The Standing Rules of the Senate are drafted to encourage vigorous public debate on our nation’s most important issues. Indeed, the U.S. Senate is often referred to as “the world’s greatest deliberative body.” The Rules allow any Senator to seek recognition from the Chair at any time and, absent a temporary agreement to the contrary, to speak without interruption so long as he or she wishes. Debating important questions before the Senate is one way a Senator can highlight an issue, advocate for a change in policy, or voice his or her opinion on pending legislation.
Senate debate occurs in public, and is televised on CSPAN and transcribed in the Congressional Record. For your convenience, I post transcripts of my Senate floor speeches on this site for your review. I hope you find them informative and useful. My web site also makes available information on my voting record and legislation that I have sponsored in the Senate.
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Sen. Sessions Speaks on the Economy
I thank my colleague for raising it.
Madam President, all of us realize our country faces a fiscal crisis. Unless we take action, we are going to see dramatic damage to our economy in the years to come. With the retirement of the baby boome rs, our current spending levels on Social Security, Medicare, and Medicaid in particular are simply unsustainable.
Absent reform, the Social Security trust fund is expected to be exhausted by 2041, the Medicare Part A trust fund will be exhausted in 2019--only 11 years from now--and the cost of these Federal programs will actually exceed the current budget. The resulting deficits will be so large that many predict the Government will not be able to borrow its way out of the problem. So we do need to take some steps now.
Some may think these grim predictions, these projections are not accurate. Maybe things are not as bad as some are projecting. But I do not think anybody can doubt we are moving to a period of time when our ability to fund the entitlement programs, plus our general expenditures, will be beyond our capacity--really beyond our capacity. It becomes more difficult each year we delay in getting there.
Next week we will be marking up, in the Budget Committee, this year's budget. I have serv ed on the Budget Committee for a number of years. Last year, we had a budget, and it was a bit discouraging. We have had discouraging budgets for some years, frankly.
I want to make some remarks to clarify what I think is a problem. Some would say it is partisan, but I think we might as well talk about it because, prior to the last election, our Democratic colleagues vigorously attacked the Republicans for not fixing our fiscal situation. They said: You are in the majority. There was, in truth, much mer it to those criticisms. I do not think the Republican majority did a very good job, and people were not happy about it. It was a factor in the last election.
In fact, in the last election, 2006, when my Democratic colleagues were promising to do better--and they achieved a majority in both Houses of Congress--the polling data showed the Democratic Members of Congress were believed to be better able than Republicans to confront this deficit problem we were facing. So it was a factor, I think, in the last e lection.
I note that over the last several years substantial progress was made about the deficit. We do not need to be too negative here. The deficit fell from $413 billion in 2004 to $162 billion last year. That is more than half--well more than half--that we reduced it. I, frankly, was very hopeful that if we could continue to contain the growth in spending we would see that deficit continue to fall.
But two things have happened that, frankly, make this a difficult year. First, the Congress voted fo r a $170 billion stimulus package to send everybody checks and other things--$170 billion. Last year, our deficit was just $162 billion. This year we added on top of all of our spending another $170 billion.
Since we were already in deficit, where did we get the money to pay the $170 billion? Nobody disputes it: Every single dollar of the $170 billion proposed is paid for by more debt. It is borrowed. It is going to be a debt we will carry and our grandchildren will carry, frankly. And we will pay intere st on it. So this year's budget is going to look bad, and it is going to be difficult because we have another $170 billion, and that is more than the deficit of all of last year.
Secondly, we still have very considerable expenses related to the war on terrorism. That hurts. But that was included in last year's deficit.
The next thing--that is troubling for us all--is the economic slowdown. We tax the American people pretty heavily--frankly, more than I like to see them taxed. We tax upper income people with even higher marginal tax rates than we tax lower income people.
When the economy is doing well--and somebody should do a better study about this, I think, than has been done to date--when the economy is doing well, upper income people tend to do very well. So their business--maybe they own 10 or 12 of this or that outlets in some city. The economy is booming. The CEO, the owner, makes $300,000 a year, and he pays that 35-percent marginal income tax rate to the Federal Government.
Now, if the econ omy slows down, instead of making $300,000, he makes $100,000. It looks like a lot of money, but it certainly will not benefit the U.S. Treasury nearly as much because the marginal rate on $100,000 will be lower than 35 percent. And he will only be paying on $100,000.
