Mr. President, are we in a quorum call? Mr. President, the debt ceiling agreement that will soon come before the Senate is a clear and present danger to the fragile-- indeed, faltering--economic…
Mr. President, are we in a quorum call?
Mr. President, the debt ceiling agreement that will soon come before the Senate is a clear and present danger to the fragile-- indeed, faltering--economic recovery. To say this is the wrong policy at the wrong time is a gross understatement. One has to ask the question: Is anyone paying attention? We just learned economic growth fell to a 1.3-percent annual rate in the second quarter. The first quarter growth was revised downward sharply to just four-tenths of 1 percent--virtually flat.
The economy created a meager 16,000 jobs in the month of June--again flat, not even keeping up with population growth. Last month, over 25 million Americans could not find full-time employment. Let me repeat that: over 25 million Americans are effectively out of work. This includes those formally looking for work and those so discouraged that they are no longer looking but want to work. State and local governments continue to slash funding for jobs at a stunning pace, destroying an estimated 500,000 jobs in the last 2 years. Let me repeat that: In the last 2 years, State and local governments have destroyed an estimated 500,000 jobs. Those are consumers too. Those are people who shop and buy cars and clothes and houses and go out to eat at restaurants and things such as that.
According to an article in today's Wall Street Journal, in the first half of 2011, all government spending fell at a 3.5-percent annual rate, enough to knock three-quarters of a percentage point off the GDP. On top of this wreckage, this so-called budget deal is proposing to slash funding in investment by $2.4 trillion over the next 10 years--an unprecedented step that will further destroy demand and directly kill millions of public- and private-sector jobs.
This is what Mohamed El-Erian, chief executive of the bond investment firm of PIMCO, said just yesterday on one of the network shows in regard to this budget deal:
Unemployment will be higher than it would have been
otherwise.
Speaking of this budget deal we are talking about, he said unemployment will be higher because of it.
Growth will be lower than it would be otherwise, and
inequality will be worse than it would be otherwise.
He added:
We have a very weak economy, so withdrawing more spending
at this stage will make it even weaker.
For months now, Washington politicians have been distracted by the phony manufactured crisis about raising the debt ceiling. This city has been obsessed with this. The rest of the country, for a very good reason, is more concerned with a far more urgent deficit than the budget deficit. They are more concerned about the jobs deficit--25 million people out of work. In a recent CBS News-New York Times poll, 53 percent of the public polled named jobs and the economy as the most important problem, while only 7 percent named the deficit.
So I oppose this misbegotten, misguided deal they have conjured up in return for raising the debt ceiling. I don't oppose raising the debt ceiling. I wish to make that clear. I believe we have a constitutional obligation to pay our debts and to make good on our debts, as we have done since the Revolutionary War. What I am objecting to is the deal that was put together in order to permit us to perform our constitutional obligation.
I oppose it for four reasons: Reason No. 1 is this deal will destroy millions of jobs, as I have said, in both the public and private sector. By shutting off Federal funding in investment--a critical engine sustaining our sputtering economy--it could easily plunge America back into recession.
Please read your history, see what happened in 1937 and 1938. We were coming out of the Depression and all of a sudden Congress decided to tighten down the screws and plunged us right back into higher unemployment.
Secondly, I have always advocated a balanced approach to deficit reduction, including both spending cuts and revenue increases. This deal--the one we are going to have before us this evening, I guess-- rejects a balanced approach. It rejects any sense of equity and fairness.
As my friend, the Senator from New Jersey, Mr. Menendez, said earlier on the floor: This is not fair. Are we concerned about fairness or is that just sort of passe? Is that something we should even be concerned about, whether something is fair? I think we ought to be concerned about fairness. This is the message that is coming across loudly and clearly in the phone calls coming into my office and the e-mails I am getting from Iowa and around the country.
This deal offends people's basic sense of fairness--that Congress would slash funding for things such as student loans and cancer research and Head Start programs and Vista and legal services or cut essential funding for seniors--senior volunteer programs, senior centers, and Meals on Wheels--cutting support for people with disabilities, cutting the safety net for a lot of the most vulnerable people in our society, hurting the middle class. We can do that, but we simply can't ask for one more dollar of shared sacrifice from the millionaires and billionaires who have made so much money in the last decade and who have received, thanks to this Congress, huge tax breaks.
This deal is not fair.
Third, I oppose this deal for the simple reason that I oppose paying ransom to hostage takers. Since the 1930s, Congress has routinely raised the national debt 89 times, including 7 times during the recent Presidency of George Bush, and 18 times under Ronald Reagan. Did Democrats hold the economy hostage? Did we say: Oh, no, we are not going to raise the debt unless you do this, this, this, and this? No. Did we filibuster? No.
