Floor Statements

Mr. President, tomorrow the Senate will vote on a cloture motion that deals with an amendment that would do away with a tax provision that was enacted many years back by Congress but was extended just this last December. In fact, there were a whole series of tax extenders that were passed by the Congress in December of last year, but this particular one, the volumetric ethanol excise tax credit, was also extended. It was extended until the end of the year 2011. December 31 of this year is when it would expire with the amendment we will be voting on tomorrow--or at least the cloture motion we will be voting on is with regard to an amendment that would eliminate that and end it now. There are a number of problems associated with that approach, one of which is this issue of economic certainty. We have lots of people across this country who have made investments. We have lots of jobs that are impacted by this industry. In fact, if you look, there are 204 plants, ethanol plants, in America today, spread across 29 States and on the order of about half a million jobs--all of which, I might add, are American jobs--you have half a million American jobs impacted by this industry. The ironic thing, too, is coming on the heels of an announcement last week that Venezuela, Libya, and Iran will block OPEC from producing more oil to relieve gasoline prices, we continue to be held more and more hostage every single day by our addiction to foreign oil.

We send $1 billion a day outside the United States to purchase foreign oil--$1 billion every single day to purchase foreign oil. The ethanol industry, which now represents about 10 percent of the fuel mix in this country, displaces 445 million barrels of oil every single year. That is the equivalent of $34 billion that we don't send overseas--445 million barrels of oil displaced every single year, $34 billion that we don't have to spend purchasing foreign oil. So this is an issue that has a direct bearing on the issue of energy independence, the issue of continuing what I think is a very dangerous dependence on foreign sources of energy, foreign oil, and has a direct bearing as

well on the price consumers pay at the pump. Clearly, if you took 10 percent of the fuel mix out of production or out of that mix, you would put an additional pressure on the price that currently is being paid by consumers.

In fact, there was a study done by Iowa State University that said, in 2010, if you took away the contribution ethanol makes to the fuel mix in the country today, you would see gasoline prices increase by 89 cents per gallon. When you are already facing $4 gasoline prices in this country, which I think is having a profound impact on our economy and particularly on consumers who, day in and day out, are having to deal with these high prices, it seems ironic that we would be looking at legislation and policy that would further drive up the cost of gasoline. We ought to look at ways we can reduce it, and this clearly would have the opposite effect.

A few weeks ago there was a proposal to put additional taxes on oil and gas or at least to change some gas policy with regard to oil and gas which many of us argued would add to the cost of gasoline in this country. It would essentially, in effect, be raising taxes on gasoline.

This proposal would have the same effect. It would increase the cost of energy and obviously impact many of the jobs to which I just alluded. It would also break faith with the commitment made by this Congress last December when we extended the VEETC, the volumetric ethanol excise credit, for another year. We have a lot of folks who made investments, you have people across the country whose livelihoods and jobs depend upon this, and I think it makes sense, when we put policy in place and we say it is going to be in place for a certain period of time, that that be honored.

Having said that, I have been working closely with my colleague from Nebraska and others of our colleagues on both sides of the aisle, Republicans and Democrats, on a proposal that would reform the VEETC and move us in a direction that puts us on a pathway or a trajectory into the future that will take greater advantage of this contribution that is being made by biofuels to our country's energy independence and also phase out the VEETC tax credit but that does it in a way that does not impact and disrupt in a way that this would, where you say you are going to end this today. As I said, you have lots of people who made investment decisions based on current policy. You would change that policy immediately and abruptly, but that is not the right way or correct way to go about this. There is a better way. That is what my colleague from Nebraska and I have been working on. I hope my colleagues in the Senate will vote tomorrow against this attempt to end this abruptly and to disrupt this market and do tremendous harm to an industry that is contributing, in a significant way, to America's move toward energy independence and is helping to keep gas prices lower than they would otherwise be were it not for the 10-percent contribution ethanol makes year in and year out to our energy.

So there are lots of reasons why we think it is a bad idea to move forward with the amendment that will be offered tomorrow and the cloture motion that would get on that amendment. I hope my colleagues will defeat that cloture motion so we can work on a more responsible, reasonable way that phases out the VEETC and, in a responsible way, that would allow those who have made investments to be able to plan accordingly.

I would simply say, as we get into that debate tomorrow, this is an issue which has ramifications for our economy because of the price of fuel and the impact ethanol has on the price of fuel in this country. It has an impact on the old issue of energy independence and whether we are going to continue to be held hostage and over a barrel by oil we have to import from other places around the world. Of course, it has implications as well for just the jobs that are created here at home, American jobs that could very well be lost if we move down a path that, in my view, would be very harmful for this industry and its ability to create jobs.

I have my colleague from Nebraska here as well this afternoon and I would welcome his thoughts on this subject and would like to enter into a dialog with him about the impact this industry has on his State of Nebraska--and not just the impact it has on Nebraska or South Dakota but the impact it has on this country by creating jobs, by lessening the dependence we have on foreign sources of energy, and by keeping gas prices at a more reasonable level than we would otherwise see if it were not for the contribution ethanol makes to our fuel mix.

I am going to yield to the Senator from Nebraska for his observations about this subject.

Mr. President, if I might just say to the Senator from Nebraska, because I am wondering if perhaps in his discussions with farmers and ranchers in his State--I am sure the issue which he alluded to, which I think is an important one, comes out--I wonder if other people around the country realize, when we make a gallon of ethanol, we take a bushel of corn--which is a remarkable thing that we have gotten to, where the technology enables us to do that--we produce 2.7 gallons of ethanol from a bushel of corn. We have almost 3 gallons of ethanol from a bushel of corn which goes into our fuel supply and represents about 10 percent of all the fuel we use. I wonder if a lot of people realize that one of the byproducts of that, as the Senator from Nebraska has mentioned, is something called dried distillers grain. The DDGs, as we refer to it, is something that is then used to feed livestock.

Now, a lot of people think there is this whole corn debate about food versus fuel, but I don't think most Americans realize that only about 12 percent of our corn crop in this country actually ends up in foods. It is either consumed directly, such as corn chips, or indirectly, such as high fructose corn syrup. But one-third of the grain that goes into ethanol production comes out as dried distillers grain, these DDGs, and for each bushel of corn used in the ethanol-making process--as I said, the 2.7 gallons of ethanol--18 pounds of DDGs and 18 pounds of carbon dioxide.

If we took, let's just say, for example, 5 billion bushels of corn used for ethanol production in a year, the feed product equivalent of about 1.7 billion bushels of corn is returned to the livestock food chain as an ethanol byproduct. So we take about one-third of all of the grain that is put into the process to make ethanol, and that comes back in the form of something we feed to livestock and something that has been a great source of protein for livestock producers in this country. I don't think most Americans even realize we are not just talking about the fuel component; we are not just talking about that liquid we use to blend with petroleum products and get ethanol in this country; but there is also this other byproduct which is essential for livestock producers to feed their livestock.

I am wondering if, in the conversations the Senator from Nebraska, I assume, has with his farmers and ranchers--of course, they are very familiar with this--the average person around this country understands this.

Mr. President, in closing, I wish to, first of all, thank the Senator from Nebraska for joining us. He has a great wealth of experience, not only having grown up on a family farm in his early years but representing his State as a mayor, as a Governor, and then representing our Nation as the Secretary of Agriculture. I recall working with him when he was the Secretary of Agriculture on a lot of these issues.

One of the things that strikes me about where we are today relative to where we were then is the prosperity that has returned to the agricultural sector in our economy, to rural America. We can't say the biofuels industry has been solely responsible for that, but certainly a contributing factor. We have seen growth in the economy in the Midwest.

Again, what I would point out about this, which is so important for people to realize is that these are American jobs. This is our home- grown industry. We are either going to get fuel in the United States or we are going to buy it from some foreign country. That is what we have been doing, and that is what we continue to do to the tune of $1 billion every single day. So to the degree we can promote domestic energy production in this country and add to the supply in this country, which is what biofuels does, it is for the American consumer and, obviously, good for America's economy and America's dangerous dependence we currently have on foreign energy.

So the proposal the Senator from Nebraska is a cosponsor of and that he and I have worked together on and that we will file as a bill today will present an alternative to the approach that will be advanced, or that they will attempt to advance tomorrow, which is to just right now, in a very disruptive way, abruptly end something that we just voted on in December to put in place. We have people who have made investments in it, and it has made a tremendous impact on jobs in this country.

The approach the Senator from Nebraska and I are advocating I believe is a reasoned approach. It is forward looking in the sense that it promotes the next generation of biofuels, advanced biofuels, and cellulosic ethanol. In the same way the Senator from Nebraska mentioned, it gets us to where we have more choices for American consumers when they come into a filling station by investing in some of the

pumps out there and giving consumers more choices.

Then, finally, as the Senator from Nebraska said, it also puts money toward the debt, toward deficit reduction, and phases out the tax credit that is available today to ethanol producers in this country. It is a reasonable, responsible and, as the Senator said, measured way of dealing with this, not the way that is being proposed by the vote we are going to have tomorrow.

So I hope our colleagues will join us in working in a constructive way to continue to grow this industry and do it in a way that creates jobs for Americans and lessens our dependence on foreign nations.

I yield the floor.

Mr. President, if I might just say to my colleague from Minnesota, I appreciate her good work and advocacy on this subject. This is something we have been working on for some time, along with some of our colleagues on both sides of the aisle, for a lot of reasons; one of which, of course, is because, as the Senator from Minnesota mentioned, these are difficult fiscal times.

Obviously, every area in our budget needs to be reviewed and scrutinized and looked at to see where we might be able to achieve some savings. But, as my colleague noted, there is a right way and a wrong way to do this. The way that has been proposed in the amendment that was offered, and on which the cloture vote will occur tomorrow, is the wrong way. We cannot tell an industry in December we are going to give them a set of policies that are going to be in effect for the year, that they are going to be able to make investment decisions, they are going to be able to go to their lenders, they are going to be able to go secure financing based upon this set of policies--we do that around here all the time. We make policy, and we try to do it in a way, hopefully, that gives those who are investing their dollars some certainty about what those policies are going to be. Well, how can we then, in the middle of the year, come back and say we are just going to pull the rug right out from under them? We are sorry, that is just the way it is. This is gone.

Well, frankly, there is a much better way to go about doing this, and what the Senator from Minnesota and I have proposed does just that and, in my view, does this in a responsible, measured, thoughtful, reasonable way. We get to the same ultimate result, which is that for those who are really interested in doing away with the volumetric ethanol excise tax credit, it does phase it out, but it does it in a way that does not create disruption and harm and allows people to plan for the future. It also invests some of those resources in areas that are important to the future of that industry; namely, blender pumps, which is the one thing that does not exist out there today, at least not in any great numbers. If those pumps were more available, I believe we would see a lot higher usage of the fuel than we already have seen. But we already know it is 10 percent of our fuel supply.

