Cut, Cap, and Balance Act of 2011-Motion to Proceed-Continued

Floor Speech

Mr. President, these are challenging and daunting times. While we are coming out of the worst economic crisis since the Great Depression, with continued high unemployment, our economy remains fragile.

The fragility is not simply a macroeconomic phenomenon. It affects every family in this country who is worried about their employment, about the future of their children, and about whether their parents will still enjoy adequate coverage under Medicare and will still be able to draw some sustenance from Social Security checks. All these worries are in the daily lives of all Americans. We have to respond to that.

The most salient fact that affects most Americans is the dramatic loss of employment, beginning in 2007, 2008, as the financial crisis engulfed this country.

The U.S. economy has lost about 8.8 million private sector jobs just in 2008 and 2009 alone. These were times when a Republican President continued to accumulate huge deficit spending--most of it beginning with tax cuts, which my Republican colleagues supported enthusiastically; two wars that were not paid for, which was supported overwhelmingly by my Republican colleagues; and an expansion of Part D of Medicare, which again they supported. At no time did I hear the kind of outcry about growing deficits we are hearing today.

We all understand that after the 10 years of this decade--8 of which were under the Presidency of George W. Bush--we are in a very difficult deficit position. That position is made worse because our economy has not generated enough jobs. One of the aspects of all these so-called plans--the cut, balance, whatever plan, and all the rest--should be the answer to the fundamental question: How is it going to help us grow our economy and grow jobs in Rhode Island, in Vermont, and in Wyoming? That seems to elude all the proponents of these plans at the moment.

We have seen, since President Obama has taken office, some growth in employment, with 16 consecutive months of private sector job growth--about 2.1 million jobs--in sharp contrast to what was happening during the last 2 years of President Bush's administration. But we have a long way to go. Indeed, we have a long way to go to make up for the surplus which President Bush and the Republican Congress inherited in 2001 and the deficit and economic destruction President Obama inherited when he took office.

Our most immediate and pressing business is to reach some principled compromise on raising the debt ceiling--something that was done, I must say, rather routinely under President Bush about seven times, even though Democrats had very serious disagreements with him on tax policy--a tax policy that was increasing the deficit--and disagreement on wars, which were increasing the deficit as well as distorting our strategy internationally. At no time did we try to use the debt ceiling as the ultimate apocalyptic weapon to bring the President and, perhaps in doing so, even the country down. Yet I hear too many of my colleagues on the other side talking in those terms, particularly in the other Chamber.

The bill that has been passed in the House is an attempt to shrink government, protect the wealthy and special interests in the Tax Code. It ties the debt ceiling increase to passage of a constitutional amendment that would require 38 States for ratification. Once again, we are taking what was routinely done and necessary so we don't default on our credit and making it the vehicle for altering the Constitution of the United States, of building in even additional protections in the Tax Code for our wealthier citizens. This approach they are taking will needlessly jeopardize Social Security, Medicare, and Medicaid, while it enshrines in the Constitution further protections for loopholes in our Tax Code and the tax benefits that many of the wealthy and the large corporations enjoy today.

At the heart of what they are trying to propose in the House, and what they have sent to us, is to make it easier to cut these vital programs--a range of programs that involve transportation security agents at our airports, flight controllers in the towers, and can even involve the distribution of agriculture programs, which affect large parts of our country--not so much in my State but large parts of this country. All that would be subject to the calculation of cutting, cutting, cutting, while it would be extraordinarily difficult to raise revenues.

I don't think that makes sense. I don't think that is what the American people want. From what I have seen from the polling, huge numbers of Americans are frankly saying the wealthiest in this country are enjoying huge tax benefits. I believe approximately 80 percent of the American public believes the first step we should take in balancing the budget is to raise the taxes on the wealthiest Americans. That is what they are saying. They are not saying cut benefits from people who are on the margin, who are struggling--the working poor, who may be just under or over the line to qualify for Medicaid benefits in a State and get health care for their children. I think the American people are smarter and more decent than some of the proposals that have surfaced around here.

Again, the caps on spending are all dressed up as if they will have no real effect on the important programs, but they will have an effect on every program, including Social Security, Medicare, and Medicaid. For people who are still struggling to find work, who are still struggling to find some type of traction in a difficult economy, these cuts can be devastating. Indeed, one of the challenges we have is to generate more growth in our economy again. When we pull back from spending in the economy, that will further accelerate the lack of demand and the lack of any incentive for private hiring.

We are already seeing companies cut back and cut back. What are they saying? There is no demand. People aren't buying. People are saving. They sense--not sense, they know--they have to save more because they are not quite sure whether they will get all of their Social Security check or their Medicare benefits or any other benefits. That drives demand further down and slows the economy further down.

The Republican plan includes overall spending caps that reach 19.9 percent of GDP in 2017, but we have to look at this number in historical perspective. Over the past 40 years, this rate of spending is not only lower than the average spending but, moreover, outlays as a percentage of gross domestic product have only declined to 19.9 percent or lower when unemployment has been 6 percent or below. That makes sense. When the American economy is working, people don't collect a lot of benefits. They have a job and so they do not need the kind of assistance they need today. This cap of 19.9 percent is totally out of the context when it comes to the present unemployment rate of 9.2 percent and, frankly, could perhaps cause an even larger unemployment rate if this program is enacted.

Again, I don't think this makes sense in terms of the simple mathematics or the history or the underlying policies it would inevitably produce in the country. Yet still, in this Republican proposal, we are protecting the most special interests in this country--Big Oil and corporations. Those tax breaks, those tax perks, are still there, and they will continue to be there.

We all recognize we have to make tough decisions about spending and about revenue. What I find acutely ironic is Democrats did that in 1993 and 1997 and we heard about it for years and years, with Republicans assailing us. Of course, by 1998, we had a surplus. We had an economy with an unemployment rate much closer to 5 percent than 10 percent. But all that hard work--without any assistance from the Republicans--was completely squandered beginning in January 2001. Now we are back to the same challenge we faced in 1993 and 1994. But we did it before by making tough decisions. We did it over several years. We did it by trying to balance both cutting expenditures and increasing appropriate revenue and also by recognizing that working Americans need the assistance and support of their government. So we can do it again, and I hope we do.

But the first challenge--the one that has to be met--is to raise the debt ceiling. Defaulting on our debt would have catastrophic consequences. As we approach this deadline, the mere fact we haven't done anything yet is prompting credit agencies to suggest they will downgrade our credit rating. One of the most salient figures I have heard in this debate is that for every increase of 1 percent in our cost of credit and the interest we pay to borrow over 10 years, we will add $1.3 trillion to our deficit. The longer we avoid raising the debt ceiling, the closer we come to actually accelerating the deficit dramatically by increasing the rate we have to pay to borrow funds.

The final point I would make is, raising the debt ceiling is not for new spending we want to borrow money for. This is for the accumulation of the deficit that began dramatically in January of 2001. So I would urge my colleagues to move promptly and responsibly to raise the debt ceiling and then to get to the hard, difficult work of balancing our budget, as we did, as Democrats, in the 1990s, and then later, in 1996-97, with a Republican Congress, further adding to the deficit reduction under the leadership of President Clinton and not some magic plan that is produced overnight.

With that, I yield the floor.

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