Oh, there is always a skirmish on raising the debt ceiling. Ever since I have been here, for the past 35 years that I have been here, 36 years now, there is always a skirmish on it. But do you know how it has always worked? The majority always has to come up with the votes so there is no default. Well, that is not the way it is working this time.
This time congressional Republicans are holding our Nation hostage, threatening to default on our national debt and plunge America into an abyss that we don't even know what would possibly happen; that would affect our
bond rating for years in the future, affect the interest rates that everyone pays on their car loans, their student loans, housing, and everything else. They would plunge America into that unless their demands are met.
Let's be clear. This is not a negotiating tactic; this is blackmail. Republicans have basically said: We will inflict grievous harm on the economy if Democrats do not meet our demands. Well, President Obama said it earlier. We are not going to go into default. So with this kind of a lopsided deal, the ransom is paid, the hostage is released. But what a terrible precedent this sets. Make no mistake, Republicans will use these same despicable tactics down the road in the future.
Now, if I sound like I am picking too much on Republicans, let me just say, with this kind of precedent, I can see a Republican President--and there will be another one sometime, but I hope not too soon. But there will be a Republican President and there will be a Democratic Congress, and Democrats will use this as a precedent: We will hold it hostage.
Is this the way we want to start running our country? What a terrible precedent this sets. It reminds me of the precedent that was set starting back in the 1980s with the use of the filibuster in the Senate.
Now, I say to the President that I have for years advocated that we do away with the filibuster over a short period of time; that we allow things to be slowed down but not be stopped because of a filibuster. I didn't just say this now; I said it in 1990s. It was right after Democrats had lost control of the Senate and Republicans had taken over, and I even advocated doing away with the filibuster then because I said it was escalating. It was a tit-for-tat. When the Republicans were in charge, we filibustered; and then when we got in charge, they filibustered, but they added a few more. Then when we got in charge, we filibustered, but we did it a little bit more than what they did. This went back and forth.
I predicted in 1995 that if we didn't nip that in the bud, it was going to get out of hand. Sure enough, it got out of hand. That is what I mean. That is what happens. You set a precedent like that, and there is no end to it.
So I think the precedent that has been set bodes ill for our country, not just for Republicans but for Democrats too.
President Obama had an alternative, however, to capitulating to the Republicans' hostage taking and their blackmail. In remarks in the Senate on Saturday and many times, I have urged the President to respond to this unprecedented threat by taking the unprecedented action under the 14th amendment to the Constitution of basically eliminating the debt ceiling. I know the occupant of the chair, the distinguished Senator from Delaware, has advocated this for some time also. It is deeply regrettable that President Obama preemptively took this option off the table.
Throughout history, where meaning is unclear, where precedent was nonexistent, the American people, through their elected officials and through their President, have acted boldly to protect the interests of the United States and to save our country.
I have heard it said that people around the President at the White House--well, they got attorneys to weigh in on this and the Justice Department. I understand that the Vice President said this morning to the House caucus that the authority was unclear as to whether the President could take such action.
Again, I repeat: Where there is no precedent, where the meaning is unclear, we can't run across the street to the Supreme Court and ask for an advisory opinion. They don't give those advisory opinions. But when the country is in a crisis mode and our future is at stake, I believe the President can act boldly, should act boldly, must act boldly, both to prevent the country from falling into a crisis but also to prevent this kind of hostage taking, this kind of blackmail that we either do it this way or we will not raise the debt ceiling.
I pointed out in my speech Saturday, and I point out again, Thomas Jefferson concluded the treaty with the Louisiana Purchase--and he himself wrote letters, and I have copies of those letters. I have read them, letters to Senator Breckenridge anguishing over whether he had the constitutional right to do this.
In one letter he said: I believe Congress is going to have to pass a constitutional amendment and send it to the States for their ratification before I can do this. But, finally, Jefferson came to the realization that if he didn't take this action, the whole western part of the United States at that time might never become part of the United States. Think about that. We might have been facing a part of the United States that belonged to France.
So Jefferson acted boldly. In fact, there were critics at that time who said he didn't have the authority to do that, and they had a vote in the House of Representatives, by the way. I think it carried by a couple votes.
Abraham Lincoln signed the Emancipation Proclamation. There is nothing in the Constitution that gave him the power or the authority to do that, but he did it. He did it to help save the country and to right an egregious wrong.
