Floor Statements

Mr. President, today I recognize Mellette County in South Dakota. Mellette County will commemorate the 100th anniversary of its founding this year.

Mellette County was organized in 1911 and named after Arthur C. Mellette, the first Governor of the State of South Dakota. The county seat, White River, is home to the annual Frontier Days celebration and rodeo. In celebration of the centennial, the communities of Norris, White River, and Wood will be hosting many events to mark this important milestone.

Mellette County has been a successful and thriving example of South Dakota values and traditions for the past 100 years, and I am confident that it will continue that tradition. I would like to offer my congratulations to the citizens of Mellette County on this landmark occasion and wish them continued prosperity in the years to come.

Mr. President, I appreciate the good words of my colleague from Kansas. He comes from a State where they understand that the role of the government should be limited. They understand the importance of living within your means, of not spending money you do not have. The Senator from Kansas has had a long and distinguished career in public life, but before coming to Washington, DC, to serve in Congress I suspect he also was a State legislator and my guess is that when he was a member of the State legislature in Kansas they had to balance their budget every year.

I ask my colleague if he could perhaps shed some light on what his State of Kansas does, year in and year out, in order to get their budget balanced, to make sure they are not spending more than they take in. I think, as he pointed out, that is something for most families in Kansas--I would say for most families in my State of South Dakota-- those are decisions they have to grapple with all the time and we don't always have the luxury of being able to borrow. Most States don't allow it. My State of South Dakota doesn't allow that. Certainly rules in our States probably are not very conducive to saying we are going to raise taxes on people and on small businesses, which requires then we have to make our decisions on spending.

I would, through the Chair, ask my colleague from Kansas, perhaps that might have been the way in which they went about dealing with their fiscal crisis in the past?

To the point the Senator from Kansas was making, he talks about higher interest rates and the impact of not dealing with the fiscal circumstances in which the country finds itself. Look at what is happening in Europe. Three-year government bond interest rates are about 19.4 for Portugal, 28.9 for Greece, and 12.9 for Ireland.

Think about the impact in this country if we had interest rates go back to what is even a 20-year average. We would see an additional $5 trillion, about $5 trillion in additional borrowing costs in the next decade alone. That is if we went back to the 20-year historical average for this country, not to mention going to what they are looking at in countries in Europe, with these 19, 20-percent rates. Think about auto loans, think about home loans, think about student loans, think about business loans--all those things we rely on in our economy and that families across this country rely on, in order to carry on with their daily lives if we were looking at those types of interest rates. That is the type of interest rate sensitivity we have. If we do not get our fiscal house in order, we could very well end up like many of these countries, and that would be devastating for our economy.

The most important work we could be doing right now--and the Senator from Kansas pointed this out--is to put policies in place that actually grow the economy and support jobs. I also will support the cut, cap, and balance proposal that is before the Senate today because I think it does important work. It cuts spending today, immediately, it caps spending in the near term, and puts in place a process by which we balance the budget in a long term, a balanced budget amendment

It is interesting to note, if we go back historically, something President Ronald Reagan said 29 years ago this week. He led a rally of thousands of people on the Capitol steps calling for a balanced budget amendment. This is what he said: ``Crisis is a much-abused word today but can we deny we face a crisis?''

That is 29 years ago at a time when the Federal debt was $1 trillion. We face a debt 14 times as high, $14 trillion. Under the President's budget it would literally double in the next decade. We have to get our fiscal house and our spending in order.

The Senator from Kansas also mentioned the size of government as a percentage of our entire economy. If you go back to 1800, the formation, in the early years of our country, 2 percent is what we spent on the Federal Government, 2 percent of our total economy. This year we are over 24 percent, in that 24 to 25-percent range. If you look at the 40-year historical average, about 20.6 percent is what we have spent as a percent of our entire economy. What does that mean? It means we are spending more at the Federal level and that the private economy is shrinking relative to our total economy. What we want to see is an expansion of the private economy where we put policies in place that enable our job creators to create jobs and that we get the Federal Government smaller, not larger. My view is, when you are looking at a debt crisis the way we are, you don't grow and expand the size of government, you make government smaller. You get the private economy growing and expanding and creating jobs, and that is how you ultimately get out of this situation.

We have policies in place right now that are making it more difficult, and

more expensive I would argue, for our small businesses to create jobs. Anywhere you go--in my State of South Dakota and elsewhere--you talk to small business owners, you talk to farmers and ranchers, and what they will tell you is the policies, the regulations, and the taxes that are coming out of Washington, DC, make it more expensive and more difficult for our job creators to create jobs.

If you look, the data on that it is pretty clear. Since this President took office, we have higher unemployment by 18 percent, we have 2.1 million more people unemployed than we did when he took office, and we have a 35-percent higher debt. We saw spending go up in the last 2 years alone, nondefense discretionary spending, by 24 percent. The number of people who are receiving food stamps in this country is up by 40 percent.

All the data, all the tools by which we can measure economic progress and growth demonstrate that the policies that have been put in place by this administration have been a complete failure. So what we need is a change in policies, and it starts by cutting Federal spending, capping it in the near term, and putting in place a long-term solution--a balanced budget amendment like so many States have in place, like the Senator from Kansas mentioned they have in his State of Kansas, like we have in my State of South Dakota, where our State governments have to live within their means. They cannot spend money they do not have. That is the problem we have in Washington, DC, today.

In terms of our small businesses, there was a survey done by the chamber of commerce a couple of weeks ago in which they found that 64 percent of the small businesses that responded to the survey said they are not going to hire this year. Another 12 percent actually said they are going to cut jobs. Why? Half of the small businesses listed economic uncertainty as the major reason. They are concerned about what is going to come out of Washington, DC. They don't know what policies and regulations are going to be imposed on them and what it is going to do to them and their cost of doing business, and as a consequence they are just hunkering down and trying to survive.

We need to change that. We change that by getting Federal spending under control. Cut, cap, and balance is an important step in that process, and I am pleased the House of Representatives last night passed it and sent it over here to the Senate. We will have an opportunity to vote on that in the next few days, and I would argue to my colleagues that this is fundamentally the best we can be doing to not only get our fiscal house in order and get it on a more sustainable path going forward but also to help get our economy growing again and get jobs created out there. You can't do it by making government larger. If that was the case, the trillion-dollar stimulus bill that was passed last year would have brought unemployment down. But, as we all know, we are facing 9.2 percent unemployment today.

We continue to see an economy that is struggling, that is growing at a very slow rate. We need to unleash that economy, and the way we do that is by capping or cutting spending in Washington, DC, making the Federal Government smaller, not larger, getting that amount of spending as a percentage of our entire economy back into a more historical norm, and working to ensure that taxes and regulations stay low on our job creators in this country.

That is why I fundamentally object to what the President and many of his allies in Congress want to do with regard to the debt crisis; that is, increase revenues. You cannot create jobs, you cannot grow the economy by increasing taxes on our job creators. I can't think of a single tax that you could put on our economy that actually would help create jobs. It will have the opposite effect--it will make it more difficult for small businesses to create jobs, more difficult for us to get out of this economic downturn.

