Mr. President, last week I had the opportunity to travel my State of South Dakota, as I think most Senators did who were home over the break. During the week, I was able to be part of a couple of…
Mr. President, last week I had the opportunity to travel my State of South Dakota, as I think most Senators did who were home over the break. During the week, I was able to be part of a couple of events in my State with former Comptroller General David Walker. I think most people here are acquainted with Mr. Walker. He had a 10-year run as the Comptroller General of this country. He has since started an organization called the Comeback America Initiative and has been traveling the country trying to explain to the public the issues surrounding our national debt--high Federal spending levels and their effect on our Nation's future.
I would add he is someone who takes both parties to task. He is an equal opportunity critic. He is very bipartisan in his criticism of the out-of-control
spending that exists in Washington, DC, but he did point out the tremendous growth in government which has occurred in the course of our Nation's history. In fact, when our country was founded, if we go back to the formative years of our country--and he uses the year 1800 as an example--government spending made up just 2 percent of our entire economy. Just 2 percent of our GDP represented government spending. Today, it makes up almost 25 percent, and we are on a trend line, a trajectory, where that will rise to 39 percent by the year 2040.
So we have seen this upward spike in the spending, the amount of Federal spending as a percentage of our entire economic output. The reason Mr. Walker gives for the continuing increase in spending is primarily entitlement programs. In other words, we have Medicare, Medicaid, and Social Security which now represent about 43 percent in 2010. Those three programs represented 43 percent of our total Federal spending and, again, that number is set to spike as we head into the future.
Mr. Walker pointed out we are set to spend more on mandatory programs than we will take in in revenue in 2011. So this current year we will spend more on mandatory programs, which include those I just mentioned--Medicare, Social Security, and Medicaid--than all the revenue the Federal Government will take in. So that would mean we can't even afford to pay out for the mandatory spending programs we have in our budget, not to mention those discretionary programs which are the other part of our Federal budget.
If we look at it in terms of how much we spend today and how much we borrow, we are borrowing about 42 cents out of every dollar we spend. That is the reality we are faced with. So it is clear we need to make some reforms, Mr. President, particularly in the entitlement programs, to put them on a more sustainable footing.
Further, Mr. Walker shared the results of his fiscal fitness index, which puts the United States at 28 out of 34 developed countries--just behind Italy and just two places in front of Ireland. We are No. 28 out of 34 developed countries around the world in terms of our fiscal fitness.
Mr. Walker's message, obviously, is not a fun one. It is not a message you would expect people to like to hear. It is not a message that promises more spending on people's preferred programs. Yet my constituents were eager to hear this message. Why is that? No. 1, he was honest. He was honest about the size of our problem, about the scope of our unfunded liabilities, about the causes of this deficit-- that it is primarily a spending-driven crisis, about the effect of the health care law on health care spending in this country, and about the measures that are needed to cut spending and to bring the budget back into balance.
My constituents appreciate that kind of honesty. They appreciate someone telling them the truth, not simply continuing to make promises that cannot be kept. And, No. 2, they were eager to hear his message because his message offered hope. He pointed out that if the country adopted a fiscal plan that would bring down our deficits on a level that was similar to the plan of the President's fiscal commission, our Nation's rating on the fiscal fitness index would jump from 28th clear up to 8th place. He showed the attendees that there is a series of steps we can take to fix Social Security, Medicare, and Medicaid--to preserve these important programs without bankrupting our country--and he showed us that if we start now we have time to make these changes without being forced to make Draconian cuts or to hike tax rates.
This hope that we can fix these problems is real and it gives the general public something they can understand. That was certainly the case with my constituents last week.
Unfortunately, there was another event that occurred last week and that was the release of the unemployment numbers. Those numbers did not reflect hope but, instead, indicated we have a long way to go toward fixing our economy. These numbers showed that unemployment had risen to 9.1 percent. Further, the long-term unemployed increased to 6.2 million people, as those who are out of work are taking longer to find jobs. This long-term unemployment is particularly important for a number of reasons. No. 1, these individuals who suffer from long-term unemployment often exhaust government and personal resources that are available to them. As a result, they are at greater risk of falling into poverty. Further, it indicates our economy is not sufficiently dynamic. These individuals could have skill mismatches or there may simply not be any jobs in their local economy.
