The Budget

Floor Speech

Mr. THUNE. Mr. President, today we are going to vote on last year's unfinished business. We are going to vote on a continuing resolution that will fund the government through this fiscal year, which ends on September 30. The proposal we have before us in order to fund the government through the end of the fiscal year certainly is not perfect. In fact, there are many--myself included--who would like to see it make deeper reductions in spending. That said, we will be voting on a proposal that will cut spending by around $40 billion this year, and when you look at baseline spending over the next decade actually saves over $300 billion over the 10-year period.

What strikes me about that is that it will be the first time in a long time that we have done something about reducing spending. That is not something routinely or traditionally done here. In fact, we are going to reverse a trend that began a long time ago but accelerated a couple years ago when nonnational security discretionary spending increased by almost 25 percent in the last 2 years.

This is an important first step. Granted, it is a first step, and in a minute, I am going to get to the bigger issue, but it is critical that we send a message and signal to the American people that we have heard their voices loudly and clearly and we get what they want us to do; that is, to get spending under control, shrink the size of the Federal Government, to get it to live within its means, and to quit spending money that we do not have in Washington. That is something that has been happening here for a long time. It has taken on a whole new dimension in the last couple of years.

As we talk about the unfinished business of last year, trying to get a measure in place that will fund the government through the end of the year, that will reduce spending by about $40 billion, we are talking about the smaller part of overall spending when we look at the macroeconomic view or pull back to what some would say to the 30,000-ft. view and look at spending over the next decade. In fact, we had someone testify in the Finance Committee yesterday, the former Comptroller General David Walker. He put it well when he said talking about funding in the continuing resolution is like arguing about the bar tab on the Titanic. We are on a sinking ship, and we need to do everything we can in the short term, getting maximum amount of spending reduction, but then we need to pivot and start talking about the next big battle, and that is the battle over the 2012 budget.

Ironically, we are just now getting to the 112th Congress's business because we are wrapping up the business of the 111th Congress. The Democratic leadership here didn't pass a budget last year or a single appropriations bill. As a consequence, we are voting here now on a continuing resolution to do last year's business to get us through the end of this fiscal year before we can start the work of the 2012 budget, which is where I think the big debate will begin about how we get this country back on a more reasonable fiscal path.

We have seen a couple of developments here in the last 2 weeks or so that bear on that debate. One is last week, when we had the introduction by the House Republicans of a budget plan, a 10-year budget plan that was very aggressive in trying to take on the issue of spending and debt, very aggressive in trying to put progrowth policies in place that would help grow the economy and create jobs and that gets our economy back on track in this country. That was kind of the big discussion last week.

The President, I believe, felt left out of that discussion, so yesterday he decided to make a speech in which he would lay out his vision for the next decade and how we address the big challenges this country needs to tackle. I would describe that speech as a do-over because the President's first trip to the plate was really his budget, which he submitted a couple of months ago. That budget was conspicuously bereft of any effort to address the really big challenges facing the country. It didn't talk about how we are going to reform entitlements, didn't address tax reform, and it actually increased spending--increased taxes and increased the debt dramatically over the next decade. It nearly doubled the gross debt from $13 trillion or $14 trillion to over $26 trillion, and that is using I think pretty optimistic economic assumptions.

That being said, because the President didn't address any of the big issues in his budget and because the House Republicans put a proposal forward last week which would, I think he felt as if he needed to get in the game. So yesterday he made a stridently partisan speech in which he tried to put forth a plan. I would argue that speech yesterday was very long on politics and very short on substance. There wasn't a lot in there to really sink your teeth into if you are someone who believes seriously that we need to make reforms in entitlement programs. There was the usual prescription for dealing with the deficit and the debt, which consisted of increasing taxes. There are tax increases in here, tax increases in the President's proposal on small businesses--the job creators in our economy.

I would point out to my colleagues that half of all small business income is taxed at the individual level because many small businesses allow the income from that business to flow through to their individual tax return. In fact, the number of small businesses that would be impacted by his proposal employ about 35 million people in our economy. So you are talking about raising taxes on the job creators, on the people who really are employing people across this country, and that was a key element in the President's prescription for dealing with the fiscal crisis this country faces.

Another element of the President's plan was relying on this proposal that was part of the health care reform bill to squeeze provider payments under Medicare to try to wring a little more out of Medicare. He relies on an independent payment advisory board which would be empowered to go ahead and make reductions, to make cuts in provider payments. What is interesting about that is the health care reform bill last year did make some significant cuts to providers, not to reform Medicare but to create the new health care entitlement program, which, when it is fully implemented, will cost $2.5 trillion. So that is what the President used--any savings that were achieved in Medicare last year. So when he talks about now using this independent payment advisory board to make further reductions in provider payments, it is relying on the same old tried-and-true formula. I say tried and true, but it is actually a tried-and-failed formula that has been in place before.

There is no reform in this proposal. There is nothing new or innovative that says: Let's figure out a way to solve this Nation's fiscal problems, something that actually gets at the heart of the problem and doesn't use the same old failed prescriptions that have been used in the past.

I frankly don't know what is going to happen. If you continue to cut payments to physicians and to hospitals, you will find fewer and fewer medical providers who are going to serve Medicare and Medicaid patients in this country. It is as simple as that. When you lose a little on each transaction, on each customer or each patient you serve, you have to cost shift and make up for it by shifting more of the cost over to private payers, which continues to drive health care costs for everybody who is not receiving their health care from some government program even higher and higher. So there wasn't anything in there that I would suggest really gets at this problem.

Also conspicuously absent from that speech was anything to do with reforming Social Security. We all know Social Security is also a program which ran a deficit last year. It looks as if it will be in the black this year but next year it starts running deficits and runs them well into the future. We have to make that program solvent, not just for the senior citizens who are benefiting from it today, those who are nearing retirement age, but for the next generation. The President decided to punt on that subject as well.

