tv U.S. Senate CSPAN2 August 1, 2011 12:00pm-5:00pm EDT
who then consider it with their votes to see that the best possible way to achieve significant further deficit reduction beyond the initial trillion dollars is through a balanced approach. and as you know, the legislation has within it an enforcement mechanism, a trigger and the metaphor -- well designed triggers create acknowledge incentive -- knowledge to create them. and it would be mandated for the congress to failed to act. if congress failed to pass the committee's it would be across-the-board cuts between evenly defense and domestic spending including entitlements. i would note social security, medicaid and beneficiaries in medicare would be excluded from any arm. and, again, but the whole point of the trigger is that nobody wants to do them and it's
equally onus for both of them and it creates better potential of the committee's action to bear fruit. >> what's the big picture. i know this debate was so contentious and it was so partisan, what can the american people realistically expect washington to be able to do particularly on jobs between now and the election. >> that's an excellent question and there's no doubt that the process we have seen in the past several weeks and months was kind of a mess. and the president made clear a week ago today when he spoke to the nation from the residence that while americans voted clearly last november, november 2010 for divided government, they certainly did not vote for or choose dysfunctional government. in fact, they expect when they have divided government, when they have one party controlling some parts of the government, another party controlling others that they will work together and together find the kind of compromise that is balanced. that is more -- it is
representative of where the american people want to go. now, this was a mess. there is no question. it was a circus at times. we unnecessarily sent a message around the country and the globe that the united states might, in fact, default on its obligations for the first time in its history. but in the end, compromise won out and an agreement that we believe strongly is in the interest of the american people was achieved. so looking forward, we hope to be able to build on that. none of this is easy 'cause all the issues are hard. but you do begin to build more capacity for compromise in the future, the more you get under your belt. we certainly hope that to be the case. because there's -- we will not stop. this is -- assuming as we do and hope that congress will pass it and the president then signs it. we then move on to the work of the committee and to all the other initiatives that we need to get going that will help
create jobs and drive the economy. and we believe fundamentally that there is broad consensus in washington that we need to focus on growth and job creation. thanks. >> what's the message to democrats who see it as capitulation and more of the republicans as the new democratic priorities? >> well, i just went through, i think, a number of arguments that we are making about why this is such a strong agreement. why it is -- no doubt as compromise. it is not a perfect agreement. it is not the one that the president or the democrats would have crafted if only they controlled all levers of government themselves. obviously. but it does accomplish some significant things which i just went through with julie. >> why do democrats support -- >> because it protects key investments up front in the cuts that are launched initially, the trillion dollars including pell grants which are so vital to our
future economic growth and to the education of americans. because it creates a firewall between in those domestic discretionary cuts or rather those discretionary cuts it creates a firewall that ensures savings are gleaned not from nondefense discretionary programs but from defense and it creates a process through the joint committee which will allow for the president and democrats and others including a lot of republicans who have an -- have this view and have expressed it recently that we need to take a balanced approach going further as we seek more deficit reduction and that balanced approach would include revenue. >> you mentioned job-creating measures. what's the strategy at this point on getting the payroll tax extension which wasn't included in this measure. is the president still committed in doing that? >> the president is still committed to it. and i think it's important to
remember the president vocally talked about the idea of including the extension of the payroll cut as part of a grand bargain and it's not the case that is short of a grand bargain but there is no question he will continue to push for this and he will make the argument that it is absolutely essential to continue to put extra money in americans' pockets as they deal with high energy prices and high food prices next year because it was so important this year. we certainly look forward to having that debate in the fall and he will press very strongly for it. i note there was broad bipartisan consensus beyond the crease of the tax cut at the end of 2010 and so we certainly expect it would be broad bipartisan consensus to extend it for next year. yes. >> house republicans seem to be arguing that the super committee is going to have a difficult time doing any tax reform. and the tax cuts are set to
expire 2013. can you comment on that. >> i have seen that and i would say it's impossible for the joint committee to raise tax revenue simply not accurate. it's false. if the joint committee decides, for example, that the -- that part of a balanced deal would be to eliminate tax subsidies for oil and gas companies or corporate jets or if they decide to limit the value of itemized deductions for high incomed earners as the president has called for, they can do that and they will raise revenues for doing that. in fact, nothing in the legislation in the congress that the committee operates under any specific baseline, any suggestion otherwise is simply false. [inaudible] >> the committee can act according to whatever baseline. it could use and operate the fiscal commission for the bush tax cuts or it could be a policy tax cut when speaker boehner had agreed to $800 billion in
revenue. so it's simply not accurate that this committee can't consider and act on revenue raising. >> and that includes lower rates. >> going in i mentioned the bush tax cuts as part of that. and let's also be clear that the president has made -- whatever the result, if congress does not act on tax reform, which by the way broadly speaking is supported by both parties, a desire for tax reform. so there's great incentive created in this committee to deal with tax reform because of the -- remember, it will be a balanced committee between republicans and democrats and they need to produce a product that will then be -- have fast track authority and be voted on by congress. it is certainly our expectation that that product will include revenue as well as other areas of finding deficit reduction. if it fails either to produce something where congress fails to act on it, you can be sure
that the president will honor his promise to veto any legislation that would extend the bush high incomed tax cuts beyond 2012, which would, of course, create nearly a trillion dollars in revenue raisers when that happens. >> in afghanistan, in may and june, isaf casualties are down and civilian afghan casualties are up 50%. >> uh-huh. >> why is that? >> you know, i would refer you to the department of defense. i haven't -- i confess i haven't studied that -- those numbers of late. but, obviously, the situation continues to be a tough one and fighting continues to occur. but we believe we've made significant progress in implementing the policy proposal the president put forward. and we are now in the process of implementing the drawdown as he
made clear in his address not long ago in drawing down the surge forces beginning now. >> is there a concern in the administration that the president -- >> well, i haven't looked at those numbers so i don't have a specific response related to those numbers but, obviously, we believe very strongly that we are in a position where we can begin to draw down those forces and we are continuing to do so. yes. >> how hopeful are you or how hopeful is the president i should say that this plan will help avoid a downgrade in the credit rating? >> well, we take action and control the things that we can control. and what is important about this is that we have not simply averted what would have been an absolute disaster, again, congress acts, which would have been passing a period beyond which we would no longer have borrowing authority and risking -- creating the possibility of default on our
obligations for the first time in our history. but we have lifted that cloud of uncertainty for a sustained period of time and we think that coupled with the real and significant deficit reduction that is part of this package and the enforcement mechanisms that guarantee further deficit reduction is taken before the end of the year. we believe that should send a very reassuring message around the world as well as around the country, obviously, that washington is beginning to get its fiscal house in order. >> so is it fair to say that your concern in that area is much diminished? >> well, our primary concern was that we reach an agreement, a compromise, a bipartisan deal that would newer that we lift the cloud of uncertainty created by this debt crisis. we have done that and that we would -- through that process ensure that we would have significant balanced deficit reduction. we have done that as well. we certainly hope that sends a signal that washington is getting its act together and
dealing with these tough issues. >> do you think it's enough? >> enough for -- >> to avert that? >> again, i don't really have a comment on how the rating agencies make their skwluments all i know is that we in washington -- the policymakers and the elected officials can do the things that we can do to ensure that the american economy is going in the right direction and that we are demonstrating that we are getting our fiscal house in order and hopefully that message is made clear. >> what kind of assurances do democratic and republican leaders give the president that they can get the vote passed? >> well, i think it was part of the agreement was the expectation that they could get the votes to pass this and hopefully they will. >> do you have a -- >> i don't have any announcement or scheduling announcements to make on that. yes. >> you mentioned that the president and the vice president are selling this to members of congress by saying it's a victory for the american people. how is this a victory to the
american people when it still adds $7 trillion to the deficit over the next 10 years? >> because it significantly reduces the deficit. it significantly addresses some of the drivers -- or will address some of the drivers of our long-term debt. and if you're asking does the government continue to function and does -- do we still owe -- do we still have to borrow money to pay our bills, yes, that has not been eliminated. we will continue to have a debt. the point is economically, it's to begin to get the growth in our deficits and the growths in our debt under control and that is what this agreement begins to do very significantly. will all the work be done? absolutely not. that's why the joint committee's work is so important. and i'm sure even as that occurs and takes place, there will be more work that is necessary. but this is significant and it should not be discounted. i mean, it's a little -- the ink hasn't even been printed on the
paper yet let alone signed into law and we're already talking about how it's not substantial enough or what the next step is. i think we all take a step back and remember where we were 24, 48 hours ago, a week, two weeks ago. the prospect that was hanging out there that america would not honor its obligations for the first time in its history and the impact that would have on our economy and the global economy. and the fact that while i got a number of questions understandably during briefings in recent days and weeks about why we were optimistic that we could reach a bipartisan compromise because it looks so unlikely -- the fact is here we stand today. less than 24 hours after that compromise was reached anticipating votes in both houses of congress that will achieve something rather significant. yes, that's a victory for the american people. >> you talk about two weeks ago, two weeks ago the president talked a lot about shared sacrifice. he talked about ending subsidies for oil companies and ending tax breaks for corporate jet owners
and he talked about this was a very fair deal 3 to 1 spending cuts. where are the tax revenues? >> well, i think we just addressed this but i'll be happy to do it again. we did not get the grand bargain up front. and we all know why, okay? there were as the speaker himself said $800 billion on the table in revenues as part of a grand bargain. there was tough choices made by both sides in that potential agreement that was not reached. and we did not get that done. the speaker decided -- >> he gave them everything they wanted and -- >> i feel like i've taken this question two or three times already and i've been clear how that's not the chase and, in fact, we've got significant achievements -- let's step back also, the president of the united states believes the deficit reduction is important. it is a false setup to suggest that somehow a dollar in deficit reduction is a loss.
it is a positive thing for democrats -- >> with spending and revenue -- >> well, he does. and that's why he fully expects why the joint committee will include tax revenue as part of its consideration and its product. but as you know throughout this process there were cuts identified through the vice president-led process in domestic spending. and also in the presidential-led process with the speaker of the house. and you see that embodied in the first tranch of spending cuts that are part of this deal. that is not a negative. that is a positive. as the president made clear, progressives need to understand -- and we think most, obviously, do that deficit reduction is essential done in the right way because we need to get our fiscal house in order in order to ensure that we can do the things we need to do, to grow the economy, make the investments we need to make. >> finally, can you address the word the "new york times" made in the front page page that the president has been diminished.
