this debt under control.

I tried to offer an amendment to this nonbinding sense-of-the-Senate bill, but the majority is blocking amendments. That amendment would cut all nonsecurity discretionary spending for the current fiscal year by 2.5 percent. It is a nominal amount, I recognize that. It is not a big spending cut. It is a small haircut. It will not solve our problem. It would produce about $11 billion in savings from some of these accounts that have seen, as the Senator noted, extraordinary growth since 2008.

Spending has increased in the discretionary part of the budget by 24 percent in 2 years, when inflation was about 2 percent. The government was spending at a rate of 10 or 12 times the right of inflation. It is unsustainable.

We cannot argue to the American people with a straight face that that is the kind of spending that ought to be going on in Washington, DC. Because the amendments have been blocked, we are probably not going to have a chance to vote on that. But the amendment says: Let's cut by 2.5 percent the discretionary spending, given the fact that it has increased 24 percent in the last 2 years.

These accounts started to feel downward pressure when the continuing resolution passed earlier this year, but more needs to be done. We need to put pressure on the spending side of the equation, not the tax side. All of my Republican colleagues have said it multiple times, but I think it bears repeating and explaining that our problem in Washington isn't that Washington taxes too little; it is that it spends too much. That is true.

Revenues are below their historical average, but spending is dramatically higher than its historical average. The reason we have revenues that are lower than the historical average is because we have an anemic economic recovery. If we get the economy growing and expanding and creating jobs again, we will start to see some of the tax revenue pick up. Just as a point of fact, in 2006 and 2007, we had a very similar income tax system to what we have today. At that time it raised more revenue than our historical average. Our historical average is around 18 percent of our entire economy--what we raise in tax revenues. In 2006 and 2007, in the Tax Code, the rates were similar to today. We have exceeded the average.

The issue is not that we have too little revenue in Washington, not that Washington taxes too little; it spends too much. Once the economy starts to turn around, we know we are going to be raising a substantial and sufficient amount of revenue without having to resort to tax increases. In fact, if we were to enact tax reform that was revenue neutral--and by that I mean it doesn't generate more revenue for Washington to spend--but if we were to lower the rates on people and businesses and broaden the tax base, our economy would grow and expand dramatically, and we would see even more revenue generated for the Federal Government and more jobs created, which is what everybody wants to see. We should not, however, simply increase taxes to pay for ever-increasing spending for programs that aren't sustainable.

This year Federal government spending will comprise 24.3 percent of our Nation's entire economic output. So almost a quarter of every dollar spent in this country will be spent by the Federal Government. That doesn't take into consideration spending by State and local governments. But it is 18 percent more than our historical average. We spend about 20.6 percent, historically, of our entire economy on the Federal Government. This year it is 24.3 percent. We are almost at a quarter out of every dollar being spent by our Federal Government in Washington, DC.

What happens? That means there is less activity in the private economy, which is where the real jobs are created. When the Federal Government is spending this much and borrowing this much, it crowds out private investment and makes it difficult for the private economy to create jobs that are permanent, good-paying jobs for the people of this country.

Perhaps an even more pertinent statistic is the years in which our budget has been balanced since 1969. These budgets were balanced because spending was constrained. If we look at the 5 years when the budget was balanced, the Federal Government's spending in those 5 years comprises just under 18.7 percent of our GDP, our economic output. So if we look at the problem that we are trying to diagnose in this country, our colleagues on the other side diagnose it as a revenue problem. I submit that the problem we are trying to solve is fundamentally a spending problem. Five times, when the budget was balanced since 1969, in every instance it was because we were spending less than the historical average.

This year's spending is over 30 percent more than the years in which we balanced the budget; that is, as a percentage of our entire economy. That is how much higher it is than the years in which we balanced our budget. That is how much and how fast government spending is growing. Unfortunately, it remains above the historical average every year in the President's budget. He submitted a budget that borrows more, spends more, and taxes more. I can't think of a worse way to get out of an economic downturn and start creating jobs than to continue to spend at this uncontrollable rate, to continue to borrow more and more money, and impose higher taxes on an American economy that is already struggling.

After 2018, according to the President's budget, spending increases every single year. That is a spending problem; that is not a revenue problem. Despite that, the administration wants to take what they call a ``balanced approach'' and to have shared sacrifice.

Only in Washington, DC, would spending more and taxing more be considered a balanced approach. Only in Washington would shared sacrifice mean taking more of taxpayers' hard-earned money to spend on the administration's priorities.

To put a fine point on that, this week, the President said he would ``rather be talking about things that everyone wants, like new programs.'' This is code for: I need more of your money so I can spend more.

I reject that notion. We don't need more spending in Washington, DC. We don't need more programs. We don't need to expand government. Government is too big already, at 25 percent of our entire economy.

Let's pretend for a minute that deficit reduction really was the President's priority. What has happened in the past with these ``balanced budget'' deals? In 1990 the budget agreement reached by President Bush at Andrews Air Force Base was supposed to have spending cuts that outnumbered tax increases by a 2-to-1 margin. Spending was supposed to be cut by $274 billion, and taxes were going to be increased by $137 billion.

What actually happened? Tax hikes certainly materialized, but the reality is that spending actually increased. So in the 1990 ``balanced'' budget approach, we got increased spending and increased taxes. In 1982, under President Reagan, the exact same thing happened.

Madam President, I simply say to my colleagues that this is fundamentally a debate about the size of our government. We believe in a debt crisis we ought to make government smaller, not larger, and not create more programs. Our colleagues on the other side have a different view. We ought to be talking about what we can do to get people in this country back to work and small businesses hiring.

There was a Chamber of Commerce survey that said 64 percent of small businesses will not add to their payrolls this year, and 12 percent will cut jobs. Why? Because of the economic uncertainty created in Washington and because we are unwilling to deal with the spending and debt issue that is in front of us and to put policies into place that will enable job creation and economic growth.

I hope my colleagues will work with us to reduce the size of government, not grow it.

I yield the floor.

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