Cut, Cap, and Balance Act of 2011
Floor Speech
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Mr. VAN HOLLEN. I yield myself such time as I may consume.
Madam Speaker, this is no time for this body to be playing dangerous games with the American economy and with American jobs, and yet that's exactly what's going on on the floor of this House today. Our Republican colleagues are taking the position that unless and until we accept their radical budget plan, they will prevent the United States from paying its bills.
And what does their budget plan do? Yes, it is the same old plan to end the Medicare guarantee, to slash Medicaid, to cut education while protecting special interest tax breaks, like subsidies for Big Oil companies.
And here's what they're saying: Unless we do that, unless we take that, they're going to prevent the United States from paying its bills.
Remember, these are bills that are coming due on actions that this Congress has already taken. These are the bills to pay for two wars. These are bills to pay for the prescription drug plan that was never paid for. And one of the primary reasons we don't have enough revenue coming in to pay those bills is because of the tax cuts in 2001 and 2003 that disproportionately benefited the very wealthy.
It's interesting to hear some of our Republican colleagues who have been here for that entire period of time and voted on all those things saying that it's a sacrifice for them to accept responsibility and pay the bills for the things they voted for. Imagine if the American people took that position.
And what are the consequences of the United States failing to pay its bills? The same thing that would happen to an American family that decided not to pay its bills, whether it's its mortgage, its car payment, whatever it might be. It would undermine the creditworthiness of that American family.
And taking that action will undermine the creditworthiness of the United States. That will lead to a rise in interest rates and a sinking economy. It would hurt every American family. And it would increase--not decrease--the deficit of the United States. That is the result our Republican colleagues are threatening in this bill if their demands are not met.
So let's dig a little deeper into those demands. As I say, what they want to do is impose the same budget plan that they voted on earlier in this House and we debated. It does end the Medicare guarantee, it does slash Medicaid and education, and it does protect corporate tax loopholes. Only this time it's worse, because they want to take that budget plan and implant it in the Constitution of the United States.
Now, nobody in this body should be fooled for one moment. This is not an ordinary balanced budget amendment to the Constitution. We can have that debate, and there are legitimate arguments. This does something very different and very sinister. It manipulates the Constitution of the United States in a way to graft the Republican budget plan into the Constitution. How does it do it? There are two devices, and the gentleman knows them well.
The first is, it says you can cut Medicare, you can cut Social Security, you can cut education, with a majority vote. But if you want to cut a subsidy for a Big Oil company for the purposes of reducing the deficit, if you want to
cut corporate jet loopholes for the purpose of reducing the deficit, that's not a majority vote. That's a supermajority, two-thirds vote. So it biases the Constitution itself in a manner that prefers cuts to Medicare beneficiaries who have a median income of under $22,000 before asking the very wealthiest in our country to return to the same tax rates that were in place during the Clinton administration.
Secondly, it says, we have to pass a constitutional amendment in the next 2 days that also includes an overall cap on spending. And if you look at the bill that came out of the Judiciary Committee, what that would impose is an 18 percent cap. Maybe 18 percent, maybe 19 percent in the end, we don't know, but you have to have a cap. And the one that's come out so far has an 18 percent cap.
Now, let's put that number into context. Not since 1966, just after we enacted Medicare to protect our senior citizens from health crisis, not since that time has the United States met that level of expenditures. We've been over that level of expenditures. So by putting that cap on, combined with the provision to make it easier to cut Medicare than it is to cut corporate tax subsidies, they are writing into the Constitution itself this bias. They're stacking the constitutional deck in favor of engrafting their budget plan into our founding document.
Now, I heard the gentleman say, and we hear it many times, and I hope we won't hear it again on this floor today, 49 of the 50 States have balanced budget amendments. That's true. But they don't have this kind of balanced budget amendment. They don't have balanced budget amendments with these pernicious features, with some exceptions.
Fourteen States have a supermajority requirement written into their constitution. For a good number of those, it's less than two-thirds, which is what this would require. Sixteen States write into their Constitution spending caps, and only seven States in the country combine the two.