I hope my colleagues will support cut, cap, and balance and that it will get a big vote here in the Senate and get this country on a more sound fiscal footing and on a path where we can create jobs and get this economy growing.

I yield the floor.

Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, I ask unanimous consent to engage in a colloquy with the Senator from New Hampshire.

I have been coming to the floor for several weeks to talk about the need to restrain spending and cut our deficit. As we look at the next few days, we are going to have an opportunity to debate something that does that. We are going to be talking about the Cut, Cap, and Balance plan.

The third part of the plan--the balanced budget amendment--is something I have supported since I first ran for the House of Representatives about 15 years ago. This past week, I received a letter from a Boy Scout in South Dakota, who was writing in to earn a merit badge. I will read an excerpt from the letter. This is what he said:

I feel that the Federal Government needs a balanced budget.

If we don't, the debt gets larger each year. I feel that

there are two solutions for this. In our house, we are

careful to only spend what my Mom and Dad earn. The needs

come first and what is left is for wants. Many times we were

told no when we asked for something. With my allowance and

lawn mowing money, I divide it between donations, savings and

spending. I can't spend more than I make.

I think there are two very powerful thoughts in this statement. First is that the need for a balanced budget is obvious--even to this young man because, like him, we cannot spend more than we make. The second is that this has a profound impact on the younger generation. The debts we are running up now will have profound impacts on our children and our grandchildren.

The Senator from New Hampshire is on the floor. She is fairly new to the Senate, but she has already had an immediate impact on many of these budget debates. She is also the mother of two young children, each of whom is carrying a $46,000 debt. I ask the Senator from New Hampshire about those two young children and the $46,000 burden that has been placed on them by the $14.3 trillion national debt we have. Does she feel comfortable having her children essentially owe $46,000 of this massive national debt we have accumulated now for the past several years?

Absolutely. I say to my colleague from New Hampshire that the cut, cap, and balance approach is the correct way to approach this problem, because it makes cuts to spending today--real cuts--this year, to this year's budget. It caps spending in the near term, and then it puts into place a balanced budget amendment that would require Congress to balance its budget in the future years. Obviously, that is something many States have. My State of South Dakota has that. I know that the ``live free or die'' State of New Hampshire has some very distinct and direct views about the role of government and making its role limited, keeping spending under control, and living within your means.

Cut, cap, and balance is the correct approach because it puts the emphasis on getting spending under control. If you look at the five times our country balanced the budget since 1969, the average amount we spent was just under 18.7 percent of GDP--our entire economy. This year, we are set to spend 24.3 percent of our GDP. That is just on the Federal Government--a historic high.

The President spends substantially above this average in his budget for every year. You literally have to go back to the end of World War II to find a time when we spent this amount as a percentage of GDP on the Federal Government.

Part of the reason for this is the huge increase we have seen in nondefense discretionary spending from 2008 to 2010. In those 2 years, in which the economy was hurting and families everywhere were cutting back, these accounts increased by a mind-boggling 24 percent.

This year, part of our deficit is also caused by low tax receipts, which are caused by a slow economic recovery. If you look at the tax revenue that we brought in in 2006 and 2007, we brought in over 18 percent of GDP in both years. So if we are able to constrain spending, we know we will be able to balance our budget once our economy improves.

I argue that one of the ways we help our economy improve and get back on track is to get Federal spending under control. In 2006 and 2007, the income Tax Code--the way we collected taxes was similar to what we have today. We brought in over 18 percent of GDP in both of those years. So if we get back to a more normal footing in terms of the economy, we will see revenues start to come back. But we have to get spending controlled and actually start to rein in the out-of-control spending we are seeing here in Washington, DC.

If there is still a gap, even if we get back to 18 percent of GDP in terms of what we collect in the form of tax receipts, there is still 23, 24, 25 percent of GDP that the President wants to be comprised of Federal spending. The gap cannot be met through tax increases. It has to be dealt with through spending restraint.

A couple of years ago--and I want to get back to my colleague from New Hampshire in just a moment--Senator Ayotte's predecessor in this job, Senator Gregg of New Hampshire, who was a great fiscal mind around here and somebody who was very focused on spending and debt, along with Congressman Ryan, asked the Congressional Budget Office to estimate how high tax rates would have to rise to pay for our projected spending. CBO's response had two parts. First, they said marginal rates would have to more than double to cover the expected expenditures of our government. They said:

The tax rate for the lowest tax bracket would have to be

increased from 10 percent to 25 percent. The tax rate on

incomes in the current 25 percent bracket would have to be

increased to 63 percent. And the tax rate at the highest

bracket would have to be raised from 35 percent to 88

percent. The top corporate income tax rate would also

increase from 35 percent to 88 percent.

That is a quote from the Congressional Budget Office in response to an inquiry from Senator Gregg and Congressman Ryan about what the tax rates would have to be in order to get our budget back into balance.

CBO also said that, practically speaking, this is impossible; you cannot increase tax rates and create this huge disincentive that would have a profound impact on our economy and our ability to create jobs.

So we know that amount of revenue would never be collected when you raise tax rates that high. We know the real way to deal with the budget and to get the budget balanced and under control in this country is to get spending under control. So I think the cut, cap, and balance approach is the correct way in which to proceed because it puts that focus on spending. We need to make sure to constrain spending and live within our means. The cut, cap, and balance approach does that.

By the way, I would like to make one observation about that because there are people who have said the balanced budget amendment that has been proposed by Republicans is too Draconian and won't work. The cut, cap, and balance plan doesn't specify or prescribe a specific balanced budget amendment; it just says a balanced budget amendment.

I think my colleagues on this side would be more than happy to work with our colleagues on the other side to come up with a balanced budget amendment that actually would work to ensure we don't spend more than we take in each and every year, which is what almost every State in the country has in its constitution. That is why they are able to live within their means.

I would say to my colleague from New Hampshire, I am told she recently held a townhall meeting back in New Hampshire, and I am interested in knowing what her constituents had to say because I think New Hampshire has always been a good barometer when it comes to fiscal issues. What did they think about the crisis we are facing? Do they believe the way we ought to deal with this would be to constrain spending and to get our budget balanced in that way, as opposed to moving toward raising taxes, which is what many of our colleagues on the Democratic side and the President have suggested doing?

What is remarkable about that is when I first got here, there was a vote in the Senate in 1997. We didn't have the opportunity to vote on it in the House of Representatives, although I think we could have passed it with a two-thirds majority there at the time. It failed in the Senate by one vote. It got 66 votes in the Senate and it needed 67.

I can't help but think how different things would be today had we passed the balance budget amendment then and sent it to the States. I presume, as does the Senator--and New Hampshire is not unlike South Dakota--that we would certainly have ratified it. The 38 States would have ratified it, and it would have put us on a path that is fiscally sustainable. Ironically, at that time the debt was about $5 trillion. We are talking about $14 trillion today. Back then, it was $5 trillion. So that is a $9 trillion increase. If we had passed a balanced budget amendment, we wouldn't have run up this debt.

