Speeches & Floor Statements
Posted on April 1, 2009
Mr. President, I call up amendment No. 747 and ask for its immediate consideration. Mr. President, I see the Senator from New Hampshire is here, and the Senator from Arizona, the assistant Republican leader, will be here in a few minutes, I believe. Senator Gregg earlier offered an amendment which essentially would say that the projected debt under President Obama's budget couldn't go up more than all of the debt that has been accumulated by all of the Presidents from George Washington to President Bush. That is one way of saying to the American people and to the Senate that the debt that is proposed by these budgets is so staggeringly high that we need to find some way to put a limit on it. I am offering with my amendment another way to put some limit on the debt. I call it a runaway debt point of order. This is not a matter of not letting the horse get out of the barn; this recognizes that the horse is already out of the barn and we are trying to put a fence around him before he gets into the next county or even into the next country. This amendment would create a new point of order against considering any budget resolution that estimates gross Federal debt -- our total debt, total amount of obligations -- exceeding 90 percent of gross domestic product in any year covered by the budget. To put that in a little plainer English, what it means is the Senate would be forced to come up with 60 votes if the public debt in any year goes beyond 90 percent of the estimated gross domestic product. The gross domestic product is what all of us produce in the United States every year. Despite the fact we are in an economic slowdown, we are a very privileged country. We make up only about 5 percent of the world population -- those of us who live in the United States -- but year in and year out we produce about $1 out of every $4 of wealth produced in the world. So 22, 23, 25, 26 percent of all of the wealth, all of the money produced each year in the world is produced in the United States for distribution among primarily the 5 percent of us who live here. We are a very privileged country. This amendment says if we intend in any year to increase the debt above 90 percent of all of that production in any year, that 60 Senators have to agree with it. When was the last time the United States had a debt, a national debt, that exceeded 90 percent of the gross domestic product? It was when we were fighting in World War II and as we were coming out of World War II. Of course, during that time, it didn't matter what we spent. It didn't matter what we taxed. We were in a fight for our lives, and we did whatever we could think of to do, spent whatever we could think of to spend, and ran up any debt we needed to to win the war. And we did win that war. Right after World War II, our national debt was about 90 percent of the annual gross domestic product of the United States. More recently, it has been about 40 percent. So here is what happens now - the Senator from New Hampshire went into this to some degree. We talked about deficits and we need to make a clear distinction between deficits and debt. Deficits adds to the debt each year. We talked about the fact that the deficit is going up this year and next year during the recession, and we understand that is necessary to some degree. But then the deficit comes back down to approximately 4 percent of gross domestic product, and it stays at a little over 4 percent in President Obama’s budget. That is also the Conrad budget, which OMB Director for President Obama said, is about 98 percent of the Obama budget. This proposes an annual deficit as compared with GDP that is worse than the following countries: Guatemala, the Philippines, Aruba, Cuba, Nigeria. This amendment I’m offering, however, seeks to talk about the debt. For example, the President's proposal is to double the debt in 5 years and to almost triple it in almost 10 years. So we start out with debt held by the public at about 40 percent of gross domestic product. But by 2014, we are at 66.5 percent of gross domestic product under Senator Conrad's budget. President Obama proposed a 10-year budget -- which is a picture of America's future in the same way that a photograph of a first grade class would be a picture of a community's future 10 years out -- that actually presented a very honest picture of our future as he sees it. I respect him greatly for that. I just don't like the picture he has presented because that picture, as I mentioned, doubles the debt in 5 years and nearly triples it in 10 years. So we go from a level of debt held by the public equaling about 40 percent of gross domestic product to 82 percent of gross domestic product. Under President Bush -- and we hear a lot of talking about President Bush, we had lower deficits. I was listening to the radio yesterday morning, and they said: How can you Republicans be talking about debt when under President Bush you ran up the debt? True, true. But Senator Gregg offered an amendment that gives us a chance to deal with that because he points out that President Obama would increase the debt more than, not just President Bush, but than all of the Presidents put together, going back to George Washington. That is a very sobering fact. So President Bush may have made some mistakes, but