>> well, i disagree. i think the president showed enormous leadership throughout the process. and working with the majority leader that produced basically the foundation of the initial rounds of spending cuts that were part of any envisioned compromise. he then initiated and had sustained negotiations with the speaker of the house which while they did not bear fruit in terms of an agreed-upon compromise. they made clear through that process that for significant deficit reduction to be achieved beyond the initial round of spending cuts that are part of this agreement, there has to be balance. that was agreed upon. it was on the table, rather. put on the table by the speaker of the house and acknowledged -- it was certainly acknowledged by the the senators behind the gang of six. i think the threshold has been crossed here and the beauty of that is the elected leaders here are catching up the american
public who overwhelmingly support the president's position that balances essentially as we approach these hard choices. we think the president's leadership has been essential through that process and will furthermore ensure that the kind of deficit reduction we get in the future will be the right kind for the american people. >> jay, where were the tax revenues? no. [laughter] >> on taxes, one of the ways you're selling this overall plan as you started the briefing, the cloud of uncertainty has been lifted. and the american people are saying are my interest rates going to go up? the president says this all the time this is on his public speeches we want certainty on taxes. and so do the american people they want to know what their taxes are going to be. while on one hand you have
certainty of no default isn't there a lot of uncertainty about taxes because as you've been spent the 10, 15 minutes nobody know what the tax rates are going to be. you say the taxes are on the table round 2. republicans are saying, no, they're really not. >> well, i think i addressed that issue -- the baseline issue which we are quite clear about. it's simply not part of the deal. and it's irrelevant because the committee can take whatever action it chooses. the president has made clear that when we talk about the need for balance and raising revenue is part of the broader approach to deficit reduction, we are talking about protecting average americans not just protecting them from tax hikes but as was noted earlier, extending tax cuts for them. this president has -- since he has taken office cut taxes significantly for working americans.
the only -- at the marginal rate level, at the income tax level, the only rates that the president has sought to return to the levels of the clinton administration, which by the way, was a period of the longest sustained expansion economic expansion in the post-war american history where 23 million jobs were created and where rich people did very well indeed, which is a good thing, those rates prevailed. he thinks we should return to those rates as part of a process where everyone shares in the sacrifice necessary to get our deficits and debt under control. we may not get there because tax reform is a goal of his as well. and it is a goal shared by a lot of republicans. and if the committee can produce tax reform that raises tax reform and simplifies the tax code that would also be a good thing but it would not result in -- and we certainly -- well, we certainly do not want it to resolve in putting added burdens
on average americans, this president's approach has been just the opposite. >> finally, a quick call on medicare, making a big deal that medicare beneficiaries will not be touched in round 2. that if there is these drastic cuts they would affect medicare providers. the doctors are already saying they're dropping medicare patients. they're not getting enough reimbursement and so you get providers -- it's going to wind up affecting -- >> well, let me be clear -- for everyone watching that we are talking about the trigger, the enforcement mechanism for the second stage here, which is onus for a good reason. itself onus -- while it does and it is a very important to remember that low-incomed programs including medicaid as well as social security and medicare benefits would be exempted, medicare cuts would be capped limited to the provider's
side. and yet this is still tough stuff. and it's supposed to be tough stuff just like the envisioned 50% cuts in our defense budget so that congress doesn't go there. the whole purpose of a trigger is that nobody wants to pull it. so that focuses the mind of members of congress on the need for the joint committee to produce a product that can pass in a fast track manner pass in both houses of congress and be signed into law and that would be a very welcomed result of this. so if you're asking me is the -- is the enforcement mechanisms tough, yes, they are. >> but you're trying to sell it as medicare beneficiaries won't be hurt. it will just be the providers. if providers get hit, it affects -- >> well, the program -- the program's integrity is sustained, beneficiaries are -- do not see their benefits cut, the cuts are capped and limited to the provider side. that is written into the
agreement. >> the "new york times," this deal with damage an already depressed economy. it will probably make americans' deficit situation worse -- >> well, we, obviously, disagree. we think that done well, done wisely and in a way that affects the investments, that deficit reduction will help the economy. we think that will be the case here. and it is also why i mentioned earlier why the president will continue to push for the extension of the payroll tax cuts that put $1,000 or is putting $1,000 in the average american family's pocket this year, he hopes to extend that next year. he believes there will be bipartisan support for doing that. so you need -- that's why balance is so important. and timing as the cuts are enacted is so important. and where those cuts come from is so important.
we believe that overall, done well, that the positive impact of the fact that washington is getting its act together and getting its fiscal house in order will outweigh the effect -- the negative effect of cuts because of the way the cuts are structured and enacted and because of the protections that are embedded in this legislation. >> in addition to balance, the president also talked a lot about not wanting to kick the can down the road. doesn't this deal in essence kick the can down the road? it's not really dealing with -- >> well, i appreciate -- i mean, the question goes to the president's very strong desire that he articulated many times to get a grand bargain up front which would have required that he and the speaker reach an agreement. that didn't happen. we don't have to relive that disappointing past.
but the process did produce a lot of positive product that can be used by the special committee, for example, the joint committee going forward if they're looked at a balanced approach to deficit reduction dealing with entitlement reform and tax reform. there's no question the president preferred a grand bargain up front that would have dealt with all of this issues all at once. once that was not going to happen, what we needed to do was ensure, a, that the debt ceiling was lifted for an extended period of time so the cloud of uncertainty would be removed from our economy. and, b, that we got -- we nevertheless got significant deficit reduction that was balanced and we believe that this compromise, while not perfect, achieves that. and that while -- on the issue of tax reform and entitlement reform, the can is kicked a little bit down the road. the fact is legislation forces action on this very soon. the committee must report out by
thanksgiving. congress must give an up or down vote by christmas. in terms of the way congress normally rolls that's pretty darn fast. >> even if what you said was an economic crisis with the debt ceiling was not raised tomorrow, why should people have so much faith that these triggers will actually motivate this bipartisan committee to act when really the -- >> let's be clear about the triggers. first of all, they're onw -- ons on both sides and i think the proof has been in both corners and they're designed precisely to incentivize congress to act. what the triggers also do -- if either the committee fails or congress rejects the committee's product is that it will ensure that significant defendant reduction is enacted anyway. so when you -- either way you will have significant deficit reduction. we hope and we also believe that
most members of congress and both parties hope that will will be accomplished through the joint committee because the alternative is so onerous. >> following up on that, the way the trigger is structured, it doesn't actually kick in until january of 2013. so what incentive does congress have and the committee have to act if the real pain doesn't come until january 2013 and it's not set up today the republicans -- [inaudible] >> well, i'm sure they'll have the same fight because there's, obviously, an honest set of differences about how -- how government should behave, its role, its effectiveness. and that will be a debate that will, i'm sure, take place throughout next year. the debate we won't be having is
whether or not the debt ceiling should be raised. we will not have a situation where people will hold the american economy hostage in order to achieve a specific agenda, at least not until 2013. so we think that is incredibly important as a matter of economic good. and that is -- that is a significant achievement created by this agreement. in terms of the -- i mean, the trigger, provisions called for by the trigger are onerous. i think everybody agrees to that. it's a matter of law and we do believe that congress will want to avoid it. >> but your argument that it's not kicking the can down the road is saying that congress and president have deal -- >> but saying any law that you pass tomorrow its implementation is over a certain period of time is meaningless. it's not the case.
and the fact is it will enact into law significant reductions, whether through the joint committee or through the trigger provision. and we believe that the committee will want to avoid the trigger being pulled and, therefore, hopefully, will take action in a balanced way. >> jay, as you know, the cbo had issues with the savings numbers in a couple of the previous proposals. how confident are you that this is going to pass muster. >> i believe it will pass muster but i haven't seen the cb, who >> and how do you all plan to respond when the two votes will be taken. will we see the president again? >> you know, we're still -- even though the cloud is mostly lifted we're still in that period where things are still pretty fluid so i can't anticipate whether or not the president will stand before you
again anytime soon. >> a cleanup question. has anyone in the administration talked to the rating agency -- >> i don't know. i just don't know. i would direct you to treasury that normally handles that stuff and i think that pretty much taps me out on that knowledge on the question. >> i'll shift to another committee. it shows u.s. manufacturing in january was the lowest rate in many years. many businesses citing cutbacks. mr. sperling on the talk shows yesterday said he saw or the administration see as growth rate -- >> it is said -- i think that is a general consensus out there about what growth might look
like in the third and fourth quarters. the ism is not for the third and fourth quarters. it's for the second quarter or the july of the second quarter. so what we have acknowledged all along is that growth is not fast enough. that job creation is not substantial enough, of late. i mean, there are a number of reasons for that. some of the head winds that were obviously out of washington's control the earthquake and tsunami that did so much damage in japan and disrupted supply lines and, therefore, had direct impact -- impact on the american economy as well as the global economy. and the higher fuel prices that were caused by -- >> we're going to leave today's white house briefing at this point as the u.s. senate is gaveling in to consider agreement on the debt ceiling. votes on that measure may come later this afternoon and now live to the senate floor.
senator from alaska. mr. begich: madam president, are we in a quorum call? the presiding officer: yes, we are. mr. begich: if we could have the quorum call vacated, please. the presiding officer: without objection. mr. begich: madam president, i've come to the floor a couple times and talked many times to my constituents back home in alaska about the importance of ensuring that we have a balanced approach how we deal with this incredible debt crisis that we're in, how we manage to create some certainty not only for today but into the years to come. we wanted to make sure not only did we create certainty but we also did what we can to protect the working families, honoring our commitment to seniors and veterans, and letting our small businesses know that we stand behind them, we want them to be successful and we want them to create some certainty out there so they can expand their
operations and opportunity. you know, i -- as i'm sitting here in washington, d.c. and it's whatever temperature it is outside right now, probably close to 100, maybe 80%, 90% humidity, sometimes i think maybe we could have got this done quicker if we just turned the air conditioning off in these buildings and probably would have got better results quicker. but we are where we are. we're in the last 24 hours or so before we have to make a decision what's -- what to do with the proposals, the solutions that have been presented. you know, i'm here and i wish i was home, to be very frank with you, this last weekend. my son was celebrating his ninth birthday, and as a parent, you know, every birthday is huge, makes a difference. i know, you know, my -- the presiding knows that very well. so while i'm here, they were enjoying life, made me think about a lot and i'm going to put
this poster up because i think this is a great poster. i got this texted to me during a committee meeting. this is my son who's just turned nine with a real fish. those who can't see it, it's the same height that he is. he caught this fish with his mother a few days ago. you know, it's a 40-pounder king salmon. it's what we call real fish. and we would also consider this small in comparison to some others we catch. but why, when i got this text -- and that's what's so great about technology today, you -- he's on -- you know, he sends me little notes and little comments during meetings and wants to make sure that i'm connected to what he's doing back there. but this debate that we're having, this moment in time to figure out where we're going is about the jacobs and the others of his age and not even born today, what we're going to do. you know, we're here, the presiding officer and i already experienced many years of our life and what we've already
enjoyed and hopefully enjoy more, but really it's about jacob and others, many of the kids that when i go back home i get a chance to talk with them. and i'm sure the presiding officer has done it where you go into an elementary school or a preschool, you -- and i know you were a teacher in sunday preschool -- and you go in there and you have conversations with them and you talk with them and they tell you in their own way -- which is sometimes, you know, very brutally honest -- about what they think about what's going on. and i'll say a quote here in a second. my son said to me, not that he understands everything we're doing but understands that it is a intense time here because i'm want home, i'm not with him. so he knows it's important, what we're doing here. 10 as we sit here and -- so as we sit here and debate this solution, what's the next step in you know, is it a perfect solution? no.
does it have some issues that i'm still concerned about? yes. but does it move us down a path to start dealing with the spending, the deficit, the debt, creating certainty, protecting those that need protection and such as our seniors and our veterans? yes. this proposal produces about a $1 trillion down payment on our deficit and debt. it lays out a process that we could achieve another $1.5 trillion in debt reduction. if this joint committee can come back with a proposal. but in the process of all this, it will create certainty into the marketplace. it will create certainty for all of us to know that a small business person who's been thinking about expanding their business can do that because the markets will respond positively. it will create certainty to the individual who maybe was thinking about buying a house or
buying a car, because now there's stable rates. for those that are putting money aside for education for their young family, us putting money aside for jacob for his college, know now that the markets are safer, the bonds we invest in are safer and that the market is better. and that his future is a little bit more secure if we do the right thing over the next 24 hours. but still knowing that it's not the perfect deal. it's evenly split between discretionary, cutting in half in discretionary and half in pentagon waste. still ensuring that we are a secure nation and protecting our defenses but cutting what i would consider opportunities within the pentagon to reduce. you know, as we sit here today and i think about jacob's future
and where he could be and all the kids that i see back home, there's enormous amount of opportunities. one oor the pages that are sittg here in this room, or the kids that are here during the summer running around washington, d.c., and seeing these great monuments. that's what we're here to do for this generation and future generations. that's our task, making decisions based on that, not on what our next election cycle will be, should we get elected, should we not get elected. will this look good on a brochure, will this not look good on a brochure. those that plan that or that have that kind of thinking are not about this country, are not supporting what this country's all about. you know, i think about all the issues that are in front of us. there's no more critical issue that at least in my last three years -- almost three years now that i've had to deal with. is there a component missing in this deal, in this solution?