Now, it is interesting because--and I will point this out to my colleague from New Hampshire too--if you go back 29 years ago this week, President Reagan led a rally of people--thousands of people on the Capitol--calling for a balanced budget amendment. He said:

Crisis is a much abused word, but can we deny that we face

a crisis?

I would say to my colleague from New Hampshire that the Federal debt at that time was $1 trillion, and President Reagan thought that was a crisis at that time. Obviously, we are in a situation now where the debt is 14 times that amount--$14 trillion since President Reagan 29 years ago suggested we needed a balanced budget amendment because of the debt crisis we faced then.

A lot of our Democratic colleagues say we just need to balance our budget; we don't need a balanced budget amendment. My response to them is, as the Senator from New Hampshire pointed out, where is your plan? We have been sitting here for 812 days since the Democrats passed a budget in the Senate, and even then that was a budget that didn't balance. The President's budget submitted earlier this year, as the Senator from New Hampshire pointed out, was rejected by the Senate 97 to 0. When the President sent a budget up here, it was actually voted on in the Senate and didn't get a single vote, either Democrat or Republican. So the President took a mulligan on that budget, and he gave a speech outlining the framework for how he would cut the deficit. That didn't balance either.

So it is clear the Democrats don't have the will to balance the budget now. But if we had a balanced budget amendment, they would, along with all of us--Republicans and Democrats because we have all contributed to where we are today--be required to balance the budget every single year, and that would have a huge impact on what our future is going to look like and what the future for your two children and my two children will be.

The rating agencies are considering, as the Senator from New Hampshire mentioned, downgrading us if we don't take concrete steps to reduce our deficits. It would have a tremendous impact on interest rates if that happened. As I mentioned earlier today, 3-year government bond interest rates for Portugal are 19.4 percent; for Greece, they are 28.9 percent; and for Ireland, 12.9 percent. We are already suffering from slower economic growth because of our debt and deficit.

There is a study by economists Reinhart and Rogoff that found that debt levels above 90 percent of GDP were associated with economic growth that was 1 percentage point less than it would be otherwise.

We know from the President's own economic advisers that translates into the loss of about 1 million jobs every year. So it is clear we need to cut spending now, we need to balance our budget, we need a discipline imposed on Congress. A balanced budget amendment would do that, as it has done for so many States around the country.

But the cut, cap, and balance approach cuts spending, as the Senator from New Hampshire mentioned, now, today, by over $100 billion this year, cuts spending over the next decade by almost $6 trillion, and then puts in place a balanced budget amendment that would ensure that going forward into the future we learn to live within our means, that we don't continue to spend money that we don't have.

So I appreciate the observations of my colleague from New Hampshire, as I said. She represents a State that has a great tradition when it comes to keeping spending and government under control. We need that tradition in Washington, DC. I would simply say to my colleague from New Hampshire, I hope we can find the support among our colleagues in the Senate when we have this vote--and it sounds like now it is going to be scheduled for sometime on Saturday--to get a big bipartisan vote in support of cut, cap, and balance.

I know that is what my colleague from New Hampshire hopes as well. I do believe it is the pathway that will get us toward fiscal sustainability for the future of this country and put us on a trajectory that is good for our children and grandchildren, doesn't put this Nation on the verge of bankruptcy, doesn't have the adverse economic impacts that we are experiencing in real time both in terms of jobs lost, potential for much higher interest rates that would affect homeowners, people who are trying to get student loans, auto loans, people who are trying to start businesses. It would be absolutely devastating to this economy if that happened. If we don't get our fiscal house in order, that is the train wreck we are headed for.

I think our colleagues in the House have shown us the way. They passed this last night. They have given us an opportunity now to have this vote, and it is long overdue. In my view--and I think the numbers bear this out--this is not a revenue problem. This is not a problem of having too little tax revenue. This is not a problem, as I pointed out, that can be solved by tax increases, which would devastate the job creators in this country and make it more difficult for our economy to recover and to get people back to work. But this is really about spending.

This is about getting Federal spending back to a level that is historically normal. If we could do that, we will have done a great thing for the future of this country, for our children and grandchildren. It is so important, in my view, that we not wait any longer. We can't afford to wait. The time is now.

We are going to have this vote coming up, it looks like probably on Saturday. I hope we will have a big bipartisan vote in support of this approach that would cut spending today, cap it in the future, and get a balanced budget amendment on the books.

Mr. President, I yield back the remainder of our time.

Mr. President, today I recognize Delmont, SD. The town of Delmont will commemorate the 125th anniversary of its founding this year.

Delmont was founded in 1886 after the first train passed through. Located in Douglas County, it boasts community members dedicated to supporting and growing local business. It is also home to the annual Kuchen Festival and the Harvest Festival. The citizens of Delmont have committed themselves to developing their strong heritage and traditions.

Delmont has been a successful and thriving community for the past 125 years, and I am confident that it will continue to serve as an example of South Dakota values and traditions. I would like to offer my congratulations to the citizens of Delmont on this landmark date and wish them continued prosperity in the years to come.

Mr. President, today I recognize Hermosa, SD. The town of Hermosa will commemorate the 125th anniversary of its founding this year.

Located in Custer County in western South Dakota, Hermosa was founded in 1886 and was named after the Spanish word meaning ``beautiful'' because of its breathtaking landscape. Today, Hermosa's rich history, strong traditions and beautiful scenery continue to make it a great place to live.

Hermosa has been a successful and thriving community for the past 125 years, and I am confident that it will continue to serve as an example of South Dakota values and traditions. I would like to offer my congratulations to the citizens of Hermosa on this landmark date and wish them continued prosperity in the years to come.

Mr. President, today I recognize Trent, SD. The town of Trent will commemorate the 125th anniversary of its founding this year.

Located in Moody County, Trent was originally a post office for the early settlers of eastern South Dakota. Trent was officially given its name with the arrival of the railroad in the late 19th century and soon after, many settlers migrated to the town from neighboring states as well as other areas throughout South Dakota. Today, the citizens of Trent are known for their commitment to growing the community and their local businesses.

Trent has been a successful and thriving community for the past 125 years, and I am confident that it will continue to serve as an example of South Dakota values and traditions. I would like to offer my congratulations to the citizens of Trent on this landmark date and wish them continued prosperity in the years to come.

Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, as we all know, in the next few weeks we are going to have to be faced with a decision about what to do with the debt limit, and of course there has been a lot of discussion around here as well as between the White House and the congressional leadership about how best to resolve this issue.

I believe what it really comes down to is a question about what is the best way to resolve a debt crisis. I think it creates a great debate, a philosophical debate about do we need to grow government or do we need to shrink government. I would argue that is kind of the defining line in this debate, whether you believe the best way out of a debt crisis is to expand and grow government or whether you think, as I do, that we ought to make government smaller, not larger, if we are trying to figure out how to get out of this particular circumstance we find ourselves in right now.