So I say, we have created a tax system that has tied itself to a growing economy, and we are not in a growing economy this year. It looks like the economy is going to slow down, and it is troubling. So we cannot project the same level of r evenue to the U.S. Government that we had the last several years, which had been surging. It was 13 percent, 11 percent, 10 percent the last 3 years in growth. So we are facing a difficult issue.
My Democratic colleagues, during this past election, promised to cut spending and do better than those who had been in power. My very fine colleague Senator Conrad--who I think, if he had more support among his majority colleagues, would be able to do more than he is doing--said these things last year. This is the chairman of the Budget Committee:
So for those of us who are concerned about spending, sign me up.
On ``60 Minutes'':
We need to be tough on spending.
I think most of it is going to have to be on the spending side of the equation, given the magnitude of the baby boom generation.
I think we should sharply inhibit the growth of spending.
Well, those were some promises that were made last year. They have also promised and made a big to-do about the tax gap.
Now, the debate over the tax gap was simply this: Well, we don't want to promote in our first budget--last year, that was the first Democratic budget--a tax increase, so what we will do is we will use the same current tax rates, and what we will do is collect more and get those people who are cheating. We had reports from the IRS that said that was not going to work. We had experienced Senators, such as Senator Grassley, former chairman of the Finance Committee, who said: That is not going to work. Senator Gregg, former chairman of the Budget Committee, and now ranking Republican on that committee, said: It is not going to work.
Oh, but they used that argument. When the budget was passed, this extra income they projected would be received into the Treasury as a result of enhanced enforcement by the IRS, t hat that was going to help them, allow them to spend more money and not increase the debt. OK. That was the debate we had last year when we passed a budget: a commitment they would raise more money by collecting from those who are not paying as much as they are supposed to pay. It did not happen. I will talk about that in a minute.
But I want to say this: A budget is a defining document for a political party. It is organized 51-49 with a Democratic majority here. We passed a Budget Act a number of yea rs ago--because we could not pass budgets because of filibusters--to eliminate the filibusters during budget debates. You can pass a budget with a majority vote. So the majority party, as the Republicans could do in the past, was able to pass a budget without support from the other party. Anybody who is in a majority in the Senate ought to be able to pass a budget. It also is a document that says something about the priorities and the direction that the majority wants to see the country go: how they are going to get there. It is a very important, defining document.
Senator Gregg, last year, was very eloquent. He is such an experienced and wise Senator, who watches this carefully. He has studied these issues carefully. He predicted their budget was not going to add up last year when we passed that budget. But they insisted that it would work, as it was passed, and history now can tell us what happened. Looking back, it is clear--even in a period of good economic growth last year--the promises that were ma de were not kept. They told us they would cut the existing spending or reduce the
rate of increase in spending. Yet last year the majority attempted to add $23 billion to President Bush's discretionary spending request, which already reflected a $60 billion increase.
So President Bush's budget had a $60 billion increase in discretionary spending. This excludes Social Security, Medicare, and the military--or the war supplementals. It excludes those entitlement programs. He proposed $60 billion in i ncreases. Our colleagues passed a budget in the Senate that was a $23 billion increase above that.
Contrary to cutting spending, I would suggest my colleagues did not fulfill their promises, but actually proposed a budget that increased spending 50 percent more almost--40 percent-plus more than President Bush proposed. Over a 5-year period, that budget would have hiked nondefense discretionary spending by $205 billion. But we did have somewhat of a battle last year, and as the great omnibus bill came thr ough at the end of the year--that monstrosity--President Bush threatened a veto, and he forced a cut in spending. Republicans in the Congress backed him up on that veto threat, and that was achieved at the end.
It appeared that we had a spending program that was more akin to President Bush's $60 billion increase than to an $83 billion increase as propose d by my Democratic colleagues. But it wasn't all that good, frankly, because, as has been the case for decades, there are other options to get around the budget--gimmicks and devices. By abusing the emergency spending designation last year, the majority party was able to spend an additional $24 billion anyway, by calling it an emergency.
If we have a budget and we agree to commit to that budget and legislation is proposed that goes above that budget, it is subject to a point of order, and you have to hav e 60 votes at least before you can spend it. But if you can get enough votes, if you can get 60 votes, you can just declare something an emergency, and you can put the money in the emergency spending with 60 votes, and it doesn't count against the budget because you have declared it an emergency. So that is on top of the deficit budget we have.
