Hurricane Satellite Modernization Act

Madam Speaker, I come to the floor today to raise the issue of the dire financial situation facing our country.

We must come together to face the reality that America is living on borrowed dollars to the tune of $11 trillion in debt and $54 trillion, soon to go higher, in unfunded liabilities with entitlements. We must offer a bipartisan solution to these long-term financial challenges.

In recent days, there have been calls to consider the long-term budget controls in tandem with any economic stimulus package offered. The respected Heritage Foundation released a report last Friday, entitled ``Stimulus Legislation Must Include Budget Reforms to Address Long-term Challenges.''

The report offered support for budget control mechanisms that would be set up through the Cooper-Wolf SAFE Commission legislation in the House and the Bipartisan Task Force for Responsible Fiscal Action effort proposed by Budget Chairman Kent Conrad and Ranking Member, Senator Judd Gregg, in the Senate.

The Heritage publication, which I submit for the record, notes that SAFE ``would have the advantage of a two-step process. Its first phase would be a series of nationwide public hearings to talk frankly about the long-term fiscal problems and the tough options for fixing it and build public support for congressional action on a broad plan of action.''

As our colleagues may recall, the SAFE process would culminate in legislative recommendations to Congress, and like the BRAC process for closing bases, Congress would be required to vote up or down on the plan.

I know there have been questions raised about incorporating long-term budget controls in a short-term stimulus aimed primarily at job creation, but I would argue--and many would argue--that the time is now here to begin to confront the underlying problem of autopilot spending. I don't know about other Members, but my constituents continue to share their frustration with Congress' seeming to know only how to spend money with no regard for the future.

We need to listen to the American people and show them that we can lead and that we can make the difficult choices. The longer we wait and the more consuming entitlement program spending becomes, the more draconian our choices will be. We are mortgaging the future for our children and grandchildren. The bottom line is we cannot deal with the short-term financial problems without thinking about and dealing with the long-term solutions.

The SAFE Commission is not a new idea. Over 110 Members of Congress cosponsored the legislation in the last year. The Heritage Foundation, the Brookings Institution and the Concord Coalition all helped draft the bill.

Jim Cooper and I joined bipartisan forces in the last Congress, and SAFE has continued to garner support from other leading voices, including the business community--the Virginia and Tennessee Chambers of Commerce, the Business Roundtable and the National Federation of Independent Business.

We all know that it will take all of the political courage that we can muster to reject the partisan and special interest demands and to do what is best for the country. If other Members have a better bipartisan idea that can pass the House, they should be introducing it, and it should be included in the stimulus package.

Not acting on this issue is effectively supporting either the ``do nothing plan'' or the ``maybe this problem will fix itself plan'' or the ``let's just bury our heads in the sand plan,'' but the numbers don't lie. The Nation's future outlook is sobering. Just in the short term, CBO projects that the Federal budget deficit for this fiscal year alone, which started in October, will balloon to $1.2 trillion and perhaps higher.

We offered this SAFE idea as an amendment to the FY09 Financial Services spending bill last June. Unfortunately, we came up one vote short of passage. Congressman Allen Boyd, the founding member of the Blue Dog Coalition, spoke eloquently from his heart in support of the amendment, asking us to envision ourselves 20 years from now, sitting on the front porch and telling our grandchildren about the days we served in Congress.

What will we tell our grandchildren--that we looked the other way, knowing that out-of-control entitlement spending would threaten the living standards of future generations?

The stakes for the country's future may have never been so high. This is clearly an economic issue, but it is also a moral and a generational issue. Abraham Lincoln once said, ``You cannot escape the responsibility of tomorrow by evading it today.'' I believe the moral component of this issue goes to the heart of who we are as Americans.

This is not a Republican issue or a Democrat issue. It is an American issue. If we can't find a way to come together on this fundamental issue, I will have serious questions about our ability to find bipartisan solutions that will work for the good of the country.

I am asking our colleagues today to come together, to know that while we served in Congress we did everything we could in our power to provide the kind of security and way of life for our children and for our grandchildren that our parents and grandparents worked so hard to provide for us.

This challenge, too, goes out to the leadership in Congress and to the soon-to-be Obama administration to make this a truly bipartisan effort. Put the SAFE Commission process in the stimulus package and on the fast track to enactment.

I have never been more committed to an issue and to helping to find bipartisan solutions to address our long-term financial sustainability of this country. The American people expect nothing less.