he was not judged on whether he caused Hurricane Katrina. He was judged on how he reacted to it. President Obama certainly didn't create the economic mess we are in, and he won't be judged by that, but he will be judged -- and the majority party will be judged -- by how they react to it. I don't believe doubling the debt and tripling the debt is the way to grow the economy or restore good jobs. I see the Senator from New Hampshire here, and I would like to ask him about these gross domestic product discussions -- 90 percent of this and 20 percent of that and a trillion of this -- all of that makes the case, but it is hard to fathom. Through the Chair, I would ask the Senator from New Hampshire how would he put it in terms that the average family can deal with, what it means to double the debt in 5 years and nearly triple it in 10 years, as the President's budget would do. Mr. GREGG. Mr. President, if the Senator would yield for the purposes of a question, I will try to make it rhetorical. First off, I congratulate the Senator for his amendment because it is a serious amendment addressing what I consider to be the most serious problem with the President's budget, which is that the amount of debt that is being put on the books by this budget is a result of incredible expansion of the size of the Government and the spending of the Government. It is going to put us in a situation where, as the Senator noted, we will probably not be able to sustain the payment of that debt or we will be forced into a position similar to some of the countries the Senator mentioned, which is serious inflation or an inability to borrow money because people will worry about the ability to be able to pay it back and our concern about the devaluation of the dollar. It is hard, I think, and inappropriate for one generation to put that much debt on the back of another generation. So what the Senator is proposing is -- not that you can't pass a budget, but when you do pass a budget that raises the public debt and grows debt, in this case up to 90 percent of GDP, at a level of countries such as Cuba and Aruba -- what were the other countries? Mr. ALEXANDER. Guatemala, the Philippines, Aruba. Mr. President, I ask unanimous consent that the Senator from New Hampshire and I be allowed to engage in a colloquy for the remaining minutes we have. The PRESIDING OFFICER. Without objection, it is so ordered. Mr. ALEXANDER. Guatemala, the Philippines, Cuba, Nigeria, and Aruba are countries that have an annual deficit level lower than we will have. Mr. GREGG. And the debt level, too, I suspect. In fact, we could not get into the European Union at the debt level of 90 percent of GDP. They would not even allow us in. Mr. ALEXANDER. Lots of times Members of Congress sort of make fun of Europe and make fun of France and say: Well, that is French. We don't want to be French. It is embarrassing to stand here and say the situation exists where, if the United States were applying to be a member of the European Union, our annual deficit level would be too high to be admitted. We would be unable to qualify for the entire 10 years projected in this budget if we were to choose to do that. Mr. GREGG. That is correct, as a result of this budget proposed by the President, because the budget proposal is a dramatic expansion in spending -- an expansion of spending up to levels we have not seen since World War II in terms of gross national product. Huge numbers. The Senator asked how can this -- these huge numbers, which nobody can understand, $1 trillion or 90 percent of GDP -- how does that translate to the person who lives on Main Street? Well, basically it means at the end of this budget, every household in America will have an obligation relative to the Federal debt that is owed of $133,000. That is probably going to exceed a lot of mortgages they have. So not only do you have your mortgage on your house, but you are going to have a Federal debt which you are responsible for of $130,000. The service on that debt -- in other words, the interest costs to pay for that debt -- will be $6,200 a year. Mr. ALEXANDER. Mr. President, if I may ask the Senator from New Hampshire, who will be the mortgage holder on that debt in 20 or 30 or 40 years? Mr. GREGG. Well, China regrettably. They are the primary mortgage holder, although other nations also hold our debt. Russia owns a lot of it, and Middle Eastern countries, such as oil-producing Emirates and Saudi Arabia. Obviously, America also owns some of its debt. But the countries outside our Nation, regrettably, have raised their level of ownership of our debt. It has actually been good for us because some people have been able to borrow from us; we have borrowed from people who lent us money -- primarily, China, Russia, and other countries in the Middle East have been lending us money. When we pay back this debt, which is going to be run up dramatically -- doubled in 5 years and tripled in 10 years by this budget -- we are basically going to be sending hard-earned money from Americans to these other nations. Mr. ALEXANDER. If the mortgage holders around the world -- China, the Middle East, and other countries -- worry about our ability to pay it back, I suppose they could simply stop buying our dollars or ask us to pay them more or pay a higher interest rate for our mortgage