Whether the opponents of this like it or not--and I know they do not--there are 13 billion gallons of ethanol produced in this country. At least that is what it was in 2010. We assume it will be that number, maybe a little higher, this year. That displaces 445 million barrels of imported crude oil. That is 55 million barrels more than the total crude oil imports from Saudi Arabia last year.

Now, think about that: a fuel that is produced from a kernel of corn now displaces more than the entire imports of Saudi foreign oil into this country. That is what we ought to be looking at. We ought to be looking at more ways to produce domestic energy, home-grown energy, adding that to our fuel supply rather than taking it out.

What the amendment our colleagues are trying to get a vote on tomorrow would do is basically to say to this industry: Yes, we are going to take away this particular tax incentive, and we are going to do it right in the middle of the year. We are going to do it, and we do not like this industry--which is probably what animates a lot of the opposition to this because if people look at the facts, if they look at the contribution that biofuels have made to our fuel supply in this country, it is significant.

Ten percent of our entire fuel now is biofuels. In fact, if we look at the other byproduct of biofuels--once we take the starch out of that kernel of corn and convert it into liquid form, we can get, for every bushel of corn, almost 3 gallons of ethanol. But we also get dry distillers grain, which is something that has been used extensively now for feed for livestock.

So if we take 5 billion bushels of corn, for example, that are used for ethanol production in any given year, the feed product equivalent is about 1.7 billion bushels of corn that is returned to the livestock food chain as this ethanol byproduct called dry distillers grain. So we are adding additional protein that is fed to livestock in addition to the almost 3 gallons of ethanol we get from every single bushel of corn.

So I do believe there is an approach that makes sense. What the Senator from Minnesota and I and many of our colleagues on both sides have come together around is a way in which we can move forward, and do it in a way that not only makes it reasonable for the industry to plan for the future but also in a way that returns dollars to the Treasury of this country because there is $1 billion in here for debt retirement. I think that is something the industry recognizes, we all recognize, and we need to address. It is addressed as part of this bill.

So I appreciate the good work of the Senator from Minnesota in working with me, along with other colleagues of ours, to introduce the bill we introduce today.

Mr. President, if I might add one point.

I think the Senator from Minnesota did point out that there are a significant number of jobs that are associated with this industry--in fact, one-half million jobs. They are American jobs. They are jobs in the heartland of this country. They are jobs that help grow the economy, make it more prosperous. It strikes me, at least, that what we ought to be looking at is more jobs in this country and less investment in foreign regimes, where we get a lot of our energy today.

Mr. President, $1 billion a day is what we send outside the United States because of our addiction to foreign oil. We have a dangerous dependence upon foreign energy, and we have a fuel that, as I said, displaces 445 million barrels of oil every single year--more than we import from Saudi Arabia. That is a pretty remarkable number when you think about it.

We had a debate here a few weeks ago on the floor of the Senate about whether we ought to change tax policy with regard to oil companies. The decision was reached that we should not do that; that it would be punitive, directed at oil companies. We decided, too, that it would raise taxes on gas for people in this country.

I would make the same argument today. We are talking about a tax increase--a large tax increase--which we know is going to get passed on. So we are talking about raising taxes on consumers at a time when they can least afford it.

We have today 3\1/2\ to $4-a-gallon gasoline. The last thing consumers in this country need is something that would actually push that gas price higher. In fact, if we did away with biofuels altogether--which some people would like to do--there was a study out last year, in 2010, that said the price per gallon of gasoline would go up by 89 cents a gallon. So we have a proposal here that would have an adverse impact on energy prices, fuel prices for people in this country, which, frankly, again, because of the commitment that was made last December, strikes at the very heart of economic certainty, which so many of us come down here and talk about: the importance of having policies in place that are reliable, that people who are investing in particular areas of our economy can know they are going to be there, at least when Congress makes a commitment.

This completely undermines the commitment Congress made back in December that this particular tax credit would be in place until the end of the year. So what the Senator from Minnesota and I have done is propose a path forward that we believe makes sense and that is a thoughtful, measured, reasonable, responsible way in which to get to the goal that many of the proponents of the amendment that will be voted on tomorrow want to get to; that is, to phase down the volumetric ethanol excise tax credit. But it does it in a way that makes sense for American consumers and those who have investments in the industry today.

So I hope my colleagues will take a look at this legislation. We think we can get it moving this year. It does, as was noted by my colleague from Minnesota, put a significant amount toward reducing the debt, which I think is something all of our colleagues are very interested in doing. So we will present this legislation, obviously, to our colleagues and hope there will be many who will choose to support it.

Mr. President, I yield the floor back to the Senator from Minnesota.

Mr. President, if I might just say to my colleague from Minnesota, I appreciate her good work and advocacy on this subject. This is something we have been working on for some time, along with some of our colleagues on both sides of the aisle, for a lot of reasons; one of which, of course, is because, as the Senator from Minnesota mentioned, these are difficult fiscal times.

Obviously, every area in our budget needs to be reviewed and scrutinized and looked at to see where we might be able to achieve some savings. But, as my colleague noted, there is a right way and a wrong way to do this. The way that has been proposed in the amendment that was offered, and on which the cloture vote will occur tomorrow, is the wrong way. We cannot tell an industry in December we are going to give them a set of policies that are going to be in effect for the year, that they are going to be able to make investment decisions, they are going to be able to go to their lenders, they are going to be able to go secure financing based upon this set of policies--we do that around here all the time. We make policy, and we try to do it in a way, hopefully, that gives those who are investing their dollars some certainty about what those policies are going to be. Well, how can we then, in the middle of the year, come back and say we are just going to pull the rug right out from under them? We are sorry, that is just the way it is. This is gone.

Well, frankly, there is a much better way to go about doing this, and what the Senator from Minnesota and I have proposed does just that and, in my view, does this in a responsible, measured, thoughtful, reasonable way. We get to the same ultimate result, which is that for those who are really interested in doing away with the volumetric ethanol excise tax credit, it does phase it out, but it does it in a way that does not create disruption and harm and allows people to plan for the future. It also invests some of those resources in areas that are important to the future of that industry; namely, blender pumps, which is the one thing that does not exist out there today, at least not in any great numbers. If those pumps were more available, I believe we would see a lot higher usage of the fuel than we already have seen. But we already know it is 10 percent of our fuel supply.

Whether the opponents of this like it or not--and I know they do not--there are 13 billion gallons of ethanol produced in this country. At least that is what it was in 2010. We assume it will be that number, maybe a little higher, this year. That displaces 445 million barrels of imported crude oil. That is 55 million barrels more than the total crude oil imports from Saudi Arabia last year.

Now, think about that: a fuel that is produced from a kernel of corn now displaces more than the entire imports of Saudi foreign oil into this country. That is what we ought to be looking at. We ought to be looking at more ways to produce domestic energy, home-grown energy, adding that to our fuel supply rather than taking it out.

What the amendment our colleagues are trying to get a vote on tomorrow would do is basically to say to this industry: Yes, we are going to take away this particular tax incentive, and we are going to do it right in the middle of the year. We are going to do it, and we do not like this industry--which is probably what animates a lot of the opposition to this because if people look at the facts, if they look at the contribution that biofuels have made to our fuel supply in this country, it is significant.

Ten percent of our entire fuel now is biofuels. In fact, if we look at the other byproduct of biofuels--once we take the starch out of that kernel of corn and convert it into liquid form, we can get, for every bushel of corn, almost 3 gallons of ethanol. But we also get dry distillers grain, which is something that has been used extensively now for feed for livestock.

So if we take 5 billion bushels of corn, for example, that are used for ethanol production in any given year, the feed product equivalent is about 1.7 billion bushels of corn that is returned to the livestock food chain as this ethanol byproduct called dry distillers grain. So we are adding additional protein that is fed to livestock in addition to the almost 3 gallons of ethanol we get from every single bushel of corn.

So I do believe there is an approach that makes sense. What the Senator from Minnesota and I and many of our colleagues on both sides have come together around is a way in which we can move forward, and do it in a way that not only makes it reasonable for the industry to plan for the future but also in a way that returns dollars to the Treasury of this country because there is $1 billion in here for debt retirement. I think that is something the industry recognizes, we all recognize, and we need to address. It is addressed as part of this bill.

So I appreciate the good work of the Senator from Minnesota in working with me, along with other colleagues of ours, to introduce the bill we introduce today.

Mr. President, if I might add one point.

I think the Senator from Minnesota did point out that there are a significant number of jobs that are associated with this industry--in fact, one-half million jobs. They are American jobs. They are jobs in the heartland of this country. They are jobs that help grow the economy, make it more prosperous. It strikes me, at least, that what we ought to be looking at is more jobs in this country and less investment in foreign regimes, where we get a lot of our energy today.

Mr. President, $1 billion a day is what we send outside the United States because of our addiction to foreign oil. We have a dangerous dependence upon foreign energy, and we have a fuel that, as I said, displaces 445 million barrels of oil every single year--more than we import from Saudi Arabia. That is a pretty remarkable number when you think about it.

We had a debate here a few weeks ago on the floor of the Senate about whether we ought to change tax policy with regard to oil companies. The decision was reached that we should not do that; that it would be punitive, directed at oil companies. We decided, too, that it would raise taxes on gas for people in this country.

I would make the same argument today. We are talking about a tax increase--a large tax increase--which we know is going to get passed on. So we are talking about raising taxes on consumers at a time when they can least afford it.

We have today 3\1/2\ to $4-a-gallon gasoline. The last thing consumers in this country need is something that would actually push that gas price higher. In fact, if we did away with biofuels altogether--which some people would like to do--there was a study out last year, in 2010, that said the price per gallon of gasoline would go up by 89 cents a gallon. So we have a proposal here that would have an adverse impact on energy prices, fuel prices for people in this country, which, frankly, again, because of the commitment that was made last December, strikes at the very heart of economic certainty, which so many of us come down here and talk about: the importance of having policies in place that are reliable, that people who are investing in particular areas of our economy can know they are going to be there, at least when Congress makes a commitment.

This completely undermines the commitment Congress made back in December that this particular tax credit would be in place until the end of the year. So what the Senator from Minnesota and I have done is propose a path forward that we believe makes sense and that is a thoughtful, measured, reasonable, responsible way in which to get to the goal that many of the proponents of the amendment that will be voted on tomorrow want to get to; that is, to phase down the volumetric ethanol excise tax credit. But it does it in a way that makes sense for American consumers and those who have investments in the industry today.