So let's not talk about how every State can balance the budget, an argument which also ignores the reality that the Federal Government is not just any old State. It is the Federal Government of the United States of America. It needs to be able to respond to emergencies and wars and the like.
So let me close with this, Madam Speaker. We do need to, number one, make sure we pay our bills; and, number two, we need to get our deficits under control in a way that helps our economy, not hurts it. And that's why the President of the United States put forward a proposal that is modeled on the framework that was put forward by the Simpson-Bowles commission. It doesn't have every detail in it, but it adopts that framework that says let's cut the deficit by approximately $4 trillion over the next 10 years. Let's do it in a balanced way. In fact, it's tilted toward spending cuts--$3 of spending cuts for every dollar in revenue. He makes it very clear he wants to get the revenue, closing some of these corporate tax loopholes, asking the top 2 percent of income earners in the United States to just go back to the rates they were paying during the Clinton administration, a time we all remember when the economy was booming and we created 20 million jobs.
So let's take a balanced approach to this. Let's not take the position that if our demands are not met, if we can not manipulate the Constitution of the United States to engraft our budget plan into that founding document, then we're going to let the United States fail to pay its bills and suffer the terrible economic consequences. It's not so much Members in this body that will be suffering those; its the American people. Let's not do that to the American people.
I reserve the balance of my time.
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Mr. VAN HOLLEN. Madam Speaker, I wish the gentleman had yielded because I think it would have become very clear that the Republican position is they won't close a tax loophole that generates one penny for deficit reduction, not one penny.
So you can't close a corporate jet loophole if it's going to deficit reduction. You can't say to the oil and gas companies we're going to end your subsidy if it's going to go for deficit reduction. We all know there are a lot of
Washington lobbyists that manipulate the Tax Code around here. Getting a tax break, a taxpayer giveaway to the Tax Code, is just like getting something through spending, and yet our Republican colleagues refuse to allow any cut in a loophole to go to deficit reduction, not one penny.
Again, we heard it from the majority leader, we're going to hear it I guess all day, 49 out of 50 States have balanced budget amendments. This is not the kind of balanced budget amendment States have. This writes into the Constitution of the United States again a preference for cutting Medicare and Social Security--that requires a majority vote--but in order to close one of those corporate tax loopholes for the purpose of reducing the deficit you need a two-thirds vote. You're going to imbed into the Constitution of the United States those policy preferences. That is exactly what this does.
So let's not hear about the 49 States. They don't all have these spending caps, and they don't all have that preference protecting special interest tax breaks from use for deficit reduction.
Madam Speaker, I yield 3 minutes to our distinguished leader of the Democratic Caucus, the gentleman from Connecticut (Mr. Larson).
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Mr. VAN HOLLEN. I yield myself such time as I may consume.
I just want to make a couple of points in response to statements that have been raised.
Not only would this write in the Constitution a two-thirds requirement for getting rid of special interest tax breaks for the purposes of deficit reduction, it would make it easier to create new special interest tax loopholes than to eliminate them. If a Washington lobbyist is pushing for a big special break, you can do that with a majority vote under this constitutional amendment. But if you want to eliminate one of those special interest tax loopholes, whoops, you need a two-thirds vote.
Now let's be very clear on what the President has said. Yes, we want to close those corporate loopholes. He has also been very clear that beginning in 2013 we should go back to asking the very top income earners to pay the same rates they were paying during the Clinton administration, which, as I said, was a time when the economy was booming. Now every time we mention that fact we hear our Republican colleagues talk about small business and how they're going to protect small business. When you hear that language, you really know that they're using that as cover to protect some of these big special interests.
Why do I say that? We agree that small businesses are the engine of this economy; but if you look at the Joint Tax Committee report, July 12, nonpartisan, they say that 3 percent of all businesses would even be impacted--only 3 percent. Less than 3 percent of all businesses would be impacted by the President's proposal, those that file as S corporations. And then it goes on to provide a warning here, specifically saying beware because these entities might not be "small,'' in quotes.