More recently, Franklin Roosevelt--you can read about it in the history books. In the 1930s, it was clear if we didn't come to the assistance of Great Britain, it was going to fall to Nazi Germany--not that they needed our men but they needed our material. They needed the kind of material that we could supply in a short amount of time so they could defend Great Britain against Nazi Germany.
So Franklin Roosevelt concluded a lend-and-lease program. That is what it was called, the lend-and-lease program. Even President Roosevelt at that time said in his writings he considered this probably unconstitutional. But he had to do it to save our country because it was a crisis, and he acted boldly to do it.
There was no clear authority for him to do that, but, as I point out, there was no prohibition against him doing that either. There was no prohibition explicitly in the Constitution to prohibit Thomas Jefferson from making the Louisiana Purchase. There was no express prohibition against Lincoln signing the Emancipation Proclamation. There was no express prohibition against Franklin Roosevelt signing the lend-and- lease deal.
So, again, I point out, where meaning is unclear--and in the 14th amendment the meaning is kind of unclear. But we do have a court case, Perry v. U.S., 1935. Read what Chief Justice Hughes wrote in his opinion. He said quite clearly that Congress has the power to borrow money. He said that is a good thing. It may be used to save our country sometime. But, he says, Congress does not have the authority to alter or destroy those obligations. We cannot alter or destroy those obligations once we make them.
So as I argued Saturday, and I continue to argue, if Congress either through action or inaction destroys or alters those debt obligations, then I think it is up to the President of the United States to step into the breach.
Is there clear authority for the President to do this? No. I submit there is no clear prohibition against him, either, to do this. So when I cast my vote later today against this deal, I am not casting a vote to send our country into default. I would not do that. If I thought that my vote was the determining vote to send this country into default, I would not do that. That is not the way I see it, Mr. President. The way I see it is even if we turn this down, the President can use his Presidential power and authority to sign an Executive order getting rid of the debt ceiling so that, constitutionally, we make good on our debt obligations.
Read Perry v. U.S. I think you can see it there. So if this deal goes down either in the House or the Senate, the President can act before tomorrow to save this country. He may not want to do it, but he should do it. And he should have put that out there a long time ago.
Each one of the three cases I mentioned, Jefferson, Lincoln, and Roosevelt, three great Presidents, took action to save the country, and they did the right thing.
Mr. President, my fourth reason for opposing this deal is because, in truth, it is not about reducing the deficit. First and foremost, this deal is about preserving hundreds of billions of dollars in tax breaks for corporations and the wealthiest in our society. Bear in
mind this is the singular purpose and goal of today's Republican Party: not reducing the deficit but preserving and expanding tax breaks for the wealthy. Here is why I say that.
Back last December when Republicans demanded the deal to preserve the Bush-era tax cuts for the wealthy, that deal added a whopping $800 billion to deficits in just 2 years: this year 2011, next year 2012. Here we have it. We are being asked to raise the debt ceiling. A big portion of that is to pay for tax breaks to the wealthiest just in 2 years because of that deal last December where the Bush-era tax cuts were extended for 2 years, the wealthy can get billions in tax breaks for 2 years. So now what we are being asked to do is to pay for these 2 years' of tax breaks to the wealthiest by slashing funds to the most vulnerable in our society.
So that is the game here. The game here is to preserve those tax breaks even though we have to slash funding for the most vulnerable.
In December, Republicans' No. 1 priority was preserving tax breaks for the wealthy even if that meant adding hundreds of billions of dollars to the deficit. So last December Republicans said: We have to extend the Bush-era tax breaks for 2 years. That tax bill added $800 billion to our deficit. I didn't hear a peep out of them, not one peep from the Republicans about the impact on the deficit.
Now, in recent weeks and months Republicans have repeatedly rejected grand bargains to reduce future deficits by nearly $4 trillion. Why did they reject the Reid proposal and proposals by the administration and others? Because each one would have required some modest sacrifice from millionaires and billionaires to help pay for those tax breaks they got. Republicans adamantly opposed this.
In his remarks last evening announcing this debt ceiling bad deal, as I call it, President Obama said the result ``would be the lowest level of annual domestic spending since Dwight Eisenhower was President.'' That bears repeating. President Obama said the result ``would be the lowest level of annual domestic spending since Dwight Eisenhower was President.''
For the record, the American people do not want to take down Federal funding and investment to the level of the Eisenhower years. To do so would be tantamount to repudiating what we have done since then to make our country better and more fair, to make our country more of a middle- class society, more a country where people born into poverty can aspire to be in the middle class to get a good education, good health care, decent housing, a ``Head Start.''
