Second Opinion

Floor Speech

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Mr. LEE. Mr. President, I stand before you today to discuss a problem that is of concern to 300 million Americans. It relates to our national debt, a debt that will soon cross the $15 trillion threshold.

We have been asked to raise the debt limit, extend the Nation's credit one more time. This we have the power to do but we have to ask ourselves the question: Should we exercise that power? Should we incur additional debt yet again without any plan moving forward to change fundamentally the way we spend money in Washington, DC?

Our current law requiring us to raise the debt limit periodically every time our existing line of credit dries up dates back to 1982. We have raised the debt limit since 1982 nearly 40 times. I fear if we do it again this time without any permanent binding plan in place, legal restrictions changing the way Congress spends money, we will be right back to the same trough a few months later. That is a problem because as we do this over time we inevitably put pressure on our financial system, pressure that will soon cause our economy dire circumstances, pressure that will in time result in excessive job losses, skyrocketing interest rates, and lots of other economic conditions that would be, to say the least, unpleasant.

It is for this reason that 100 Senators from around the country have canceled their plans they previously made to spend time with their constituents in their respective home States this week. That had been our plan, to spend time in our home States. We canceled those plans so we could come back here and have serious, earnest debate and discussion surrounding the best path forward toward moving in the direction of a balanced budget, toward figuring out what conditions, if any, would satisfy the American people who are understandably concerned about the prospect of yet another knee-jerk reflexive debt limit increase.

The American people understand the fact that if we choose to do nothing more than say: Well, if we are going to raise the debt limit by $2 trillion, let's make sure we cut $2 trillion from our anticipated spending--they understand that kind of promise is one that is not binding on the Congress if those spending cuts are stretched out over the course of 10 or 15 years or more, as has been discussed, because we here in Congress cannot bind the Congress that will be sworn into power in January of 2013 or January of 2015 or January of 2017. We cannot bind a future Congress. We can make suggestions they can follow, but we cannot bind them--unless, of course, we choose to do that, which has been done only 27 times in our Nation's history, which is, amend the Constitution. That will bind a future Congress. That, I believe, is what we have to do in order to change fundamentally the way we spend money in Washington, to make sure we are not headed back to the same trough a few months from now to do exactly the same thing, leading us closer and closer to the dire circumstances I described a few minutes ago.

While we have been here this week, convening during a week that was previously scheduled for a recess, we as a group of Senate Republicans have come together and offered a real meaningful solution. We have offered to raise the debt limit. We have introduced legislation today with 21

Republican cosponsors in the Senate which is a piece of legislation we are calling the Cut-Cap-Balance Act. Here is what it says. It says we will raise the debt limit. We will do so only under three circumstances, only after three very specific conditions precedent have been met.

The first two relate to immediate spending cuts to discretionary spending, and statutory spending caps making sure we start putting ourselves right now on a statutorily mandated glidepath toward a balanced budget.

The third step, which is by far the most important, involves passage out of both Houses of Congress by the requisite two-thirds margin a balanced budget amendment to the Constitution--one that would cap spending as a percentage of GDP, and one that would require a two-thirds supermajority in order to raise taxes. Upon each of those conditions being met, then the debt limit would be raised, but only then. We would not raise it without those conditions having been met. Because if we do not meet those conditions, we will not be able to look our constituents in the eye and say: We have done what needs to be done in order to make sure we get to where we need to be, in order to get to the point at which we will no longer be in a position of having to go back to the same trough every few months to go through the ceremony of raising the debt limit yet again.

We have to remember that every time we do this, we run an increased risk that we will start having to pay higher and higher yields on our Treasury instruments. Every time that happens, we incur more expenses that relate to our ability to remain current on our debt interest payments. Every time interest rates, yields on those debt instruments, go up by 1 percentage point, we have to spend an additional $150 billion a year in interest once our debt instruments catch up with the increased rate. That is a lot of money. That means if we were to return--let's say if interest rates were to go up 3 percent, we can soon find ourselves in a position in which we might be spending as much as $700 billion a year on interest. We are currently paying about $250 billion.