[From the Heritage Foundation, Jan. 9, 2009]

Stimulus Legislation Must Include Budget Reforms To Address Long-Term

Challenges

(By Alison Acosta Fraser)

Congress and President-elect Barack Obama have set their

sights on a massive economic stimulus bill crammed full of

spending projects intended to ``jolt'' the economy into

recovery. By some counts this package may reach $1 trillion,

or nearly 85 percent of the total of all budget bills passed

last year.\1\

This is not the way to spur economic recovery. But even if

it were, Obama already recognizes he faces a difficult

challenge: how to keep the stimulus focused on short-term

deficit spending and avoid a huge, long-term expansion of the

federal government--and with it a dramatic increase in the

staggeringly large unfunded obligations due mainly to Social

Security, Medicare, and Medicaid. To deal with that

challenge, Obama should work with fiscally responsible

Members of Congress to include four key budget reforms in any

stimulus legislation:

1. Put long-term obligations from Social Security,

Medicare, and Medicaid front and center in the budget

process;

2. Establish a bipartisan congressional commission to

develop a package of long-term reforms for entitlements;

3. Establish equitable policies for assessing and enforcing

spending and revenues changes in the budget; and

4. Create a long-term budget for entitlement spending.

Spending and Deficits Hit New Records. Federal spending is

projected to top 25 percent of GDP in 2009, according to the

Congressional Budget Office (CBE), the highest it has been

since World War II, and that is before any stimulus

legislation. The deficit is projected to reach $1.2 trillion

by the end of this year, and any stimulus would likely push

the deficit to more than $1.6 trillion.

Similar large deficits are projected to continue into the

future.\2\ Such deficits are a loud alarm to which

policymakers must listen: Federal spending is out of control.

But even they ignore the deeper fiscal problems of Social

Security and Medicare. These programs together, not even

counting Medicaid, have an unfunded obligation that is

equivalent to a mortgage of $43 trillion.\3\ Future

generations will be forced to pay for those obligations

through higher taxes unless the programs are modernized.

Budget Restraint. While making the case for his massive

short-term stimulus proposal. President-elect Obama

acknowledged the threat entitlements pose to the economy,

noting, ``If we do nothing, then we will continue to see red

ink as far as the eye can see.'' He called budget reform ``an

absolute necessity,'' and he has pledged to confront the

problems from Social Security and Medicare in his budget.

Budget writers in Congress are also alarmed. Senate Budget

Committee Chairman Kent Conrad (D-ND), called the deficit

``jaw dropping,'' and House Budget Committee Chairman Jack

Spratt (D-SC) was suffering ``sticker shock.'' \4\ They

and their ranking member counterparts have encouraged

lawmakers to tackle the long-term budget problems posed by

these entitlement programs. Conrad and Senator Judd Gregg

(R-NH) have urged Congress to link the stimulus with

action to address the long-term budget crisis.\5\

If President-elect Ohama is serious about fiscal

responsibility, he and responsible Members of Congress must

insist on budget reforms to prevent further deterioration of

an already alarming long-term budget problem and require

action to tackle these challenges directly. To that end, he

and responsible lawmakers should insist on these four key

budget reform measures being included in any stimulus

package:

1. Put long-term obligations from Social Security,

Medicare, and Medicaid front and center in the budget

process, with an up-or-down vote on any budget that will

increase debts on future generations. Such a measure could

easily be incorporated into the annual budget resolution.

This would provide a more accurate and transparent assessment

of the federal government's commitments and provide all

Americans with a vivid picture of the problem. All major

policy changes should be scored over the long term to

indicate what impact they would have on the total unfunded

obligations of the government. That would provide lawmakers

and the public with a better understanding of the true long-

term costs of new legislation. And to put Members on record

on their attitude to burdening our children and

grandchildren, they should have to vote during the annual

budget process if the proposed budget will increase long-term

obligations.\6\

2. Enact a bipartisan congressional commission to develop a

package of long-term reforms that will make these programs

affordable. Bipartisan legislation to implement this type of

commission was introduced in the previous Congress: the SAFE

Act (H.R. 3654), co-sponsored by Representatives Jim Cooper

(D-TN) and Frank Wolf (R-VA), and the Bipartisan Task Force

for Responsible Fiscal Action Act (S. 2063), co-sponsored by

Conrad and Gregg. Under both bills, a commission would craft

detailed recommendations for a fast-track vote in Congress.

