Proposing an Amendment to the Constitution Relative to Requiring a Balanced Budget

Floor Speech

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Mr. PAUL. Mr. President, I rise today in support of the balanced budget amendment. In fact, it is beyond me to imagine how anybody in this body could oppose a balanced budget amendment. I ran my election last year primarily on this fact--that government spending was out of control and the debt was consuming our country and that we needed new and more serious rules to bring the budget under control.

We have tried in the past. This body passed Gramm-Rudman-Hollings with bipartisan support in the 1990s and immediately began to evade it. This body passed pay as you go and then proceeded to disobey their own rules 700 times. And we wonder why 9 percent of the people approve of Congress? It is because we cannot even obey our own rules.

So we need new rules. We need a balanced budget amendment that would be an amendment to the Constitution because we do not adhere to the rules we pass. This body is literally out of control.

Now, the other side says: Trust us. Trust us. We can balance the budget. The other side hasn't passed a budget this year or last year--not just a balanced budget, the other side can't pass any budget. So I think we need new and stronger rules to force us to do what is right, do what every American family has to do; that is, balance their family budget. A nation is no different. A nation has a printing press and can run deficits for longer, but there are ramifications.
The enormous debt we are accumulating as a country--we are borrowing $40,000 every second. During the time of my 5-minute speech, we will have borrowed millions of dollars.

So there are ramifications. We have to pay for our debt in some way. We can either tax people or we can borrow--we are at the limits of both--or we can simply print the money. But as we print money to pay for our debt, we destroy the value of the existing currency. So those who have savings, those who are on fixed incomes--senior citizens, the working class--those who use every penny of their paycheck to pay for their needs are being robbed on a daily basis by inflation. Inflation is the end result of debt.

If we look at the approval of Congress being 9 percent, and we contrast that with how much of the public is for a balanced budget, 75 percent of the public--Republicans, Democrats, and Independents--would vote in favor of a balanced budget amendment. Yet this body is out of touch because we can't get anybody from the other side even to talk to us about a balanced budget amendment. We worked for months to see what it would take to make one acceptable to the other side, and we got nowhere.

We need to balance our budget because the debt is a threat to our country. This is not just me saying this. The Chairman of the Federal Reserve has said our debt is unsustainable. Admiral Mullen, part of this administration, has said our debt is the greatest threat to our national security. Erskine Bowles, who led the deficit commission and has been known as a Democrat, said we are approaching the most predictable crisis in our history, and it will be a debt crisis.

All throughout Europe there is a debt crisis: Italy is having trouble paying its debt; Greece is underwater; Portugal, Spain, and Ireland are all tenuously holding on and trying to pay their debts. That European crisis, that destruction of the Euro, is coming this way. Our debt now equals our economy.

Senator Hatch mentioned we have a $15 trillion debt and a $15 trillion economy. Many economists say when our debt approaches 100 percent of GDP--where ours is now--we are losing 1 million jobs a year. So this is having a drain on the here and now. It is not just that this debt is being passed on to our kids and grandkids. The debt is affecting jobs.

When I talk to college kids, I say: The chance of you getting a job depends on what we do with the debt. If we continue to finance our spending through debt, you will not have a job. You will have less likelihood of getting a job.

Now, some say it would be too hard to balance the budget. It is just too far out of whack. We can't do it. It is pretty bad. We are borrowing 40 cents on every dollar. If we look at the spending, borrowing 40 cents on every dollar is remarkable. When we look at our budget, the revenue coming in is being consumed by entitlements and interest. Everything else we spend--national defense, roads, everything else--the rest of the 40 percent of the budget is being borrowed. It is out of control.

Can you imagine any business or any family in this country borrowing 40 percent every year, year after year after year? It can't be done. There are ramifications and a day of reckoning is coming.

Some say: How could we ever balance our budget? I will tell you how. If we cut 1 percent of spending--this is called the penny plan--cut one penny out of every dollar in Federal spending for 6 years and freeze spending for 2 years, the budget will balance in 8 years. If we were to pass a balanced budget amendment and send it to the States, there is a 5-year window in the amendment, plus it takes a couple of years to pass, so it would be about 8 years.

So we could balance the budget in 8 years simply by cutting one penny out of every dollar. One might ask: How could that be, when they are cutting trillions of dollars and not balancing the budget? The reason is, when they talk about cutting spending around here, they are always talking about cutting proposed increases in spending. They are never talking about real cuts in spending. What I am talking about is a real cut.

We spend $3.8 trillion in our budget this year. One percent is $28 billion. Next year, we would spend $3.8 trillion minus $38 billion. A real cut of 1 percent each year for 6 years balances our budget in 8 years. It could happen, but it is going to take some resolve.

People need to understand the alternative. The alternative, if we do nothing, is that our debt is going to consume us as a nation. We have been warning about this for some time. Senator Hatch has been active. The last time we voted on this was in 1997. Fourteen years later we have had a significant revolution at the polls, and people are anxious to say: Do something, protect us from this mountain of debt. Yet there is still great resistance in this body.

I would say people in this body who vote against the balanced budget amendment do so at their own peril and do it against the will of the people. If they think it is so important to continue to accumulate debt, and that debt is fine, they should vote against this amendment. But they are thumbing their nose at the people. They are thumbing their nose at the American people who are very worried about our Republic and very worried about this debt.

So, Mr. President, I rise today in support of the balanced budget amendment and encourage my colleagues to give serious thought to voting for this amendment.

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