To return to the spending of Dwight Eisenhower would be tantamount to repudiating the Great Society programs. We always hear from Republican friends how the Great Society was a failure, what a failure the Great Society was. I respectfully disagree. Head Start a failure? It was a Great Society program. Medicaid? Of course Medicaid now is exempted out of this measure. How about the Elementary and Secondary Education Act, title I, where we have agreed to put money out to the States to help low-income students and schools in poor areas? That is a Great Society program. How about the Higher Education Act? Student loans help a lot of kids go to college.
I have here a list of some of the Great Society programs: the Civil Rights Act of 1964; the Voting Rights Act of 1965; the Age Discrimination and Employment Act of 1967; Job Corps--that is another one which is going to get slashed because of this, Job Corps; VISTA; Upward Bound; food stamps, now called the SNAP program, which enables low-income people to have a decent diet during economic downturns; LIHEAP, the Low Income Home Energy Assistance Program; the community action programs that do so much for the elderly and the poor. I mentioned the Elementary and Secondary Education Act, the Higher Education Act of 1965, the Bilingual Education Act to help kids-- learners of English as a second language. I mentioned Medicare and Medicaid. How about the Clean Water Act, the Clean Air Act, the Land and Water Conservation Act and on and on. I am not going to read them all. These are all parts of the Great Society programs. They made our country what it is today. But, they do cost money.
We have cleaner air, cleaner water, better educated kids, better health care, better cancer research--all kinds of research done at the NIH. These programs, along with Social Security, undergird the middle class in our society. They create a ladder of opportunity to allow disadvantaged Americans to work, move upward, and become part of the middle class. These programs define America as decent, compassionate, and, yes, as a great society.
The President is sorely mistaken if he believes the American people want to slash the budget to the level of the Eisenhower years and turn back the clock on half a century of progress.
Mr. President, I hope that is not what you meant. I hope that is not what you meant. To turn spending back to the level of the Eisenhower years is not a bragging point. That is not something positive. To me, that is a big negative.
What we need is to have a better and more fair tax system to pay for all the things that make our society great. We are not having the right debate here. We have not had the right debate for a long time. The debate ought to be about what is happening to our society.
I just read a recent interview with Bill Moyers. Bill Moyers was asked what his greatest fear was. His greatest fear was that we in America would accept greater and greater inequality, wealth inequality, as the norm; that we would accept a greater and greater inequality as normal. Here is maybe what he was talking about. From 2005 to 2009, the median net worth of Hispanic households went down 66 percent. The median net worth of African-American households went down 53 percent. The median net worth of White--Caucasian--households went down 16 percent. The median net worth right now of a White--Caucasian--family in America is 20 times that of an African-American family and 18 times that of a Hispanic family. This is twice the gap since before the recession, and it is the biggest gap since this data was collected by the Bureau of Labor Statistics in 1984.
Do you see what is happening? Our country is pulling apart. There are fewer and fewer people at the top getting more and more wealth and more and more people at the bottom, destroying the middle class.
From 2005 to 2009, the median net worth--I keep stressing ``median net worth.'' What that means is you take all the things you own--your house, car, TV sets, all the stuff you own--and you subtract that from all your debts and obligations--mortgage, things such as that for the middle household with half having more and half having less. The median net worth from 2005 to 2009 of African-American households went from $12,124 to $5,677. The median net worth of Hispanic households went from $18,359 to $6,325. Keep those figures in mind--median net worth of African-American households in 2009, $5,677; Hispanic households, $6,325. That is their net worth. That is everything. White households, in 2009--from 2005 to 2009, the net worth went from $134,992 to $113,149. So as of just 2 years ago, the median net worth of White households was, indeed, 20 times that of African-American households and 18 times that of Hispanics. Here is Hispanic households: net worth, $6,325; median for Whites, $113,149. Again, that wealth, as I say, is the sum of all their assets--their houses, their cars, their bank accounts--minus their debts, including mortgages, loans, and credit card debt.
The share of wealth? In 1988, the top 5 percent of Americans, in terms of wealth, had $8 trillion in assets. That was 1980. In 2010, that top 5 percent had $40 trillion in assets. That is more than 60 percent of the national wealth. The other 95 percent of America has the remaining 40 percent.
Jim Wallis, president of Sojourners, Rev. Jim Wallis, said, ``A budget is a moral document.''
``We are making choices,'' he added, such as whether to cut $8.5 billion for low-income housing or whether to retain a similar amount in tax deductions for mortgages on vacation homes for the wealthy.
As Senator Menendez said earlier, it is not fair. This is the debate and discussion we should be having in America, in the Senate, and in the House. There is this huge disparity in wealth in this country, and it is getting worse year by year. Yet our Republican
friends say: Give more tax breaks to those at the top.