So I hope my colleagues will take a look at this legislation. We think we can get it moving this year. It does, as was noted by my colleague from Minnesota, put a significant amount toward reducing the debt, which I think is something all of our colleagues are very interested in doing. So we will present this legislation, obviously, to our colleagues and hope there will be many who will choose to support it.

Mr. President, I yield the floor back to the Senator from Minnesota.

For 10 minutes.

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

Mr. President, the Senator from Oklahoma has a strongly held view about ethanol, particularly on this issue, on the VEETC, and I understand that. I understand there are

Members who would like to see that particular tax credit go away. I understand that.

What the Senator from Minnesota and I have come up with is a way for them to achieve that objective, but it does it in a way that is reasonable, measured, and which doesn't totally, in the middle of the year, abruptly disrupt an industry and all of the investment that has been made.

The question I ask my colleague is, does our word mean anything around here? We passed this in December. There were 81 Senators who voted for a package of tax extenders, one of which was the volumetric ethanol excise tax credit. Eighty-one Senators are on record. If you want to do away with it, there are lots of ways you can do that. But the way the Senator from Oklahoma is proposing to do that is to say, tomorrow let's pass this and end it. It is $2.5 billion we can save the taxpayers. Well, about $500 million a month is about what this is going to cost. With every month that goes by, there is a little less available to the taxpayer.

What we are saying is that we put in a billion dollars today into this proposal that would go toward debt retirement, and we phase out the tax credit to which the Senator from Oklahoma refers, and we take a very forward-looking, futuristic-type view toward ethanol production in this country, biofuel production in this country. We are going to be capped out at 15 billion gallons, which is the RFS, the renewable fuel standard to which the Senator from Oklahoma referred. We are going to hit that. Then we have to get to the next generation of biofuels.

With all due respect to my colleague from Oklahoma, methanol is not a realistic option. You would have to retool every plant in this country. We have 204 plants in America today that, directly or indirectly, employ 500,000 Americans. Those are the jobs that are impacted. We have had policy on the books now for nearly 30 years that has encouraged the investment in these plants on the belief that we need to get beyond dependence on foreign sources of energy. That ought to be our energy policy, and we ought to be looking to producing more.

I am for oil and gas. The reason I voted against the proposals leveled a couple weeks ago that would have targeted the oil and gas industry is because I think we need all forms of energy--oil and gas, clean coal, biofuels, nuclear, and we need any form of energy we can generate and produce in the United States. I am for it. That is why I think the future of this industry is still very bright, because I think there is an advanced biofuels future out there, and a cellulosic ethanol, next-generation ethanol, whatever you want to call it, where we can make it from switch grass, from blue stem grass, from corn stover, and these types of products. That is out there. But you don't get there unless you have a corn-based platform to start with.

The Senator talked about a renewable fuel standard and talked about this being redundant public policy. One of our colleagues from South Carolina introduced an amendment to this bill that would end that. I assume--I don't know this for a fact--that my colleague from Oklahoma would support that amendment, which would do away with the renewable fuel standard.

Certainly.

Well, I say to my colleague from Oklahoma that I was not aware he said he supports ethanol. I was not aware he supports the RFS. If there is an amendment offered to strike the RFS, which there will be--am I wrong in saying the Senator would oppose that amendment?

I don't disagree with that. There is an issue I have not argued. It is your prerogative to bring this up and file cloture, which you have done in this circumstance. I think the renewable fuels standard that creates the sort of policy construct we are talking about here today is one aspect of the biofuels policy going forward. The other aspect, going back for long time, historically, is the blenders credit.

I will tell you--because the statement you made is all the people who get this don't want it--well, that is not true. The large integrated oil companies, which are also refiners and, in many cases, retailers of refined gasoline, don't want it, maybe. I understand you have a letter to that effect. But there are lots of smaller refiners who do want it.

There are also an awful lot of--the blenders credit gets passed on to the retailer, which gets passed on to the consumer, hopefully. The people who will be impacted by this are not just the large integrated oil companies. If you talk about the large integrated oil companies, saying they don't want this--they said in hearings before congressional committees a few years ago they didn't want the oil subsidies they get in the Tax Code today. They are on the record saying that. Yet we voted to keep those in place just a few weeks ago.

Yes.

When we characterize what you called tax expenditures, there are a bunch that fall into that category. I know the Senator is familiar with that as he served on the President's debt commission. It is about $1.1 trillion a year. In some way or another, we reduce the tax liability of various individuals and businesses around the country. I don't disagree with you. In fact, I will work with the Senator on a proposal that would address this and look at all those types of tax expenditures.

I think it is punitive to single out one and say we are going to kill this one, after we committed in December, with 81 votes, that we are for this. I don't know how we can, in good faith, go to this industry, which employs 500,000 Americans, and say we are going to pull the rug out from under you after 6 months.

That being said, I would characterize it as anything that reduces the tax liability that is public policy. I think it is characterized as tax expenditures. The oil depletion allowance and the intangible drilling costs--those are all things that are unique to the oil industry.

If it is under the definition of tax expenditure, sure. Oil depletion allowances and intangible drilling costs are characterized, for subsidy purposes, the same way as the ethanol tax credit. We have lots of what we would characterize as tax credits and earned income tax credits in the Tax Code. We have lots of what is characterized as tax expenditures. You may characterize it differently, and that is accelerated depreciation, but in fact for the purposes of description, as we describe things here, it fits into that category.

The oil industry came in front of congressional committees and said they didn't want those. So for them to say they don't want this particular blenders credit--and my view certainly isn't determinative, but I think the large integrated oil companies that get the blenders credit also view ethanol as a threat. Like it or not, today the only viable alternative to petroleum--the only one we have--is 10 percent of our fuel supply in this country.

I am not debating the Senator from Oklahoma about whether the merits of this particular policy--at least in its current form--should not be transformed and should be reformed; I am

saying that we should. I have come to the Senator with a proposal to do that. That is not something, obviously, that he agrees to. That is fine. He is entitled to not support that. But I believe we ought to reform it. I think the way we reform it is do it in a reasonable way that doesn't cut it off tomorrow but, rather, phases it out.

I think that for the Senator from Oklahoma, to me, it is something that is a win for him as well. He gets what he wants. He gets the phaseout, plus $1 billion in debt reduction, and if this thing goes to the end of the year, we get zero. We get goose-egged.

This thing expires at the end of the year. Whether it gets extended or not remains to be seen. But one thing we know with certainty is that I am putting a proposal on the table today that gets $1 billion in reduction, that provides some certainty at least in phasing out the VEETC and also makes an investment in blender pumps, which is something that is very important to the future of the industry.

So I think it is a reasonable way to deal with this issue.

The Senator from Oklahoma and I have a disagreement, and that is probably not going to change. But I am offering what I think is a reasonable proposal that gets you where you want to end up and I think also is a way in which we can keep this industry from having the rug pulled out from under them after we made a commitment to them in December of last year.

Mr. President, I yield the floor.

Mr. President, last week I had the opportunity to travel my State of South Dakota, as I think most Senators did who were home over the break. During the week, I was able to be part of a couple of events in my State with former Comptroller General David Walker. I think most people here are acquainted with Mr. Walker. He had a 10-year run as the Comptroller General of this country. He has since started an organization called the Comeback America Initiative and has been traveling the country trying to explain to the public the issues surrounding our national debt--high Federal spending levels and their effect on our Nation's future.

I would add he is someone who takes both parties to task. He is an equal opportunity critic. He is very bipartisan in his criticism of the out-of-control

spending that exists in Washington, DC, but he did point out the tremendous growth in government which has occurred in the course of our Nation's history. In fact, when our country was founded, if we go back to the formative years of our country--and he uses the year 1800 as an example--government spending made up just 2 percent of our entire economy. Just 2 percent of our GDP represented government spending. Today, it makes up almost 25 percent, and we are on a trend line, a trajectory, where that will rise to 39 percent by the year 2040.

So we have seen this upward spike in the spending, the amount of Federal spending as a percentage of our entire economic output. The reason Mr. Walker gives for the continuing increase in spending is primarily entitlement programs. In other words, we have Medicare, Medicaid, and Social Security which now represent about 43 percent in 2010. Those three programs represented 43 percent of our total Federal spending and, again, that number is set to spike as we head into the future.

Mr. Walker pointed out we are set to spend more on mandatory programs than we will take in in revenue in 2011. So this current year we will spend more on mandatory programs, which include those I just mentioned--Medicare, Social Security, and Medicaid--than all the revenue the Federal Government will take in. So that would mean we can't even afford to pay out for the mandatory spending programs we have in our budget, not to mention those discretionary programs which are the other part of our Federal budget.

If we look at it in terms of how much we spend today and how much we borrow, we are borrowing about 42 cents out of every dollar we spend. That is the reality we are faced with. So it is clear we need to make some reforms, Mr. President, particularly in the entitlement programs, to put them on a more sustainable footing.

Further, Mr. Walker shared the results of his fiscal fitness index, which puts the United States at 28 out of 34 developed countries--just behind Italy and just two places in front of Ireland. We are No. 28 out of 34 developed countries around the world in terms of our fiscal fitness.

Mr. Walker's message, obviously, is not a fun one. It is not a message you would expect people to like to hear. It is not a message that promises more spending on people's preferred programs. Yet my constituents were eager to hear this message. Why is that? No. 1, he was honest. He was honest about the size of our problem, about the scope of our unfunded liabilities, about the causes of this deficit-- that it is primarily a spending-driven crisis, about the effect of the health care law on health care spending in this country, and about the measures that are needed to cut spending and to bring the budget back into balance.

My constituents appreciate that kind of honesty. They appreciate someone telling them the truth, not simply continuing to make promises that cannot be kept. And, No. 2, they were eager to hear his message because his message offered hope. He pointed out that if the country adopted a fiscal plan that would bring down our deficits on a level that was similar to the plan of the President's fiscal commission, our Nation's rating on the fiscal fitness index would jump from 28th clear up to 8th place. He showed the attendees that there is a series of steps we can take to fix Social Security, Medicare, and Medicaid--to preserve these important programs without bankrupting our country--and he showed us that if we start now we have time to make these changes without being forced to make Draconian cuts or to hike tax rates.

This hope that we can fix these problems is real and it gives the general public something they can understand. That was certainly the case with my constituents last week.