Mr. President, $700 billion a year is roughly what we spend on national defense. It is roughly what we spend on Social Security in an entire year. It is close to what we pay in Medicare and Medicaid combined at the Federal level in an entire year. So where is the difference going to come from when interest rates start to creep up? Even if they go up 3 percentage points, they would still be below their historical average. That money has to come from somewhere, and it will. It will end up coming from the various programs that Americans are most concerned about.

So whether you are a conservative, and you might be most concerned about that money coming from our defense budget or, on the other hand, if you are a liberal, and perhaps you are most concerned about it coming from entitlements, you ought to be concerned about our practice of perpetually raising the debt limit and engaging in perpetual deficit spending, especially when that deficit spending is now in excess of $1.5 trillion every single year.

This potentially threatens every Federal program out there. It also interferes with the ability of each American to find the prosperity he or she seeks, the ability of each American to live his or her life in the way he or she chooses. That is distressing. It interferes with the liberty of the individual, which is what we have been elected to protect.

I am very proud to be part of this 21-Senator coalition consisting of a group of Senators who are concerned enough about this issue that they are willing to say: We understand that we cannot just not raise the debt limit. There are enough people who are concerned enough in this country about not raising it. The abrupt halt in spending that would bring about would create enough uncertainty and chaos that many are unwilling to face that prospect.

So recognizing that reality, we have taken the bull by the horns and we are willing to do one difficult thing. In order for us to raise the debt limit, we have to be willing to set things in motion in such a way that will solve the underlying problem and will create permanent structural spending reform within the Congress.

I wish to close by responding to an argument made recently by Timothy Geithner, the Secretary of the Treasury, to the effect that we in Congress are essentially mere surplus when it comes to the debt limit increase. He argued that, as I understand it, section 4 of the 14th amendment somehow independently authorizes the executive branch--perhaps the Treasury Secretary, perhaps just the President--to somehow raise the debt limit without consulting Congress, without an act of Congress in place.

That argument is not accurate. That argument is based on an improper reading of the 14th amendment. The language to which he refers reads, in part, as follows:

The validity of the public debt of the United States, authorized by law, shall not be questioned.

Adopted in the immediate aftermath of the Civil War, this provision simply acknowledges the fact that we can't ignore our debt obligations, that when interest or principal comes due on our national debt, they have to be honored. You will notice that in the middle of it, set off by commas, is a phrase that says ``authorized by law.''

To create law in this country, you have to move something through Congress. That something has to be presented to the President for his signature or a veto. You cannot make a law in the U.S. Government without Congress. Article I, section 8, clause 2 makes that point clear by giving the authority to Congress to incur debt in the name of the United States.

So, necessarily, by definition and operation of the plain text of the Constitution, you cannot raise the debt limit without an act of Congress. If anything, section 4 of the 14th amendment simply makes clear that which I wish Secretary Geithner would acknowledge--and I hereby call upon him to acknowledge--which is that he has a legal and a moral obligation to make sure that if the debt limit is not increased, during whatever time it remains in limbo, during whatever time we face the debt limit-induced shortfall, it is his obligation to use the first tax revenues coming in the door to pay our debt obligations, pay the interest being accrued on our national debt. It is his obligation not only as a fiduciary or quasi-fiduciary but also the very provision of the Constitution, section 4 of the 14th amendment--the same provision he cites--binds his hands and requires him to make sure that interest gets paid and prohibits him from bringing about a default on our national debt, which is what he has been threatening on many occasions.

There is a way forward. The circumstances in which we now find ourselves are, to be sure, threatening, intimidating and daunting and they are circumstances that bring about substantial disagreement within this body and the other body that meets down the hall from us. But there are answers and solutions to which we can agree.

I believe the Cut-Cap-Balance Act provides the proper solution which can appeal to liberals and conservatives, Democrats and Republicans alike. I call on all within the sound of my voice to look at this legislation and jump on board and become part of the solution.

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