yes. we're not dealing with the millionaires and billionaires, tax cuts they received and benefited from when they really didn't need it. we're not dealing with the loopholes, the scams and shams that people have taken advantage of within our tax structure. we haven't resolved the question of fairness in our tax structure so the middle class doesn't continue to carry the burden. we have not create add tax reform strategy that creates an opportunity for us to be more comettivcompetitive in this word economy. i am a hopeful that the joint committee made up of democrats and republicans will present to us a plan before thanksgiving and that we can sit back and look at that plan and realize it is an additional to what we're doing in the next 24 hours,
creating more fairness. but those who are out there, and i know the amazing thing about here -- this is an unbelievable place for media. you breathe, they report it. you sneeze, they report t and there'll be two opinions o on hw you sneezed. that's the way it works here. they feed on everything you do. i know some are out there bragging that this is a great deal because it just does cuts and it doesn't deal with revenues. then there's others that say it doesn't deal with revenues or it hurts social security. you can tell when it all occurs, it's probably not a bad plan because there's so much -- or there's elements they don't like. but we do need to deal with revenues at some point. we need to deal with a tax reform policy that brings balance and brings fairness where the middle class does not continue to be holding the back
for everything. i know there's a proposal that senator wyden, senator coats, myself have proposed. it is bipartisan. it's ts tax reform, creates a me corporate competitive rate, reduces the rates down for individuals but gets rid of a pile of these loopholes, these scams and shams that people have taken advantage of so they don't have to pay their fair share for the services and the benefits we all receive in this great country -- the roads we drive on, the schools we get to go to, our kids get to go to, the defense of this country, the border protection of this country, the safest food in the world. i mean, you name it, we have it. that's why we're the envy of every country in the world of a place to be and raise your family.
but as i look at again this picture -- and, yes, i'm doing a little marketing of alaska salmon -- i would be remiss if i didn't do that -- i think about jacob's future and what he has and what his potential is. but i also think about -- because as he celebrated his birthday, my father-in-law passed the same day -- about his dream when he was a young man working in connecticut. he bought a house in new haven, as he went off to vietnam, served his country, was a colonel, as r as he retired in e army. and then he sold that home to buy what's in the background here his cabin for his grandson, to enjoy the fruits of his life and what he enjoyed of his
american dream. that's what this is about. it's about making sure that this generation and the future generations can also have that american dream, that they have choices and options, not restrcted by politics or the -- not restrcted by politic restri. the presiding officer: the senator has used ten minutes. mr. begich: i would ask for an additional five minutes. the presiding officer: without objection. mr. begich: and i think about where we are today. my son has been watching this and just because i'm not home, and i -- he has a phrase he likes to use, even though it is not the perfect deal, but it does create balance. he will say at times, just suck it up, buttercup. i don't know what show he saw that on, but all you know, that's his phrase, and that's what we're going to have to do
here. it's not perfect. but we're going to have to do what's right for the next generation and the future generations. madam president, we have huge opportunities and challenges ahead of us. we have an economy that needs additional work to ensure that we are creating every opportunity to create jobs in this country for everybody, "no" fo--for everybody, no matter whu are. we need to make sure we continue to be the respected country that my father-in-law fought for in vietnam, my son hopes for, we hope for and future generations hope for. so today i come down here because think we are close to resolving the issue that has stretched us to the brink almo almost. and hopefully, as we get beyond this, we'll have this ability as democrats, as republicans to look first as americans, as
alaskans, as north chemica caro, wherever you're from, and focus on what's good for this country. we'll hear more over the next 24 hours of what all the details -- i've heard a lot of it already, but the public will learn more about it. there will be pieces we don't like. there'll be pieces i'll get phone calls in my office that they don't like t you'll get calls. but at the end of the day, we're going to do it, because it is the right thing to move forward. it's going to be tough, and we'll get criticism for things we could have done, but we are where we are and we need to move forward. madam president, as my son would say, we just got to suck it up, buttercup. i note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:
the presiding officer: the majority leader. mr. reid: i ask unanimous consent that the quorum call being terminated. officer without objection. reid scried that the time between 6:00 be equally divided between the leaders or their designees, senators be permitted to speak for up to ten minutes each. the presiding officer: without objection. mr. reid: madam president, for the information of all senators, a couple of house votes later today. they have a one-hour rule, so whenever they take it up. that he will debate it for one hour. it is my intention to try throbbing in a unanimous consent agreement and set a vote and
complete action on the debt limit increase. this vote could happen either tonight or tomorrow, so i want senators to be aware of that. of course with an unanimous consent agreement, we can move whenever we wish to this agreement, but it would take consent. i think it is pretty clear that we have -- we finish this, we have some nominations we have to deal with and we have to get the f.a.a. thing resolved. i think this frankly would probably be the last vote we have that i'm aware of. and it's been a pretty hard work period we've had, the last two weekends and working late. and i think the senate deserves to be able to go home as soon as we can. if there were ever a time when we need to work with our constituents, it's now. and for me personally, i've been here for a long time. i have a home in nevada that i haven't seen in months.
my pomegranate trees are, i'm told, blossoming and have some pomegranates on them. i have some fig trees and roses and things that i just haven't seen. so i have constituents that i'm anxious to see, friends i need to visit with, relatives i need to visit with. so as soon as we can complete our work, i'd like to move as quickly as i can to the summer recess period. so i would ask that as the house moves to this bill this afternoon be, senators should use this time to come over and talk about the bill, whether they like it or dislike it or are neutral. it would be a time that they could get their remarks on the record. a senator: mr. president? the presiding officer: the senator from louisiana. mr. vitter: thank you, madam president. madam president, i'm happy to be the first to take the distinguished majority leader up on his offer and be here on the floor to talk about this very
important matter. madam president, i plan on voting "no" on this proposal. it is a very important matter. its in many ways the greatest challenge we face as a nation, so i don't come to this decision lightly. but i do come to it firmly for three primary reasons. first of all, the most important, this bill, this so-called solution, doesn't fundamentally change our spending and debt picture. it plays around the marine in, doesn't make any big change whatsoever. to put it differently, i don't want to default under any circumstances but i don't want a downgrade of our credit rating, either. and from everything, the markets and the credit rating agencies, moody's and standard & poor's have said for months, this would result in a downgrade. this would result in higher
interest rates, first for the government and then for all of us on our home mortgages, on our car payments, and everything else. why? because again, it doesn't fundamentally change our spending and debt picture. it only cuts $7 billion in the first year, and $3 billion in the second year, a total in the first two years of $10 billion. that's basically a minuscule rounding error in terms of the size of the federal budget. over the next ten years we continue to mount up new debt, $7 trillion worth of new debt. so we're at 14 now, we're going to add on another $7 trillion of new debt under this plan. and we do nothing to stabilize our debt-to-g.d.p. ratio which is perhaps the most important metric that economists and others point to. we need to do better.
we need to have some plan to balance the budget. this plan never balances. this plan has mountains of new debt still building. this plan never stabilizes our debt-to-g.d.p. ratio. again, i don't want to default, i'll vote to avoid a default but i don't want a downgrade either that costs every american in a really meaningful way. secondly, i've looked very hard at the enforcement provisions of this bill and i'm convinced that even the meager numbers in this bill in terms of cuts are going to be blown, are going to be waived because there is no meaningful enforcement. the only thing that it will take to bust the numbers in this bill is a new bill that passes by a simple majority in the house and by 60 votes in the senate. and we are constantly looking at those sorts of vehicles, particularly when we're probably
going to have a disaster appropriations and disaster bills coming to the congress. so there are no real teeth in this bill. there is not adequate enforcement. to their credit, several members of this body, several members of the house, have spent months talking about how good, meaning enforcement mechanic nimples could work. the gang of six had real enforcement mechanisms that they spent a lot of time on. senators here like bob corker had meaningful enforcement mechanisms built into their proposed legislation. none of those are in this bill. those could easily have been adopted, those could easily have been put in the bill. they were not. and third and finally, i'm very concerned the triggers in this bill that are supposed to be there to ensure a second round
of savings and deficit reduction just aren't going to work. i don't see how they're going to inscent, particularly the democrats, particularly the left, to move to a new package of savings and deficit reduction. i think, rather, the triggers will be triggered and we'll have unsustainable defense cuts and also unsustainable cuts to doctors and hospitals in medicare. that's perhaps another reason going back to point number two that even the numbers in this bill aren't going to hold, they're going to be waived, they're going to be busted. i have to say i hope i'm wrong on all three counts if this bill in fact passes. but i've looked at it carefully, soberly, and that's the clear conclusion i've come to. i hope we can do better. i hope we do do better because we must for the american people because we need to start turning
around our completely unsustainable spending and debt situation. thank you, mr. president. with that i yield the floor. mr. grassley: mr. president. the presiding officer: the senator from iowa. mr. grassley: i didn't come to the floor to comment on what senator vitter just said and i can sure appreciate his view that a decision that ends up with a $7 trillion addition to the national debt over the next 10 years isn't getting us very far down the road compared 20 what the emof the united states who have to live within their income feel that this congress should accomplished. but a $7 trillion deficit addition to the debt over that
period of time compared to what the president suggested that we spend over the next ten years when he issued his budget to congress on february 14, we would end up with $3 trillion for -- i said that wrong. we could end up with $13 trillion added to the national debt. so somewheres along the line between february 14 and last night when the president announced his support for this compromise, he has come to the conclusion that -- that we could spend $6 trillion less over the next 10 years. so even though a lot of people see this as not making progress, the president admitted that he has found ways of changing his mind about $6 trillion in the course of just a few months.
i suppose it also might lead our constituents to think in terms of well, there's got to be something wrong with the thinking in washington if on february 14 you think we have to spend x number of dollars that will add $13 trillion to the national debt, and here it is just, you know, three or four months since then and the president goes on television and says this is a good compromise, and we can be $6 trillion less of spending. it probably leads people to believe that there's got to be a lot of money wasted in washington, d.c. if in fact between february 14 and last night the president can find consensus of spending $6 trillion less over the next ten years. now, that's comment on what senator vitter just said, and i'm not disagreeing with senator vitter's comments in any way.