In fact, they say in 2005, over 12,000 S corporations and 6,000 partnerships had receipts of more than $50 million. Among those are KKR and Pricewaterhouse. Now these are all good businesses, but I would ask my colleagues whether they are small businesses. And let's not use the rhetoric of small businesses to protect preferences for the big guys.
We all need to share responsibility for getting this deficit under control. We need a balanced approach to doing that.
With that, I yield 3 minutes to the gentlewoman from Pennsylvania (Ms. Schwartz), my colleague on the Budget Committee.
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Mr. VAN HOLLEN. Madam Speaker, the sponsor of the bill mentioned some House rules. I think he is well aware that you can always waive House rules by majority vote. Thank goodness you cannot just waive the Constitution of the United States. Our Founders made it difficult to get bad ideas into the Constitution. Again, I want to make it clear, this is not your garden-variety balanced budget amendment. This is manipulating the Constitution of the United States itself in a way that makes it easier to cut Medicare, easier to cut Social Security, and easier to cut education than it is to cut corporate tax loopholes for the purpose of reducing the deficit.
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Mr. VAN HOLLEN. Madam Speaker, when we were all sworn in, we were also sworn to protect the Constitution of the United States, not manipulate the Constitution of the United States to protect special interest tax breaks for oil and gas companies or other special interests by implanting into that document a requirement that two-thirds of this body and the Senate have to vote to get rid of them for purposes of deficit reduction.
I also think that while we're all entitled to our own opinions, we're not entitled to our own facts. If you look at the Medicare trustees' report, it will indicate that the health care reform bill extended the life of the trust fund, and we also did it by getting rid of the overpayments to some of the Medicare Advantage plans that were being paid at 114 percent of what other plans were being paid for. Taxpayers were oversubsidizing those plans, as were Medicare recipients.
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Mr. VAN HOLLEN. I will not yield on my time.
The gentleman pointed out that not even the Republican budget that passed the House, that ends the Medicare guarantee and is draconian, not even that would meet those requirements, that the budget that would meet those requirements was that passed by the Republican Study Group, which is like the Republican plan on steroids. In fact, a lot of Members on the Republican side decided that was way overboard. That would require slashes in things like Medicare and Social Security even more than the Republican budget that passed the House.
So that is the one budget that was identified as meeting the requirements of that constitutional amendment. This is not a simple constitutional amendment. They know that that's a popular idea.
So they're dressing up their particular version of it in that language, talking about 49 out of 50 States have this. Again, two devices: One, supermajority; a two-thirds vote required to cut corporate tax loopholes when only a simple majority is required to cut Medicare and Social Security. We don't think things like that belong in the Constitution of the United States.
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Mr. VAN HOLLEN. I would just remind my colleagues that the President has put on the table a balanced approach to reducing the deficit. It would cut about $4 trillion from the deficit over the next 10 to 12 years. It's a balanced approach, again, based on the overall framework of the bipartisan Simpson-Bowles Commission. It calls for $3 in spending cuts for $1 in revenue. It would be raised after 2013 by closing special interest tax loopholes and asking the folks at the very top to go back to the same rates that were in place during the Clinton administration. That's what the President said.
It's hard to have a conversation when the other party to the negotiations takes the position that they will not allow one cent from closing a corporate tax loophole to go for the purposes of deficit reduction. And now we see them trying to enshrine within the Constitution a limitation on our ability to get rid of those special interest tax loopholes. They would now require a two-thirds vote. That is a Washington lobbyist's dream in the Constitution.
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Mr. VAN HOLLEN. Madam Speaker, nobody is saying that we shouldn't balance our budget. We should balance our budget. In fact, the last time it was in balance was during the Clinton administration when they took a balanced approach to reducing the deficit, including having in place sufficient revenues from the folks at the very top to help cover our bills.
Then what happened in 2001-2003 is that we had back-to-back tax cuts that disproportionately benefited the very wealthy, which are a significant contributor to why there is now a mismatch between the bills we have to pay and the revenue coming in, which is why the President of the United States has said, Let's reduce the deficit. Let's do it in a balanced way. Let's do $3 in cuts to $1 in revenue.