Unfortunately, there was another event that occurred last week and that was the release of the unemployment numbers. Those numbers did not reflect hope but, instead, indicated we have a long way to go toward fixing our economy. These numbers showed that unemployment had risen to 9.1 percent. Further, the long-term unemployed increased to 6.2 million people, as those who are out of work are taking longer to find jobs. This long-term unemployment is particularly important for a number of reasons. No. 1, these individuals who suffer from long-term unemployment often exhaust government and personal resources that are available to them. As a result, they are at greater risk of falling into poverty. Further, it indicates our economy is not sufficiently dynamic. These individuals could have skill mismatches or there may simply not be any jobs in their local economy.

Finally, the long-term unemployed may see their skills diminished and become less and less attached to the workforce. What this all means is it becomes harder and harder for these people to find a job as they no longer know the latest technologies or no longer have the skills they developed by years of practice. This creates longer term challenges for our economy to be able to find these individuals jobs.

The question is how do we create an environment where businesses and individuals can be creating jobs. We know we need to cut spending, to cut our deficit, and to cut unnecessary and harmful regulations. In a recent presentation to the University of Washington, Nobel laureate Robert Lucas pointed out that the possibility of higher taxes, the uncertainty of regulations, and the increasing role of the Federal Government in health care because of the health care law, are all contributors to our slow economic recovery.

Likewise, Dr. Lucas speculated that our economy may continue to grow at a slower rate because of the increased regulation, taxation, and spending that is moving us closer to a European welfare state. In fact, Dr. Lucas notes that these European economies have incomes that are 20 to 30 percent less per capita because of these differences in the size of government.

It is clear it would even further increase unemployment if we continued to move along this path. We cannot continue with the status quo. We already know the size of our debt is costing us 1 percentage point in growth every year which, according to the White House's own economists, is the equivalent of 1 million jobs. In other words, when we sustain the kind of debt load we have today--our gross debt as a percentage of our GDP, our entire economic output, is over 90 percent-- that means we are losing economic growth and that means we are shedding jobs as a consequence of this high level of debt and high level of spending.

We need to grow the private economy, shrink government spending, and cut our debts and deficits. This is the path that will help us on a recovery, help our economy to recover, and create the jobs that are necessary to lower that unemployment rate.

We know we can do this. There are a number of reforms and spending cuts we are pushing to attach to the deadline that is under discussion right now so we can make it easier and cheaper for individuals to create the jobs that are so necessary to get our economy back on track and get people back to work. There are a number of things that can be done and should be done.

Obviously, as I noted, as we continue the debate about spending and debt and doing something about this year-over-year $1.4 trillion, $1.5 trillion, now $14.3 trillion debt that is hanging like a cloud over our economy, we have to deal with that. We have an opportunity, as has been noted by the leader earlier this morning, to do that in the context of this debt limit debate we are going to have. We should view this--both sides--as an opportunity to do something meaningful about spending and debt and to put our country on a more sustainable fiscal path for our future.

But there are a number of other things that impact the economy today that should be done. One is we have three pending trade agreements that were negotiated 3 to 4 years ago. They have been languishing here because the White House will not send those trade agreements up here for Congress to act.

To give an example of what that means to an agricultural State such as South Dakota, Colombia is one of those three trade agreements-- Colombia, Panama, and South Korea, all of which present markets for South Dakota agricultural markets. But agricultural exports are a big part of our trade relationship with Colombia. In 2008 we had an 81- percent market share in Colombia. Today that is a 27-percent market

share. We need those trade agreements approved to create jobs and to grow this economy. I hope the White House will send those, follow through on their rhetoric and actually send those trade agreements up here so we can act on them.

It has been 771 days since we passed a budget in this country. We and the administration talk about doing something about spending and debt, and yet here we are having gone 771 days without even having passed a budget, the most fundamental responsibility we have to the taxpayers of this country. If we are serious about spending and debt, we need a budget that sets a blueprint for a more fiscally sustainable future for this country. We need energy policies that allow us to develop American energy to get fuel costs under control, which also impacts in a very direct way our economy and our ability to create jobs.

The solutions are out there, they are very straightforward and simple. We need to have the will to move forward and address these issues and I hope we will because the American people expect and deserve that we will. As Dr. Walker pointed out last week, in my State of South Dakota, if we do not, we are headed for a fiscal train wreck.

I yield the floor.

What are the rules of discussion or debate right now? When the Senator from California wraps up her remarks, would it not be appropriate to have someone from the other side speak at that time?

I appreciate that, Mr. President. I don't know if there is any time agreement, but I think it is appropriate to go back and forth.

Mr. President, point of clarification. My understanding is the Senator from California cannot yield time to another Senator.

Mr. President, the request was that at the conclusion of the remarks of the Senator from California, the Senator from Ohio would have how many minutes?

I don't have any objection to that.

Madam President, I rise in support of the amendment that has been proposed by my colleagues from Maine and Oklahoma, Senators Snowe and Coburn, the Freedom from Restrictive Excessive Executive Demands and Onerous Mandates Act of 2011. This is a very commonsensical piece of legislation. It is something that certainly responds to a concern I hear from small businesses all across this country about the need for relief from burdensome, one-size-fits-all Federal regulations.

We hear a lot of discussion--in the Senate and around this town and around the country, for that matter, because that is where it truly matters--about creating jobs. Yet for all the rhetoric about job creation, it seems there is very little that is actually being done with regard to the substance of putting the right kind of policies in place that will make it cheaper and easier for small businesses to create jobs. It seems as if everything we do makes it harder, more difficult, and more expensive for our small businesses to create jobs.

As the Senator from Maine very correctly pointed out, 70 percent of the jobs in our economy are created by small businesses. I think there are a whole range of issues that impact small businesses in this country and their ability to create jobs.

My colleague from Ohio just talked about trade. I happen to have a view on trade that you ought to have trade agreements that are fair, that are enforceable, obviously, but that we are a country that benefits enormously from the opportunity to export the products we grow and make to other countries around the world.

To just give you an example of one particular country, one of the bilateral trade agreements that is under consideration--or at least I wish was under consideration; it has been negotiated and has not been submitted by the White House yet to the Congress for consideration--is the one with Colombia. I mentioned this earlier today in some remarks on the floor, if you look at it and its impact on agriculture in this country: In 2008, in the commodities of corn, wheat, and soybeans, our country had 81 percent of the Colombian market when it comes to those three agricultural commodities. In 2010, that was down to 27 percent. Why? Because a lot of other countries that had negotiated free-trade agreements with Colombia have stepped in to fill the void because we do not have that kind of agreement.

This has very direct and profound impacts on the American economy. Because when you lose that kind of market share--81 percent in 2008, down to 27 percent in 2010--that is a significant number of jobs that are impacted in industries in this country. The same would be true with Panama and South Korea, all of which would be trade agreements that are teed up that have been sitting and languishing for 3 or 4 years now without action in the Senate. It is absolutely insane for us not to be moving trade agreements that could benefit our economy and create jobs at a time when job creation--certainly, at least rhetorically around here--is stated to be the No. 1 priority we deal with.

When it comes to jobs and the economy--and I think there are a number of things, as I said, that impact that, trade being one--there are a number of policies coming out of Washington that impact small businesses and their ability to create jobs. Clearly, tax policy is one. Tax policy is something I think needs to be reviewed. We need tax reform. It is long overdue. It is making us noncompetitive with other countries around the world because our tax laws are outdated relative to other countries, our takes rates are higher relative to every other industrialized country in the world, with the exception, perhaps, of Japan. That is something we need to be looking at. If we are serious about being competitive and about growing our economy and in the global marketplace creating the kind of jobs we need here at home, we have to have trade policies, tax policies that are conducive to economic growth and job creation.

The other area, however, on which we can be impacted by what happens in Washington is regulation. That is what this particular amendment is all about. It is about making regulation coming out of Washington, DC, reasonable, making it based upon common sense, making it based upon science, making it where any objective bystander or person out there-- an observer who looks at these regulations--would say: They are trying very hard not to make it more difficult for small businesses to create jobs in this country.

But I think what happens too often is the exact opposite. It looks like what is coming out of Washington are heavyhanded, burdensome requirements, mandates, and regulations which drive up the cost of doing business in this country. Frankly, I do not disagree with what some of my colleagues on the other side have said about regulations that are important to public health and safety. What I am talking about are excessive, overreaching regulations, which in some cases go beyond the congressional intent, the statutory purpose that Congress, when they enacted the laws, wanted to see take place. So you have regulatory agencies that go way beyond the congressional intent and the statutory purpose with regard to many of these policies that are being put in place.

I have to say that when I travel in my State of South Dakota--and, for that matter, outside the State of South Dakota--and I talk to small businesses, I talk to agricultural producers, the overriding theme, the consistent theme I hear over and over and over again is: You have to get these out-of-control regulatory agencies under control. They keep spinning and kicking out more and more regulations that are making it more difficult for us to grow our businesses and to create jobs.

Maybe that is a function of the fact that we have a government that has gotten too big and out of control. If you look at government today relative to historical standards, we are looking at government, as a percentage of our entire economy today, of being somewhere in the 24- to 25-percent range. I mentioned earlier this morning in some remarks on the floor that back in the year 1800, the government was actually 2 percent of our entire economy. For our entire economic output at that

time, 2 percent represented what we spent on the Federal Government. Today we are spending one-quarter--one-quarter--of every dollar of our entire economic output in just the Federal Government. That does not include State and local governments. When you add those in, you get up over 40 percent. The trajectory we are on today will take us up to 40 percent of spending on the Federal Government to GDP in the not-too- distant future. If you look at 2035, 2040, that is where we are headed if we stay on our current path.

So it necessarily follows, I suppose, that when government keeps getting bigger and more expansive, more government regulations, more government redtape, more bureaucracy is a natural outgrowth of a growing government. What I think makes the most sense is for us to be creating jobs in the private economy. What we have seen here in just the last few years is that the government economy is growing relative to the total economy. The private economy, thereby, is shrinking. We have seen, over the last 40 years, the average of the Federal Government, as a percentage of our entire economy, being 20.6 percent. So 20.6 percent of our entire economy spending has been by the Federal Government. As I said, now it is 24 to 25 percent.

So we are on a path where we are rapidly ramping up, we are rapidly growing the size of government relative to our entire economy. That is not where we want to go if we are serious about creating good-paying, permanent jobs for people in this country. Those jobs originate and come from the private sector. They come from small businesses. That is where we want to create the jobs.