We have a $14 trillion debt. We are going to have to increase the borrowing authority to get to the 2012 election by $2.4 trillion. That is the rate at which our debt is growing. I have said on the floor before that if you look at just the daily borrowing our Federal Government does, it exceeds the entire budget of my State of South Dakota for a whole year. So we will borrow more in the next 24 hours here in Washington, DC--about $4 billion--than the State of South Dakota spends in an entire year. That is the dimension of the problem we are facing.

Many of us believe the best thing we could do in order to get ourselves on a better fiscal track is to pass a balanced budget amendment to the Constitution. Frankly, I hope we will have an opportunity to vote on just that sometime in this next week or the following week. Most States around the country, including my State of South Dakota, have a balanced budget amendment in their constitution. It requires them year-in and year-out to get their books balanced. They cannot continue to spend as if there is no tomorrow. They cannot spend money they do not have. They live within their means. That is what most Americans have to do, that is what American businesses and families have to do, and it certainly makes sense that we ought to be doing that at the Federal level.

I would urge my colleagues, as we look at the short-term issue, which is the debt limit vote, we have to figure out how we are going to get the best deal we can get in the near term, but what are we going to do in the long term to put our country on a more sustainable fiscal footing? I would argue that putting an imposed discipline on Congress, such as an amendment to the Constitution that would require us year-in and year-out to balance our budget, just makes sense. It is practical, it makes economic sense, and it certainly is discipline that has been lacking here in Washington, DC, for some time.

If you look at the States that have made hard decisions--mine is a good example of that--they had to cut spending this year significantly to balance their budgets, but at least they are doing that. They are making these

hard choices and hard decisions, and that is something we have been putting off here for way too long.

I would point out to my colleagues here that as we talk about how to get the country back on the right fiscal track, we do have to start setting priorities.

Well, we are not doing that. We haven't had a budget here now for 806 days. It has been 806 days since the Democratic majority in the Senate has allowed us to have a vote on a budget.

Many of us believe that in order to determine how you are going to spend $3.7 trillion of America's hard-earned money, you ought to have some priorities. You ought to at least put a pathway out there about how you are going to go about spending those dollars and setting priorities for the country.

Well, we are not doing that because we have not passed a budget in 806 days. That is the fundamental responsibility we have as leaders. The people of this country elected us to do that. We are not doing that. I think that is creating uncertainty. It is creating instability out there around the country.

I met with some business owners this morning who say that in their particular industry, there are people who want to invest, they want to create jobs, and they want to make capital investments. But these are long-term investments, and they don't know what is happening, they don't know what the policies coming out of Washington are going to be with regard to taxes, spending, regulations, all of those sorts of things. There is an enormous amount of uncertainty.

There was a survey done just recently by the U.S. Chamber of Commerce in which they asked small businesses about their future hiring plans, and 64 percent of the small businesses that responded to that survey said they were not going to add to their payroll this year, they were not going to hire this year. Another 12 percent said they were actually going to cut jobs. Why? Half of the people who responded to the survey said: Economic uncertainty. They just flat do not know what Washington is going to do next. And you can't have that kind of uncertainty. What the markets want, what businesses want, what investors want is they want to know what the rules are going to be, and they want some certainty about what is going to happen next.

The kind of uncertainty we are creating reaches beyond our shores because I think that if you look at what is happening in Europe today, they are facing a debt crisis in many of those countries. What are the economic impacts of that? Well, if you look at the interest rates in the Euro zone, the 3-year government interest rates are 19.4 percent for Portugal, 28.9 percent for Greece, and 12.9 percent for Ireland. That is our future if we don't get our fiscal house in order.

What does that mean? That means that not just does the Federal Government have to pay more to borrow money, pay more in higher interest costs, it also means that those interest costs--all interest rates in this country, whether it is for an auto loan or a home loan or a student's college loan, they all track with the Treasury borrowing rates. If those rates go up, that has profound implications for our economy. That means people across this country are going to pay much higher interest rates. Small businesses are going to pay higher interest rates to borrow money.

These are real-world impacts if we do not make the right kinds of decisions here to get this spending and this borrowing under control. So if you want to see our future, look at some of the European countries. Look at what impact this is having on interest rates and on their economies. That is something our economy could not withstand.

We are already facing 9.2 percent unemployment. We have a need to get people back to work. And what we need now is not more expanded government and more uncertainty about what Washington, DC, is going to do; we need stability, we need certainty, and we need decisions here which have a favorable impact on the private marketplace and create an inducement to hire people as opposed to discouraging it, which is what we are seeing today.

I have argued down here on many occasions that this debt is really strangling our economy because it is crowding out private investment. Anytime the government is out there borrowing money, it means there is less capital out there for private businesses to have access to. I think the more fundamental issue in this whole debate, however--and I mentioned this yesterday in some remarks on the floor--is really the size and scope of government and whether we want to see an expanded, bigger, larger government or whether we ought to try to work our way out of this debt crisis by actually reducing the size of our government.

I pointed out that in the past couple of years alone, we have seen government expand dramatically. In fact, nondefense discretionary spending in the last 2 years has grown by 24 percent. The debt has grown by 35 percent in just the time this President has been in office. The amount we spend on our Federal Government as a percentage of our entire economy has grown dramatically as well. The 40-year historical average is 20.6 percent. That is what we historically, for the past 40 years, have spent on the Federal Government as a percentage of our entire economic output. If you go back to the year 1800--hard to believe--it was 2 percent. That is what we spent on the Federal Government as a percentage of our entire economy. Of course, it has grown since that time, but it has really taken off here in just the last few years.

I pointed out yesterday as well that of the five times the budget has actually been balanced in this country since 1969, in every circumstance it has been when government has spent less as a percentage of our entire economy than the average. So if the average is 20.6 for the past 40 years, the times when we have actually balanced the budget, we have averaged spending 18.7 percent of our GDP.

The point simply is this: If you want to solve this problem, it gets solved on the spending side of the equation. The problem we have in this country is not that we tax too little or have too little revenue, it is that we spend too much because this year we will spend, as a percentage of our entire economy, 24.3 percent. There is almost a quarter of the entire economy of this country now being spent by the Federal Government, and that will only go up over time as we see these new entitlement programs, the new health care program that was created last year, continue to consume more and more of our resources in this country. That means there is less and less out there for the private economy where the real jobs are created.

If you look at just what we pay in interest costs alone and how we would be influenced by a slight uptick in interest rates--there was a great op-ed written in the Wall Street Journal a couple of weeks back by Larry Lindsey, who is a former economic adviser to President Bush and also a member of the Federal Reserve Board of Governors. He pointed out that if interest rates return to their 20-year average, it would add $4.9 trillion in additional borrowing costs over the next decade. So everything we are talking about here in this debate about the debt limit in terms of reducing spending really pales in comparison to just a normalization of interest rates.