So, as I said, the speech yesterday was long on politics, short on substance, and short on a meaningful discussion about how we get at and address and fix these enormous fiscal challenges we face.

The other thing the President does is he uses a 12-year timeframe. We normally operate here on a 10-year budget window. That is what the House and the Senate do. It is typically what the White House does when it submits a budget to Congress. So he stretched that out to 12 years, perhaps maybe to lessen the impact of some of the few reductions he does make in his budget, but nevertheless it is a very different schedule, in terms of the proposal he makes, relative to the one that came forth last week from the House Republicans.

The reason this whole debate is important is because we continue to spend and spend as if there is no tomorrow, and it is money we just flat don't have. This year, we will take in $2.2 trillion, spend $3.7 or $3.8 trillion, and we are going to run a $1.6 trillion deficit. I have said this before on the floor, but it is now 1:20 in the afternoon today, and by tomorrow, Friday, at 1:20 in the afternoon, we will have added over $4 billion to the Federal debt. That is the rate at which the spending and debt problem is going today. We cannot continue on this path.

Some people would argue--the President and some of our colleagues on the Democratic side--that the way you fix this is ``have a balanced approach'' that raises taxes, that there has to be a tax increase as a part of this. I don't think the American people ought to have their taxes raised until we demonstrate a willingness to get at the heart of the problem.

The problem here in Washington is not a revenue problem, it is a spending problem. The numbers bear that out. If you look at the last 40 years of American history, the average amount we spend on the Federal Government as a percentage of our total economy is 20.6 percent. A little over one-fifth of our entire economic output is spending by the Federal Government. This year we will spend over 25 percent of our total economy on the Federal Government. So we have seen the Federal Government, in relation to our total economy, grow by about 20 percent over the historical average just in the last couple of years. In the last 2 years of this administration, we have added almost $3.5 trillion to the Federal debt.

As I said before, spending increased--non-national security, discretionary spending increased in the last 2 years by almost 25 percent at a time when inflation in the overall economy was only growing at 2 percent. So you have the Federal Government spending at somewhere on the order of 10 times or more than 10 times the rate of inflation. You can't defend or justify that to the American people.

The American people have a right to know we are serious about getting spending under control, as evidenced by the report of the Government Accountability Office a few weeks back where they looked at about one-third of the overall government to determine where there was duplication and where there was wasteful spending. They came up with a number of conclusions in that report, one of which was that there are 82 programs--82 programs--at the Federal Government that deal with teacher training spread across 20 agencies or so of the Federal Government.

Can you believe this--56 programs that teach financial literacy. Imagine Washington, DC, lecturing or instructing anybody around this country about financial literacy, of all things, but there are 56 programs spread across 10 different agencies or departments of government that deal with financial literacy. I mean, the American people have to be thinking, get serious.

This is the kind of thing that outrages and frustrates the American people. That is why I think they want us to singularly focus on reducing spending and getting this debt under control not by raising their taxes in the middle of an economic downturn, particularly taxes on our small businesses that will create the jobs to get the economy back on track but by reducing spending. That is where this debate ought to be centered. Regrettably, as I said, the President, in his speech yesterday, immediately latched on to the idea that we need to raise taxes on our small businesses, on our job creators.

Well, we are going to have the chance, after the vote today on the continuing resolution--assuming that it passes--and then wrapping up last year's unfinished business, to shift to this debate about the debt limit. The debt limit will be the next major issue coming along that will present an opportunity for both Republicans and Democrats to engage in a debate about how to solve this country's fiscal problems, starting with measures we put in place that put caps on spending.

We have to get spending under control, and then we will have a debate about the 2012 budget. It is unclear to me at this point whether the Senate will do a budget at all. The House of Representatives clearly will. They passed it out of their Budget Committee, and they are going to vote on it today. They are going to put forward a plan that does reduce spending by over $6 trillion over the next 10 years, that brings reforms to our Tax Code, that lowers marginal income tax rates on our businesses and our individuals, and that hopefully will create economic growth and development out there and create jobs.

It is a budget that changes the way we look at some of these traditional entitlement programs, insulating and protecting everybody who is over the age of 55. And that is the ironic thing about it, because our colleagues on the other side get up and immediately attack this proposal as cutting benefits to senior citizens. The House plan that was put forward does not impact anybody over the age of 55. So if you are retired today and drawing Medicare benefits or if you are nearing retirement age, under this particular proposal, you are unaffected. It would affect those younger than 55 who are beginning to look at the retirement years and wondering whether any of these programs are even going to be around for them. We can make those programs sustainable and viable for younger Americans who are willing to look at these things in a new way. The House budget does that.

It makes reforms that put the patient back in charge, the consumer back in charge, that I think draws on the great impulses of tradition in this country--competition, choice, allowing people to have more opportunity and more flexibility to choose a plan that works for them.

It seems, at least to me, that we have to get to a new model because the current model clearly doesn't work. It is an example of government spending that, if it perpetuates, has a $38 trillion unfunded liability in Medicare alone and has further unfunded liabilities in Social Security.

We have a major problem in this country, and it needs to be addressed. It starts with the debate on the debt limit and then hopefully on the 2012 budget. I am glad to see the President finally having a proposal out there and engaging in this debate. Unfortunately, his vision is the wrong vision for the future of this country. But it is high time the American people saw us have this debate, take these issues on, and let's hope we can come together behind a proposal that will reduce spending, reduce debt, and put us more on a fiscal footing that is good for future generations and that gets this economy going and creates jobs.

Mr. President, I yield the floor, and I suggest the absence of a quorum.

BREAK IN TRANSCRIPT

Source