So I would say the amendment that is being proposed by the Senator from Maine and the Senator from Oklahoma is a very reasonable one because all it is simply saying is, before these new regulations go into place, the small businesses ought to have access to some review and perhaps even, if necessary, to the court system, to make sure those regulations are consistent with the legislative intent and not overly burdensome and putting an unnecessary and excessive burden on our small businesses.

I think it is common sense. If we are serious about job creation, if we are serious about economic growth, getting the economy back on track, this is the very type of legislation we ought to be supporting. Too often around here we end up off on these tangents, working on things that do not have an impact on job creation. I will say that one of the things we should be working on--and that we are not--it has now been 771 days since Congress passed a budget. Think about that: $3.8 trillion, $3.7 trillion, $3.8 trillion in annual spending, and it has been 771 days now since Congress passed a budget.

It strikes me, at least, that if we are serious about getting our fiscal house in order and sending signals to the economy and to the market that we want to create jobs, the first thing we could do is get the fiscal house in Washington, DC, in order. Yet we have had 771 days now without a budget.

If you are really serious about getting the economy back on track, you have to also restrain spending. You have to grow the economy, you have to restrain Federal spending, because when you have a government that is growing at the rate ours is, it does crowd out private investment. It makes it more difficult for small businesses to get access to capital and create jobs because they are competing with the government.

Back to the issue at hand here--that is regulations--I think that whether it is a farmer or rancher in South Dakota--by the way, I spoke yesterday with someone who is in town representing a livestock organization in my State--the No. 1 issue is overreaching government regulation driving up the cost of doing business.

You look at some of the proposals and suggestions that are out there, and sometimes they fall into the category of ``you can't make this kind of stuff up.''

There was a proposal under consideration here recently at the EPA-- which they have not, to be fair, promulgated regulations on yet or proposed regulations on yet--that would regulate fugitive dust. I mean, imagine and think about what that means in an agricultural. What it essentially means is you could not have dust from your property drift over onto someone else's property.

Some of this stuff borders on insanity. I think that is the point that is being made by the amendment of the Senator from Maine. Let's use some common sense. Let's use some reason. If we are going to have these regulations, let's at least put them forward in a way that does not disproportionately adversely affect small businesses and make it more difficult for them to create jobs.

Here is another example. Just last month, the DOT started seeking comment on the need for commercial driver's licenses for individuals who are driving off-road farm equipment such as tractors. Well, where I come from, that is a pretty important part of our economy. You have a lot of young people working in farm operations, a lot of people, period, who are out there who grow up learning or knowing how to drive tractors, how to handle farm equipment, and this particular requirement would force them to get a commercial driver's license.

I mean, some of this stuff, as I said, falls into the category of ``you can't make these kinds of things up.''

The EPA recently threatened ranchers in the Flint Hills region of Kansas to stop or limit the controlled burn of their prairie pastures, which is a practice that allows for the new growth of grass to feed cattle, or to be faced with EPA-mandated regulations.

The list goes on and on.

It strikes me again that when you have as many of these studies that are out there, and a lot of data supports these arguments, we ought to be responding in a way that recognizes that science, data, and input from people who are impacted by these regulations ought to have more of an influence on the regulations that are imposed by these agencies. What this does is it simply puts in place a way in which small businesses can get access to that kind of a review.

I hope my colleagues in the Senate will support the Snowe-Coburn amendment and move us in a direction where we are dealing fundamentally with the issues that are important to our economy right now because, for all of the rhetoric, as I said earlier, about wanting to grow the economy and create jobs, it seems as though every policy coming out of Washington, DC, is contrary to that objective, whether that is tax policy, trade policy, energy policy, but perhaps more important now than ever, regulatory action coming out of the executive branch of the government and running amok by creating all kinds of roadblocks and hurdles and impediments to job creation in this country.

Again, when you are at 9.1 percent unemployment, when you have as many people out of work as we have and who have been out of work for as long as they have, you would think that, first and foremost, we would be looking at policies that make it easier and less expensive to create jobs in this country. And what is happening is we are making it more difficult and more expensive to create jobs by these excessive, overreaching, runaway regulations that are coming out of Federal agencies every single day.

It is hands down the thing I hear more than anything else from people in my State of South Dakota. As I said, whether that is the Farm Bureau or a livestock group or a small business organization, right now government regulation is the thing they state most often as the biggest impediment to them going out there and creating jobs.

So this is a very commonsense amendment. It is something our small businesses are all supporting. We saw the list of small business organizations the Senator from Maine put up earlier. This is something this Senate ought to act on and act on today. I hope we will get a strong affirmative vote.

I yield the floor.

Well, I would say through the Chair that there may be

many efforts, as there typically are here in the Senate, to address some of the issues, and a lot of our Members have different ideas about how best to do that. I happen to believe the proposal put forward by the Senator from Maine is, as I said, a very reasonable, commonsense approach to this.

The Regulatory Flexibility Act is something that is in need of some revisions, particularly in light of the fact that we have so many regulations coming out of these agencies that are so costly, so difficult, and so burdensome for small businesses in this country. I think we ought to be, at every opportunity, looking for ways to lessen the cost and the difficulty for our small businesses to create jobs.

Mr. President, today I wish to recognize Peter P. Henry for his many years of service to the veterans of our country, including a very long and successful career spent serving as the senior executive director of the Department of Veterans Affairs Black Hills Health Care System. He will be retiring in July after 41 years of Federal service which includes a 16-year period with the Black Hills Veterans Affairs, VA.

A strong advocate of personal and professional development, Peter enhanced his skills and experience through completion of a graduate degree in health care administration before going on to become executive director of the Black Hills VA. Throughout his tenure with the VA, he has worked tirelessly to provide services to all South Dakota veterans, even those from rural and reservation areas, making sure that every veteran has access to quality care. During his years of public service, he has provided care to over 400,000 veterans and touched the lives of over 20,000 VA health administration staff members.

In his time with the VA, Peter has received many notable awards, including the Meritorious Presidential Rank Award. He was awarded this prestigious honor in 1998 and 2010. It is awarded to only 1 percent of career civil service executives who consistently demonstrate strength, integrity, and a persistent commitment to excellence in civic service.

I would like to express my personal and sincere appreciation to Peter for his outstanding service to the veterans of our great country. I wish him and his family happiness in the years to come.

Madam President, last week I came to the Senate floor to talk about the crushing burden of debt that will soon be coming our way because of government spending, mainly driven by entitlement programs. I noted that our unfunded liabilities in Medicare and Social Security are over $40 trillion. In fact, last week we received the reports from the Medicare and Social Security trustees which noted that Medicare is already running a cash deficit of about $46 billion. Social Security is running a cash deficit of about $32 billion.

For those who think we do not need to do anything because the so- called trust funds are not going to be in trouble until some point into the future, I think the important point to remember is that the trust funds and the IOUs that are the trust funds are not an economic asset that can pay cash benefits. At some point there is either going to have to be a massive tax increase, a huge reduction in benefits, or an incredible amount of additional borrowing.

What we project will happen with Social Security at some point in the future is that there will be about a 20, 25 percent reduction in benefits when we hit that wall, which suggests we ought to be taking steps right now to avoid that. The important point is, when we start seeing cash deficits where the payroll taxes that are coming in no longer exceed the amount of benefits they are paying out but, rather, are running deficits, that also adds to the overall deficit we are dealing with as a country.

We do not have the luxury of time. We cannot afford to wait. This is an issue that is upon us. Social Security and Medicare reforms are issues that need to be undertaken. If we do not do that, as I mentioned last week as well, we will see enormous increases in the amount of debt and the amount of deficits as a percentage of our GDP.

In fact, in the year 2035, if we do not change our ways, the amount of government spending--and this is under the current projection, which I believe is very conservative, and probably these numbers could be much worse--would comprise 35.2 percent of GDP. Government spending would comprise 35.2 percent of GDP, which is 60 percent higher than the historical average. The historical average of what the Federal Government spent as a percentage of our entire economic output for the last 40 years has been 20.6 percent. This year it is over 24 percent. If we stay on this current trajectory, as I said, in the year 2035, based on what I believe are very conservative assumptions--and this could be much worse than that--we would be looking at over 35 percent of our entire economy spent just on the Federal Government.

As I said, that is 60 percent higher than the historical average. In the same year, deficits would be about 16 percent of GDP, and debt to GDP would be 185 percent. We would actually have a cumulative debt that is almost twice the size of our entire economic output, our entire GDP for that year.

These are more than just numbers for economists to look at; these have real impacts in real time. They affect people across the country today. I wanted to point out again, as I have mentioned in the past, the study done by economists Rhinehardt and Rogoff, which took a good look at countries, and particularly developed countries, that have acquired or accumulated the sort of debt level we are looking at in this country and the impact that has had on their economies. And in their analysis and their study, they came to the conclusion that when you reach a certain level of debt to GDP--in this case, 90 percent debt to GDP--you lose 1 percentage point of economic growth. In other words, economic growth will be 1 percentage point less than it would otherwise be because of that high GDP debt level the country is sustaining. They say that is at 90 percent. If we look at where we are today debt to GDP, we are about 93 to 94 percent. According to the White House's own economist, every time you lose a percentage point of economic growth, it costs you about 1 million jobs.

So having the kind of debt level we are carrying today creates a cloud over our economy, reduces economic growth, and reduces jobs. It is costing us job creation in our economy, which I think is what most of us believe we should be focused on, and if we are going to focus on jobs, we have to say there is a correlation between spending, debt, and jobs. I believe the sooner we acknowledge that, the quicker we address that, the better off we will all be and the sooner we will see the economy start to recover and expand and create jobs again. That is the impact that is happening now, and it only gets worse if changes aren't made.

When the government borrows money, obviously there is an impact in the private economy: there is less money for private companies and individuals to invest in equipment, plants, housing, and training. It crowds out these investments and instead allocates money--spends money--on less efficient, less necessary, duplicative, and oftentimes downright wasteful programs and projects.

If we don't get our arms around this level of spending and debt, it also means higher interest rates for individuals who want to borrow to buy a home.

It is clear to individuals and businesses across the country--even if it isn't clear to everyone here in Congress--that the government cannot continue to spend ever-increasing amounts of money without raising taxes. That creates uncertainty among individuals and businesses across this country and acts as a disincentive for them to invest. So because you have

uncertainty about what the impact of all this spending and debt will have on future taxes, a lot of capital continues to sit on the side lines not being deployed, not being put to work. That is happening simply because there is this uncertainty about what is going to happen and whether Washington is serious about getting this spending and debt issue under control and focusing on the fiscal problems we have as a nation.