If we saw interest rates go back to what is a 20-year average, we would see an additional $4.9 trillion that we would have to spend to finance our debt. That is a staggering statistic. Again, I think it speaks to the need for us to get our spending under control because the amount we borrow, as it continues to ratchet up, and we continue to get further in debt, the likelihood is that our interest rates are going to go up in a corresponding manner, and we will end up spending more and more on higher interest.

I think the real issue is whether we as a nation are going to make a conscious decision that the way we resolve this debt crisis is either on the spending side or on the revenue side. We heard our colleagues on the other side--and we heard the President--say we need more revenue. In fact, I have not been in on the discussions occurring at the White House, but it is my understanding that one of the latest proposals on the table was a $1.6 trillion increase in taxes. In other words, they want to add $1.6 trillion in additional tax revenues in order to get some amount of spending reduction.

We have seen this picture before. We can go back to the 1990 budget deal that President Bush made with the

Congress at the time which was supposed to have 2-to-1 spending cuts to tax increases. The tax increases occurred; the spending cuts didn't. That is our history. That is why making a deal that involves massive increases in taxes on our economy, on our small businesses, when we have 9.2 percent unemployment is a bad idea when the problem we are trying to fix is fundamentally a spending problem. It would be one thing if we were spending at a historical rate. If we were spending at a rate that is 20 percent of our total economy, the 40-year average, that would be different. We are spending more than 24 percent. This is fundamentally a spending problem that cannot be solved on the revenue side.

The only thing that increasing taxes would do is make it harder, more expensive, and more difficult for small businesses to create jobs. That is precisely what we want small businesses to think about doing. Instead, 64 percent of them are saying that this next year they are not going to add to the payroll, create jobs. Why? Because of economic uncertainty. We need to create some certainty out there. We need them to know that tax rates will stay at a low level--taxes on investments and income. We need them to know we are committed to cutting spending and getting the Federal debt under control. We need them to know we are not going to add massively to the cost of doing business in this country by dramatically increasing the number of Federal regulations with which they have to comply.

I hear that everywhere I go, whether it is a farmer, rancher, or small business owner--everywhere. In a meeting I had with some small business owners, they said the regulations are making it increasingly costly and more difficult for them to create jobs. So if we get into the final days of this debate and these decisions have to be made, I would say that the President needs to recognize that this is not a revenue issue; this is a spending issue, and he needs to step up and provide leadership and a pathway for how we get our fiscal house in order--not by increasing taxes on the job creators in our economy, our small businesses but, rather, by getting Federal spending under control.

I think we would have an incredibly warm and favorable reception from both the House and the Senate, who are prepared to do business when it comes to reducing spending and making government smaller, not bigger, dealing with this long-term structural problem that we have of a runaway debt that is growing literally by the year at the tune of about $1 trillion annually.

If we don't do this, as I said before, we are looking at a future that will resemble many countries in Europe. We don't want to be a country that defaults on our debt. We obviously need to address this issue of the debt limit. We need to do it in a responsible way that holds us accountable to the American people who spoke loudly and clearly in the last election indicating that they believe government has gotten too big and is growing too fast. They want the government reined in.

The way we do that is to rein in Federal spending. That involves not just the discretionary spending I mentioned earlier, which has grown at 24 percent in the last 2 years, but the long-term structural challenges that we face in entitlement programs--Medicare and Social Security.

Republicans in the Congress are willing to lead on those issues and are willing to step forward and put forward a plan. The only plan put forward so far has come from the House Republicans, and it has been criticized by a lot of Democrats in the House and Senate and also by the White House. We have yet to see a plan from the other side. It has been 806 days, and we haven't had a budget presented by the Democratic majority in the Senate, nor has the President come forward with a plan that actually does something to reduce spending and debt.

The President did submit a budget proposal earlier this year which dramatically would have increased spending and doubled the debt over the next decade and dramatically increased taxes. That is the wrong message to have received.

The message the people of this country are sending is that we want Washington to focus on the spending side. We want a smaller Federal Government, not a larger Federal Government. We want the Federal Government to do what we have to do--American families and small businesses--and that is to live within its means.

I hope this debt debate, as it comes to a conclusion, will come to a good outcome and result for the people of this country. We don't want to have this country in a situation where we are not making payments, where we are defaulting on our debt. But we cannot just continue this pattern of raising the borrowing authority of this country, adding to the Federal debt, without doing something to get that debt under control, without doing something to reduce the amount this Federal Government spends every single year. Spending at 24 to 25 percent of our entire economy is a trend that cannot be continued and cannot be sustained. We need to get back to more of a historical average, where the American people want us to be.

The reason the American people reacted the way they did in the last election is they saw this government growing at a rate that made them very uncomfortable and frightened. That continues to this day because there is uncertainty about the country's future and an instability that exists today.

I heard from some business owners this morning. They want stability, some certainty about what the rules are going to be. More importantly, it starts by having a Federal Government that lives within its means and doesn't spend money that it doesn't have and that focuses intently on getting spending and debt under control and creating favorable conditions for economic growth and job creation.

That doesn't happen by raising government revenues, raising taxes; that happens by the Federal Government exercising fiscal responsibility, reducing spending, reducing debt, and keeping taxes low on our job creators so that we can get people in this country back to work. That is the correct prescription for this country. It is a prescription I hope the President will embrace.

I can say that the Republicans in the Senate--and I daresay the Republicans in the House of Representatives as well--are prepared to meet him in working together on that challenge of reducing spending and debt and creating conditions favorable to economic growth and job creation and getting American people back to work.

I yield the floor and suggest the absence of a quorum.

Madam President, I want to echo some of the remarks made by my colleague from Alabama regarding a budget. He is the ranking Republican member on our side on the Budget Committee.

It is ironic that we are on the floor of the Senate this week, as we were last week, debating a nonbinding sense-of-the-Senate bill that states ``those earning $1 million or more per year make a more meaningful contribution to the deficit reduction effort.''

It doesn't specify what that is. It doesn't say there should be tax increases or spending cuts that should have an impact on these high- income earners. I echo what was stated by my colleague, which is that this is no substitute for a budget. Congress's job is to pass a budget. That is why we are here. That is why the taxpayers elected us. It is to set priorities and make decisions about where we are going to allocate their hard-earned tax dollars.

The Democrats have not passed a budget for 805 days. Now, this sense- of-the-Senate bill--which is vague, ambiguous, and meaningless--does not do anything to address the fiscal challenges our country faces or achieve any level of budgetary savings.

I am happy to yield for a question.

My colleague is absolutely right. There was tremendous interest this year. If we look at the last election, the 2010 election, a lot of the people who were elected in the House and Senate were elected because they ran on a message to their constituents of getting America's fiscal house in order, getting spending and debt under control.

Where does that start? It starts with a budget. So they got here and tried to get on the Senate Budget Committee. We have all these bright new Members of the Senate who have a lot to contribute and who have had no opportunity to do that because we haven't had a budget, a markup, and we haven't done the necessary things in order to move the budget process forward.