Also, there were great promises that any new spending programs would be offset. This is the pay-go rule. How do you offset a new spending program? You can cut sp ending somewhere else or you can increase taxes. That is the only way to do it under pay-go. But our colleagues have often--this pay-go rule that had been so much ballyhooed here by our colleagues--they either ignored it or gimmicked the pay-go rules last year. Such gimmickry resulted in $143 billion in deficit spending.
For example, let's look at the SCHIP reauthorization. I hope my colleagues will just think about this. I take no pleasure in this. I have seen Republicans do this too. But this is really a blatant example. The bill we passed last year increased funding for SCHIP, the insurance for children, increased spending over 5 years by $35 billion. But in fiscal year 2013, that spending level was decreased by 85 percent. Now, I ask my colleagues: Why? Why would we dramatically increase funding for the SCHIP program and then in an outyear--2013--slash it by 85 percent? The reason is they score the cost of it over 5 years. So for 4 years we would have a dramatic increase, and in the fifth year they make a dramatic 85-percent reduction. The question is, Why was that done? So it would fit within the score, the 5-year score. But what is really going to happen? Does anybody in this Senate think that in 2013 we are going to cut the children's insurance program by 85 percent? Of course not. This is a gimmick. It was a gimmick to make it fit within the budget, to appear not to be in violation of the pay-go rule when, in fact, we know we couldn't possibly reduce that program by 85 percent.
Not only does the pay -go rule fail to control spending, it will put us on an almost guaranteed path to large tax increases. Under the Democratic budget that passed last year, any existing tax cut, any existing lower tax rate that expires sometime in the future would be allowed to expire--for our colleagues, to continue those current levels of taxes, to continue them at a lower rate is considered a tax cut. So to extend the dividend cuts, extend the capital gains cuts, extend the lower rates for lower income workers, it amounts t o, under their definition, a tax cut. It takes 60 votes under this pay-go rule to pass a tax cut. President Clinton said he opposes these tax cuts that President Bush passed, and I think that represents the majority view of my colleagues, so we are looking at a period of time that we could see additional increases in taxes, and to keep them at the current rate, they will score it as a tax cut. We will either pay for it under this definition by reducing spending or increasing taxes somewhere else. We are not going to reduce spending because we have already seen the majority party has proposed a budget that spends more than President Bush proposed, and he proposed an increase in spending.
It is sort of a perverse little deal. Under this pay-go rule, my colleagues assume that spending will go up each year, so that doesn't have to be offset. It goes up at a certain rate, but they say if you extend the current tax rates, that is a tax cut. It provides an incentive and an advancement of spending and a detriment to tax reductions.
Now, with regard to the tax gap, it would be pretty humorous, frankly, if it weren't so serious. Their proposals on this tax gap, this idea that they are going to raise more taxes by having the IRS increase collections, was one of the wildest political chimeras this Senate has seen in quite a number of years. As I have indicated, senior Senators such as Senator Grassley and Senator Gregg pointed out how it was not going to work, and they cited the IRS and other things that showed it, but we passed it anyway. We scored the budget on the assumption the money would come in. It was going to raise $300 billion over 5 years, just in enhanced collections. So we assumed we were going to enhance tax collections by $300 billion over the next 5 years last year when we passed this Democratic budget. But we see now, from the best estimates we have for the effort of closing the tax gap, it is not going to raise $300 billion, it will raise $200 million over 5 years, $40 million a year--hardl y enough to impact the overall deficit situation we are in at all. The House has recently passed legislation that actually is going to widen the tax gap, unfortunately.
Our colleagues promised to enact middle-class tax relief, but that has not been done. There has been no action to extend the marriage penalty relief we have today, the $1,000-per-child tax credit we have, the 10-percent tax break credit--the 10-percent tax bracket for low-income workers, or any kind of estate tax reform. So we have had th at talk, but we haven't passed it, and we are heading to the point where we are going to have a pay-go problem to even extend these current rates, and they are going to score that as a tax cut and demand to know where we are going to get the money from. The capital gains reduction that virtually every economist agrees results in increased revenues to the Government from capital gains taxes
will expire in 2010. The 10-percent tax bracket--the low 10-percent tax bracket that didn't previously exist but was created as a result of President Bush's tax cuts would expire, and it would go back to 15 percent for lower income individuals. Setting a dividend rate at 15 percent will end; it will go back to the marginal rate for many people of over 30 percent. Does anybody think that is going to help the stock market to increase--double--the rate for dividend taxes yo u have to pay? So the best scores we have are that we are heading toward a $900 billion tax increase that will impact directly--and everybody indirectly--116 million taxpayers.
