The Debt Crisisby Senator Daniel Coats
Posted on 2013-01-29
COATS. Mr. President, I have been coming to the Senate floor just
about every day that we have been in session so far this year, and I am
going to continue to do so to talk about what I believe is our most
pressing crisis that this body faces and that our country faces; that
is, the uncontrolled runaway Federal spending and accumulated debt and
how it is dragging our economy down and how it threatens to provoke a
major economic disaster if it is not addressed.
In previous remarks I have made on this floor, I tried to make the point that if we fail to get Federal spending under control in the short term, our economy will continue to remain in the doldrums because of this cloud of economic uncertainty that hangs over investors, businesspeople, and consumers. But I don't want my colleagues to just take my word for it. A host of experts, commentators, businesspeople, and investors around the country--and, frankly, around the world-- people from both sides of the political spectrum have been and will continue to make this same point.
The message is this: Unless Washington stops punting this problem and begins to demonstrate the will to cut spending in serious ways to reduce our long-term debt, the economy will continue to limp along; investors will continue to remain on the sidelines; business owners will continue not to hire new employees; and, we will hasten the day when investors lose confidence in the United States as a worthy credit risk.
I know the market has responded in a favorable way recently. I hope that continues. But the fundamentals underlying our current economy don't justify that continuing far into the future.
So today I would like to quote from what others are saying, not just what a Senator from Indiana believes and has been saying on this floor. I want to talk about what they are saying about our debt and spending crisis.
First, I believe we can all--or most of us can--agree with this fact: that the first and the most essential function of the U.S. Government is to defend and protect its citizens from threats to their national security. As our national debt continues to rise unrestrained, we are putting our children's future and our country's future in a very vulnerable state.
Perhaps the most dire and frightening warning has come from one of our Nation's highest ranking officials, former Chairman of the Joint Chiefs of Staff, Admiral Mike Mullen, who said: The continually increasing debt is the biggest threat we have to our national security.
Not al-Qaida, not suicide bombers, not Islamic fundamentalists. According to the former Chairman of the Joint Chiefs, someone who has made a career leading our country through tumultuous battles of war, the largest threat to our national security is our very own red ink.
Erskine Bowles, former White House Chief of Staff to President Bill Clinton, also recognizes the imperative need to address our spending and debt crisis. As we all know, Bowles was tapped by President Obama to lead a bipartisan deficit commission with former Republican Senator Alan Simpson. The two [[Page S340]] men, along with the commission, proposed recommendations for a big and bold plan to reduce our long-term debt. Rather than heed some of these recommendations and build off of this bipartisan momentum several years ago, the President ignored it completely and since has done nothing and offered no plan of his own to fix our dire fiscal plight other than to propose new taxes.
As I mentioned in previous remarks, the President got his tax increases on millionaires and billionaires, but no one should be fooled into thinking this solves our fiscal crisis. Recently, in an interview, former Chief of Staff Erskine Bowles rightfully criticized the administration and the Congress for not striking a significant budget deal and called that failure, ``The most disappointing thing in my life.'' He went on to say: They're bouncing from one crisis to another. . . . It's nuts. We have an enormous fiscal problem in this country. . . . We've got to put our big boy and big girl pants on and go to work.
He also added: . . . the problems are real, the solutions painful, and there's no easy way out.
Finally, he said: We got to do stuff that's real. I mean there's no sense in, you know, just working at the edges. . . . If we don't slow the rate of growth in healthcare programs, it's going to eat up the entire budget and virtually bankrupt the country.
The warning signs and the calls for action are coming from all sectors.
From the business sector, Gary Loveman, chairman of the Business Roundtable's Health and Retirement Committee, said the following: Keeping the U.S. economy from careening over the fiscal cliff was the first step, but our elected leaders must not stop there. Although economic recovery has been stalled, renewed expansion is possible if conditions are set in a comprehensive budget agreement that includes entitlement reform and long-term changes to reduce deficits. In this way we will ensure the viability health and retirement safety net for future generations of Americans.
John Mauldin, president of Millennium Wave Advisors, an investment advisory firm, publisher of Mauldin Economics, and author of ``End Game,'' a book many of us have heard about and read, said this: The real issue is the deficit. The leaders of both parties recognize that the current path spelled out on our fiscal balance sheet is unsustainable. The deficit must be brought under control . . . or we will find ourselves all too soon in the situation now facing much of Europe and Japan. The options at that point become far more dire.
Business owners in my home State of Indiana also recognize these dangers. Reflecting the sentiment of virtually every businessperson I have talked to over the past 2 years, Rick Zehr, a business owner in Fort Wayne, IN, said: We all need to manage our income and not borrow beyond what we can afford. I look at our country's deficit spending and it's so far beyond what the rest of us have to live like every day. As a business owner, it makes me nervous. Everyone is paying for deficit spending.
Economists are sounding the alarm as well. Kenneth Rogoff, a respected Harvard economist, said: The idea that one should just ignore all these problems and apply crude Keynesian stimulus is a dangerous one. It matters a great deal how the government taxes and spends, not just how much. The U.S. debt level is a constraint. A growing number of empirical studies, including my own joint work with Carmen Reinhart, suggests that the U.S. has already reached a debt level that has been associated with slower growth in advanced countries.
Our own Treasury Department and some credit rating agencies have also weighed in. These warnings alone should be enough to urge Congress and the administration to act.
According to the U.S. Treasury Department's Financial Report of the U.S. Government for Fiscal Year 2012: While these projections are subject to considerable uncertainty, the debt-to-GDP ratio would continue to rise unsustainably under current policy.
Can I state that again? Our own U.S. Treasury report said that while these projections are subject to considerable uncertainty, the debt-to- GDP ratio will continue to rise unsustainably under current policy.
Does that not suggest to us that current policy is not working when the U.S. Treasury puts out a report saying: What the administration and Congress are doing is unsustainable? Unless we grasp the reality of what is happening with our spending and our debt, we are headed for a crisis if we are not in one already.
When Standard & Poor's downgraded the U.S. Federal Government debt in August 2011, they said: Our lowering of the rating was prompted by our view on the rising public debt and our perception of greater policymaking uncertainty.
There is that word again, ``uncertainty.'' There is that implication again: failure to take action. The time to act is now. We can no longer sit back and hope this problem is going to go away. Too many people want to just think, well, if we just sort of stumble along the way we are stumbling along, it is all going to work itself out.
We can no longer, and should no longer, accept double-digit unemployment. Yes, I said double-digit. While the official number is hovering around 8 percent, we all know millions of Americans have given up looking for work, and millions of others have dropped out of the employment lines or settled for jobs below their qualifications. The real numbers are far higher, and the distress is far greater than what is admitted.
This is not a new problem. It has been long recognized even by the President. In February 2009, 4 years ago, President Obama held a fiscal responsibility summit, and here is what he said: And that's why today I'm pledging to cut the deficit we inherited in half by the end of my first term in office. This will not be easy. It will require us to make difficult decisions and face challenges we've long neglected. But I refuse to leave our children with a debt that they cannot repay--and that means taking responsibility right now, in this administration, for getting our spending under control.
Here we are, 4 years from those remarks where the President's own budget and bipartisan deficit commission was dismissed, 4 years from the time when he pledged to the American people that he would cut the deficit in half, 4 years from the time when he said responsibility needs to be taken now.
Mr. President, I ask unanimous consent for 3 more minutes.
The PRESIDING OFFICER. Without objection, it is so ordered.