Debt Ceiling Extensionby Senator Benjamin L. Cardin
Posted on 2013-02-04
CARDIN. Mr. President, last week the Senate passed legislation
that had already been approved in the House that extended the debt
ceiling until late this summer. It was the right thing to do. It was
the right thing to extend the debt ceiling of our Nation because it
allows us to pay the bills we have already incurred. There is not one
dime of new spending that is authorized under the legislation we
approved. My only regret is that we did not extend it for a longer
period of time, giving greater certainty to the financial markets.
If we were ever to violate the debt ceiling, the consequences would be that the taxpayers of this country would have to pay more for the obligations of our Nation in interest costs. It would permanently damage the reputation of this Nation as far as our ability to pay our bills. It would be counterproductive to everything we are trying to do to help the taxpayers of America. It was the right thing for us to do, to extend the debt ceiling, but we still have a lot more work we need to do.
Our current accumulation of debt is not sustainable. We cannot continue to spend what we are spending today and collect what we are collecting today in revenue and sustain the fiscal integrity of the United States. We spend too much and we do not bring in enough revenue. That is the issue we need to address. It was not addressed in the debt ceiling. The debt ceiling should have been extended. But we now need to deal with the fundamental problem that our spending and revenues are not in line.
We could talk about the cause of how we got here. We could talk about how the Congress reduced tax revenues while we were at war, a policy I spoke out against and voted against. But our responsibility is to figure out how we go from where we are today, with budget deficits that are not sustainable, to how we can bring our country into better fiscal balance. We need a balanced approach. We need an approach that looks at spending, looks at revenues, that acknowledges that job growth is, first and foremost, our objective. We have to create more jobs in our economy--more people working, less people needing governmental services, more people paying tax revenues; all that helps generate the growth in our economy.
We have to protect the middle class. The middle class has been particularly vulnerable during this slowdown in our economy from which we are now recovering. It has to be real, what we come up with. That means it really does deal with the deficit problems of this country and should be long term. I think all of us are tired of these short-term extensions. They may avoid an immediate problem but they do not give the type of predictability that is necessary for our economy to take off and grow.
If you are an investor, it is tough to invest if you do not know the ground rules, if you do not know what the Tax Code is going to look like, what the Federal budget is going to look like. How do you invest in expanding a plant to deal with expanded Federal needs when you don't know what the budget is going to be? How do you deal with the Tax Code if maybe you want to develop an energy company when you do not know what the tax provisions are going to be for that operation? We need to give predictability. Therefore, long-term solutions are better.
And it needs to be truly bipartisan. I was here on New Year's Eve at midnight. I saw the Democrats and Republicans come together in a true compromise that I think put the Nation's interests first rather than our partisan interests. I would have wished to see us do things a lot differently than in that agreement, but it was bipartisan, we compromised, we listened, and did it in the best traditions of the Congress.
I wish to take us back 2 years ago when we started to struggle with how we would deal with our fiscal problems. President Obama appointed the Simpson-Bowles Commission, and we know a lot about that. They made their recommendations. Some of the recommendations' specifics were pretty controversial, but I think as to the overall framework of the Simpson-Bowles recommendations--the amount of additional revenue we need to bring in, the types and parameters of the spending cuts--I think there was general national agreement that that was the framework which would allow us to move forward in the best interests of our economy. I point out in the last Congress the Democrats on the Senate Budget Committee adopted that approach as our framework to move forward. I think that is what we need to look at.
Let me make a couple of points, because I have listened to a lot of my colleagues come to the floor and talk about how we have not made progress, that our deficits are too large. We have made progress. We have. We have gotten about halfway there. Simpson-Bowles was somewhere between $4 and $5 trillion of deficit reduction over a 10-year period. We are about halfway there. We have about $2.5 trillion we have gotten done. We got that done because we passed the Budget Control Act, and the Budget Control Act put in lower caps on discretionary spending on the domestic side. That is now the law of the land. Over $1 trillion of deficit reduction was accomplished because of the Budget Control Act.
We did another $1 trillion of deficit reduction on New Year's Eve, the fiscal cliff agreements that brought in more revenue by making permanent the 39.6-percent tax rate for high-income taxpayers and bringing in some additional spending cuts. That is real.