debt. Mr. GREGG. That is absolutely right. That comes out of every American's ability to have a better lifestyle here. It means Americans will have to pay higher taxes, and they will not have as much discretionary money to spend on buying a house, sending their children to college, buying a car, and doing things Americans like to do in order to enjoy a good life. So much of the income of America will have to be poured into paying off the debt, which will be run up by this budget. There is an interesting fact that I know the Senator is aware of: By the time we get through the 10-year period proposed in the budget, the amount of money that we as a nation will pay in interest -- just interest -- on the Federal debt will be over $800 billion, or almost a trillion dollars. That is interest annually. That will be more money than we spend on defending America, on our national defense. Mr. ALEXANDER. We have been worrying about sending billions of dollars overseas to buy oil. So we should be worried about sending half of that money overseas to pay interest on the debt. The Senator from New Hampshire was Governor of New Hampshire, as I was Governor of Tennessee, and we used to have a friendly competition about which had the most conservative fiscal policies. Of course, Tennessee did, but one thing we always tried to do was keep our debt low because that meant we had more money for schools and for State parks and for hospitals. What happens when we run the debt so high that we are paying $800 billion in interest, which I believe is 8 times more than the Federal Government spends on education each year and 8 times more than the Federal Government spends on transportation each year. We are taking away the money that we would invest to make this a better country in the future. Mr. GREGG. The Senator is absolutely correct. We will spend this money for the purpose of paying interest and, as the Senator points out, maybe more than half the interest payment will go to the people in China, Russia or in the Middle Eastern countries, rather than spending it here to build better schools or basically make sure our national defense is adequate, which is the primary responsibility of the Government, or to build better roads or invest in energy. That seems to be a very bad policy to me. Mr. ALEXANDER. How much time do we have left, Mr. President? The PRESIDING OFFICER. The Senator used 16 minutes. There is 44 minutes left in support of the amendment. Mr. GREGG. Mr. President, I believe we had an agreement that, under this amendment, our side would have 25 minutes and the other side would have 25 minutes. I ask unanimous consent that we be able to have another 5 minutes on our side, and then we will go to the other 25 minutes. The PRESIDING OFFICER. Without objection, it is so ordered. Mr. ALEXANDER. Mr. President, I see the Senator from North Dakota here. We have been talking about Senator Gregg's amendment, which would try to put some limit on the size of the debt. And we have been talking about my proposal, the runaway debt point of order, which would say debt is not where it should be, so let's say whoa out there and let ourselves and the American people know when we reach a debt level of 90 percent of GDP and that we should not have a budget in any year that does that. I know the chairman, Senator Conrad, has said in committee he didn't think that was a very effective way to do things. I wonder why that is true because it seems to me it would be extremely effective to shine a big spotlight on the Senate and say you have proposed a budget where debt exceeds 90 percent of the gross domestic product of this country for a year. You cannot do that, unless a bipartisan group of 60 of you agree to do it. I wonder whether Senator Gregg believes these kinds of limits or spotlights would be a helpful tool in beginning to reduce the staggering debt these budgets propose. Mr. GREGG. I think they would be. First off, we are not barring the ability to bring a budget to the floor. We are simply saying any budget that anticipates the debt of the United States, which in this budget potentially is occurring or which would occur under this budget as proposed from the President, that has a general debt of over 90 percent of GDP, gross national product, and requires 60 votes. Why shouldn't it? If you are going to do that and step off down the road of basically banana republicanism -- is that a word? -- you ought to have a major vote to do that, a supermajority to accomplish that. I don't want to be like some of these nations listed by the Senator from Tennessee. I would rather not find myself in a situation where we basically cannot afford our debt and we are passing on to our children a nation which has been so profligate in its spending that it ran up a debt to make it impossible for our kids to have such a life as good as the one we have had. Mr. ALEXANDER. Mr. President, I believe our time has expired. I ask unanimous consent to allow a couple more minutes because I see Senator Kyl from Arizona who wishes to speak briefly. Mr. CONRAD. Mr. President, I yield 2 minutes off my time to Senator Kyl. I do that not because I am eager to hear from Senator Kyl but because I would like to maintain the overall time constraint we have put into place, given all the other demands. I am happy to yield to the