I go back to the fact that the Republicans in the House want to insert in the Constitution of the United States a provision that would require a two-thirds vote to get rid of a special interest tax loophole for the purpose of deficit reduction. That kind of makes it difficult to have a balanced plan.
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Mr. VAN HOLLEN. Madam Speaker, the one surefire way that we're going to send interest rates up in this country and add to the cost of living for every American is if the United States doesn't pay its bills--bills for obligations that we've already taken on, which is what this is about. Some people, again, think it's a sacrifice to pay bills for actions and decisions that they've already supported and voted for. I would also point out that the Republican budget that passed the House and that would be put into this bill would require us to raise the debt ceiling by $8 trillion between now and 2022. So let's not play this game with respect to paying our Nation's bills.
We have to do two things: We have to pay our Nation's bills--every family knows they have to pay their bills--and we have to come up with a deficit reduction plan.
The reality is the President has put a plan on the table. The reality is our Republican colleagues don't happen to like it because, as I said, for every $3 in spending cuts, it would ask us to have $1 in revenue from closing these special interest tax loopholes. Again, they want to manipulate the Constitution of the United States to protect those loopholes, to make it hard to get rid of them.
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Mr. VAN HOLLEN. Madam Speaker, as part of the plan the President has put on the table that would reduce the deficit by $4 trillion over about 10 to 12 years, he has about a trillion dollars in cuts in discretionary spending. He does ask the Pentagon, which is the one agency that has never passed a GAO audit, to help contribute toward resolving that deficit problem. And he also does it without making deep cuts in critical investments for our country like education, like investment in infrastructure.
We're going to see in a couple of weeks a bill that may come out of the Transportation Committee that dramatically slashes infrastructure investments at a time when we have 20 percent unemployment in the construction industry.
So, yes, we have to make these cuts. The President's plan makes the cuts. But let's not take a hatchet to education investments. Let's not take a hatchet to investing in critical infrastructure, and let's not enshrine in the Constitution of the United States a preference for cutting Medicare and Social Security over cutting special interest tax loopholes. That's what this provision will do.
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Mr. VAN HOLLEN. Mr. Speaker, I think the American families gathering around their tables do not have the option of not paying their bills on obligations they've already incurred. They can't say, Oh, it's okay to not pay my car payment, but I will pay my mortgage. They don't have that choice; and, frankly, the United States Government should not be saying that we're going to make those choices. We should be paying all our bills. And I would remind my colleagues that the reason we have to raise the debt ceiling is for obligations that have already been incurred, votes that have already been taken. For example, two wars, an unfunded prescription drug bill, and the reality of two tax cuts that disproportionately benefited the very wealthy.
Now, I would urge my colleagues to read the bill. The section the gentleman referred to dealt with the sequestration. There's nothing in the bill that says not to cut Medicare or Social Security as part of reaching those targets. In fact, they're going to implant in the Constitution of the United States a spending level that we have not achieved since just after we passed Medicare.
So what they would do through this is call for deep cuts in Medicare. The numbers in this particular statutory provision track the budget that the Republicans passed off this floor. The CBO analyzed that. It looked at the impact on Medicare beneficiaries, and it's in a letter dated April 5, 2011, to the chairman of the Budget Committee, pointing out that under the Republican budget plan, Medicare beneficiaries will end up paying about 60 percent of the costs compared to 25 to 30 percent under Medicare today.
It's interesting that Members of Congress have written into the statute provisions that say for Members of Congress, we will have about 72 to 75 percent of our premiums and costs covered when we're saying to seniors on Medicare, let's put in these spending caps that will require you to pay a whole lot more.
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Mr. VAN HOLLEN. Mr. Speaker, again, the President has said two things: Number one, America pays its bills for the obligations that it's incurred. Number two, he put a plan on the table to reduce the deficit by $4 trillion; again, $3 in spending cuts for $1 of revenue.
I would point out to the gentleman, the President was very explicit. He said that the revenue component would begin in January of 2013; and in the meantime, he's actually proposed extending the payroll tax for another year during the year 2012 so that consumers would have more money to generate more demand in the economy, which is very fragile right now.