when -- when you're here in the senate of the united states, talking about what to do about the deficit situation and how much deficit spending we're having, it probably gets lost in people's minds that what we're spending today and adding to the national debt is really creating a great legacy of debt to leave to our children and grandchildren. so this debate around this issue brings me to this question: is it fair to tax our children and grandchildren, is it fair to tax our children and grandchildren just because they can't vote? because our children and grandchildren for the most part don't have any voice in this except what our generation and people representing the older generations, other than our
children, are making these decisions. because we in fact are doing just that, taxing our children and grandchildren by adding to the national debt. and that's what we're doing with our irresponsible budget deficits. we have a choice between a brighter future for our descendants or more social spending now. more social spending or, as president obama might put it, investments. any way you look at it, money we spend today and we don't pay for it, we're putting this bill on future generations, our children and grandchildren. and this is a choice we should
be thinking about as we arrive at a decision of whether to vote for or against this grand compromise that has come out of these negotiations. and it gets down to basic choices of what do we do to encourage private sector employment. it gets down to choices of what do we do about the size of government. and there's a real choice that comes in this debate. as you talk about how big government should be, the choice is do we grow government or do we grow the private sector? and then what is the philosophical differences as well as the economic differences between growing government versus allowing business and pren sureship to flourish in america? and we've had these dramatic increases and expenditures over
just the last two years. 22% increases in appropriations in the last two years when the economy only grows at about 2%. everybody knows that's not sustainable. and on top of that, we had an $814 billion stimulus package that didn't do what it was supposed to do to keep employment -- unemployment under 8%. and -- and in this period of time we've gone from the gross -- the debt, the national debt being 35% of the gross national product today to be about 65%, before the end of this year it's going to be 72%, and it's on a path to go to 90%. and so we have seen government grow during these last few years out of proportion to the 20% of the gross national product that
the public sector represented by the federal government took, compared to that growth now from 20% to now 24%. 25%. now, those five percentage points of growth in the government may not seem like a lot, but just look at the difference between he incentives for growth of the private sector creating wealth as opposed to the government consuming wealth. and that is a fact. you know, government consumes wealth. government doesn't create wealth. people that are using their labor and their mind and investing are the ones that create wealth in our country. those five percentage points make a difference because it's a very dramatic growth in government. and as growth -- as government
consumes more, and i said it doesn't create wealth, it takes money out of the private sector where it can grow more and create jobs, and consequently then limits the opportunity for expanding the economic pie and that's what the private sector does through investment and labor, expand the economic pie so we can have an economic growth, so we can have more for more people. but when government gets bigger, you restrict the opportunities for economic growth in the private sector and you have less for more people. so five percentage points growth of the government in just the last two years compared to a 50-year average lessens the chance for a brighter future for our children and grandchildren, and that's got to be a part of
this debate as we decide the size of government versus the size of the private sector, the wealth-producing private sector. if you keep government at 20%, that's investment then that's going to be more in the private sector, that's going to create wealth. it's going to be a more productive use of our resources. the promise of our free market system can only be realized if we choose less social spending, less intrusive regulations and more efficient uses of our resources in the private sector as opposed to the public sector. so we should be doing things not only in this budget agreement, this deficit reduction agreement, but in all of the decisions we make here this the congress of the united states.
we should be doing more to encourage productive uses of our resources in the private sector rather than the expenditures of those resources in the public sector. now, just in case i said that wrong, i want to repeat it. we need to be encouraging more uses of productive resources in the private sector as opposed to the consumption of those resources in the public sector. president obama has launched a campaign over the 30 months he's been in office to defend the welfare state and, of course, the woefully inefficient government-run health care system that is an example of that welfare state. and i think we can learn some lessons from the rest of the world as well in looking at
what's right for america. we should learn from history and not repeat the mistakes that have been made in other countries. since the 1950's, we've seen a lot of countries around the world use the transfers of wealth from one generation to another or the transfer of wealth from one group of people to another. we've seen grants. we've seen a redistributive philosophy in a lot of countries. and what did that do? it did very little to raise the living standards of those in asia, latin america, africa. but more open economies have proven otherwise and more open economies, like we've had in japan since the 1950's, have lifted more people out of poverty in ten years than welfare state programs have done in 50 years. japan, just using it as an
example, forced its producers way back 50, 60 years ago to compete. private sector used resources are more productive than those of the public sector, making the decisions on how to use those resources or a command economy, as you might call it. after japan, we had korea, taiwan, hong kong, singapore and more recently in the last 20 years, china and india encouraging more competition and more productive uses of research -- resources, less of it promoted by the government, more decisions made to the private sector. eventually even brazil now and parts of africa now are learning that that's the route to go. we should learn from that. we shouldn't turn backwards and rely more on government than we
have in the past. because doing that, we retard opportunity in america, you retard opportunity by growing government at the expense of individual initiative. i hope that we don't go that route, and i think this budget debate has something to do with whether or not we're going to turn the -- turn this around from the direction that it's taken over the last few years, and those last few years has not just been the 30 months of this presidency but a little bit going back into the previous presidency as well. in regard to -- in regard to president obama's programs, we've had few results from the government becoming more involved in the economy. we've dealt with near zero
interest rates for a long period of time. i've already mentioned the $814 billion stimulus, and there's other things that -- that have been done in recent months to turn this economy around. and we still have unemployment above 9%. the recovery that was supposed to come from all of these programs that have had greater government involvement in our economy have made a recovery very, very illusive. in fact, there's even questions in the recent media of two weeks of whether or not we could even be going into another recession. yes, president obama tried mightily and wastefully and in the end very ineffectually to turn this economy around through a massive number of government
programs but it hasn't worked. progress would have been greater if we'd tried programs by president reagan or even president kennedy's policies, because in both of those instances, they cut marginal tax rates, they eliminated burdensome regulations, and instead, what do we have out there right now, even today, coming from the white house? promises yet of higher taxes, almost a demand that congress pass higher taxes right now, more regulations. just recently read about a business person saying that out of e.p.a., 29 onerous regulations are coming out that's going to be debt menlts tdetrimentalto job creation bece so costly. or another way of putting it is, it might lead or cause business people to worry about the
uncertainty of what government's going to do. and when you have that uncertainty -- and right now there is a heightened uncertainty -- it retowards rets growth. it retards growth because people won't invest. and when there's increased investment and hiring, there's less productivity, and what these issues are all about is creating jobs. and we are not creating jobs right now, and that's really what people are going to see as a test of whether or not we're out of a recession, regardless of what economists that are leading economists that make the decision we've been out of a recession now for two months, for people that are unemployed, it's not a recession, it's a depression, and they're going to measure coming out of a recession or coming out of their depression whether or not they have a job. and jobs aren't being created.
now, president obama promises what he wants is something that's fair and balanced, and when i hear him talking about fair and balanced, i wonder if he's really trying to steal those words from fox news. why is it fair to distribute more welfare to the present generation and today's voters by growing government at the expense of wealth creating private sector at harm to our children and our grandchildren, who are going to end up paying for it with less productive uses of the resources of this country. we should not be thinking, as europe has thought, about growing government, having government consume more of the resources of the economy, leaving less to individuals to make decisions whether to save
or spend and what to save and what to spend on. that's the way it's done in europe. we shouldn't go that way. and i always use a statistic that may seem very small to be insignificant, but i use the statistic of 1%. because if you compare the united states with europe over the last 25 years, our growth have averaged about 1% more in the united states than what it does in europe. now, that 1% may not sound like very much, right? however, over a generation, just 1% difference in growth between one economy of europe and the economy of the united states adds up to 20 -- after a generation, up to 25%
differential in per capita income. so it seems to me the issues of this debt reduction debate, or if you want to call it increasing the deficit ceiling, borrowing capacity of the federal government, too often it tends to be about what is the situation right now. but it's really a debate about what is fair for our children and grandchildren because those are the decisions on borrowing that we're making today. and i have to say where i started out, with a question of whether or not it's fair for us to tax future generations for the borrowing that we're doing today and simply say it isn't fair to tax future generations
and the reason is pretty simple. this deficit-reduction package is grotesquely unfair and it is also bad economic policy. it should not be passed. mr. president, the wealthiest people in this country and the largest corporations are doing phenomenally well. in a recent 25-year period, 80% of all new income created in america went to the top 1%, who now earn more income than the bottom 50%. in terms of wealth, the united states has the most unequal distribution of wealth of any major country on earth, with the top 400 people owning more wealth than the bottom
150 million americans. and when we talk about this deficit-reduction package, with the richest people becoming richer, huge corporations making billions of dollars in profits and in some cases paying nothing in taxes, how much are those people, the wealthy and the powerful, asked to contribute toward deficit reduction and shared sacrifice? how much are the rich and the powerful going to contribute into this deficit-reduction package? and the answer is zero, not one cent. meanwhile, as everybody in america knows, we are in the midst of a horrendous recession. real unemployment is over 16%.
people have lost their homes, their life savings. we have the highest rate of childhood poverty in the industrialized world, and yet this deficit-reduction package comes down on those people, the working families, the low-income people, the sick, the elderly, the children. rich pay nothing. large corporations pay nothing. and yet working families and the most vulnerable people in this country are going to be shouldering the burden of deficit reduction on their shoulders. that is immoral, that is wrong, that is bad economic policy. now, mr. president, as you well know, this is a complicated package and nobody can predict with any certainty exactly what programs will be cut and how much they will be cut because
the process will kick into the appropriations committees here all over the house and the senate and they will go to a supercommittee who will make very significant decisions. so nobody with certainty can tell you exactly what programs will be cut. but what we can say is that we are looking to -- up to $1.4 trillion in cuts and virtually every program, every program, that working families depend upon, that our children depend upon, that the sick depend upon are on the line. now, in my state, for example, it gets cold. we have a beautiful state and we loof our winters, but it gets cold t gets 10 buy low zero, 20 disee low zero. and many people in my state, including senior citizens, desperately need a program
called liheap, the low-income heating energy assistance program, which provides help to many people, including a lot of seniors in staying warm when it gets 20 below zero. i fear very much that there will be major cuts in that program. in our state we have done very, very well in expanding community health centers. we got over 110,000 people now accessing new community health centers, finally being able to get a doctor and a dentist when they need it. i'm going to do everything i can to prevent those cuts, i fear, that those programs can be cut. in vermont, in connecticut, all over this country, we have a major crisis in child care. a families want to get into the head start program. they want affordable child care. those programs will be cut. in my state, we have a program that helps struggling dairy
farmers, a program called the milk program. it helps them stay in business. i fear very much -- and i'm going to fight against this -- i fear that that program will be cut. we have young people today from working-class families hoping upon hope that maybe they will be able to afford to go to college. well, we can expect major cuts in pell grants and other programs that make college affordable for our young people. in this country, we have people who are going hungry. we did a study recently. more hunger among seniors. some of those programs will be cut. affordable housing programs will be cut. so let us not kid ourselves, in the midst of a terrible recession, when so many people are hurting, so many people are struggling just to keep their
heads above water economically, this deficit-reduction package is going to slap them at the side of the head and make life much more difficult for them. now, mr. president, as you well know, this a two-part program, and the first part calls for approximately $900 billion in cuts, and the second part calls for about $1.2 trillion to $1.5 trillion in cuts. and here's where it gets a little by the complicated because a supercommittee made up of six democrats, six republicans will have the opportunity to look at everything. as the majority leader said, everything is on the table. now, what does that mean? if everything is on the table, social security is on the table. and what we have heard from our republican friends, what we've
heard from some democratic friends, what we've heard from the president of the united states is that maybe we should adopt a so-called chained c.p.i. which will result in very significant cuts in social security benefits. if you're 65 now and that program is implemented, when you are 75 you're going to lose $560 a year. 20 years from now when you're 5erb8gs you are a going to lose $1,000 a year. am i saying that definitely will happen? no, i'm not. social security will be on the table. medicare will be on the table. medicaid will be on the table. everything will be on the table. if that committee ends up not coming to a decision, if they end up being deadlocked, say, 6-6, then we go to a sequestration program and more cuts are being made. so i would say, mr. president,