I mentioned last week that Social Security benefits would automatically be cut by over 20 percent if that program is not reformed. This is not the result of the House-passed budget, contrary to what many are saying. This is the result of the current situation we face today with Social Security. Likewise, according to the alternative scenario of Medicare's own actuaries, the health care bill that was passed last year would lead to significant numbers of providers becoming unprofitable and who would, presumably, stop providing services if health care costs are not contained.

This assumes we don't have a debt crisis. The former Chairman of the Federal Reserve, Alan Greenspan, said recently that the odds of a debt crisis happening in the next 2 to 3 years are about 50 percent. So if you take that analysis and you take what Standard & Poor's has said about America's credit rating--they have warned of a possible downgrade in the U.S. credit rating in the next 2 to 3 years if serious changes aren't made--I think you can see why there is such a cloud hanging over our economy right now.

Some believe this debt crisis may not occur for a few years down the road. But I think one thing we know for sure is that it is coming. It is predictable. We don't know exactly when, but we know it is coming because you cannot continue to have these types of signals, this kind of not only anecdotal information but hard data describing the current state of our economy, the current state of Federal spending, the amount of debt to GDP we are continuing to increase year over year, and not believe we will have some significant and measurable impacts on our economy.

That is why it is so important that we take the steps necessary to avert this crisis. If we don't, we know what will happen. As our debt burden increases, investors from around the world are going to increasingly demand higher yields to lend us money, and that will further exacerbate our deficits. Interest alone will consume increasing amounts of our revenue until we can no longer pay our bills.

We have seen this happen in countries around the world. We know the magnitude of the actions those governments have had to take in response to debt crises in other places around the world.

Greece, for example, was forced to take loans out from the International Monetary Fund and has had to impose a variety of austerity measures. These austerity measures have included laying off public sector employees, cutting their pay, freezing their pay for many years at a time, a 2-percent increase in their VAT tax--they have a value-added tax in that country--and a 10-percent increase in other taxes. They have also made dramatic cuts to pension programs and reforms to entitlement programs as well. Yet they are still paying, after all of that, very high interest rates. The yield on 2-year debt is over 24 percent in Greece.

In Ireland, they had to implement austerity measures of more than 9 percent of GDP--9 percent of their entire economy. In the United States, if you were to translate that into the impact it would have on our economy, that is the equivalent of raising taxes and cutting spending by $1.3 trillion in 1 year--an astounding amount. But that wasn't enough. They are looking to implement another austerity plan of tax increases and spending cuts. That one is estimated to cost the average family in Ireland $5,800 a year.

Those are the types of measures that have been forced upon, imposed upon some of these other countries around the world because they have seen the debt crisis we are trying to avoid in this country. At the same time, after having taken all these austerity measures, they have seen massive contractions in their economy, because we all know what happens when you start raising taxes and you create the amount of economic uncertainty I described earlier. It becomes very difficult for small businesses to invest and to create jobs. So, not surprisingly, you see these austerity measures leading to violence, protests, and general discontent. It appears now that Greece is seriously considering at least a technical default on some of their debt.

So that is, I guess, a picture of what our future will look like absent changes. We will have a shrinking economy, fewer government services, and dramatically higher taxes. That is what the experiences have been in some of these countries I just mentioned, and that is what we are headed toward absent serious, meaningful action in getting our spending and debt and our entitlement programs under control.

There is no reason to go down this path. The Senate will have the opportunity over the course of the next few months, at least, I hope, to vote on legislation that will start to address not only the near- term issues of discretionary spending and capping that and capping it into the future, in the near term and midterm, but also address the issue of entitlement reform. As I mentioned earlier, we cannot solve the debt problem, the fiscal problem, and the crisis our country faces without taking on the issue of entitlement programs. If we don't, our future will look like that of Greece and Ireland.

Today, we will vote--today or tomorrow; I am not sure exactly when-- on a series of budget proposals which are, in each and every case somebody's attempt to address this issue. We saw the House of Representatives act on a budget earlier this year--the so-called Ryan Budget--which they passed. We will get a chance to vote on that in the Senate. We have a couple of our colleagues on the Republican side who have come up with their own ideas about budgets and what we might do to address this fiscal crisis. We are going to vote on the proposal the President put forward, which is completely inadequate to the challenge. In fact, it increases spending over 10 years, dramatically increases debt, and dramatically increases taxes, which would have an incredibly detrimental impact on the economy. That is what the President put forward. We will vote on that today as well. Having said that, all these votes--although they are, I suppose you could argue, important in some respects--are going to end up being more symbolic votes because I don't think any of them will get the necessary votes in the Senate to pass.

What is ironic about the debate on budgets this week is that the only budget we are not voting on is a Senate budget. We have not had a budget now in the Senate for 756 days. This government spends $3.8 trillion a year, and yet it has been 756 days since the Senate has passed a budget. So we have a couple of our Republican colleagues who are putting forward alternatives, we have the House that has put forward an alternative, but the Democratic majority here in the Senate has not, for 756 days, moved to bring a budget to the floor so we can have a debate and vote upon the fiscal priorities for this country and how we are going to spend $3.8 trillion of the American people's tax money. That is a stunning development. I am on the Budget Committee in the Senate, and we have yet to even have a markup, and I don't anticipate we will in the near future.

Having said that, we cannot afford to wait to take on this Nation's fiscal challenges. I hope that, absent action on a budget here in the Senate, these discussions that are occurring right now between the Vice President and Senate leaders will yield a result that will enable us to at least move forward and address these fiscal issues, but it doesn't negate the responsibility we have as Senators to put forward a budget and to debate that budget.

Ironically, we are going to vote on the budget passed by the House of Representatives. I don't know this for a fact, but I have heard this is the case, that it will be the first time ever that the Senate will vote on a budget passed by the other body--in particular, by the other body when it is controlled by the other political party. This will be the first time in history. I think the Democratic leader wants to do that to make some political point, but I think we all know that our not passing a budget or at least debating a budget here in the Senate is a complete abdication of the responsibilities we have

as Senators to be good fiscal stewards of American tax dollars.

I would just close again today by saying we have seen our future. You can look at what is happening in Greece, you can look at what is happening in Ireland, and you can look at the types of austerity measures imposed by outside entities who have said: You make these changes or you are not going to continue to get IMF funding, for example. And even after all that, you are still looking at these interest rates in the 20-percent range, you are looking at economies that continue to contract rather than expand and grow. We need to create the conditions here that will enable our economy to grow and to create jobs, and it starts with getting Federal spending and debt under control.

One final point I will make, and this has to do with an issue that pertains to my State of South Dakota, but I think it ties into the broader point I am making about the economic uncertainty that is being created out there today for businesses.

There was a piece of legislation that passed a little over a year ago here--the Credit CARD Act--which put in statute a number of changes with regard to subprime credit card companies. That is all fine and good. I voted against it. We have companies in South Dakota that play by the rules, they have abided by the laws, and they are a heavily regulated industry. Yet Congress decided--over my objections--to move forward with legislation that would change the rules by which they play.

Well, that was all fine and good, but when it came time to implement those regulations, the Federal Reserve decided the statutory framework that was created wasn't quite good enough. So the initial regulations that were out there--this company reacted to those and tried to adapt its business model, but the Fed decided that wasn't good enough, so they took regulatory steps that went beyond what the statute had called for and made it even more difficult.

We predicted this at the time--we said: This is going to cost jobs in our State of South Dakota. Well, just this last week that particular company announced they are closing their operation in Spearfish, SD. That will impact 330 jobs in a town of about 10,000 people. Incidentally, the mayor of that city worked for this company. And there is a story here from the Rapid City Journal which describes the economic impact of these job losses and what it will mean to that community and to the entire area.

I can't help but think this is just another example of regulatory overreach, of regulatory agencies deciding they know best and going above and beyond what Congress called for in terms of legislative requirements and the legislative intent and taking regulations beyond that. So we have real-world impacts on people out there as a result of decisions made here in Washington, DC, and when we tried to make these arguments to the regulators, they couldn't have been less concerned about jobs. We said this is going to cost us jobs.

This is just the beginning, by the way. There is another location in Huron, SD; Dakota Dunes, SD; and Sioux Falls, SD, and I think this is just the tip of the iceberg of what we will see in terms of job losses caused by regulatory overreach because a Federal agency decided they knew best and went above and beyond what even the U.S. Congress said with regard to this particular issue.

These are, again, real-life examples of decisions made here in Washington, DC, and the impacts they have in the real world. I hope we can put policies in place here that will encourage economic growth and job creation, not hinder it, not inhibit it.

I yield the floor.

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

Madam President, I ask unanimous consent that speakers on the Republican side be allocated up to 10 minutes each.

Last Friday, the Social Security trustees' report and the Medicare trustees' report were both released. They showed that as large as our debt and deficits are now, without tackling these two entitlements, our future debts and deficits will dwarf current levels. In fact, this year alone, Medicare is running a cashflow deficit of more than $32 billion. This is the largest deficit ever for this program. Likewise, Social Security will run a cashflow deficit of $46 billion this year. This requires the Treasury to finance

these programs through additional borrowing, adding even more to our deficit.

In total, Social Security faces a $6.5 trillion unfunded liability. The reason for this, according to the report, is the aging of our society. As we live longer and as the size of families has decreased, the number of workers financing benefits has steadily decreased. For example, in 1950 there were 16\1/2\ workers for every Social Security recipient and life expectancy was 69 years old. By 1960, the number of workers supporting each recipient was just half of what it was 10 years before. Now there are fewer than three workers for each beneficiary. By 2040, it will be just over two.

Around the same time, in 2036, Social Security's trust fund will run out of all of the IOUs the government has issued to it. After this point, Social Security will be able to pay just over 75 percent of the current benefits. That is an important point because some say Social Security does not need to be reformed because these benefits are still going to be able to be paid. I think we have to remind ourselves of how this will work.

But you can see the demographic trend here, what is happening. Going back to the 1950s when you had a life expectancy that was shorter, you had more people paying in--16.5 for every 1 who was drawing out. Now we are looking at three people paying in for every one drawing out. And, of course, the life expectancy now is up to about 78 years average. In 2040, as I said earlier, there will be two people paying in for every one drawing out. So the crunch is coming. We all know that. We can predict it. We see it coming.