But make no mistake: Our long-term challenge is getting the economy going again and reducing our deficit, and the economy needs that to happen, and it should happen in a balanced way.
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Mr. VAN HOLLEN. Mr. Speaker, I agree with much of what the gentleman said, especially that we need to take responsibility for our own actions. And that's why nobody should be taking the position that we won't pay the bills of the United States of America unless we get a plan that's 100 percent our way.
American families can't say to the mortgage company, you know what? I don't like the way you're handling this. I'm not going to pay you, or whatever. And so we need to take that same approach.
Decisions have been made in the past. We're obligated to pay the bill for those decisions. Let's not try and duck those responsibilities for our own actions.
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Mr. VAN HOLLEN. Mr. Speaker, I know that the gentleman is new to the body, but there were lots of decisions made over the past years for which the bills are coming due now. For example, in 2005 when our Republican colleagues headed up the House, we passed a prescription drug add-on to Medicare which was not funded, not one penny. It was all put on the credit card. Two wars were put on the credit card; and again, tax cuts in 2001, 2003 that disproportionately benefited the very wealthy that created this gap.
So I agree with the gentleman. It is time, sir, to take responsibility for our actions. And it is interesting to hear some folks say that it is a sacrifice for us to have to pay bills for decisions that were made in the past.
Now, yes, we need to get the deficit under control. And again, the President of the United States has put on the table a balanced approach over 10 years, $3 of spending cuts to $1 of revenue. And again, our Republican colleagues have walked away from the table because they don't want to raise one penny of revenue from closing corporate tax loopholes.
Just to be clear, the President's plan would extend middle class tax cuts beyond 2013. The President's plan would say let's extend the payroll tax cut for 2012. But he says let's get serious about our deficit and let's do it in a balanced way with shared responsibility.
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Mr. VAN HOLLEN. Mr. Speaker, I think what will defy the logic of the American people is why our Republican colleagues are going to write into the Constitution of the United States a provision that says a majority vote is needed to cut Medicare, a majority vote is needed to cut Social Security, a majority vote is needed to cut education, but you need two-thirds vote to cut subsidies for Big Oil companies, you need a two-thirds vote to get rid of subsidies for corporate jets. That is something that defies logic.
You would also write into the Constitution a provision that says even if you balanced the budget at 19 percent of GDP or some other level so that we can meet the needs of Social Security and Medicare, you wouldn't be able to do that. You would constitutionally prohibit that kind of balanced budget, one that meets the needs of Social Security and Medicare beneficiaries. That defies logic.
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Mr. VAN HOLLEN. Mr. Speaker, there are some things that we want to change, and there are some things we don't want to change. One of the things we don't want to change capriciously is the Constitution of the United States of America.
I think many of us think it is a corruption to the Constitution to write in provisions that say you can only balance the budget the way the Republicans want to balance the budget; you can only do it by capping things at 18 percent even if that means deep cuts to Social Security and deep cuts to Medicare.
We think it's a corruption of the Constitution to write into the founding document a provision that says it's easier to cut Medicare and Social Security than corporate tax breaks. That is in here. We keep hearing 49 out of 50 States. Forty-nine out of 50 States do not write those kind of provisions into their State Constitutions--a very few do--and for good reason: They're bad ideas, they're bad ideas now, and they will be bad ideas in the future which would constrain a Congress from balancing the budget in a way that reflects the will of the American people.
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Mr. VAN HOLLEN. I would again remind my colleagues that the last time the Federal Government budget was in surplus was during the Clinton administration, at a time when they took a balanced approach to deficit reduction--unfortunately, one that has been rejected by our colleagues in the communications and conversations with the President of the United States, who has put forward a proposal for $3 in spending cuts, for $1 in revenue, again, generated by closing special interest loopholes and by returning to the rates that were in place for the very top income earners, rates that were in place during the Clinton administration, which was the last time we were in surplus.