Senator. Mr. KYL. Mr. President, I am appreciative and chagrined at the same time. I appreciate very much the courtesy. The only point I wished to briefly make -- and I don't know whether it was made before with specificity -- is that there is a reason why the debt and the deficits matter. It is because so much of it is held by other countries. Those other countries are becoming very concerned about the debt they hold in America. We don't have an unlimited ability to continue to sell this debt to other countries. I just got these statistics. The Chinese specifically hold $727 billion, or about 23.6 percent, of all foreign holdings of U.S. debt. The Japanese hold $626 billion, or 20 percent. Others are held by Persian Gulf countries. When they hold this debt, they both have a very large indirect stake in the kinds of policies we can pursue as a nation, and they also, obviously, would affect our future ability to borrow by their assessment of the quality of the debt and of the value of the dollar. To this point, the Chinese Premier, in response to a question at a news conference, said: We have lent huge amounts of money to the United States. Of course we are concerned about the safety of our assets. My only point is, it is not just a matter that there is more debt in this budget than the entire history of the United States combined -- there is a reason to be concerned about that debt beyond the fact that our kids and grandkids are going to have to pay it back -- but today and tomorrow how that debt is viewed by the holders of the debt in other countries. Therefore, I think we ignore that at our peril. I appreciate the willingness of the chairman to lend me a couple minutes to make that point. The PRESIDING OFFICER. The Senator from North Dakota is recognized. Mr. CONRAD. Mr. President, look, I believe that, over the first 5 years, this budget resolution takes us in the right direction. The resolution dramatically reduces our deficits, reduces them by more than two-thirds, it reduces our deficit as a share of gross domestic product from 12.2 percent this year down to less than 3 percent in the fifth year. The place where I would actually agree with my colleagues is in the second 5 years of either the President's budget or, frankly, mine, although mine would have substantially less debt than would the second 5 years of the President's. My own belief is getting down to 3 percent of GDP is not enough. Why is it not enough? Because at 3 percent of GDP, you stabilize the debt. That is why it is so critical to get there. At least that is what the economists tell us. The problem with that, I believe, is I don't think stabilizing the debt at those high levels is an acceptable outcome. I think when the Senator talks about the Chinese Premier -- when Senator Kyl talks about the Chinese Premier sending a warning shot, we had better take that very seriously. I think that when we see the U.S. gross debt approaching 100 percent of GDP -- gross debt as distinguished from the publicly held debt -- that is a real warning flag. I understand that Japan’s debt is about 180 percent of their GDP and rising. I don't think it is healthy for them or for us to have public debt so high relative to GDP once the immediate crisis has passed. Look, the problem I have with the Alexander amendment is not the sentiment behind it; it is the specifics of the amendment because what does it provide? The amendment says you are going to have a 60-vote point of order against the budget resolution when you are at those debt levels. Senator Alexander said it himself moments ago -- we would not do a budget when we get to those debt levels. I don't think that is what he meant because that is not what his amendment provides. The amendment provides a 60-vote point of order against the budget resolution at those levels. I just don't get how that is the solution to the buildup of debt. I think one of the last things you would want to do is make a budget resolution more difficult because the budget resolution actually has the disciplines, the points of order, and the supermajority points of order that help discipline the budget process, which makes it easier to prevent more appropriated spending. Let me say this. I have been through this exercise of cutting $160 billion over 5 years from the President's discretionary proposal. I have the scars to prove it. I will tell you, if you want an intense experience around here, cut domestic discretionary spending. That is what this budget does. There are a lot of people who are not happy about it -- very much not happy. I don't know what else you do when you are faced with losing $2 trillion in revenue. I say to my colleagues that I agree very much with the sentiment that Senator Alexander has expressed about the dangers of debt. I have said many times on the floor of the Senate that debt is the threat. The debt is the threat. I will just say this: In the previous administration, we never heard the word "debt" leave the mouths of the President or Vice President of the United States. Never did you hear them talk about the debt of the United States. Do you know why? Because they doubled the debt during their time. Our colleagues were complicit in that activity. They stood and voted with them to endorse the policies that doubled the debt of the United States. That was during good economic times.