Mr. President, I ask unanimous consent that the order for the quorum call be rescinded. Mr. President, I want to speak today once again concerning the really astounding, irresponsible, unjustified…
Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.
Mr. President, I want to speak today once again concerning the really astounding, irresponsible, unjustified increases in spending we have seen in this Congress. I don't believe this Nation has ever seen anything like it in the non-defense area, and it is threatening this country's long-term financial health. So I am going to focus today on some of the appropriations bills considered in this Chamber as well as the next highway trust fund bailout, which is in the works.
I have some prepared charts, and my staff will bring those here in a minute, which will show the runup in appropriations spending we are seeing today, which is pretty much unprecedented in the history of this Congress.
Take for instance the agricultural appropriations over the past 8 years. They are dramatic. We passed that recently. Agricultural appropriations increases were 14.5 percent in this year's appropriations bill over last year's. That would double the agricultural budget in 5 years if we maintained those increases. That is a stunning number. The average increase in agriculture spending was 2.1 percent compounded over the 7-year period from 2003 to 2009. Yet we now jump up, in this time of unprecedented deficits and debt, to where we have a 14-percent increase. The 2.1-percent average we had from 2003 to 2009 was criticized by many as being excessive, but it was about the rate of inflation. As we know today, inflation is virtually nonexistent, and yet we end up with a 14-percent increase.
If you look at the Department of the Interior, those changes over the past 9 years are also dramatic. We just passed the Interior appropriations bill. Interior and EPA, the Environmental Protection Agency, have now been put together. Their increases were 16.6 percent in over the previous year in the 2010 Senate bill.
This chart just shows in graphic detail how agricultural spending has gone. I know my colleague from Nebraska believes in agriculture, and I do, too, but this is one of the few times I have not been able to support an agriculture bill. We don't have the money to increase spending 14 percent.
President Bush, they said you spent too much on agriculture. We heard that a lot, didn't we, I say to Senator Nelson. But it was pretty frugal over the years. Here we have, in 2009, a 15 percent increase, and in 2010 a 14.5 percent increase in spending. Our debt today is so much greater than what we had in those years, it makes us wonder how did we get here.
If you look at Interior, as I just mentioned, we see the same thing. The Environmental Protection Agency has not always been a part of this funding mechanism, but we worked hard to try to make sure we are comparing apples to apples, and you see less than 1 percent in 2002, 5.6, 1.6, a minus 1.3, minus 4.0, then 16 percent this year. I couldn't vote for that. I do not think our colleagues are listening to their constituents back home. They know something is going awry up here. They think we are detached from reality. Doesn't this chart suggest that they are correct?
I will just mention the Environmental Protection Agency. Their increase this year is 33 percent. That would double EPA's funding in 2 to 3 years.
Let me add, these funding levels do not count the largest appropriations bill in the history of America, which we passed in February--wait a minute. I hear my wife right now: Jeff, would you quit saying ``we'' passed, when you voted against it? The Senate passed $800 billion. If you add the stimulus funding the Interior bill agencies received, that would add another $11 billion to their spending and take it to over a 50-percent increase.
So Interior got a lot of money out of the stimulus bill. This chart is not including the stimulus spending; this is baseline spending. So next year, they will want an increase again and it will be on a much higher baseline, a 16-percent higher baseline than the previous year.
I will get to this one next, the T-HUD appropriations, as we call it around here, Transportation, Housing and Urban Development.
Since the Transportation-HUD bill has only been around for 3 years in this configuration, together, this is what we have been able to graph out for those two bills. The average of all discretionary appropriations increases for all appropriations bills that we have had, from 1995 to 2009, 15 years, averaged 5.2 percent compounded. So when you see a 23-percent increase this year in the fiscal year 2010 bill, that is over four times the 15-year average of appropriations for discretionary spending in our cup. At a 23-percent rate, spending on T- HUD would double every 3 to 4 years.
Next, let's look at Commerce-Justice-Science. Although CJS has also only been around for the past three years, we were able to reconstruct the funding levels for all agencies going back to FY2003. What we discovered was surprising. The average spending increases from 2003 to 2009 for CJS was 4.4 percent. However, this year we have a 12.3-percent increase in the baseline funding for the CJS bill. At that rate, spending in that CJS--Commerce-Justice-State spending would double every 6 years, and that doesn't include the $16.9 billion CJS accounts got from the stimulus legislation.