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Mr. VAN HOLLEN. Mr. Speaker, I think we would all agree if we saw a wasteful spending program, we should cut it for the purpose of reducing the deficit. And the question is: If there is a wasteful or unnecessary special interest tax loophole, why shouldn't we cut it for the purpose of reducing the deficit? Why should we write into the Constitution of the United States a provision that says you need two-thirds to cut a wasteful tax loophole rather than say let's cut it to reduce the deficit for the benefit of our children?
I would also observe, Mr. Speaker, that the Republican plan, with respect to Medicare, would force seniors out of the current Medicare system into the private insurance market where the private insurance industry would ration their care. They would get a lot less support from the Medicare program and yet face much higher costs.
That is a deal that Members of Congress don't give to themselves, and I don't think we should ask seniors to take a deal that Members of Congress themselves do not take.
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Mr. VAN HOLLEN. Again, I would remind my colleagues to do the basic math. Go back to the last time the budget of the United States was in surplus; it was during the Clinton administration. It followed on some very difficult decisions in the early 1990s. And what it included, as part of a balanced approach, was asking the folks at the very top to pay a little higher rate than they are today. And what the President has proposed is to ask those Americans, as part of a shared responsibility, to go back to paying those rates.
And what our colleagues would plant in the Constitution of the United States is a supermajority requirement, two-thirds vote, to go back to the same tax rates that were in place during the Clinton administration, but a majority vote if you want to reduce the deficit by cutting benefits for Medicare beneficiaries--whose average income, by the way, median income is under $22,000 a year.
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Mr. VAN HOLLEN. Mr. Speaker, I find it very curious that on the one hand our Republican colleagues are saying that the revenues that the President has requested as part of a balanced plan are peanuts, that they're irrelevant, and on the other hand arguing that somehow if you raise those revenues it's going to crush the economy. They're trying to have it both ways. The fact of the matter is they are a balanced part of an overall approach that talks about reducing our deficit in a balanced way. And I go back to the fact that the last time we had that balanced approach was the last time that we had Federal budget surpluses.
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Mr. VAN HOLLEN. Mr. Speaker, as the gentleman well knows, the President has put on the table a balanced approach, $4 trillion in 10 to 12 years, $3 in spending cuts to $1 in revenue. In fact, the Speaker of the House and the President of the United States, as my colleagues well know, were talking about a number of components of that plan. What was very clear is our colleagues didn't want to touch it because of this principle they have that not $1 from closing a tax loophole or revenue can go for the purpose of reducing the deficit.
We heard a little rewrite of history. Let's just remember that when the President of the United States was sworn in, he immediately faced a record $1.3 trillion deficit. The guy took office, and it was $1.3 trillion that he inherited. And 700,000 jobs were going down the tubes every month. It took a little while to turn things around, and things are still very, very fragile.
What would be a huge mistake is to go back to the same trickle-down on steroids policy that got us into this mess to begin with, because we know how the movie ended at the end of the Bush administration. They left this administration with a pile of debt, an economy that was falling through the floor. We need to work together to fix this problem. But taking the position that you're going to prevent the United States from paying its bills unless you implant in the Constitution a provision that says it is easier to cut Social Security and Medicare than cut corporate tax loopholes to reduce the deficit is not going to fly with the American people.
With that, I yield 3 minutes to the gentleman from Massachusetts (Mr. Markey), the ranking member of the Natural Resources Committee.
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Mr. VAN HOLLEN. Mr. Speaker, I yield myself such time as I may consume.
Let me just quote from a letter:
"Denigration of the full faith and credit of the United States would have substantial effects on the domestic financial markets and on the value of the dollar in exchange markets. The Nation can ill-afford to allow such a result. The risks, the costs, the disruptions, and the incalculable damage lead me to but one conclusion, that we must pass legislation to raise the debt ceiling.''
President Ronald Reagan.
Now, there's legislation floating around here that creates this delusion, into thinking that somehow we can get to that date and it's all made up, that Secretary Geithner cooked the books, and there's legislation that says, you know what, let's pay the Government of China and other creditors before we pay our troops, before we pay our Social Security beneficiaries.