I am completely in agreement with the Senator from Alabama when it comes to what the priorities should be. It ought to be doing a budget that actually focuses on cutting spending and getting this debt under control.

I tried to offer an amendment to this nonbinding sense-of-the-Senate bill, but the majority is blocking amendments. That amendment would cut all nonsecurity discretionary spending for the current fiscal year by 2.5 percent. It is a nominal amount, I recognize that. It is not a big spending cut. It is a small haircut. It will not solve our problem. It would produce about $11 billion in savings from some of these accounts that have seen, as the Senator noted, extraordinary growth since 2008.

Spending has increased in the discretionary part of the budget by 24 percent in 2 years, when inflation was about 2 percent. The government was spending at a rate of 10 or 12 times the right of inflation. It is unsustainable.

We cannot argue to the American people with a straight face that that is the kind of spending that ought to be going on in Washington, DC. Because the amendments have been blocked, we are probably not going to have a chance to vote on that. But the amendment says: Let's cut by 2.5 percent the discretionary spending, given the fact that it has increased 24 percent in the last 2 years.

These accounts started to feel downward pressure when the continuing resolution passed earlier this year, but more needs to be done. We need to put pressure on the spending side of the equation, not the tax side. All of my Republican colleagues have said it multiple times, but I think it bears repeating and explaining that our problem in Washington isn't that Washington taxes too little; it is that it spends too much. That is true.

Revenues are below their historical average, but spending is dramatically higher than its historical average. The reason we have revenues that are lower than the historical average is because we have an anemic economic recovery. If we get the economy growing and expanding and creating jobs again, we will start to see some of the tax revenue pick up. Just as a point of fact, in 2006 and 2007, we had a very similar income tax system to what we have today. At that time it raised more revenue than our historical average. Our historical average is around 18 percent of our entire economy--what we raise in tax revenues. In 2006 and 2007, in the Tax Code, the rates were similar to today. We have exceeded the average.

The issue is not that we have too little revenue in Washington, not that Washington taxes too little; it spends too much. Once the economy starts to turn around, we know we are going to be raising a substantial and sufficient amount of revenue without having to resort to tax increases. In fact, if we were to enact tax reform that was revenue neutral--and by that I mean it doesn't generate more revenue for Washington to spend--but if we were to lower the rates on people and businesses and broaden the tax base, our economy would grow and expand dramatically, and we would see even more revenue generated for the Federal Government and more jobs created, which is what everybody wants to see. We should not, however, simply increase taxes to pay for ever- increasing spending for programs that aren't sustainable.

This year Federal government spending will comprise 24.3 percent of our Nation's entire economic output. So almost a quarter of every dollar spent in this country will be spent by the Federal Government. That doesn't take into consideration spending by State and local governments. But it is 18 percent more than our historical average. We spend about 20.6 percent, historically, of our entire economy on the Federal Government. This year it is 24.3 percent. We are almost at a quarter out of every dollar being spent by our Federal Government in Washington, DC.

What happens? That means there is less activity in the private economy, which is where the real jobs are created. When the Federal Government is spending this much and borrowing this much, it crowds out private investment and makes it difficult for the private economy to create jobs that are permanent, good-paying jobs for the people of this country.

Perhaps an even more pertinent statistic is the years in which our budget has been balanced since 1969. These budgets were balanced because spending was constrained. If we look at the 5 years when the budget was balanced, the Federal Government's spending in those 5 years comprises just under 18.7 percent of our GDP, our economic output. So if we look at the problem that we are trying to diagnose in this country, our colleagues on the other side diagnose it as a revenue problem. I submit that the problem we are trying to solve is fundamentally a spending problem. Five times, when the budget was balanced since 1969, in every instance it was because we were spending less than the historical average.

This year's spending is over 30 percent more than the years in which we

balanced the budget; that is, as a percentage of our entire economy. That is how much higher it is than the years in which we balanced our budget. That is how much and how fast government spending is growing. Unfortunately, it remains above the historical average every year in the President's budget. He submitted a budget that borrows more, spends more, and taxes more. I can't think of a worse way to get out of an economic downturn and start creating jobs than to continue to spend at this uncontrollable rate, to continue to borrow more and more money, and impose higher taxes on an American economy that is already struggling.

After 2018, according to the President's budget, spending increases every single year. That is a spending problem; that is not a revenue problem. Despite that, the administration wants to take what they call a ``balanced approach'' and to have shared sacrifice.

Only in Washington, DC, would spending more and taxing more be considered a balanced approach. Only in Washington would shared sacrifice mean taking more of taxpayers' hard-earned money to spend on the administration's priorities.

To put a fine point on that, this week, the President said he would ``rather be talking about things that everyone wants, like new programs.'' This is code for: I need more of your money so I can spend more.

I reject that notion. We don't need more spending in Washington, DC. We don't need more programs. We don't need to expand government. Government is too big already, at 25 percent of our entire economy.

Let's pretend for a minute that deficit reduction really was the President's priority. What has happened in the past with these ``balanced budget'' deals? In 1990 the budget agreement reached by President Bush at Andrews Air Force Base was supposed to have spending cuts that outnumbered tax increases by a 2-to-1 margin. Spending was supposed to be cut by $274 billion, and taxes were going to be increased by $137 billion.

What actually happened? Tax hikes certainly materialized, but the reality is that spending actually increased. So in the 1990 ``balanced'' budget approach, we got increased spending and increased taxes. In 1982, under President Reagan, the exact same thing happened.

Madam President, I simply say to my colleagues that this is fundamentally a debate about the size of our government. We believe in a debt crisis we ought to make government smaller, not larger, and not create more programs. Our colleagues on the other side have a different view. We ought to be talking about what we can do to get people in this country back to work and small businesses hiring.

There was a Chamber of Commerce survey that said 64 percent of small businesses will not add to their payrolls this year, and 12 percent will cut jobs. Why? Because of the economic uncertainty created in Washington and because we are unwilling to deal with the spending and debt issue that is in front of us and to put policies into place that will enable job creation and economic growth.

I hope my colleagues will work with us to reduce the size of government, not grow it.

I yield the floor.

Madam President, today I recognize Parkston, SD. This year the town of Parkston will commemorate the 125th anniversary of its founding.

Located in Hutchinson County, Parkston was originally known as Dakota City and was located southeast of what is now Parkston. When the railroad was built, it did not run through Dakota City as expected. So the residents of Dakota City moved their buildings with teams of horses to where Parkston is currently located. Today Parkston is a growing community with many local shops and excellent health care and educations facilitates. It is also home to the Parkston Classic, a high school basketball tradition.

Parkston has been a successful and thriving community for the past 125 years, and I am confident that it will continue to serve as an example of South Dakota values and traditions. I would like to extend my congratulations to the citizens of Parkston on this landmark date and wish them continued prosperity in the years to come.