Finally, there is the State and Foreign Operations bill. The State and Foreign Operations has only been around together in this configuration for 3 years, and that is all we have been able to graph. However, we can once again compare it to the average of all appropriations increases for all the bills from 1995 to 2009, which I said was 5.2 percent.
So the 33-percent increase in the fiscal year 2010 State and Foreign Operations bill is over six times the 15-year average increase for discretionary spending. At a 33-percent rate, the spending would double every 2 to 3 years, at a time of unprecedented deficits.
This week, we are going to have the Legislative Branch appropriations bill, our budget. It increases spending at a 5.9-percent rate compared to fiscal year 2009. That is four times the rate of inflation excluding food and energy, which, according to the Bureau of Labor Statistics, is 1.4 percent for the last 12 months. So, excluding food and energy, we have inflation at the rate of 1.4 percent, and we are funding our own selves in the legislative branch at a 6-percent increase. If you include the cost of food and energy--and there is some good news here: inflation has gone down, actually. We are in a period of deflation. It has gone down 1.5 percent when you figure that over the entire year, including food and energy prices, which have dropped considerably from the huge gasoline prices we remember not long ago. So if you add the stimulus and the supplemental funds from fiscal year 2009 to fiscal year 2010 instead, you come up with an 8.2-percent increase.
So what is wrong with spending 23.2 percent or 16 percent more on these bills than last year, or on the average? The simplest way to put it is, we don't have the money. We are going to have to borrow money to do this spending. We borrow the money. It is not free money. We don't have the power just to spend money. When we go into debt, we borrow the money, and people buy Treasury bills and notes, and we use that money to pay the debt, the shortfall between what we spend and what we take in in taxes. We are going to have to borrow money from a lot of people, but China is our biggest loaner of money. Other countries lend as well.
Shortly after President Obama's inauguration, he released a budget entitled ``A New Era of Responsibility.'' Here are some quotes from his passage in that document:
Therefore, while our Budget will run deficits, we must
begin the process of making the tough choices necessary to
restore fiscal discipline, cut the deficit in half by the end
of my first term in office, and put our Nation on sound
fiscal footing.
That is a good statement. I just have to say that I am still looking to where those tough choices are going to be made. According to the Congressional Budget Office, our independent source of information, the President's budget doubles the debt in 5 years and triples it in 10. This is the Congressional Budget Office. This is a nonpartisan group, although our Democratic majority on the Budget Committee, of which I am a member, has the votes to select the Director. Since the history of the founding of this Nation, we ran up a total debt, national debt, of $5.8 trillion. According to the Congressional Budget Office, the President's budget would double it in 5 years, by 2013, to $11.8 trillion, and in 2019 it would be $17.3 trillion, thus tripling the national debt in 10 years. I know people do not think that is true, but those are the numbers we have, and we are on track to get there. This does not include unprecedented increases in discretionary spending that we are seeing on the floor of the Senate. It also doesn't include health care. This number was scored before we talked about spending $1 trillion or more on health care additions.
I have to mention interest on the debt because the numbers are so large that people have difficulty comprehending them. People tell me that all the time: A trillion dollars, I have difficulty understanding how large that is.
What about interest? We know what it takes when you pay your mortgage interest or your credit card interest. You have to pay the underlying debt and then you pay the interest on top of that. Sometimes interest can put you in the poorhouse.
This year, 2009, the interest on our total national debt is $170 billion. That is a lot of money. Alabama's State budget, including education, is about $15 billion. We are about one-fiftieth of the Nation in size. Interest this year will be $170 billion, and it will go up dramatically. CBO scores the annual payment of the United States to people we owe money to at the end of 10 years, as almost $800 billion. If interest rates go up a little higher than they had projected, and many have projected interest rates will go up higher, particularly the Blue Chip Forecast, which is a highly respected group of economists who forecast various things, they forecast it would be $865 billion because they forecast a higher interest rate. And if we have what some people fear will occur, which is a surge in interest rates, as we had in the late 1970s because of our irresponsible spending, it could hit $1.29 trillion or $1,290 billion in interest.
So we spend about $40 billion a year on highways, we spend about $65 billion in this Congress on aid to education, and we are going to see from $170 billion to $800 billion or more we have to pay in interest? There is no free lunch. You can't borrow your way out of debt. When you spend money you do not have, you borrow it and you have to pay interest on it.
We have low interest rates today. That seduced some of our masters of the universe to say: Let's run up a little debt right now. Running up a little debt is one thing, but the interest rates are going to go up, as CBO projects. They are pretty low today because of the slow economy.