Of course, the expectation is that because the Social Security trust fund will be able to pay benefits until sometime in the 2037 timeframe, everything is OK; we do not need to take steps to rectify this situation today. The problem with that is the so-called IOUs in the Social Security trust fund are just more borrowing. When we get to that year, when we get to the 2036-2037 timeframe, there will only be about 75 cents coming in for every dollar that will have to be paid out. So you will have people who literally will take a huge cut in benefits or we would have to undergo a massive payroll tax increase in order to make that up or dramatically increase the borrowing of the Federal Government because, in fact, those IOUs in the trust funds are not an economic asset that can be used to pay a cash benefit. It is simply borrowing. We all know that. And I think the important date--in my mind, at least--is the date at which the amount we receive coming in to the Social Security trust fund in the form of payroll taxes no longer exceeds the amount we are paying out in the form of benefits. That happened this year to the tune of $45 billion.

Many of us have committed to preserving these programs for existing retirees and for those who are about to retire soon. If we do not reform Social Security, these cuts of nearly 25 percent would be instant and automatic, giving retirees no time to make other arrangements.

Working back from the 2036 date to ensure that the program remains solvent and can pay out benefits to future generations requires us to take action today. We do not have the luxury of time. We cannot afford to wait. The sooner we take action, the more time the current generation has to prepare for a realistic level of benefits and not be blindsided when their benefits are dramatically cut. Without reform, Americans aged 42 and younger will not see full Social Security benefits when they retire.

In addition to the aging population, the rapidly rising cost of health care is placing enormous pressure on the Medicare system. Despite the recently enacted health care reform legislation, health care costs rose by over 7 percent in 2010 compared to about a 1-percent increase in all other goods and services in the economy. The Medicare trustees reported that the program has an unfunded liability of nearly $36.8 trillion and that the Medicare hospital insurance trust fund will be completely insolvent by the year 2024. Medicare spending is expected to rise from 3.6 percent of our entire economy--of our gross domestic product--in 2010, which is where it is today, to 10.7 percent in 2085. That means the amount of money the government spends on health care is going to triple over the next 75 years.

Now that, unbelievably, is the rosy picture of what will happen. Due to the double counting that occurred in unrealistic savings and targets that were included in the health care reform bill that was passed last year, these numbers are going to be invariably worse if further action is not taken.

Finally, the Medicaid system also faces nearly all the same increases in costs and funding challenges as the Medicare system, while also failing to provide States with the flexibility they need to provide quality care for beneficiaries.

Unfortunately, this administration and the last Congress made these problems even worse. Instead of reforming these entitlement programs, they created yet another new entitlement program called the CLASS Act, which even the Democratic chairman of the Senate Budget Committee has called a Ponzi scheme.

Included in the same health care bill passed last year was a massive expansion of Medicaid and the creation of new credits for individuals to buy insurance, all of which adds to the budget burdens we are already experiencing.

If these programs are not reformed, we know what we will face. Under the Congressional Budget Office's ``alternative fiscal scenario'' which makes realistic assumptions about the growth of these programs, spending in 2020 would comprise 25.9 percent of GDP, more than 25 percent above the historical average. It would continue to grow, and in 2035 spending would comprise 35.2 percent of GDP or nearly 60 percent more than the historical average.

In that same year, deficits would comprise nearly 16 percent of the GDP of our entire economy, and debt would be 185 percent of GDP.

I want to illustrate that in the form of a chart and show you what this would look like. The historical average for deficits--3 percent, as I said. Look at what we faced in the last 40 to 50 years, roughly, and where that is headed in these outyears. As you look at 2010, how this thing spiked up in the last couple of years, we have added massively to the debt, the stimulus spending, the massive health care, the entitlement programs, all of which will make this worse. But we are on a trend to follow the trajectory where we will get to where the deficit is literally going to represent 61 percent of our entire economy.

That is a stunning path to be on--why it cries out for us to take the necessary steps to get back on the right fiscal track. Interest on the debt would comprise nearly 9 percent of our economy, half of which is paid to foreign debtors. We all talk about the impact of carrying this amount of debt. Today, we have so much debt that, in a few years, the amount we pay for interest will exceed the amount we spend on national security. In other words, we will spend more financing our debt and simply making the interest payments than we do defending the country.

Think about that. Think about where we have gotten to. Think about the fact too that if we saw even a 1-percent increase in interest rates, if interest rates went up 1 percent and we had to pay more to borrow money from those creditors, some of which are foreign countries, it would increase the interest we pay annually by $140 billion. That is how sensitive we are to a slight increase in interest rates because of this massive debt. We passed, yesterday or the day before, the $14.3 trillion level, the debt limit. We are going to have to raise the debt limit here. We don't know exactly when--sometime in July or August. But that is coming. We have maxed out our credit card, our borrowing authority, we have hit the limit, and in order to keep our economy functioning we have to increase the amount our country borrows.

If we follow the President's budget, we would double that in the next decade. We will go from $14.3 trillion to literally over $26 trillion in the next decade under the President's budget. Why? Because the President didn't make any attempt in his budget to reduce spending or reform entitlements--Social Security, Medicare, and Medicaid--which are the big drivers of Federal spending. If we don't take steps to reform those entitlement programs, this picture gets worse and worse over time.

I want to illustrate this with a chart. This is where we are today. This is debt as a share of the economy. As I said before, if you look at historical averages, what we have carried in the form of debt, in World War II, obviously, there was a big ramp-up because we had to finance the war and coming out of the war. As the economy started to expand and we got spending under control, the debt, as a percentage of our economy, started to come down to historical averages, which is where it stayed for about 40 to 50 years. It started to spike in the last couple of years, as we have seen spending increases. The reason is because the amount we spend as a percentage of our total economy has continued to tick up.

I mentioned earlier that we are looking at--what was the number--25.9 percent of GDP is what we will spend on the Federal Government in 2020, according to the CBO's alternative fiscal scenario. If you think about that, the amount we have spent historically as a percent of our economy on the Federal Government is 20.6 percent. That has been the 40-year average. We are going from 20.6 spending as a percent of our economy-- the amount the Federal Government spends for our entire economic output--to 25.9 percent a decade from now. It continues to spike up. Because we are having to finance so much spending with borrowing, the borrowing level will increase dramatically, to the point where we are looking at debt to GDP--if we don't take steps to change, this is what we are looking at on this chart. It is a straight up spike in the amount of borrowing to GDP. This is pointed out too by where we are currently; right now, we are running somewhere in the $1.4 trillion to $1.6 trillion in annual deficits on $3.8 trillion in total spending, which means that out of every dollar the Federal Government is spending, we are borrowing over 40 cents.

Can you imagine any family or business in this country that could continue to get by borrowing literally over 40 cents out of every dollar they spend? You cannot do it. That would be like the average family in this country having an annual income of about $60,000 and spending $110,000. You cannot do that. The Federal Government has been doing that for way too long. That is why we have to take on this issue of spending and debt.

Some people argue that we don't have enough revenue, we need to raise taxes, and that is the way to deal with this fiscal crisis to get more revenue coming into the Federal Government. I argue that, based upon these facts, this is not a revenue problem, this is a spending problem. The reason we are where we are is not because we don't have enough revenue, it is because we are spending dramatically more as a percentage of our economy than we have in the last 40 to 50 years. The historical average is 20.6 percent over the last 40 years--what we have spent on the Federal Government as a percentage of our entire economy-- and today that is 24 percent, and by 2020 we are looking at over 25 percent--an increase of 25 percent in the amount we are spending on the Federal Government as a percentage of our entire economy. That is a spending problem, not a revenue problem.

We need to address this and recognize it, and we need to understand that the only way we can fix it is to deal with what is driving that spending. It is Social Security, Medicare, and Medicaid. Those programs comprise 55 to 60 percent of all of government spending. Absent reforms to those programs, this is what we will end up with; this is where we will be as a nation. That is certainly someplace I don't think most Americans want to go.

The other reason is critically important. I have said this before, and I will say it again. It has implications not only for future generations but in the here and now. One is that when you are carrying this kind of debt to GDP, sustaining this kind of debt level, it impacts your economy's ability to create jobs, because you are crowding out private investment that otherwise would be allocated to more productive uses, and you are spending it on the government. You are also impacting interest rates and inflation in ways that could be counter to the economic expansion, growth, and job creation in this country. There has been a great amount of research and study that has gone into at what level does that start to take away from economic growth, economic expansion, and job creation?

Two people who have recently put out a book; Carmen Reinhart and Kenneth Rogoff have suggested, from their study of developed countries over the last half century, that when your debt to GDP reaches 90 percent, it is costing you about 1 percentage point of economic growth every year. In this country, losing 1 percentage point of economic growth costs us about a million jobs. If we say we are serious about job creation, one of the problems we ought to focus on is getting spending and debt under control. If we sustain and carry this kind of debt level for the foreseeable future, we are going to cost the economy 1 percent of economic growth and, therefore, a significant amount of jobs that might have been created by that economy. That is one reason we need to rein it in.

The statement has been made repeatedly by ADM Mike Mullen that the greatest threat to our national security is our national debt. I would say that the national security implications are very real as well. When you have the highest ranking military official saying the greatest threat to America's national security is our national debt, that is a stunning statement. I think it speaks volumes about why it is important to get this issue under control.

One of the reasons he says that, obviously, is that so much of the debt is held by foreign countries, all of which have additional leverage on us because we owe them so much money. We need to get spending under control and get the debt dealt with. That starts with entitlement reform. I hope the discussions currently occurring between the White House and some of the leaders here in the Congress will come to a result where we can work together and use this as an opportunity to, once and for all, put this country back on a fiscal track that will ensure that future generations are not burdened and saddled with an enormous amount of debt and an economy that is saddled with that weight and not able to create the jobs to get people back to work and to grow and prosper and create a higher quality of living and standard of living for the next generation.

I ask unanimous consent that the time of the quorum call be divided equally on both sides, and I suggest the absence of a quorum.

Madam President, since I first came to the Congress back in 1997 as a freshman Member of the House of Representatives, I have been talking about spending and debt and deficits, and that was a key, central element of my campaign for my first election to the House of Representatives way back in the day. Of course, at that time the numbers were a lot less daunting than they are today.

If we just look at even where we were 15 years ago in relative terms, the point at which we find ourselves today is almost overwhelming. The debt now is over $14 trillion. We are being asked to raise the debt ceiling even further. I would argue we can no longer afford to put these hard decisions off because these are serious times and these call for serious solutions and serious leadership. I hope we are up to that task.

For a long time we thought debts and spending and deficits and all those sorts of things could be acceptable up to a certain level, and I suppose to some degree that is true. Historically, if we look at our country in terms of revenue and spending, over time we have consistently had a certain amount of debt that we carried. But I think by any stretch, any American, any economist, anybody who watches this closely has to recognize the situation in which we find ourselves today is unprecedented in American history and cries out for action-- immediate action and bold action.