that when poll after poll after poll suggests very strongly that the american people want shared sacrifice -- a poll just came out last week. "the washington post" -- 72% of the people polled said that they believe that folks making more than $250,000 a year should pay more in taxes in order to help us with deficit reduction. poll after poll says that it is absurd that large corporations get incredible loopholes, which enable them to make billions in profits and not pay one nickel in taxes. so, mr. president, this is a bad proposal. this is an unfair proposal. we can do better. and we must do better. and i do not sphwoan vote for a
-- and i do not intend to vote for a deficit-reduction package where the sacrifices are being made by people in the middle class and working class who are already hurting. it is time for the big money interests to stop remembering -- to start remembering they are also americans and they should contribute to deficit reduction. with that, mr. president, i would yield the floor. and i note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:
mr. chambliss: mr. president? the presiding officer: the senator from georgia. mr. chambliss: i ask that the quorum call being terminated and i be allowed to speak in morning business. the presiding officer: without objection. mr. chambliss: thank you, mr. president. mr. president, later on this afternoon, the senate intelligence committee is going to vote out the nomination of matt olson to be the next director of the national counterterrorism center, and i rise today in support of the nomination of matthew olson to be the next director of the otct. following the september 11
terrorist attacks, we did a lot of self-examination as a government and putting it simply realized that pieces of intelligence that should have been connected had not been. or, in other words, the dots had not been connected. congress understood that we could not afford another lapse like 9/11, so we created the national counterterrorism center to analyze and integrate counterterrorism information across the government. while we have not suffered another 9/11, our record is not perfect. from the christmas day bombing attempt to fort hood, times square and the new york subway plot, the threats to our homeland are very real. at the same time, changing political landscapes and challenges from adverse nations require constant attention. in this environment, it is essential for nctc to perform its mission beyond reproach. after the christmas day bombing or the near-bombing aboard
flight 253, the senate intelligence committee conducted a review to determine where the intelligence committee could have done a better job of anticipating this attempted attack. unfortunately, the committee's review showed that nctc had not lived up to its statutory responsibilities. the then-director mike lighter, to his credit, took action in a very -- took criticism in a very positive way and made the right kinds of changes at nctc to move us in the right direction. while i am encouraged by the progress nctc has made since then to repair those shortcomings, there is much work that still needs to be done. matt olson i believe, has the right background to take the helm of this important center at this very critical poe point in our history. he is so stranger either to the senate intelligence committee or
to the serious threats that face our nation. members and staff have worked with him on several high-profile issues over the last few years. as a deputy assistant attorney general for the national security division, he was responsible for ensuring that our intelligence professionals had all the legal authority they needed from the foreign intelligence surveillance court in order to continue this country's safety. let me just this was no easy task and the stakes were high especially given the political wrangling over the u.s.a. patriot act in recent years. matt spent countless hours briefing our staff and many committees on many highly sensitive issues. in large part because of his willness to stick to the facts and not play political games, he has earned the respect of members on both sides of the political aisle. for the last year matt has
served in a very professional way as a general counsel for the national security agency. a position that has always put him in close contact, again, with the intelligence committees. general keith alexander, who heads up n.s.a., provided a letter of support for matt's nomination and i have also spoke len personally with general alexander about matt. i have a great deal of respect, a great deal of respect for the yen and it speaks volumes to me that he has such high, unequivocal praise for matt both has a leader, as well as a person. matt's other job, not an enviable one, which brought him in close contact with the committee, was his service as executive director of the guantanamo review task force. i've had numerous conversations with matt about some of the he recommendations made by the task force on transferring what i believe continue to be potentially dangerous detainees. i appreciate that the task force
was following a deadline set by executive order to close guantanamo bay, but i believe that we have accepted too great a risk to our national security by transferring many of these detainees to other host countries. the recidivism rate continues to climb. it's today somewhere in the range of 26%. and we have no reason to expect that it will stop climbing any time soon. our first obligation must always be to ensure the safety of the american people, not to transfer dangerous detainees simply to meet an arbitrary political deadline. of particular concern to me were the transfers of a number of yemeni detainees during 2009 when the intelligence community was already warning about the dangerous security situation in yemen. of course, we all know that al qaeda and the arabian peninsula makes its home in yemen and that several former g. gmp itmo
detainees hold positions in aqabp. they were directly responsible for the christmas day bombing attempt and their efforts will continue to inflict harm on -- excuse me, their efforts to harm our nation will continue. matt acknowledges the difficulties and acknowledges the task force did not get every recommendation right. just as the previous administration did not get every recommendation right. he also shares my personal view that the guantanamo bay should remain open so that we are not transferring any more detainees as the recidivism rate continues to grow. i appreciate the many conversations and briefings he has had with my staff on those transfer issues. i appreciate his willingness to continue to discuss these issues, and the need for a long-term detention policy,
even after taking on his new position after ntct director. ironically in his new position he will be responsible for tracking former detainees, including detainees whose transfer the task force may have recommended who slipped into their old ways before they can strike us again. it was in this capacity that matt had an issue with a colleague, and i have vetted this with matt, and with most of those who were in the room on the occasion when the issue arose. while better judgment could have been used, the issue is now behind us. and i have impressed upon matt that if he is confirmed as the director of ntct, his credibility must be unquestionable. he has confirmed to me that he will always communicate with members of congress fully and openly without political sensorship. he also -- sensorship. he has committed to be totally open and have an ongoing
dialogue with the house and senate intelligence committees. my good friend, senator conrad, who is actually the home senator for matt since he's originally from north dakota, spoke extensively about matt's reputation and commitment to public service during his confirmation hearing. many intelligence professionals on both sides of the political lines wrote letters of recommendation on matt's behalf. i believe matt when he tells me he is committed to working closely with congress and the intelligence committees to do the job needed to keep this country safe. i'll be supporting his nomination when it comes to the floor, and i look forward to working with him. with that, mr. president, i would yield the floor and i suggest the absence of a quorum. the presiding officer: the clerk will call the roll.tor from nor.
mr. conrad: i ask further proceedings under the quorum call be dispensed with. the presiding officer: without objection. mr. conrad: mr. president, i have two unanimous consent requests for committees to meet during today's session of the senate. they have the approval of the majority and minority leaders. i ask unanimous consent these requests be agreed to and these requests be printed in the record. the presiding officer: without objection. mr. conrad: mr. president, i rise today to discuss the agreement that has been reached between leaders in the senate and the house, republicans and democrats, and the president of the united states with respect to an extension of the debt
limit and certain deficit-reduction steps to be taken in conjunction with that action. mr. president, i want to remind colleagues that if we fail to act, most economists believe we would face an interest rate spike and for everyone percentable point increase in interest rates, we would add $1.3 trillion to deficits and debt over ten years. mr. president, if there was only a 200 basis point increase, that would wipe out all of the deficit reduction that is in this package. so colleagues need to keep in mind the consequences of our actions and how critically important it is to prevent that interest rate spike.
in addition, david beers of standard & poor's global head of sovereign ratings said in an interview on cnbc on july 26 the following -- "to avoid a u.s. credit rating downgrade, the s&p wants to see bipartisan debt-reduction effort." mr. president, he said specifically, "we will measure this matter on a number of parameters. one is, is it credible? and credibility, among other things, means to us that there has to be some buy-in across the political divide, across both parties, because politics can and will change going forward. and if there's ownership by both sides of the program, then that would give us more confidence. it's not just about the number. it's about the all-in intent." mr. president, however imperfect this agreement is -- and it is
imperfect; after all, it is a work of the hands of man, we are all imperfect -- but it is critically important. it is important to demonstrate that we can work together to achieve a result. mr. president, this package contains these elements. first, it prevents a default. it saves the nation from an immediate economic crisis. it creates a process to allow debt ceiling increase to 2013. so we don't have to reenact this entire episode in just a matter of months. it provides a $900 billion down payment on deficit reduction that is enforced with ten years of spending caps. it creates a joint select committee of congress on deficit reduction tasked with finding additional $1.5 trillion in savings and to bring us a report
before thanksgiving. this select committee has a goal of $1.5 trillion in savings as a floor. it is not a ceiling. this committee could come back to us with an even more ambitious, more bold proposal to get our fiscal affairs in order. mr. president, let us hope that it be so. it also, the overall package that is before us or about to be before us, requires a vote on a balanced budget amendment. the debt ceiling increase is not contingent on its passage but there is a requirement to give colleagues in both chambers an opportunity to vote. it also, the package before us, protects pell grants from deep near-term cuts, and i think most of us understand how important pell grants are to providing opportunity to young, talented
people all across america to improve themselves through higher education. my grandmother was a schoolteacher. we called her little chief because she was only five feet tall but she commanded respect. and she commanded respect because she had character. and she told people in our family there are three priorities in this household. number one is education. number two is education. number three is education. and we got the message. i can remember fondly her telling us over and over, would yowhat you put in your head, no one can take away. they can take your property, they can take your wealth. one thing nobody can take from you is what you've done improve wriewr mind. that ought to be something that's taught in every household in our country, because it is central to america continuing to be a world leader.
mr. president, the proposal that will be before us also creates a joint select committee on deficit reduction. as i've indicated, they have a goal of finding an additional $1.5 trillion in savings, but they're not limited to that level of savings. they could do more. it is bipartisan and bicameral. 12 members, six democrats, six republicans. congress is to have a report by thanksgiving on their work. no amendments are allowed, and a simple majority vote to pass in the senate and the house. mr. president, thi this closely follows the recommendation of senator gregg and i from five years ago to create a commission empowered to bring to a vote in the senate and the house a plan to get our debt under control and to do it so that you
wouldn't have the endless process that our current situation requires. mr. president, the idea was to create a brac-like system so that a proposal could come before the senate, could come before the house to get our debt down. it is modeled in many ways after the reconciliation process that was designed for deficit reduction and only requires a simple majority vote. there is a failsafe. if this committee fails to produce a result, the failsafe is across-the-board cuts in defense and non-defense spending with exemptions for social security, veterans, low-income people, and it limits the medicare reductions to 2%. mr. president, i would prefer that the medicare reduction not be there because there is no
revenue that's assured in this plan. but we do have a have a failsafe. we do have to have some assurance that the savings are actually realized. and this mechanism does that. i think all of us know that our current status finds us borrowing 40 cents of every dollar that we spend. in fact, we are in a condition in which the united states is borrowing more than we have ever borrowed before as a share of our national income. and the congressional budget office, nonpartisan, has told us that the long-term outloom look is even more -- that the long-term outlook is even more sober. that we have a debt held by the public that is about 70% right now, or -- right here, debt held by the porks about 70%. our gross debt is actually approaching 100%. but our publicly held debt, debt
held by the public, not counting what we owe to trust funds like social security, is about 70%. but look where we're headed if we stay on our current course? the congressional budget office tells us by 2037 our publicly held debt will be 200% of our gross domestic product if we fail to act. and how did we get in this circumstance? well, mr. president, this says it very clearly and very well. the red line is the spending line of the united states. the green line is the revenue line going back 60 years. and what we can see is the red line, the spending line, is the highest it's ever been. 24% of gross domestic product. federal spending. the revenue line is the lowest it's ever been in that period, the lowest it's been in 60 years. some of ash friends say on the other side, we just have a spending problem. they have got it half right.
we do have a spending problem. spending is almost the highest it's been in 60 years. but, you know what? we've also got a revenue problem. because revenue is the lowest it's been in 60 years as a shaver our national income. -- as a share of our national income. that's a fact. mr. president, we've got to work both sides of this equation. if we go back and reconstruct, how did we get in this ditch, a story may 1, 2011, in "the washington post" is instructive. here's what they found: "the biggest culprit, by far, has been an erosion of tax revenue triggered largely by two recessions and multiple rounds of tax cuts. together the economy and tax bills enacted under former president george w. bush and to
a lesser extent by president obama, wiped out $6.3 trillion in anticipated revenue." revenue. " that's nearly half of the $12.7 trillion swing expected from real detect. tax collections now stand at their lowest level as a percentage of the economy in 0*e6 years." in addition, if one examines our history going back to 1969, and look at the five times that we have balanced the budget, in each of those times, revenue was almost 20% of g.d.p. right now -- remember what i just said -- revenue is 14.5% of g.d.p. the five times since 1969 we've balanced the budget, revenue was 19.7% of g.d.p. in 1969.