I am very concerned about this. What I am concerned about is our spending in these appropriations bills indicates we are oblivious to this. This is reality. I am not making this up. This is reality, and the American people intuitively understand it and they are really worried about it. I think they should be. We are the ones who seem to be not connected to reality.
The President also stated these words in his budget submission documents:
Then there are the years that come along once in a
generation, when we look at where the country has been and
recognize that we need a break from the troubled past, that
the problems we face demand that we begin charting a new
path. This is one of those years.
It does seem apparent that we are having a break with our past. We are definitely seeing increases in spending, the likes of which we have never seen before in our basic baseline appropriations bills. Even the deficits I have mentioned assume not a recession in the next 10 years but robust growth in the next few years and solid growth in the last 5 years. Basically, the projections on the deficit and the interest rate we are going to have to carry are greater.
And the deficits--let me share this with my colleagues. I get asked this at townhall meetings: Well, when do we pay back the debt? When do we pay it off? I am paying my mortgage. I pay principal and interest. When is the Federal Government going to pay back its debt? The answer is: We have no plan to do so. The only plan we have is to pay interest and increase the debt.
For example, this year the budget deficit has been estimated to be $1.8 trillion, the largest ever. Last year it was $450 billion. It is $1.8 trillion this year. The CBO forecasts that the lowest deficit, annual deficit, we will have in the next 10 years is over $600 billion.
How can you pay any debt down when the lowest deficit you are going to have is $600 billion? The best year they are projecting, we increase the debt by $600 billion. Indeed, what is even more troubling is in the outer years, years 8, 9, and 10, the deficit is growing. In the 10th year, they project that the deficit that will result from the President's spending policies would be over $1 trillion.
So there is no plan to pay this back. It is only a plan to increase the total debt, which inevitably increases the interest burden that is going to fall on our children and grandchildren. We are reaching into the future to pour money into today to satisfy our current needs because some say we are in a crisis and we have to get out of this crisis; let's just spend money.
We are using that as an excuse to increase our legislative branch spending, our interior spending, our agriculture spending that, at baseline level, is higher than anything we have ever done in recent memory. Let's hope the scenarios I mentioned do not happen. I think it is possible. I have a lot of confidence in the American people that somehow, some way their voice is going to be heard. There are going to be some changes in Washington. If we do not do it ourselves, they are liable
to send someone up here to replace us who will do it.
But it appears that some of our major creditors are taking note of the debt we are running up. Our creditors are looking at these numbers. They are not oblivious to what is going on. There is a special kind of Treasury Bond that we sell to get people to loan the government money called treasury inflation-protected securities or TIPS. Unlike regular bonds that would be at a certain interest rate and that could be devalued when inflation increases, TIPS adjust their value if inflation goes up. So if people with a lot of money looking at these numbers, are they betting that we will see inflation go up or are they expecting inflation to go down? It is pretty clear that they expect inflation to go up because investor interest in the TIPS is soaring.
The Dow Jones Newswires reported September 13 that prices on TIPS have risen 8.7 percent this year; whereas, the prices of regular Treasury bonds have shrunk by 2.6 percent.
Smart Money magazine reported September 23 that investors poured $8.5 billion into TIPS in the second quarter of this year alone, double the amount for the same period last year. The Wall Street Journal reported the same day that investors have poured $17 billion into TIPS so far this year; whereas, they purchased only $10 billion in TIPS all last year.
Meanwhile, the Chinese, who are some of our biggest creditors, with more than $800 billion in Treasury bonds, have expressed concerns about inflation here and have shown a corresponding interest in buying TIPS. According to the Wall Street Journal, they discussed TIPS at high-level talks in Washington at the end of July.
The United Kingdom's Daily Telegraph, in an article entitled ``China Alarmed by U.S. Money Printing,'' on September 6, even quoted a top Chinese Communist Party official lecturing the United States on spending and then quoting Benjamin Franklin to the Americans.
He said: ``He who goes borrowing goes sorrowing.'' How ignominious is that, to be lectured on spending by Communists. Due to interest from both the Chinese and others, the spread in the interest rates between the 10-year TIPS and the regular 10-year Treasuries has grown from about zero--they both had about the same rate of interest at the beginning of this year--to nearly 2 percent.
That means one can get nearly a 2-percent better rate by buying regular Treasuries. But people still want TIPS. Why? Because they believe and are afraid that as the years go by, inflation is going to rise, and they will get more interest back by buying TIPS, even though it is 2 percent below the basic Treasury rate.