The SAFE Act would have the added advantage of a two-step

process. Its first phase would be a series of nationwide

public hearings to talk frankly about the long-term fiscal

problem and the tough options for fixing it and to build

public support for congressional action on a broad plan of

action.\7\

3. Establish equitable policies for assessing and enforcing

spending and revenues changes in the budget. Any budget

enforcement mechanism is based on changes in projected

spending and revenues. The CBO projects a spending baseline

by assuming that all the laws authorizing spending--such as

the highway or farm programs, or even appropriations--will be

extended year after year and spending levels will continue

even if they expire regularly under existing law. But when it

comes to taxes, the CBO's baseline is current statute, and

any rates reductions, deductions, credits. etc., that arc

scheduled to expire are assumed to do so. The lopsided result

is that spending is given a free ride under the baseline

while any reduction in the growth of taxes is assumed to be

temporary

This skewed baseline means current ``PAYGO'' rules are

biased toward tax increases. Thus, for any enforcement

mechanism to be considered fair and to be effective, it must

be based on the same baseline treatment for both spending and

revenues. Indeed, Obama's own advisors have already

criticized this lopsided policy treatment, which stacks the

deck in favor of higher spending and higher taxes.\8\

4. Create a long-term budget for entitlement spending.

Unlike ``discretionary'' programs such as defense and

education, ``mandatory'' entitlement programs like Medicare

and Social Security are not budgeted annually. Entitlement

spending grows on auto-pilot, in conjunction with the

programs' regulatory framework, so there is not an open or

transparent consideration of priorities or budgetary trade-

offs. And since spending levels are simply the product of

individuals using their entitlement, there is in a sense no

budget just a projection of likely total costs. And as they

grow unchecked, these entitlements crowd out other programs

and priorities.

This must change, by constraining entitlement programs with

a real budget. To be sure, retirement programs require longer

time horizons and planning than typical discretionary

programs so that beneficiaries will not face unexpected

annual changes in benefits. Therefore, Congress should create

a long-term framework for a constrained entitlement budget

that would be periodically evaluated to ensure that these

programs are sustainable and affordable over the long term.

This could be done by creating a long-term budget window--for

example, 30 years. All spending would be reviewed every five

years, and the commission could recommend measures for

Congress to ensure that the programs live within this budget

framework.\9\

There are many reasons to be concerned over the

unprecedented stimulus spending now being proposed, including

the ineffectiveness of Keynesian pump priming, the perils of

such an immense hike in government spending, and the creation

of new permanent government programs. With the first baby

boomers recently retiring, America is experiencing the first

waves of the entitlement tsunami. The stimulus legislation

could set the stage for a permanent sea of red ink and an

even larger tsunami of debt. Substantive budget reforms are

needed to prevent such a scenario from occurring.

Truly Serious? If President-elect Obama insists on a

massive spending bill, he must ensure it does not result in

huge permanent new government programs and thus potentially

trillions of dollars in new burdens on our children and

grandchildren. He must demonstrate his commitment to tackle

the long-term entitlement challenges by working with Members

of Congress to build sound budget process reform measures

into the stimulus legislation. If he does not do so, the

young Americans who voted for him should question how serious

he is about protecting their financial future.

endnotes

1. Estimated FY 2008 appropriations $1.154 trillion, prior

to all enacted supplementals. Office of Management and

Budget, ``Budget of the United States Government Fiscal Year

2009: Historical Tables,'' Table 5.4, at www.whitehouse.gov/ omb/budget/fy2009/hist .html (January 9, 2009).

2. See Brian M. Riedl, ``CBO Budget Baseline Shows Historic

Surge in Spending and Debt,'' Heritage Foundation WebMemo No.

2193, January 7, 2009, at http://www .heritage.org/research/budget,wm2193 (January 9, 2009).

3. Department of the Treasury, ``2008 Financial Report of

the United States Government,'' December 15, 2008, p. 41, at

http://fms.treas.gov/fr/index.html (January 9, 2009).

4. Lori Montgomery, ``Congress Urges Spending Restraint,''

The Washington Post, January 8, 2009, at http://www. washingtonpost.com/wp-dyn/content/article/2009/01/07/ AR2009010701156.html?hpid=topnew (January 9, 2009.)

5. Senators Kent Conrad and Judd Gregg. ``A Fiscal Battle

on Two Fronts,'' The Washington Post, January 5, 2009, at

http://www.washingtonpost.com/wp-dyn/content/article/2009/01/ 04/AR2009010401436_pf.html (January 9, 2009).

6. Alison Acosta Fraser, ``Federal Budget Should Include

Long-Term Obligations from Entitlement Programs,'' Heritage

Foundation Executive Memorandum No. 1004, June 22, 2006, at

http://ww.heritage.org/Research/Budget/em1004.cfm.

7. Alison Acosta Fraser, ``The SAFE Commission Act (H.R.

3654) and the Long-Term Fiscal Challenge,'' testimony before

the Committee on the Budget, U.S. House of Representatives,

June 25, 2008, at http://www .heritage.org/Research/Budget/tst062508b.cfm.

8. J.D. Foster, Ph.D., ``Obama to CBO Revenue Baseline:

Nuts--and He's Right!,'' Heritage Foundation WebMemo No.

2019, August 11, 2008, at http://www.heritage.org/Research/ Budget/wm2019.cfm.

9. Stuart M. Butler, Ph.D., Alison Acosta Fraser and Other

Authors, ``Taking Back our Fiscal Future,'' Heritage

Foundation White Paper, March 31, 2008, at http://www .heritage.org/Research/Budget/wp0408.cfm.