in 1998, it was 19.9%. in 1999, it was 19.8%. in 2000, it was 20.6. in 2001, it was 19.5%. by the way, all of these budgets -- these last four -- were the responsibility of bill clinton. bill clinton not only balanced the budget, he stopped using social security funds to finance other government operations. and he did it with the longest period of uninterrupted growth in our nation's history and created 23 million jobs. the clinton administration record on deficits, on debt, on economic growth and job creation is the best, by far, of all modern presidents. mr. president, facts are stubborn things. now, we have a tax code today
that is riddled with tax expenditures, riddled with tax expenditures. we are losing to the treasury $1.1 trillion a year to tax expenditures, tax preferences, tax loopholes, tax exclusions. and guess who gets most of the benefit? 26% of the benefit goes to the top 1% of those tax expenditures, those tax loopholes, those tax preferences. here is one of the most conservative economists in america, martin feldstein, professor of economics at harvard, chairman of the council of economic advisors under president reagan. this is what he said about tax expenditures on july 20 of last year. "cutting tax expenditures is
really the best way to reduce government spending ... eliminating tax expenditures does not increase marginal tax rates or reduce the reward for saving, investment, or risk-taking. it would also increase overall economic efficiency by removing incentives that distort private spending decisions. and eliminating or consolidating the large number of overlapping tax-based subsidies would also greatly simplify tax filing. in short, cutting tax expenditures is not at all like other ways of raising revenue." mr. president, that is precisely why the fiscal commission and the group of six -- both groups that i was proud to participate in -- chose the reduction of tax expenditures as one way of reforming the tax system, improving the competitive position of the united states, and raising revenue to help
reduce this debt threat. mr. president, anybody that wonders about what's happening with respect to loopholes, exclusions, deductions, preferences in the tax code, you don't have to go any further than this picture that i've shown many tiessments this little five-story building, ugland house, down in the cayman island, claims to be the home of 18,857 companies. what an amazing building that is. this little building, home to 18,000 companies. they all say they're doing business out of this building. really? anybody believe that? they're not doing business out of that building. they're doing monkey business, and the monkey business they're doing is to avoid paying the taxes all the rest of us pay, because the cayman islands is a tax haven.
they don't impose taxes on these companies, so guess what these companies do? they file returns that show, miraculously, their profits of all their operations across the united states, their profits don't show up in the united states; they show up in this little five-story building down in the cayman islands. they say that's where the profits are being realized. and what a blessing that is, because the cayman islands doesn't impose any taxes on the profits that show up down in the subsidiaries of the companies who are doing business all over the world. mr. president, anybody that wonders that this is costing all the rest of us huge amounts of money ... here's what our permanent subcommittee on investigations found in a report in 2007. "experts have estimated that the total loss to the treasury from offshore tax evasion alone approaches $100 billion a year."
$100 billion a year. if you have any doubt about this, go home and google "tax havens," see what you find. i think you'll be quite startled by what you see. "thosthose losses of $s-00,000 r "include $40 billion to $4070 billion from individuals, another $30 billion from corporations engaging in offshore tax evasion, abusive tax shelters add tens of billions of dollars more." mr. president, my family and i, we pay what we owe. the vast majority of people in this country pay what they owe. we dot got a few people -- unfortunately they tend to be people with greater resources -- are not paying what they owe. that should come to a screeching
halt. mr. president, the bipartisan groups proposing comprehensive and balanced plans with spending cuts and revenues include the fiscal commission, the bipartisan policy center, and the group of six. these are the only bipartisan plans that have come from anywhere and all of them recommended a balance between spending cuts and revenue. almost all of them focused on reducing tax expenditures, the loopholes, the exclusions, the preferences, the tax havens in order to raise revenue, to reduce rates, to make america more competitive, but also to raise additional revenue to dump this debt. mr. president, the other day there was a spirited debate on the floor between the senior senator from arizona and the senior senator from illinois. i arrived here at the end of that debate, didn't have a chance to participate. there were a number of
assertions made there of my friend, senator mccain, and i just want to set the record straight. if we look at the records of reagan, bush 41, bush 43, and clinton with respect to deficits, the record is very clear. here it is. during the reagan administration, deficits exploded. and you had -- you can see on the graph, deficits that averaged about $200 billion a year. during the first bush administration, the deficits actually got worse and ended up still in the range of $200 billion a year. president clinton inherited deficits of $200 billion a year, but you can see by the end -- the last four years of his administration he was in the black. the budgets were balanced and
for, i think, two or three of those years he actually stopped using social security money to fund government operations. so -- and then of course we see what happened in the second bush administration. deficits absolutely exploded. absolutely exploded. the second bush administration was, by far, the worst on record of deficits and debt of any of these administrations. but by ft was the clinton administration. we can look at it a different way. this chart shows in dollar terms what happened to the debt. you can see the reagan administration, the debt well more than doubled. the bush administration took it up much further. the clinton administration actually started bringing down the debt. he actually was paying off debt during the clinton administration. and then we saw what happened in the second bush administration.
the debt absolutely skyrocketed, going up well over two and a half times. mr. president, when we then look at the record of economic growth under those different presidents, it's very interesting. reagan, who more than doubled the debt, had a pretty good record of economic growth, 3.5%. bush i, who ran the debt up even further, pretty paltry record, -- 2.1% economic growth. clinton, who actually paid down debt, had the best record of economic growth, 3.8% on average. bush ii, who put in place the massive tax cuts that ballooned the deficits and the debt, had the worst record of economic growth, averaging 1.6%. well, let's connect the dots. let's connect the dots.
big increase in debt during the reagan administration, but pretty good economic growth. he took the number-two spot. bush i, massive increase in deficits and debt, economic growth faltered. clinton administration has by far the best record on deficits and debt, also the best record on economic growth. and then bush ii, who had huge tax cuts, never offset by an adjustment, and as reagan did, had the worst record of economic growth. and finally, on job creation, again, reagan administration 16 million jobs were created. quite a strong record of job creation during his eight years. first bush administration, only 3 million jobs created. the clinton administration, by far the winner on the jobs
derby, 23 million jobs created, and he had the best record of deficit and debt reduction and the best record on economic growth. and you know what? he raised taxes and cut spending. wow, our friends on the other side said when president clinton raised taxes and cut spending that it would crater the economy. i was here. i heard the majority leader on that side say that that proposal would crater the economy. and the republicans all repeated that line all across america. the clinton plan, to get the deficits and debt down by raising revenue and cutting spending, they all said would crater the economy. they were wrong. they were wrong. then it came time for the bush
administration, and he had massive tax cuts, and they all said that would be a huge job creator and fire up the engines of economic growth. they were wrong again. they were wrong again. the record is clear. look at the difference here. 16 million jobs created under reagan, 3 million under bush i, 23 million under clinton, 3 million under bush ii. and clinton had the biggest reductions in deficit and debt by far of any of them. he had the best economic growth. he had the best job creation. and the second bush administration comes, and they say big tax cuts. that's going to fire up economic growth, that's going to fire up job creation. they were wrong. when clinton had a proposal to raise revenue and cut spending, they said it would crater the economy, and yet clinton had the
best record on economic growth, the best record on job creation. they were wrong again. during the second bush administration, at the end, has everybody forgotten? we were on the brink of financial collapse. i was called to a special meeting in this building with the bush administration's secretary of treasury, and i along with other leaders of the house and the senate were told we were days away from a financial collapse. this idea that you can't raise revenue or it will kill jobs; you can't cut spending or it will kill jobs has not proven to be right. in the real world, the clinton administration raised revenue, cut spending to get our debt under control, and they had the
strongest record of job creation, the strongest record of economic growth of any of the four presidents during that period. by far. i just say i wish i could have participated in that debate last night. i missed it, but i wanted to set the record straight. i thank the chair and yield the floor. a senator: mr. president? the presiding officer: the senator from new jersey. mr. menendez: mr. president, i wanted to come to the floor to talk about the deal that the senate will vote on some time later tonight or tomorrow. before i do, i want to say to my distinguished colleague from north dakota, the chairman of the budget committee, as always, what an exceptional job he's done in laying out fact from fiction, the realities of the choices before us. and i only hope that the revenue possibilities that he clearly
expressed exists as part of an equation to a solution can be invoked, but i'm concerned based on what the other side says. we have a deal before us that is a result of a manufactured crisis. the debt limit has historic, historically been raised as a matter of course by both republican and democrats, both sides, without conditions. without conditions. ronald reagan did it 18 times without conditions. george w. bush did it seven times without conditions. but, no, not this time. not this time. for days, for weeks this congress has been held hostage by a radical few, a band of tea party tyrants who believe their opinions, their values, their
view of the world, their vision of government must be america's vision. it is not. in their world, there is no room for reasonable compromise. there is no room for fair and balanced budget approaches, the kind of approaches to budgets that i and many on this side have worked for and voted for throughout our careers in congress. i have voted for balance going in, and i was looking for balance in the final agreement, or the hope of balance that the american people have expressed themselves clearly they wanted to see. spending cuts but also ending those tax loopholes and creating revenue. i have voted for $2.4 trillion in cuts in the reid amendment, with inclusion of a joint committee process. senator conrad was talking about that; that could include revenues. a balanced approach. i have supported increasing the
debt limit in a responsible way, a balanced, responsible, fair approach that implements significant but responsible deductions. i voted in 2010 to establish the bipartisan task force for responsible fiscal action, the precursor to the simpson-bowles commission, to review all aspects of the financial conditions of our government, including tax policy and entitlement spending. i voted to protect social security from being used to balance the budget when it hasn't contributed to our debt. i voted in favor of the pryor amendment to reduce the budget deficit by at least $154 billion, with a balanced approach to cutting our deficits, that included discretionary spending, entitlements, and revenues. i have supported budget enforcement measures like the statutory paygo, to pay as you go when you come up with a new
idea for spending or tax breaks, to control both spending and revenues. i led the effort in this chamber to cut $21 billion in unwarranted big oil subsidies and supported saving almost $6 billion this year alone by cutting ethanol subsidies. and i have sroetd five times in the -- voted five times in the past to increase the debt limit in a responsible way. but this 11th hour deal with so many strings attached that it has become a tangled web of conservative social values is nothing more than a concession to the radical right of one party, and it flies in the face of our values as a nation. it would mean drastic and dramatic cuts to one side of the ledger overwhelmingly from non-defense spending. and no balance, no balance opbd
revenue -- on the revenue side. their argument is the commission can look at revenue. yes it can look at revenue, but that commission which is going to be appointed with an equal number of republicans and democrats pretty much tells you where it's going to end up. speaker boehner said he won't appoint anyone -- anyone -- to the committee who would accept revenue as part of the mix. senator mcconnell has said there will be no new revenue. they get appointments to that commission. that's half of the commission. even gene sperling, the president's economic advisor, said there will be no new revenues for the next 18 months, which is a clear reflection of what speaker boehner and minority leader mcconnell have said. and since they won't accept revenue except maybe in the context of tax reform, which the joint committee has said it can't do by the end of the year which is when this commission is called upon by thanksgiving to come forth and make a
presentation, and we democrats will have members on the commission who will be responsible and want to strike a deal, we will end up either having to accept the commission's spending cuts without revenue, leaving us with trillions of dollars in non-defense and entitlement cuts or automatic sequestered cuts that are even more draconian. and does anyone really believe, does anyone really believe in this chamber that the bush tax cuts for the top tier, the richest, the wealthiest people, millionaires and billionaires, which will expire in 2012, will be on the table in an election year? that the president will issue a veto threat for those tax cuts and make them the hallmark of his reelection campaign? i don't think so. i don't think so. while i know that if we go to the automatic sequestered cuts that nearly $1 trillion of those
automatic cuts will come supposedly from defense, what guarantees are there that we won't use the overseas contingency fund of $1 trillion to meet the defense side of the cuts? the very fund that republicans in the budget passed in the house put in their budget, and that virtually all of my republican colleagues here in the senate voted on, and they voted on it as cuts, what makes us think if that isn't the case, what makes us think that supplemental emergency appropriations won't be offered on the defense side while war fighters are in the field, leaving us with no real defense cuts by a hard $1 trillion in cuts on domestic programs like education, student loans, health care, renewable energy, research and development, and the list goes on. and for those who suggest that this commission is, and the
threat, the sword of those automatic kits will make people -- cuts will make people act responsibly, what makes us think that the old paradigm which i long for, that people will be responsible, will take place given what we have seen and which we have a manufactured crisis that has bought us on the verge to an economic crisis that is not only national but international in proportion. if people have been willing to bring to us that point, what makes us think that this negotiation as proposed by the legislation will work? they will continue to look for deeper and deeper cuts to those basic services we as a party and as a nation have fought for. we will spend the next year headed into the national decision making that will take place next november, forced to debate deeper cuts, refight all battles, debate a balanced budget amendment, the bush tax cuts, instead of talking about
creating jobs, jobs, which is what americans want to see again, and helping middle-class families who are struggling to make ends meet. but don't listen to me on that. listen to paul krugman, a noble-prize winning economist, who wrote today that this deal is a disaster, his words, for the economy. he said -- and i quote -- "start with the economics. we currently have a deeply depressed economy. we will almost certainly continue to have a depressed economy throughout next year, and we will probably have a depressed economy through 2013 as well, if not beyond. the worst thing you can do in these circumstances is to slash government spending since that will depress the economy even further. pay no attention to those who invoke the confidence, claiming that tough action on the budget
will reasewer businesses and consumers, leading them to spend more. it doesn't work that way, a fact confirmed by many studies of the historical record." he goes on to say -- "indeed, slashing spending while the economy is depressed won't even help the budget situation much. it might well make it worse. on one side, interest rates on federal borrowing are currently very low, so spending cuts now will do little, little to reduce fudge interest costs. on the other side, making the economy weaker now will also hurt its long-run prospects which will in turn reduce future revenue. so those demanding spending cuts now are like medieval doctors who treated the sick by bleeding them and thereby made them even sicker." and he goes on to say -- "and then there are the reported terms of the deal which amount to an abject surrender. first, there will be big spending cuts with no increase
in revenue. then a panel will make recommendations for further deficit reduction, and if these recommendations aren't accepted, and as i described before the possibility of getting revenue in that equation with the appointments being made by the authorities making them saying they will point to no one who will consider revenues, there will be therefore even more spending cuts." so that's a nobel prize economist. no, mr. president, there is no balance in this agreement, no real compromise. it simply does not force shared sacrifices the american people have demanded. oil companies will make make $146 billion in profits this year. the big five, they will keep picking the pocket of american taxpayers with a ridiculous handout while they earn those billions in profits. ethanol millionaires will be off the hook with this deal. there is no balance in this deal.