Meanwhile, the dollar is hovering at a 1-year low, partially because the Fed recently decided to have interest rates unchanged at basically zero percent, and decided to extend through March its timeframe for purchasing $1.25 trillion in mortgage securities and $200 billion in government agency debt.
The dollar has slid 6.2 percent this year on inflation fears, while gold has soared 15 percent. Gold goes up on inflation fears in the future.
Confidence in the dollar has sunk so low that the U.N. proposed replacing the dollar as the global reserve currency in its U.N. Conference on Trade and Development annual trade report, published September 7. China has also expressed interest in an alternative currency.
Not only that, because of all this borrowing, we are about to hit our $12.1 trillion debt limit, which was last raised when? Not too many months ago, when we passed the $800 billion stimulus package in February.
Our debt has increased by $1.1 trillion just since President Obama was inaugurated. The Treasury Department has been holding record auctions of Treasury bills and notes to keep up with the deficit and the debt.
Another aspect of the continuing resolution that we will be considering this week is yet another bailout of the Postal Service. This is the third Postal bailout in 8 years. The Post Office was supposed to be completely self-funding by now. But they still refuse or are unable to pay for their outyear benefits and expenses.
According to the Congressional Research Service, they face about $95 billion in total unfunded liabilities--$95 billion--which is why they are supposed to make payments that are being suspended by the continuing resolution. They are scheduled to make $5.1 billion in payments this year for the unfunded pension liabilities. But in this bill, we are letting them only pay $1.1 billion.
There is nothing free here. OK? We will let them not pay the full amount. Those payments are to make their benefits actuarially sound. This $4 billion in relief is in addition to the $7.1 billion that was provided in 2003 and the $1.5 billion that was provided in 2006.
CBO, our Congressional Budget Office, says this is costly because it shifts money from future accounts to current expenses. But if we keep doing this without structural reforms from the Postal Service, taxpayers will wind up on the hook for a good portion of those unfunded liabilities.
Why is the Post Office in such a financially poor position? In terms of efficiency, labor costs consume 80 percent of their revenue; whereas, UPS and FedEx spend 65 and 45 percent, respectively, on their labor costs.
The Postal Service is nearly insolvent despite not paying any taxes. They have to have some reform in the Postal Service. I am not going to go into detail now, but a recent Federal Times article pointed out some of the inefficiencies. We cannot continue this.
Let's turn to the highway trust fund. We are going to be asked to pass an extension of the trust fund spending. It struck me as perhaps coincidental that our highway trust fund keeps running out of money year after year after year. What is happening here? Why is it always running out of money? After all, the highway program is supposed to be funded by the gas tax and to be deficit neutral.
However, last year we were told we had to borrow $8 billion from people who loan us money, including China and Saudi Arabia and others, to replenish the highway fund. This year, we have already borrowed another $7 billion to fix the shortfall.
Although the bill before us this week does not borrow additional money from the Treasury, it also does nothing to address the constant deficit the trust fund faces. I am told the fund has been facing and will face a deficit of about $10 billion a year, which means this bill is just kicking the can down the road, and we are going to be asked for either another bailout or a tax hike in the future.
We cannot savage the highway budget. We have to maintain a reasonable spending level for our highway budget. But we have not been going about this responsibly. We are basically funding it by increasing our debt. That is no way to go.
Some make the point that people are driving less and they pay less gasoline taxes. There is some truth to that. But the most recent authorization bill, the Safe, Accountable, Flexible, Efficient Transportation Equity Act, contained a timebomb in it that created the crisis we are in today.
It appears to have been written with the objective of drawing down the highway trust fund rapidly to zero and perhaps beyond. The previous highway bill had some safety mechanisms built into it to prevent declines in our revenue from bankrupting the trust fund. But the SAFETEA-LU weakened both of them, one known as revenue aligned budget authority and one known as the Byrd test, to the point that they are basically irrelevant today.
The combination of constantly increasing spending and disabled safety mechanisms to contain spending means that a crisis was almost inevitable. As early as April of 2006, the Congressional Budget Office was predicting significant negative balances in the outyears of Transportation spending. But did we take any action to confront that looming shortfall?
No, no action was taken either in the authorizing committees or the appropriations committees. The predictable gap between authorized spending and predictable revenue, a prediction that the highway trust fund will soon go bankrupt, which is where the balances hit zero and the timebomb goes off. Despite predictions from CBO that this would happen, to this day, no action has been taken by either the authorizers or appropriators to rein in spending or create the kind of revenues necessary to sustain the program.