Finally, the long-term unemployed may see their skills diminished and become less and less attached to the workforce. What this all means is it becomes harder and harder for these people to find a job as they no longer know the latest technologies or no longer have the skills they developed by years of practice. This creates longer term challenges for our economy to be able to find these individuals jobs.
The question is how do we create an environment where businesses and individuals can be creating jobs. We know we need to cut spending, to cut our deficit, and to cut unnecessary and harmful regulations. In a recent presentation to the University of Washington, Nobel laureate Robert Lucas pointed out that the possibility of higher taxes, the uncertainty of regulations, and the increasing role of the Federal Government in health care because of the health care law, are all contributors to our slow economic recovery.
Likewise, Dr. Lucas speculated that our economy may continue to grow at a slower rate because of the increased regulation, taxation, and spending that is moving us closer to a European welfare state. In fact, Dr. Lucas notes that these European economies have incomes that are 20 to 30 percent less per capita because of these differences in the size of government.
It is clear it would even further increase unemployment if we continued to move along this path. We cannot continue with the status quo. We already know the size of our debt is costing us 1 percentage point in growth every year which, according to the White House's own economists, is the equivalent of 1 million jobs. In other words, when we sustain the kind of debt load we have today--our gross debt as a percentage of our GDP, our entire economic output, is over 90 percent-- that means we are losing economic growth and that means we are shedding jobs as a consequence of this high level of debt and high level of spending.
We need to grow the private economy, shrink government spending, and cut our debts and deficits. This is the path that will help us on a recovery, help our economy to recover, and create the jobs that are necessary to lower that unemployment rate.
We know we can do this. There are a number of reforms and spending cuts we are pushing to attach to the deadline that is under discussion right now so we can make it easier and cheaper for individuals to create the jobs that are so necessary to get our economy back on track and get people back to work. There are a number of things that can be done and should be done.
Obviously, as I noted, as we continue the debate about spending and debt and doing something about this year-over-year $1.4 trillion, $1.5 trillion, now $14.3 trillion debt that is hanging like a cloud over our economy, we have to deal with that. We have an opportunity, as has been noted by the leader earlier this morning, to do that in the context of this debt limit debate we are going to have. We should view this--both sides--as an opportunity to do something meaningful about spending and debt and to put our country on a more sustainable fiscal path for our future.
But there are a number of other things that impact the economy today that should be done. One is we have three pending trade agreements that were negotiated 3 to 4 years ago. They have been languishing here because the White House will not send those trade agreements up here for Congress to act.
To give an example of what that means to an agricultural State such as South Dakota, Colombia is one of those three trade agreements-- Colombia, Panama, and South Korea, all of which present markets for South Dakota agricultural markets. But agricultural exports are a big part of our trade relationship with Colombia. In 2008 we had an 81- percent market share in Colombia. Today that is a 27-percent market
share. We need those trade agreements approved to create jobs and to grow this economy. I hope the White House will send those, follow through on their rhetoric and actually send those trade agreements up here so we can act on them.
It has been 771 days since we passed a budget in this country. We and the administration talk about doing something about spending and debt, and yet here we are having gone 771 days without even having passed a budget, the most fundamental responsibility we have to the taxpayers of this country. If we are serious about spending and debt, we need a budget that sets a blueprint for a more fiscally sustainable future for this country. We need energy policies that allow us to develop American energy to get fuel costs under control, which also impacts in a very direct way our economy and our ability to create jobs.
The solutions are out there, they are very straightforward and simple. We need to have the will to move forward and address these issues and I hope we will because the American people expect and deserve that we will. As Dr. Walker pointed out last week, in my State of South Dakota, if we do not, we are headed for a fiscal train wreck.
I yield the floor.