there is no fairness. there are nothing but concessions to the radical right wing of the republican party that is holding the american economy hostage, a gun to its head, threatening to pull the trigger if they don't get their way. and yet, no one on the right seems to be happy. they want more. they believe they haven't gotten enough. mr. president, when is enough enough? how far do we have to bend before we break? how much do we have to give of our values, our beliefs, our vision of america? how much do we have to give of the promises we have made as a nation to hard-working middle-class families struggling to make ends meet, struggling to pay the bills, the mortgage, pay for health care, tuition to put their children through college and give them a chance at a better life. how about those whose lives would be shattered except for the government's protection. we are their voice, and i speak
for them when i say this is not a fair deal but it is the deal before us. what's fair is fair, but this plan is not fair to the american people. i cannot in good conscience support a plan where soldiers, seniors, students and working families must endure trillions in cuts while oil companies, billionaires corporate jet owners are not asked to pay one cent toward shared sacrifice. the republicans turned a relatively routine vote to meet america's obligations into a crisis threatening the world's economy. in response, the reid plan met them 80% of the way by proposing proposing $2.4 trillion in cuts, creating a process where a bipartisan commission could find a balanced approach to deficit reductions that would go beyond that and that would meet the
american people's equal for shared sacrifice from those who have not only the greatest wealth in the country but also those who seem to have the privilege and the power to fashion the tax code in a way that benefits them but doesn't benefit working class families in our country. no, but that wasn't enough for the tea party. nor for the party they now control. no, instead, they have insisted on a process where oil companies, billionaires, offshore tax havens and the corporate elite are completely protected, completely protected from making shared sacrifices. that is simply not fair, and i cannot support it. the thought that because our soldiers will join seniors, students and working-class families on the chopping block that democrats can flock to this plan is wrong-headed. eliminating troubled d.o.d. weapons systems is one thing, but across-the-board cuts will
punish those who are bravely serving our country in a time of war. adding these cuts just makes what was a painful plan a totally unfair, unbalanced and unacceptable plan. i supported the majority leader's plan. i have shown i am serious about deficit reduction. i have supported a fair deal, as described by people in new jersey and across our country. a reasonable deficit reduction plan that truly represents compromise, a deal that fulfills the commonsense idea of shared sacrifice. i know shared sacrifice, mr. president. this is not shared sacrifice. this is capitulation to a radical fringe of the republican party that will not bend until they break this economy or get their own way. i have been for deficit reduction. i have voted for fair approaches to deficit reduction.
the presiding officer: without objection. mr. lieberman: i thank the chair. mr. president, i rise to speak on the proposed debt crisis agreement. the first thing i'd like to do is to express my appreciation, i think i'd actually say empathy, to the president, vice president, the bipartisan leadership of both houses of congress that have had to deal with this enormously significant and difficult problem for our federal government, because the obvious fact is that we have worked our way into a very deep hole of debt and when i say "we" i mean we, all of us. succeeding presidents of different parties, members of both parties, in both houses of congress. there's a tendency when you've got a problem like this to want to point and blame everybody else. the truth is, we're all
responsible and we're only going to get out of this hole and get the american government and the american people out of this hole if we work together to solve the problems, just as we -- we have together caused these problems. i saw some numbers recently. i think i've got them right -- i think i've got them almost right -- that expressed very simply what happened over the last decade. in fiscal year 2001, the last year of the clinton administration, the federal government tax revenues -- revenues were at about 19.6% of the gross domestic product. spending, federal government spending in that year was about a point lower, 18.5% or 18.6% of the gross domestic product. so you're -- you're raising about a percent more of the g.d.p. than you're spend, you've got a surplus. what is it now? it's startling how the change has occurred.
spending is up close to 25% of the gross domestic product and revenues are down to about 15%. now you've got a gap of 10% about spending over -- as a percentage of g.d.p. over revenue and we've got this enormous deficit and debt. $14 trillion. if you'd said to me when i came to congress in 1989 that our government would one day have a -- a debt of over $14 trilli $14 trillion, i would have said, impossible. but here we are. and it's growing at a trillion dollars a year and more. and that's the problem we've got. and when you think about those percentages i cited, speaking very simplistically, the way we're going to get out of the hole we're in is by cutting spending and raising revenues. now, we'd like to do that in a way that also gets us back to
economic growth. that's the critical third fact factor. if we're growing economically, the revenue system we have will raise more money and -- and help us to close this gap. but doing these two things that are critical to solving the national crisis we have, which is to raise revenue and cut spending, are difficult politically, very hard politically. it's not what our -- what a lot of politicians think our constituents want us to do. but i think today the american people are so -- so anxious about the national debt, so anxious about the economy and so frustrated and angry with members of congress that they'd like us to do what's counterintuitive which is -- doesn't seem like traditional politics, which is actually to do together what will solve the problem. stop the partisan politics, solve the problem. they know you've got to cut some spending and we've got to raise some revenues and they want us
to do it fairly. that's the difficult dilemma that the white house and the bipartisan congressional leadership faced in dealing with this problem. and it schultz in the agreement. now, i thank the leaders in the white house for the agreement because it does do some significant things. number one, it avoids the unknown risk of a default for the first time in our history. some people think it wouldn't be so bad. i don't want to play that game with our economy and our financial future. i think it would have hurt us. so it avoids that. the second is that it does begin to cut some spending and put some caps o. and the third is -- and maybe this is the most hopeful -- it creates a joint -- a special joint committee of congress to recommend further cuts in this so-called second tranche of cuts.
but it doesn't do two other things and as a result, this proposal before us now is -- is unfair. and what doesn't it do? it seems to me that in reaching this agreement, each political party yielded to the other party's highest priority political and ideological interest. so this agreement does not deal with entitlement reform at all, including medicare reform, which is a priority for democrats, and it doesn't raise revenues, which is a priority for republicans. so as a result, why do i say it's unfair? it's unfair because it sets before us a solution to the problem that only asks of the
discretionary spending lines in our budget. what i mean to say here is that discretionary spending in fiscal year 2010 represented 30 -- about 30% of all government spending -- about 35% of all government spending. mandatory spending, the so-called entitlements, was almost 60%. 35% discretionary, 60% mandato mandatory, interest payments were about 5.5%. so if you're taking the mandatory spending off of the table and you're not going to add any revenues, then you're left with taking all the savings that this agreement proposes to achieve, almost $3 trillion, maybe at best $3 trillion, you're taking it all out of discretionary spending. and in doing that, you're going
toned up -- you're going to end up having a devastating effect on our security and i believe on our prosperity and also on our future, on -- on the capacity of our government to take care of those who are most vulnerable and the capacity of our government to -- to grow, to help the economy grow. to better explain this, i just want to say very briefly, what's discretionary spending? well, there's the defense side, which is the department of defense, in some cases in this agreement it's described as security and that would include homeland security and veterans administration. the non-defense discretionary includes most of what most people see as our government: education, health, administration of justice, energy, environment, agricultu agriculture, commerce, community and regional development, science, space, technology, research. all of those will -- will suffer
devastating cuts under this proposal because we've not been willing to deal with entitlements, particularly medicare. now, why do i cite medicare? i believe in medicare. i think it's a great program. but, look, it's on the course to do two things. one, it's going to go bankrupt soon, according to the report of its own trustees, no later than 2024, but as soon as four or five years from now. the hospital part of medicare is going to go bankrupt, it's not going to have enough money. why? because the people putting in money through their payroll taxes into hospital insurance, the reality is that the average beneficiary of medicare takes $3 or $4 out for every $1 put in. you can't do that and have it be sustained over the long haul. and over the next decade, approximately 20 million more americans are going on to medicare because of the baby boomer generation.
so it's the -- it's the single largest, fastest-growing element of our federal budget. and it seems to me -- again, i support medicare. i voted against the ryan budget. i don't want to privatize it. but you -- you can't protect medicare as it is and expect it to stay as it is. you're only going to save medicare by changing it, and this budget doesn't touch that at all. i could say more about that but that's enough for the molt. so the end result of all of this is so for the approximately trillion dollars in the so-called first phase or tranche of savings adopted -- cuts adopted by this plan, they're pretty much all from discretionary spending, defense and non-defense. head start, pell grants, education, and defense.
the second phase is the part that bothers me and really worries me, i'd say. the -- the proposal before us sets up a committee, 12 members of congress equal in terms of party allocation. they have the opportunity to deal with the problems that are left out of this and have this be a fairer proposal to get america back in balance and that is to deal with the entitlements and deal with the revenues, tax reform and entitlement reform, whatever you want to call it. but will they? and if they don't, if the two parties priorities, political and it'd logical interests are stopped in the committee and stop it from dealing in entitlements or revenues, then there is an automatic mechanism for cutting an additional $1.2 trillion to $1.5 trillion. and that all comes out of
discretionary spending, defense and non-defense. now, some of my other colleagues have come to the floor to describe the impact on non-defense discretionary spending. really, most of what we know of government -- education, health care, environmental protection, transportation, et cetera, et cetera. i'm on the armed services committee, i'm on the homeland security committee, i'm privileged to be chair. my priority in service? the senate has been our -- my priority in service in the senate has been our national security. and i'll it will you this, mr. president -- if that sequester ever went into effect, it would have a devastating impact on the ability of our men and women in uniform and their leaders to protect our security and what in what remains a dangerous world. the initial $1 trillion of cuts mandated in this proposal include $350 billion over the
ten years from defense, as i understand the numbers. president obama had earlier directed the department of defense to cut $400 billion over -- from their spending over the next decade. the department of defense is working on that. general dempsey, martin dempsey rption soon to be the chairman of the joint chiefs, testified before the senate armed services committee, said that he would work on that. he said he could accomplish that but it wouldn't be easy. he was asked, what would happen if you went beyond the -- you were demand to go beyond the $400 billion in cuts from defense over the next ten years, and he said it would be extraordinarily difficult and involve very high risk to our national security. he's not against cuts in defense. i am not against cuts in defense. but they got to be reasonable, because in the end, the first
responsibility of our national government is to protect our security. if we don't have security, we don't have anything else. we don't have freedom, we don't have prosperity, we don't have anything else. an the wold is full of people who want to do us damage, who want to kill us, who want to bring down our civilization, who are involved in an ideological, in some sense, theological clash with us, and i am ape just saying that if -- and i'm just saying that if the joint committee, the special committee, cannot reach agreement or reach its agreement and congress rejects its proposals, there'll be an automatic cut in defense of an additional $500 billion to $600 billion over the next decade, add that to the $350 billion in the first phase mandated by this proarnlings you've got $1 trillion in cuts. we're just not going to be protected, as we have to be. it's as simple as that. and it's just unfair.