Instead we are supposed to keep borrowing, borrowing, debt, debt, debt. The excuses we keep hearing to justify these bailouts is that the highway trust fund has been raided at various times in the past. But that is not accurate.
It is inaccurate. According to the GAO, an independent agency, the general fund paid for $39 billion in highway expenses from 1956 to 1996. Including interest, these payments were worth $164 billion. So it seems that at best, the highway trust fund isn't owed anything, and at worst, it perhaps actually owes money to the general fund. In fact, GAO determined in that report that as of 1998, if the highway trust fund had been forced to pay for all highway expenditures, it would have been in deficit $152 billion. We are not raiding the highway fund. We have been putting in extra money. Where did we get it? By borrowing more money and increasing our debt.
Those transfers didn't stop in 1997 either. Before the current series of bailouts began, Congress already provided for $31 billion in transfers over 10 years from the general fund to the highway trust fund as part of the 2004 American Jobs Creation Act.
As I mentioned before, we have before us this week a highway trust fund extension that does nothing to help with the constant deficit in the program except borrow more money to put into it. All it does is keep spending at levels we know we don't have the money to sustain. In fact, if we keep spending at the current levels, the highway trust fund will require $87 billion in bailouts from 2010 to 2019. I remember a few weeks ago, in a stunning vote, Senator Vitter from Louisiana offered a fine amendment. We were told that the stimulus package that had to be passed so quickly in February to save jobs was going to rebuild our crumbling infrastructure and our highway programs, creating permanent improvements that would benefit the Nation for years to come.
Most people perhaps missed the fact that less than 4 percent of the $800 billion that was appropriated in February went to highways. Hundreds of billions of dollars of the stimulus bill have still not been spent. Senator Vitter said: We said we were going to use this money for highways. We are having a shortfall in the trust fund. It is going to cause serious repercussions in the transportation industry. Let's take the money and fix it on a more permanent basis, 18 months, 2 years, and take the money from the stimulus bill that hasn't been spent.
I voted with Senator Vitter, but the amendment was voted down, the effect of which was to say that the Senate prefers to borrow the money necessary to fix the highway trust fund and increase our debt rather than using the money we basically told the American people we were setting aside for highways. That was a very irresponsible vote. It spoke volumes. Basically, with few exceptions, the Democratic majority made up their minds how they wanted to handle this shortfall which was increasing the debt. They refused to consider taking it from the already appropriated stimulus package.
Unfortunately, CBO scores are not the clearest when it comes to these bailouts. I am not sure that is all CBO's fault or the Budget Committees'. One would think a bill that allows billions of dollars in additional deficit spending would score as much. But according to the CBO, highway spending is discretionary; therefore, what matters in terms of the deficit is what is appropriated not what is authorized. Of course, if we ask the appropriators, they will simply say they provide what is authorized. For fiscal 2010, the appropriators provided what they expected to be authorized by simply assuming that this extension of spending and eventual general fund transfer would happen. That is one of the reasons there was an incredible 23-percent increase in spending in the Senate-passed bill.
The committees are playing a shell game with taxpayer dollars. Somebody has to step up and start taking responsibility for the seriousness of the situation. If we look at how much transportation spending has increased over the last 10 years and where it is expected to go, the 2005 highway bill provided $286 billion in spending over 5 years and allowed spending to increase 23 percent over that 5-year period. The 2007 spending it provided represented a 92-percent spending increase from 1997; 10 years, almost double. I offered an amendment in 2005 to reduce that spending and fund it properly. It failed 84 to 16.
The House Transportation Committee apparently wants the next major reauthorization to spend $500 billion over the next 6 years. That is a per-year increase in spending of 46 percent.
One thing we are pretty unified on is that we need to adequately fund highways. I thought we had unanimous agreement that the stimulus bill would emphasize highways and bridges and roads and infrastructure, but it did not. But we still spent the money.
The reason we are not getting nearly as much jobs impact from this Federal stimulus package is too much of it is going to amorphous things that don't create positive benefits and jobs. Regardless, the number we show on this chart of the debt of the United States, projected to triple in 10 years, is unsustainable. Everybody says that, but when do we get serious? We are not getting serious in this year's budget. It is an unprecedented increase in spending.
The long-term budget the President submitted to us and what was essentially approved by this Congress shows it tripling in the next 10 years, based on what their projections are for spending. I am troubled by it. We have to keep talking about this. We need to listen to what the American people are telling us. If we do, we will be acting in a much more responsible way than we are today.
I yield the floor.