Madam President, today I recognize Viborg, SD. This year the town of Viborg will commemorate the 125th anniversary of its founding.

Located in Turner County, Viborg was originally known as Daneville. It was named Daneville because it was a booming settlement of Danish immigrants. When the railroad was built, it did not run through Daneville but, rather, was located a half mile from the village. Residents relocated to the current location of Viborg, which was

named for an ancient city in Denmark. Today, Viborg is a growing community and is well known for its annual Danish Days celebration, which celebrates the strong cultural heritage in Viborg.

Viborg has been a successful and thriving community for the past 125 years, and I am confident that it will continue to serve as an example of South Dakota values and traditions. I would like to offer my congratulations to the citizens of Viborg on this landmark date and wish them continued prosperity in the years to come.

Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, like many of my colleagues, I was back in my State for the Fourth of July celebrations, and what struck me about those visits I made and visiting and interacting with people--and I remember riding my bike around my neighborhood on the Fourth, and there were lots of families, lots of lawn parties and pit fires and get- togethers, family get-togethers, people shooting off fireworks, and all of that sort of thing. It occurred to me as I was riding around that a lot of the people who live in those neighborhoods probably are not thinking about what is going to happen if we do not do something to address this spending and debt problem we have in this country. And we are very near a debt crisis.

We have seen what has happened in other countries around the world. When you start looking at the increase in interest rates that occurs when you get into a debt crisis--and Greece is

perhaps a good example of that because now they are facing, on 2-year debt, 24-percent interest rates.

As we all know, Treasury interest rates, Federal borrowing, Treasury notes, bonds, bills--those sorts of things are sort of what drive interest rates in other areas of our economy. So if you are one of those homeowners in South Dakota and you are looking at perhaps refinancing your home or buying a new home or being a first-time home buyer, if you are looking at an auto loan, if you are looking at a loan for your child's education, you could very well, if we do not get things turned around here, be looking at much higher interest rates. That would put an even bigger crimp on the budgets of most families across this country.

It was interesting because last week there was an op-ed in the Wall Street Journal in which Larry Lindsey, who was a former Federal Reserve Board Governor and also served in the Bush administration as an economic adviser, pointed out that if you had interest rates return to their 20-year average--in other words, if you went back to a more normalized type interest rate environment--it would actually increase the borrowing costs of the Federal Government over the next 10 years by $4.9 trillion. So think about how much money, how much we are spending every single year now to pay for our borrowing, and compound that by increased interest rates. It would make the fiscal situation we are facing much worse and even more dramatic than it already is.

So the point I am making is that we have to get the spending and the debt issue addressed here in Congress. Why? Well, because we are saddling future generations with an enormous burden of debt. We are putting the country on a path to a debt crisis, which would be a huge mistake for this country for so many reasons, but probably most fundamentally is because it has a profound impact on the economy.

I think most Americans are concerned right now about jobs and the economy. That is the No. 1 issue in front of most Americans. And it strikes me that if you look at what we can do to get people in this country back to work, obviously creating conditions for economic growth means keeping taxes low, balancing the Federal budget, having an energy policy that promotes American production, improving market access through moving some of these free-trade agreements, and clamping down on the overreaching regulations we are seeing coming out of a lot of the agencies in Washington, DC.

There are a whole series of things that can and should be done if we are serious about getting people back to work. But it means we can't be raising taxes on the job creators. There is a big debate right now about how do we get ourselves out of this fiscal mess. I submit to my colleagues that the real issue here is spending. If you go back to the foundation of our country, in the year 1800, we were only spending 2 percent of our economic output on the Federal Government. This year, we will spend 24 to 25 percent. The historical average over the past 40 years is about 20.6 percent. We are now dramatically higher in terms of what we spend on the Federal Government as a percentage of our entire economy.

To me, clearly, we have a spending issue, not a revenue issue. That suggests we ought to get after Federal spending--particularly spending that is duplicative, redundant. There is so much in the Federal Government we spend money on that is wasteful, and we need to cut that type of wasteful spending out of Washington, DC.

We have to also focus on long-term programs, such as Social Security, Medicare, Medicaid, entitlement programs that drive much of Federal spending--around 60 percent of the money that is spent by the Federal Government. So far there is no appetite among our Democratic colleagues to do that. We have now gone 798 days without a Federal budget. The only votes we have had on the budget in the Senate were on the Ryan plan and the Obama budget. The President's budget--the Obama budget-- that was voted on in the Senate, prescribed more taxes and spending and more debt. It failed by a vote of 97 to 0. Again, the budget presented by the President failed 97 to 0 in the Senate.

We don't have a budget in the Budget Committee that has been shown to us yet. This week, we are voting on a nonbinding sense-of-the-Senate resolution that doesn't even say how we should contribute to deficit reduction. Is it going to put higher tax on people? Are people going to have fewer deductions? Are people going to be ineligible for farm income payment programs? Should they have to contribute more to Medicare or receive less Social Security benefits than those who are less fortunate? We don't know. We don't have a budget presented to the Senate for consideration. All we have in front of us this week is a sense-of-the-Senate resolution, which is very vague and could be interpreted lots of different ways.

The White House meeting is tomorrow, with leaders of both parties. I hope it will lead to substantive cuts and an agreement about how we are going to reduce spending and get this debt and year-over-year deficits under control. It should not lead to more taxes. The reason is that higher taxes only hurt job creation and make our economic situation much worse.

We were reminded of the need to do this this week when Moody's downgraded the status of the Portuguese debt to junk. This is despite the fact that their government is pushing through an austerity plan that cuts spending and hikes taxes. We have seen that in lots of European countries that are dealing with sovereign debt crises.

That is our future if we don't get this issue under control. It has been 798 days since this Senate has passed a budget. That is where it starts--determining how we are going to set priorities, and how we are going to spend taxpayer dollars, and rein in runaway Federal spending and make a dent in this $14 trillion debt that we are saddling on future generations.

I hope we can get a budget before the Senate. This sham of a resolution this week--the sense-of-the-Senate resolution--is certainly not the way to do that. I hope we can get to a meaningful discussion of what we are going to do about spending and debt and jobs in this country.

I yield the floor.

Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, I ask unanimous consent to enter into a colloquy with my colleague from Nebraska.

Mr. President, our Nation has an over $14 trillion debt and unless we can get a handle on it--I have a chart which I think shows what our future will look like if we stay on the current trajectory. You can see that the path leads higher and higher in debt to GDP levels. That level is unprecedented in American history. You have to go back to World War II when we had this kind of debt to GDP. The chart shows we are going to face an ever increasing burden and debt.

Without shoring up our finances, we know what our future will look like. This week, we saw that the country of Greece had to approve an austerity package to be eligible for their next disbursement of a multibillion dollar bailout loan from the IMF and other European countries. This austerity package included 28.4 billion euros in spending cuts and tax increases. That is exactly what will happen if we don't do anything. We will reach a time when we will be facing massive cuts in spending and tax increases, if we don't get our fiscal house in order.