My colleagues say we still have these large deficits and they are larger than they were before, but if we did not do the Budget Control Act and we did not do the fiscal cliff agreements, the deficit would be much higher. Again, using some common baseline, such as Simpson-Bowles did, we have done [[Page S454]] about half of what, if you agree on the framework of Simpson-Bowles, we need to do. We have to get more done; we are not there yet. The revenues of this country traditionally have been about 19 percent of our economy. That is what it was under President Clinton when we balanced the Federal budget. We actually had surpluses. Our economy was growing. There was job growth. We were moving in the right direction.
Our revenues have dipped to about 15 percent of our economy, so we are not anywhere near having as much revenue as we need in order to have a balanced approach that allows for job growth. And, yes, our spending is too high, particularly on what we call the mandatory side. We agree with that. If you look at our health care costs in this country, they are much higher than those of any other nation in the world and we do not have the health results that would demonstrate why we are spending so much more. We need a more efficient system. That is why a lot of us supported the Affordable Care Act, because we see in it delivery system reform that will make our health care system more efficient, bring down the cost of hospital care by reducing readmissions, bring down the cost of hospital care by reducing hospital infection rates, bring down the cost of high-cost interventions by dealing with people with complicated issues, multiple issues, in a much more managed way; using health technology more efficiently; using preventive care to actually reduce health care costs. We know early intervention saves lives, saves costs, and when you bring down the cost of health care you bring down the cost of Medicaid, you bring down the cost of Medicare, and you help our budget get into better balance.
We also believe we can save money in the military. The baseline for military spending assumes the high level of military operations in Afghanistan. Well, our troops are coming home. I think we can now safely assume that our Active military needs will not be at the high levels they have been over the last decade, and that will save money. I personally think we need to look at a BRAC-like process for our international military facilities, as we did for our domestic military facilities. All of that can save money.
So what do we need to do? We need to get together, Democrats and Republicans, on a balanced approach. We need to do it in the month of February because on March 1 these automatic cuts, known as sequestration, take effect. The automatic cuts were put in during the Budget Control Act as a way to get us to act. None of us wanted to see across-the-board cuts to both our domestic and our military budgets; we didn't think that made a lot of sense. After all, some programs are more important than others, and we should make the hard choices. We should not be using an across-the-board cut.
We need to come together. As I have indicated, there are areas in the spending where I hope we can come together so we can make our system more efficient, particularly on the delivery of health care. There are certain reductions we can make in the overseas contingency accounts in our military.
On the revenue side, we have brought out areas where there are loopholes and shelters in our Tax Code. We can do a better job. It is interesting that the top 1 percent of the taxpayers of this country receive 25 percent of the benefits on what is known as tax expenditures. I heard my colleagues come to the floor and talk about how we have to bring down the cost of spending. Well, yes, we do spend through appropriations bills, but we also spend through tax expenditures, which are provisions we put in the Tax Code to give breaks to some--not all--of our constituents. When we add up all those tax expenditures, it comes to $1.2 trillion a year. That is what the tax expenditures come to. That is larger than our entire discretionary spending. We are spending more through the Tax Code than we are through appropriations bills. We can certainly find some savings in those tax expenditures, and we can use that in a balanced approach to be able to avoid the across-the-board cuts and get our budget back into better balance. That is where we need to move as a Congress and as a nation.
It is important for us to take timely action. Let me underscore that. We need to act in February. We don't want to go through the uncertainty of what sequestration means. I have talked to a lot of businesspeople who depend on Federal contracts. Will that contract be let? They don't know. We need to give predictability so that our economy can take off.
I hope we all put our Nation's fiscal interests ahead of any of our partisan objectives, and that means listening to each other. Democrats and Republicans need to listen. My colleagues on the Republican side of the aisle have made some good points in regard to mandatory spending. My colleagues on the Democratic side of the aisle have made some very valid points about the need for revenue. I hope we will listen to each other, resolve our differences, and put a proposal forward that brings our Nation back to a stable fiscal future, which will allow us to create the types of jobs we need by investment and fiscal prudence so our economy can continue to lead the world. We need to act in a responsible, balanced, bipartisan, and timely way.
With that, I yield the floor.
The PRESIDING OFFICER. The Senator from Maine.