What Moody's, what Standard & Poor's, what the U.S. Chamber of Commerce and others are telling us is, you can't decide to pay your mortgage but not your car payment. If the United States is not fulfilling its obligations to pay for what it has already bought, as Ronald Reagan said, that would have catastrophic consequences.
That is why it's so dangerous to take the position that somehow unless in the next couple of weeks we pass a constitutional amendment that would make it easier to cut Medicare and Social Security than cut subsidies for the purpose of reducing the deficit, if we don't do that, we're not going to allow the United States to pay its bills, and the economy, as President Reagan said, would go straight downhill.
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Mr. VAN HOLLEN. I'll end where we started today, which is to say that our Republican colleagues are playing a very dangerous game with the economy and with jobs. What this legislation before us says is that unless we graft onto the Constitution a preference for their way of addressing the budget deficit, unless we do that, they will prevent the United States from paying its bills, with all the terrible economic consequences for American families.
So let's see what it is that they're demanding in exchange for letting the economy go. It's the same old plan that we saw in the House before. It does end the Medicare guarantee, it slashes Medicaid, it cuts education, and it protects special interest tax loopholes. But what makes this particularly egregious, what should, I think, upset every American, is they're trying to engineer those changes through the Constitution.
We keep hearing this is just a plain old balanced budget amendment; 49 out of 50 States have it. Not true. This would put into the Constitution of the United States, embed in our Constitution, a provision that makes it easier to cut Medicare or Social Security or education, a 50 percent vote; but if you want to cut a special interest tax loophole--I don't care whether it's oil and gas subsidies, corporate jet, you name it--that a lot of Washington lobbyists work overtime to get inserted into our Tax Code and which amounts to spending through the Tax Code, if you want to do that, you need a two-thirds vote.
They put another mechanism into the Constitution. They would make it unconstitutional to balance the budget if we're having expenditures at the rate of 19 or 20 percent of GDP, according to the provision that came out of their amendment. In other words, the American people cannot choose a level of expenditures that would allow us to meet our obligations under Medicare and Social Security. Since 1966, our Federal expenditures have been above 18 percent of GDP; in other words, since we enacted Medicare. So they want to prevent us by constitutional fiat from balancing the budget at a higher level of expenditures.
Let me make one last point on Medicare, because we've heard about the Democrats cut $500 billion. What we did was we eliminated the 114 percent subsidy that was going to Medicare Advantage plans. We did do that. And, you know what? Republicans say, What a terrible thing. But if you look at their budget, they assume that change. They keep that change. What they don't do is what we did, which was to use the savings to close the prescription drug doughnut hole. The Republican budget would immediately reopen that doughnut hole. So they took the savings that they're complaining about, but they didn't use any of it to close the doughnut hole.
Again, the fundamental question is this. We all understand that we've got to reduce the deficit. We've got to bring the budget into balance. The question is how we choose to do that. And why would we implant into the Constitution a mechanism that stacks the deck in favor of choosing to cut Medicare and Social Security and education over choosing to cut corporate tax loopholes or asking the folks at the very top to pay more? But they would do that to our Constitution.
The Founders made it difficult to change the Constitution for good reason. This, I believe, is a corruption of the constitutional process, because it would place these mechanisms into our founding document that essentially graft the Republican budget plan into that document. And that's what this vote is all about.
And what they're saying is that unless two-thirds of the House and two-thirds of the Senate adopt that kind of constitutional amendment, we're not going to pay our bills, bills which the Speaker of the House and the majority leader and people on both sides of the aisle should pay because they are the consequence of decisions that were made by this body. And right or wrong, when you bring up a bill, you can't say you're not paying for it. And if we take the position that we're not going to pay for it, the economy will suffer, interest rates will go up. That will hurt every American family, and it will make it harder for us to reduce the deficit.
So let's come together around a balanced plan. The President's put a proposal on the table: $4 trillion over 10 to 12 years, patterned after the bipartisan Simpson-Bowles commission; $3 in cuts, $1 in revenue. Let's take a balanced approach. That's the way we did it the last time our budget was in surplus.
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