What about entitlements? The majority party talked about doing something about entitlements. I think Senator Conrad truly believes we should do something about it. He has worked hard at it, but he has never gotten the support on his side of the aisle to ever make a dent in it. We have to think about entitlement spending.
A t this point in time, entitlement spending--Social Security, Medicare, Medicaid--exceeds half of our budget, half of what we spend. That number is growing. Some have it up to 100 percent of the current budget level in a number of decades unless something were to change. At least President Bush consistently has offered programs to improve and contain the growth in these programs. He talked about Social Security reform, and the door was slammed shut. My colleagues wouldn't even discuss it. He has talked about Medicare and Medicaid. Nobody would talk about that last year. It was absolutely not a part of last year's budget.
So I think this is irresponsible. If we are heading on a glidepath that takes us to trillions and trillions of dollars in debt, driven overwhelmingly by the 6, 7, 8 percent increases annually in Medicare and Medicaid, why can't we begin to reduce that growth rate and bring it more close to the inflation rate of 2, 3 percent, maybe 4 percent, 5 percent increases each year?
Finally, I thought one of the most effective critiques of the Republican majority leadership in 2006 and the years before was we weren't passing our appropriations bills on time. They had too much pork in them. Stuff was put in them in the dead of night, and we didn't have a chance to read it and do anything about it. That was the valid criticism of the Republican majority.
What happened this past year after our colleagues won the majority, claiming they were going to do better? Did they do better? Well, we have 12 appropriations bills each year. We should enact each one of them individually. They should be brought up on the floor one-by-one. There should be an opportunity to offer amendments, and they should be voted up or down, right? No, that is not the way it goes. This past year, we had the largest omnibus bill in 20 years. The majority sent us, near Christmas, a 1,600-page omnibus package that combined into one bill 11 of the 12 appropriations bills, and then it hit this floor; there was no time to read it. We didn't know what kind of pork or policy had been added to it. We were challenged to vote for it or not. It was $555 billion. That is worse than we have had in terms of an omnibus package in 20 years.
Frankly, the majority leader, Senator Reid, has indicated that he may not even bring up the appropriations bills or we may have another great omnibus bill this year, but after the election. Well, the election is in November. The fiscal year starts October 1. It is our responsibility to have the appr opriations bills passed before the beginning of the fiscal year, October 1.
It is as if he is throwing in the towel before we even get there. Frankly, as an aside, I truly believe we would do much better if we went to a 2-year budget and 2-year appropriations, as over half of the States have. That would help us in this process because this happens ev ery year, and it is getting worse, it seems, every year.
We will soon have the new budget resolution. It will hit the committee next week. I am a member of the committee. It was a failed and unhealthy budget last year that was moved forward by our Democratic colleagues. I am afraid this one will not be much better.
I noticed that the Democratic Presidential candidates are offering a lot of new proposals. Senator Obama, who now leads, has offered 158 of them that would cost at least $312 billion in new annual spending, or $1.4 trillion over 5 years, as we tend to score those things. That doesn't include all of his proposals that are out there.
Madam President, I will conclude by telling the American people and my colleagues that next week we will begin a defining process. Next week, the majority party will offer a budget. Because of the budget rules, with 51 votes, they will be able to pass this budget. So because the Democratic majority has 51 votes, they can pass the budget they want. But we need to examine it because it will tell us and America what their priorities are, what their commitment is, how willing they are to sacrifice and make sure we have fiscal responsibility in this country.
Based on last year's budget, I am afraid it is not going to be any better. Based on the fact that Senator Reid says he doesn't expect we will finish the appropriations process until after the November elections, I don't sense any commitment to do better than the Republicans did when they had the ma jority. Certainly, this year, their performance was worse. This past year, it was worse, and it doesn't look as if it will be better in the future.
I thank the Chair for this opportunity to share my concerns. I hope we can be frank about these matters because the majority party knows it has a very serious responsibility when it submits a budget. We knew it when we had the majority. I sat on the Budget Committee. Senator Conrad and his colleagues know they have that responsibility. They also know th ey have the votes to pass this. Therefore, there can be no excuses. There is nowhere to hide. Are you going to do anything about entitlements? Are you going to guarantee tax cuts? Are you going to submit a budget that projects lower spending or one that is filled with gimmicks to hide even more spending increases? It is a big deal. We will be talking about this for some weeks. I hope our colleagues will focus on this.
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