The American people get it. They understand this. They know there are over 25 million of them out of work. They know that wealth disparity is opening up a huge gap. The middle class is being destroyed in our country, and this so-called budget deal is going to make it even harder for anyone to succeed in becoming a middle-class person.
I just want to say that the most important thing we can do right now, the single most important thing we can do--I hate to say this--is not ``balance the budget,'' which is not what we are going to do now--this is raising the debt ceiling. That is not the most important thing. Slashing government spending is not the most important thing right now. The most important thing is to marshal the forces of the Federal Government to put people back to work, to get jobs going in our society.
There is a lot of work to be done. There are highways to be built and bridges to be built and schools to be remodeled, new technologies, new power systems, new clean energy, a smart grid, cleaning up the environment. Anyone who has suffered through the heat wave in the last couple of weeks knows something is going on in this country. Something is going on. We need more clean energy.
We need to make sure those children who are born today whose parents do not have anything, whose net worth is so little they don't have anything, we need to make sure that they have decent health, that they have early education programs and Head Start Programs. We need to make sure that every child has the best school and the best teachers in America, make sure that our streets and our neighborhoods are safe so families can go out and walk in the evening or at night and feel safe. We need to make sure the food we eat is duly inspected so we can have a high assurance we are not going to get sick and make sure the drugs we need are available, that the medicines we need, are affordable.
There are a lot of jobs that need to be done in this country, and we can put a lot of people to work. That should be the role of the Federal Government.
Some people say--I have heard it said many times: Government doesn't create wealth, only the private sector creates wealth. The government consumes wealth, it doesn't create it.
I had a hearing in my committee about a month ago or so, the HELP Committee, and we had the head of the National Institutes of Health down, Dr. Francis Collins. The head of NIH had an interesting story to tell. It had to do with the Human Genome Project, mapping and sequencing the human gene. We did it. It was a tremendous scientific accomplishment. Dr. Collins headed that effort. So we mapped and sequenced the human gene. The Batelle organization in Ohio, a research organization, analyzed it and said we had to put in taxpayers' money, $3.8 billion worth of tax dollars into this. In the last 10 years, the private sector--because of this research that was done in mapping and sequencing the human gene--has put in over $790 billion in investment, creating thousands of jobs all over this country, making huge breakthroughs in the genetic causes of so many diseases and finding interventions to help cure diseases and keep people healthy. Private investment never would have been done if we had not put $3.8 billion into the NIH to map and sequence the human gene.
The Interstate Highway System would never have been completed by any private company. We did, through the power of the Federal Government. You know what. It was not Federal Government workers out there working on that highway. It was young kids like me. When I was a kid, I was working out on the Interstate Highway System making summer money to go to college in the fall. I didn't work for the government; I worked for a private contractor.
There are plenty of jobs that need to be done, and we need to put people to work. That is the single most important thing we can be about. Yet what we are doing, as I quoted earlier, is we are actually going to make it harder. Economists say the deal could complicate the task of putting people to work. There is broad agreement that the United States needs to pay down its debts, but most economists say the government should have waited a year or more for the economy to strengthen. We sure missed a big window of opportunity to reduce our debt in our strong years when the asset prices were booming. This time it is different. Instead we are stuck trying to do it now when the economy is so weak, and we should not be cutting and slashing. We should be investing and putting people to work.
Again, I urge my colleagues to reject this misguided, counterproductive debt ceiling deal. Let's stop this precedent of taking a hostage of the United States until we get what we want. Mark my word, if we do this, it is going to happen again. Then maybe sometime when there is a Republican President and the Democrats are in charge, then the Democrats will turn on the screws and we will hold them hostage for something. It is a terrible way to run a country. It is a terrible way to run a democracy.
I urge my colleagues to reject this misguided, counterproductive debt ceiling deal. Let's join together to pass a truly balanced approach to bring deficits under control, one that first invests in putting people to work. Then as the economy begins to grow and the private sector begins to invest, then we start cutting spending, reducing the deficit. Let's have a balanced approach that will allow us to continue to invest in education, infrastructure, research, and the other things that will create jobs and boost our economy, that will build the middle class. This bill is a job killer. This debt ceiling deal is a job killer. A lot of economists agree with that. We should reject it.
Mr. President, you have the pen, and you have the Executive order and you can get rid of that debt ceiling. Take a bold action to save our country and say: No, we are not going to let any group of Congressmen or Senators of any political party take our nation hostage again.
I ask unanimous consent the time until 8 p.m. be equally divided between the two leaders or their designees, with Senators permitted to speak for up to 10 minutes each.
I yield the floor.
