Fiscal Policyby Senator John Cornyn
Posted on 2013-02-27
CORNYN. Madam President, I want to start with some numbers that
help put our spending budget debate in perspective.
Since President Obama became President of the United States, our gross national debt has gone up by 56 percent--56 percent. Over the next decade, unless we act responsibly, it is projected to rise by another 57 percent and reach a staggering $26.1 trillion. I don't know anyone who can actually comprehend numbers that big, but that is what it is.
By comparison, the sequester--the much-dread sequester that is supposed to go into effect on Friday--would cut only 2.4 percent out of Federal spending for this next year. It would authorize $85 billion in cuts for the current fiscal year, which, as I said, is only 2.4 percent of the total Federal budget--2.4 percent. Yet the President is now traveling around the country on Air Force One, telling us that a 2.4- percent spending cut will have a catastrophic effect on our economy and on jobs. Of course, this part is predictable: The only solution he seems to offer is raising taxes once again.
We saw in December during the debate over the fiscal cliff--and I know the American people must be getting nauseated with us lurching from one financial crisis to another, with the fiscal cliffs, sequestrations, debt ceiling, government shutdown threats. It is no wonder the American people look at Washington and wonder: Can't you guys get your act together? But the solution is not to keep on keeping on and spending money we don't have and racking up more debt and deficits, nor is the solution to continue to raise taxes on the very people we are depending upon to invest in new jobs and grow their current businesses to create jobs and opportunities for middle-class families.
Rather than the nightmare scenario the President likes to talk about, Republicans and Democrats would be happy to give the President and the administration some flexibility in how it implements these 2.4-percent cuts. Unfortunately, that doesn't seem to be what the President is looking for. He doesn't seem to want to figure out how to manage these cuts as every family and every small business in America who is left with less income coming in the front door would have to do. He doesn't seem to want to manage it; he seems to want to use this to scare people in order to grow the size of government by raising more taxes. He seems to believe that only Washington and only the Federal Government can revive strong economic growth by steadily raising our levels of taxation and spending. That is sheer fantasy. The President either doesn't realize or he doesn't care that Federal spending levels are already unsustainable. Everybody knows this. This is not a mystery to anyone who has been paying attention.
For example, a single Federal program, Medicare, which our seniors rely upon to provide them the health care they need, already has $37 trillion in unfunded liabilities; again, an astronomical number that I doubt any of us can fully comprehend. But $37 trillion in unfunded liabilities is big. America's total unfunded liabilities--this is all the promises we have made which we have no current ability to pay for-- exceed $100 trillion. Meanwhile, the national debt keeps going up. It is now roughly $16.5 trillion.
We are fortunate enough to now see interest rates that we have to pay on that debt at a historically low figure, but each additional percentage point of interest we would have to pay--if interest rates were simply to go up to their historic norms--would increase the cost of our service on that debt by trillions of dollars. Simply put, we cannot spend our way back into prosperity.
There are things the Federal Government can and should do to boost economic growth. We all understand this. The fact is the government is not what creates jobs. It is the private sector, small businesses in America, entrepreneurs, and the people who take a risk to start a new restaurant or open a hardware store. Actually, those small businesses are the ones that actually create many more jobs on a percentage basis than do the large Fortune 500 companies.
All we have to do is look around the country, and I know the Presiding Officer understands what is happening. We see some parts of the country that are growing fast and where jobs are plentiful. One of those is Texas, another one is North Dakota. There are some common elements in our story that I will talk about in a minute, but for the past 8 years ``Chief Executive'' magazine has ranked the best States in the country to do business. I would not have brought it up if it were not true, but the No. 1 State is the State of Texas. This week Forbes ranked the 10 best cities for good jobs, and half of those cities were in Texas--including Austin, Dallas, Fort Worth, Houston, and San Antonio.
Texas has nearly 32 percent more jobs today than it did in 1995--32 percent. Over the same period the total number of jobs nationwide increased by only 12 percent. I would think curious people would wonder why. Our State accounts for 8 percent of the U.S. population, but we accounted for almost one-third of all private sector jobs in high- paying industries between 2002 and 2011. Let me say that again so everyone is clear. Our State accounts for 8 percent of the national population, but we accounted for almost one-third of all private sector job growth in high-paying industries between 2002 and 2011. That is remarkable.
Some might wonder what the secret is, and thank goodness the States still are the laboratories of democracy where we can demonstrate the policies that actually work rather than trying to mandate a one-size- fits-all policy from Washington, DC, that doesn't work.
The secret in my State is that we have, for example, no State income taxes. We are a relatively low income tax State, although people still pay sales and property taxes. We have minimal and sensible regulations because we know that not only do taxes depress economic growth, we know government--either State government, local government, or Federal Government--that issues punitive regulations can actually dampen economic growth and job creation.
We also have a relatively low level of per capita government spending. People don't come to Texas because they want handouts. They come to Texas because they want an opportunity to work, to achieve, and to live their dreams and in the process creating a lot of jobs and opportunity for other people. We are also--and I know this is where the Presiding Officer can identify with this statement--unapologetic about harvesting our State's abundant oil and gas reserves. Indeed, Texas oil production increased by 94 percent between September 2008 and September 2012. Shale gas is natural gas that is produced by hydraulic fracturing and horizontal drilling. It has been around--actually fracking--for roughly 60 years now. When done properly, it is safe and does not damage the water supply. The shale gas now available due to horizontal drilling and hydraulic fracturing has produced a shale gas revolution in this country.
The truth is that if we get out of the way and sensibly regulate this industry, open the Keystone XL Pipeline--which the President could do, but he has not yet done--it would not only create thousands of new jobs, it would create the potential for North American energy independence. Imagine how that would change the geopolitics of the planet. In instances where the Iranian regime threatens to shut down the Strait of Hormuz and block 20 percent of the world's oil supply, it would not have nearly the impact because our country would be North American energy independent within a decade or so.
Well, I should also footnote the fact that down in Eagle Ford Shale-- which [[Page S890]] is south of San Antonio, and where I am from--they had some of the highest unemployment rates in our State. Much like the Bakken Shale, anybody who can get a commercial driver's license and pass a drug test can earn a lot of money. As a matter of fact, commercial truckdrivers in south Texas now can earn over $100,000 a year, and it is hard to find workers. They were suffering a shortage of workers because of the economic activity caused by natural gas exploration production.
The President should also reject misguided policies by the Federal Government that are killing jobs and threatening to put many oil and gas producers and refiners out of business. He should loosen restrictions on Federal lands and offshore drilling, and he should certainly issue more drilling permits. Expanding domestic energy production and eliminating harmful regulations would promote job creation and reduce unemployment, just as it has in my State.
In a larger sense, embracing this model would help the United States gain much of its economic competitiveness and fiscal credibility that we have recently lost. It would send a clear message that we are serious about rejuvenating our economy and reducing our long-term debt burden. Above all, embracing this model would show that Washington has discovered our founding principles of limited government, individual freedom, and personal responsibility.
I will close on this and say that I have not heard the President talk recently about 7.9-percent unemployment in this country, nor have I heard the President talk about the reduced number of people who are actually still looking for jobs. That number would be much higher because there are people who have lost their jobs and are still actively seeking jobs. Notwithstanding that, we know from the Congressional Budget Office that the unemployment rate will actually get worse by the end of the year. This is very urgent. It is not just about statistics; it is not just about numbers; it is about people who are hurting because they are out of work and unable to provide for their families.
One would think this would be a cause we could all come together on and address to the best of our ability using some of the powerful examples in States such as North Dakota and Texas.
I yield the floor, and suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
The PRESIDING OFFICER. The Senator from South Dakota.