But that isn't necessary, because there is a better way to solve this problem. Instead of more debt and spending, we can pass a balanced budget amendment that would prevent us from spending more than we can take in. We know what the effect of this will be on our future as well.

We have States across this country--49--that have some type of balanced budget requirement, including South Dakota. That is the reason why our State's budget is always balanced. Our legislature cannot go home until that happens. We need that same sort of discipline here in Washington, and a balanced budget amendment would bring that about.

I have with me on the floor a colleague from Nebraska, Senator Johanns, who also served as his State's Governor. My understanding is that the Senator from Nebraska, when he was Governor, had a balanced budget requirement in Nebraska's constitution. I wonder if he can explain the effect that had on his State, and whether it forced them to make some of the tough choices necessary to get a budget balanced.

Mr. President, I appreciate the comments of my colleague from Nebraska. As a former executive--both as mayor and Governor--he, obviously, has had to make the hard decisions necessary to get the books to balance both in the city of Lincoln and the State of Nebraska. As he has observed, the economic circumstances the State of Nebraska finds itself in today are so much better than other places around the country.

Now, granted, there are lots of factors that contribute to that. Part of it has to do with the business climate in some States around the country. But, clearly, it is also a function of the discipline the State of Nebraska imposes on itself through its balanced budget amendment and the decisions of the leaders in that State, both legislators and Governors, in order to make that possible.

So I think the experience of the Senator from Nebraska is valuable in helping us shape the debate that ought to occur on this balanced budget amendment. I would say one of the features of the balanced budget amendment that we are both cosponsoring is that it caps spending at 18 percent of our entire economy. That is not a number picked out of thin air. It is a number that comes from the historical level of taxation for the past 40 years. In the past five times the budget was balanced in Washington--and bear in mind five times probably in the last 40 years--spending averaged just under 18.7 percent of GDP--not too far off what the cap under the balanced budget amendment would require.

Further, we know in 2007--a year in which we had tax laws that are very similar to current tax laws--revenue was 18.5 percent of GDP. So if we could constrain spending to 18 percent of our entire economic output, we would be able to balance the budget without raising taxes.

Our colleagues on the other side continue to claim the problem could be fixed if we would only raise taxes on a few rich people, tax corporate jets, stop giving tax breaks to American energy production, and those sorts of things. The truth is, the tax proposals from Democrats put only a relatively minor dent in the deficit. To truly balance the budget through tax increases we would have to see astronomical rate increases that would hit not only high-income earners and corporations but the middle class and small business as well.

This is clearly not what the American people want. It is not what I want. Simply raising taxes on job creators isn't going to improve our economy. It is only going to hurt it more. And tax increases aren't the only threat to our economy. We also know these current levels of debt are costing us about 1 million jobs a year as well, and these debt levels are only predicted to increase.

In his experience as a Governor, I guess I would ask my colleague from Nebraska whether when it came time to make these hard decisions about balancing the budget, did the notion of raising revenues, increasing taxes, come into play? I am sure that was a debate that was always raised. It always is. You can either reduce the amount of spending or you can raise taxes on someone.

It strikes me the problem we have in Washington is not that we don't have enough revenue. We have plenty of revenue. We just have too much spending. I am curious to know in the State of Nebraska what his experience was in terms of this debate we have about more taxes or less spending.

I thank the Senator from Nebraska for his observations. In a minute I want to turn to the ranking member of the Senate Budget Committee to talk about setting priorities, because that is something we are not doing here.

I do want to point out in the course of this discussion, however, that what you have said is exactly right. You cut spending and you grow the economy. One of the things you need to do is you have got to create jobs, you have to get economic expansion going. The way not to do that is to raise taxes, and

that is the prescription many of our colleagues on the other side would like: Let's get more revenue and raise taxes.

That is absolutely the opposite thing that you would do when you have got a downed economy and you are trying to create jobs. What we ought to be looking at is how do we reduce the size of government, get us living within our means, and getting the economy growing and expanding again and creating jobs.

I want to point out one thing. This is important, in my view. We are planning right now, to the extent that there is any planning going on here--and, unfortunately, without a budget it is very difficult to prioritize. But there are expectations about what revenues are going to be for the foreseeable future.

There was an interesting op-ed piece earlier this week in the Wall Street Journal written by Larry Lindsey, who is a former economic adviser to President Bush and also former Federal Reserve Governor, who pointed out that the current predictions for the debts and deficits in the coming years are very optimistic for a couple reasons.

One is that the White House and the CBO are using very optimistic numbers for growth in our economy. While I hope they are correct, I am concerned that they could be very much overstating the potential for growth in our economy. If more realistic numbers were used, what Larry Lindsey recognized in that story was that the impact of the financial crisis on our economy, our debt numbers could jump by an additional $4 trillion over the next 10 years by assuming a more historic growth level, given the times that we have been through.

At the same time, the President and the CBO are also predicting that interest rates are going to remain much lower than they have historically. What Mr. Lindsey pointed out in this op-ed was that if interest rates normalize--in other words, reset to what are the historical averages--it would cost us an additional $4.9 trillion more over the next 10 years to finance our debt than what we are currently expecting. So those two factors alone would have an $8.9 trillion negative impact on these forecasts for the next decade. Again, it points to the importance of getting spending under control and doing it now.

He finally pointed out that the new health care law is another significant hidden cost. If you look at what employers are increasingly being faced with, many of them are going to choose to dump their employees into these public exchanges and you are going to see the additional costs of anywhere from about $74 billion to $85 billion a year over the next 10 years.

You start adding that up, you add in the economic growth assumptions--again, I hope they are right. But assuming they are wrong, you have lower levels of economic growth, which I think are probably more realistic levels. If you have more realistic interest rates at least in terms of historical averages, these long-term predictions get awful in a real hurry.

The nice thing about having a balanced budget amendment is you are forced to make those decisions every year. Instead of dealing with these long-term predictions, which are often inaccurate, each and every year the budget has to be balanced. So if interest rates go up, the budget has to be balanced. If employers put their employees on the exchanges, the budget has to be balanced. If there are fictional savings from these independent payment advisory boards that are being created and those aren't realized, the budget has to be balanced. If taxes don't produce as much revenue as predicted, the budget has to be balanced.

This is the very simple solution that, as the Senator from Nebraska pointed out, so many States have come to, so many States have concluded that you have to have some sort of a requirement to balance the budget is the most powerful fiscal reform we could have here in Washington,

Mr. President, today I recognize Zoe Cope, an intern in my Aberdeen, SD, office, for all of the hard work she has done for me, my staff, and the State of South Dakota over the past several months.

Zoe is a native of Aberdeen and a graduate of Roncalli High School. Currently, she is attending the University of Nebraska-Lincoln where she is pursuing a degree in architecture. She is a very hard worker who has been dedicated to getting the most out of her internship experience.

I extend my sincere thanks and appreciation to Zoe for all of the fine work she has done and wish her continued success in the years to come.