and not only unfair, it's irresponsible. the fact is -- well, admiral mullen was in afghanistan over the weekend, and he had a conversation with some of our troops that got a lot of attention from the media. one of the soldiers gowpt and said, admiral mullen, we're following this debt debate in congress. can you promise us that we'll get paid regularly in the coming weeks? and admiral mullen, quite honestly, said, i don't know. because it wasn't sure if we were going to come to an agreement and avoid a default. if this full package goes forward and the joint committee doesn't reach a different result and recommendation and $1 trillion of cuts are imposed on our national security defense department budget over the next ten years, whoever is chairman of the joint chiefs of staff when this goes into effect -- it'll be general different son, he'll still be there fortunately
in january of 2013 -- when they're asked, will we get paid, i believe they're still going to say, i don't know. some of you will. we may have to have a reduction in end strength, in the fu numbr of people we have protected our people. and if families of men and women in uniform ask if this total package of cut cuts go into efft on defense -- if they ask, are our loved ones in uniform going to be given the equipment to carry out the missions our country is asking of them in a way that maximizes their ability to succeed and protects them, i don't think anybody in the military can say "yes." i couldn't say "yes" if that was the case. and so i'm disappointed here. l i'll say one other thing.
the american military doesn't just protect our security and advance our ideals, as it does, and live by our ideals, as it does. but it also has a tremendous positive impact on our economy. it's the american military that is the foundation of an international system of security and stability that has undergirded, that has been the precondition of the enormous economic growth that has happened in america pands a lot of other places in the world where hundreds of millions -- probably billions of people have come out of poverty because they could rely on the safety of the sea lanes, they could rely on order in the world in places like asia and europe and throughout the world. and if america -- if the american military is cut as much, in the worst case, as this proposal would cut it, it's -- it's the beginning of the end of
america as a great international power. it's the beginning of the end of this system of international security that has undergirded our prosperity and so much of the prosperity in the world, which other nations will assume the responsibility that we have. and we benefited from it greatly, and it is a statement that we are prepared to decline as a country. i come back and say again that to get us out of the fiscal hole, we in the federal government have put this country into, everybody is going to have to give. everybody is going to have to take cuts. and that includes defense. and there's a lot that could be cut out of defense, but there's also a lot that has to be changed in entitlement spending. and there are people who are getting away with tax loopholes who ought to be paying more in taxes. everybody has got to contribute
to solve this national crisis, and right now this proposal is unfair because it asks contributions, cuts, sacrifice only from the recipients of discretionary spend, and that means while all of them should be paying should be accepting cuts, they're being asked to take cuts that are unfair and counterproductive to our security, to our liberty, to our prosperity, to our morality as a country that's always taken care of people who couldn't take care of them sessments if thes thems. so you've come to say this to my colleagues and to say, frankly, that i haven't decided how i'm going to vote on this. i understand that the proposal does prevent the default and it
does begin some process of cuts and it has this committee, which offers the most hope. but, on the other hand, i see in front of me a mechanism set up here which i think, if it goes to its conclusion will have not a net-positive effect on our future, if the committee's work is not good and accepted by congress, but a net-negative effect on america's future. i thank the chair, and i yield the floor. ms. klobuchar: mr. president? the presiding officer: the senator from minnesota. ms. klobuchar: i rise today to speak about the debt ceiling agreement that was reached last night. over the past weeks, as i'm sure you have as well, i have heard from countless minnesotans who want congress to come together and reach a compromise on the debt ceiling. they didn't want their interest rates to rise, the value of the dollar to fall, they didn't want to see their retirement savings decimated because some in washington believe that if they
refuse to compromise, the resulting crisis will score them political points. i'd like to share with you some of the comments i received from minnesotans throughout the state. judy from rochester, minnesota, wrote this: "as a senior citizen, i understand where our country is compared to where it has been in the last 50 years or so. and i appreciate the sacrifices must be made." she said, "it is almost too far back to remember when people all pulled together, including congress, to solve our issues. all the american people want is for you to represent us and make the best decisions for us using your best judgment, not prejudice or narrow viewpoints but the best judgment." paul from rochester writes, "this is not the place for political stubbornness. it is a time for our elected officials to work together for the good of the united states." louis from lakeville, minnesota, writes this:
"it's time for all you legislators to put your political affiliations aside and act as americans and do what is right for all americans, not just those voted for you. we have a tremendous fiscal mess in this country and we cannot waste time blaming each other t was jointly created and must be jointly resolved." bonnie from ossio writes this: "please put your ideologies aside and work in a collaborative effort to restructure our debt and to give the u.s.a. the opportunity to continue to prosper." marla from st. paul write, "it is so frustrating to see the same game of political budgetary chicken playing out at the national level that happened at the state level in minnesota." tom and mary from st. paul write, "if you wanted to wake us up as citizens, you certainly have. we've been told that if you allow a default, that will cost
our 401(k). if ever a situation called for compromise, this is it. raise the debt ceiling and not just for six months. reagan did it many times. but make real promises to deal with the debt and then make the real fight where it belongs: over the next budget, not paying for our current obligations. if you really want the chinese to call in all our debts now, have a phased saving plan for bringing down the debt, not a forced falls crisis. we're just hardworking americans trying to go on with our lived. we never write these kinds of messages," they wrote. "this is scary and we won't forget. get it done, please." jake from minneapolis writes this, "in these upcoming day, as you are faced with difficult decisions, i implore you to work with your colleagues on both sides of the aisle to finalize the budgetary issues facing the united states at at this time. as a husband who is supporting his wife as she attends a graduate program, i am very
concerned about what a default of united states loans would mean in regard to our finances. i am faithfully paying down student loans and my wife and i will begin to pay down the student loans that she has incurred to pay for her education as she finishes her program in may. paying off loans is never fun. it means cutting some things out of our budget. things that we like such as going out to eat or movies. and compromising on difficult decisions. i hope that as decisions are made regarding the financial situations facing the united states, you will be a person who reaches across the aisle with a willingness to compromise and make difficult decisions." marilyn from buffalo, minnesota, writes, "as an independent voter, i am asking you to compromise on the budget issue. i am also asking you to use a balanced approach to reduce the budget deficit." jay and bonnie from moorehead write this, "we would like to see a timely resolution to both
the debt limit issue and deficit reduction by means of genuine negotiation resulting in a nonpartisan compromise which will keep our country financially solvent." kim from deluth, "i am writing to add my voice to the growing number of citizens worried about washes inability or perhaps unwillingness to get done the work you were elected to do. in my opinion as a working-class men, i believe we all are expected to compromise in hopes that we can further the good worveg our nation. i fimplely believe all of america needs to be accountable to the economic disaster we have known was approaching these many long years. get the job done." while no one in this chamber feels the agreement we will soon vote on is the perfect solution, mr. president, we are in the bottom of the ninth inning. there are no extra innings here. the time has come to break through the partisan stalemate
and pass something to provide certainty so we can move our country forward. that is why i plan on voting for this agreement as it will ensure that our country does not default on our obligations, something that would have caused real pain for minnesota families and businesses while also providing a down payment on deficit reduction. unfortunately, this debate has once again shown we need to change the way congress conducts its own business. i come from county government, as you do, and i can tell you local governments don't operate this way. i've also represented businesses in the past. minnesota is home to more fortune 500 companies per capita than any other state. after fielding many calls over the past few weeks from business leaders from the biggest businesses in our state, like general mills, to the smallest one- two-, three-person
operations, they don't run their businesses the way congress has treated this issue, and there is no doubt that this is not how families balance their budget. the sooner we can come together to agree on the next stage of this package, the better for our economy and the better for our country. i believe we should look at things like closing the loopholes for oil subsidies. i believe that we should look at things like the tax cuts on the wealthiest expiring at the end of 2012. these are things that should be in the mix as we move forward. it is time to put political differences aside to work on an agenda that strengthens our economy, promotes fiscal responsibility and increases global competitiveness. if we insist on using the debate as a vehicle for rhetoric only, we will not just be doing ourselves a disservice, we will be cheating our children and grandchildren out of knowing the america that we grew up in. we already know much of what will need to be done. our failure to act has not been because we lack solutions, but
because too often congress has lacked the political will to get behind a consensus proposal. in the senate, we've had this work going on. we've had bipartisan groups of senators, including the gang of six, working together to find a solution. we now need to take that work and make sure that that is included in the consideration by this committee. it's time for us to work together to show that the american people, what they need to hear. we need to show them that washington isn't broken, that instead we're willing to put aside our partisan politics to do what we were elected to do, to do what is right for america. thank you, mr. president. i would now like to turn to another issue that i hope we can resolve before the end of this week, and that is passing an f.a.a. extension. mr. president, i rise today to speak about the urgent need to pass a federal aviation
administration extension. the federal aviation administration not only keeps our airways safe, but it also ensures that our air transportation runs effectively by overseeing grants for critical construction projects at our airports. as you know, mr. president, congress allowed the f.a.a.'s most recent extension to expire on july 22. this has resulted in a partial shutdown of the f.a.a. while the current partial shutdown of the f.a.a. is not affecting the safety of our airways, it is still having detrimental effect on our country's air service. the lack of the extension means that the f.a.a. does not have the authority to collect the fees and taxes of the aviation system needs to fund ongoing construction and improvement projects at our airport. this is approximately $200 million a week. mr. president, these fees and taxes have nothing to do with the current debt issues we have been debating over the past few
weeks. these fees and taxes go into a trust fund that is self-funded and separate from the budget that has been in the news. the trust fund pays for construction projects like a new terminal at the duluth airport in minnesota. this new terminal is critical to the duluth area. the terminal will allow more flights in and out of the airport, which is vital as more and more businesses are moving to duluth. unfortunately, the airport at this time is waiting for a $5.2 million grant that it has already been awarded from the f.a.a. for each day that the airport waits to receive its grant money, the risk gets higher that the airport will be forced to delay the terminal project for one year. now, why is that, mr. president? why can't they go through constructing things in december and january in duluth? it is pretty cold up in duluth, minnesota, and it is hard to do the construction, if not impossible, at that time. that is why it is so critically
important that we get this money in duluth immediately. such a delay won't be just inconvenient. it will cause a cost of the project to significantly increase. duluth is not the only airport suffering. construction projects are being halted throughout the country. the associated general contractors estimate that 70,000 construction workers and related fields have been affected by this shutdown. mr. president, i know there are political issues surrounding congress's inability to pass an f.a.a. extension. however, these issues have nothing to do with the construction projects like the duluth terminal, the 4,000 furloughed f.a.a. employees or the 70,000 construction workers just trying to make a living. i appreciate the bipartisan work that has gone on on my commerce committee and in this chamber with senator rockefeller from west virginia and senator kay bailey hutchison from texas. i continue to support them in their efforts to get this f.a.a.