This is something I would argue my constituents are very concerned about--I think all Americans are very concerned about--because, again, if we look at it in relative terms, where we are today--$14 trillion in accumulated debt--and we go back in the annals of history and look at from the formation of this country back in the late 1700s until 1849, our Federal Government spent--if you can imagine this--only about $1 billion over that 60-year time period.

Today, we will borrow $4 billion. Between today at 9:50 a.m. and this time tomorrow at 9:50 a.m., our Federal Government will borrow $4 billion, which, to put that into perspective, suggests we will borrow, in the next 24 hours, more than four times what we spent in our first 60 years as a nation.

Now, in fact, in 1835, under President Andrew Jackson, the government debt--for the only time in our Nation's history--was completely paid off. Since that time, our debts have been large and small, with large runups in the debt during times of war, while the debt largely declined during times of peace. Never, though, did our debt top even 50 percent of our entire economy, of our GDP, until the Great Depression.

At the end of World War II, debt topped 120 percent of GDP. But in the postwar period, debt steadily declined as a percentage of our economy, attributable to a couple factors: One was strong economic growth, and the second was a government that managed to keep spending relatively low.

When we look at the post-World War II time period, and we get into the 1960s and we reach the end of the 1960s, in that time period to 2008--from 1969 to 2008--on average government spending consumed about 20.6 percent of our entire economy while taxes during that time period on average were about 18 percent of our economy. That, in balance, led to a sizable but a manageable national debt. Debt held by the public just before this President took office was $6.3 trillion.

Now, to put it into perspective, during the previous 40 years the budget was balanced on five occasions. So if we look back, in the last 40 years of our Nation's history there were five occasions on which we were able to balance the budget. In each of these years--and those were 1969, 1998, 1999, 2000, and 2001--spending was below the historical average.

In 1969 spending was just 19.4 percent of our GDP. In 1998 it was 19.1 percent of our GDP. In 1999 it was 8.5 percent of GDP. In 2000 and 2001 it was only 18.2 percent of our GDP. So when we look at the years when our budget was balanced, spending averaged just under 18.7 percent of GDP. So what are we set to spend this year? Madam President, 24.3 percent of our GDP--an astonishing 30 percent more than we have spent historically when our budget was balanced. Our debt held by the public at the end of this year will be nearly double what it was when this President took office.

So how did we get to such a high level of spending? Well, to be fair, I think we would have to say some of this is attributable to the economic downturn. Obviously, tax receipts, revenues, are down as a consequence of the economy being in a recession. We also have the ongoing conflicts in Iraq and Afghanistan, which have been expensive and, obviously, have required a large commitment of resources in order to conduct the operations that are necessary for success there. But I would also argue that a substantial chunk is due to the spending spree that Congress has been on since 2008.

Between 2008 and 2010 spending on nondefense discretionary programs went up more than 20 percent even though inflation over that same time period was around 2 percent. When we add in what eventually the bailouts of Fannie Mae and Freddie Mac are going to cost, which will be hundreds of billions of dollars, that adds significantly to the debt. Of course, the stimulus boondoggle cost us over $800 billion in the short term. When we add in the interest costs that are associated with that, it will be over $1 trillion--which was all borrowed, borrowed money, borrowed from our children and grandchildren.

When we look at the percentage, as I said before, of spending $1 trillion, literally, on that one program, that one policy, the stimulus program that went into effect a couple years ago, that is literally a thousand times more than what we spent as a nation in our first 60 years of its existence.

If we look at the projections included in the President's budget, it is revealing that it never balances, and that is due entirely to spending. Spending under the President's budget never falls below 23 percent of our entire economy, of our GDP. After 2015 it grows, and there is not a single year when the spending does not grow as a share of our economy. So we have this constant growth in overall spending as a percentage of our GDP that is way beyond the norm if we look at any sort of historical average.

So when the President submitted his initial budget to the Congress, I think we were all hopeful it would demonstrate an acknowledgement that he gets it; that he understands the dimensions of this problem and how serious our fiscal and financial straits are. But the budget he submitted to Congress a few months ago actually increased spending over the 10-year time period, massively increased the debt, and raised taxes on our small businesses at a time when, as I said earlier, we are hoping to get the economy growing and expanding again, which helps address many of the problems I just mentioned. We cannot have economic growth when we are raising taxes on the job creators in our economy, which is our small businesses.

I would argue the two things that are going to be necessary for us to get our economy back on track and to address this issue of spending and this out-of-control debt are to get spending under control, to make the hard decisions that have been put off for far too long; and, secondly, to put policies in place that will enable and create the conditions for economic growth and job creation.

Well, if we look at what the current administration is doing in terms of policies, what I hear as I travel in my State of South Dakota from small businesses--I hear it from agricultural producers--is that at almost every turn they are facing new regulations, new policies coming out of Washington that do not reduce the cost of doing business but actually increase the cost of doing business and drive down their margins, make it more difficult for them to invest capital, to hire new people, and to get this economy going and expanding again.

There are numerous examples of that. We have a number of agencies that are just issuing, promulgating regulations, pursuing an aggressive agenda, much of which cannot be accomplished in Congress because there are not the votes in the Congress to accomplish much of that agenda. So the administration has decided, by just sort of an executive power grab, to try to accomplish much of that agenda.

Well, as I said before, most of those policies are things that make it more

expensive to do business in this country and are going to make it more difficult for our small businesses to get back on track. I mentioned the tax increases the President has proposed, consistently proposed, not only in the budget he released to Congress several months ago but more recently, a couple weeks back, when he came out with his sort of new improved budget still loaded up with tax increases on small businesses--the very opposite of what we would want to do if we want to encourage small businesses to invest and create jobs.

The economic uncertainty that is created by tax policies which are not permanent, expire in a couple years, the economic uncertainty created by not knowing what the next regulation coming out of Washington, DC, is going to do to their bottom line is creating an anxiety out there among investors and keeping on the sidelines a lot of the capital that otherwise would be put to work and deployed in creating jobs.

So if we look at just a few examples--the EPA is probably the most notable one; that is the one I hear the most about--it does not matter whether I am talking to a small business group or whether I am talking, again, to farmers and ranchers, consistently, they say: These regulations coming out of Washington, DC--and specifically in this case, most of them are referring to policies that are coming out of the EPA--are making it very difficult for us to create jobs, to put people back to work, and to invest, reinvest in our businesses.

So we have these types of regulations that are coming out of these agencies. We also have, as I said, a runup in costs associated with many of the policies the Congress has enacted, the spending and debt issues that have been created by the stimulus bill, the new health care bill, which when it is fully implemented will cost $2.5 trillion or thereabouts, but it is going to pass on lots of new costs to businesses across this country not only in the form of tax increases but also in the form of higher insurance rates which they are going to be looking at.

I think you are going to see a continued period where businesses in this country--small businesses--because of this economic uncertainty, will continue to sit it out and don't do the things that are necessary to get people back to work and to deal with high unemployment. There is also the issue of a depressed economic downturn that will make it more difficult for us to expand the economy and address this issue of increasing revenues at the Federal level, which will help solve the problem we have with the deficit and debt.

Another issue that I think is significant now, but it is always an issue for the people I represent in South Dakota, is high energy costs. The Democratic prescription--the most recent one--is to tax energy companies. If you want to get lower cost energy, one of the things you would not do is raise taxes and make it more costly and expensive for people to do business. If you look at, again, EPA and their attempt to regulate greenhouse gas emissions under the Clean Air Act, which they don't have the authority to do but want to do anyway, has made it more difficult for energy companies to get permits, and a number of projects have been scratched across this country. I can think of a couple in South Dakota.

If you look at the fact that if we continue to get 60 percent of our fuel from outside the United States--we are literally sending $1 billion a day to foreign countries because of our addiction to foreign energy--and if you look at the policies here that we should be implementing if we are interested in getting to be energy independent and produce more American energy, you find a complete contradiction with what the President and his allies in Congress say. They all talk about energy independence, getting away from spending $1 billion a day on foreign oil. Yet, their policies tell another story, because we are limiting even more the amount of area in this country that would be open to energy exploration and production. We have enormous resources in the United States--oil and gas, clean coal, biofuels, and others that we can gain access to.

Right now, we have energy policies that seem more intent on and concerned with some other agenda rather than energy independence. If you are interested in energy independence, I would think you would put policies into place that encourage the production of more American energy. Exactly the opposite is occurring. We have more and more areas that have been taken off limits--public lands. We cannot get to the Outer Continental Shelf. A permatorium is in existence in the South. The North Slope of Alaska has tremendous energy resources. Much of this is off limits, and that will continue to drive us into the arms of foreign countries--many that don't have the best interests of this country in mind and, perhaps even worse, fund organizations that plan attacks against the United States and our allies.

It strikes me at least that if you are serious about getting deficits and debt under control, the one thing you would do is put policies into place that enable small businesses to do what they do best, and that is grow and create jobs. Secondly, you would put constraints on Federal spending in Washington, DC--this issue I mentioned earlier--so that the consistent runup in the amount we spend on our Federal Government as a percentage of GDP will start to not only taper off but come down.

There are a number of suggestions that have been made out there-- certainly, perhaps, no perfect one. At least people are taking a legitimate shot at trying to address this issue. There has been a lot of discussion about the Ryan budget that was passed by the House of Representatives. That is already being immediately attacked. Perhaps it is not perfect, but it is a serious effort to control spending.

The only other suggestions we have seen, as I mentioned, are some statements made by the President about his proposals, again, all of which increase taxes, increase spending, and add massively to the Federal debt. It seems to me that we are not having a serious discussion about balancing our budget and paying off our debt, particularly, again, when you put into perspective where we are. Between now and 10 a.m. tomorrow, we will borrow another $4 billion, which, as I said before--I think it bears repeating--is literally four times the amount our entire country spent in the first 60 years of its existence. Again, that is $4 billion between now and this time tomorrow.

We are being requested to raise the debt limit, the amount we can borrow, raise the limits on our credit card in the next few weeks because we are up against that ceiling. We have hit the maximum. We have capped out our ability to borrow money. We are going to be asked to make a vote to increase that borrowing ceiling. I don't think that can occur honestly until such time as we are willing to put into place and take the necessary steps to get this issue of spending under control.

This is, by definition, a spending issue. Some people argue that we need tax increases and additional revenue. The observation I made about balancing the budget was that at the times we did that over the last 40 years--on those five occasions, in every case, we spent less than the average--in some cases significantly less--as a percentage of our GDP.

Clearly, the way to attack this issue is to get spending under control. That will require hard decisions, many of which have been postponed. We have been kicking the can down the road for a long time. We are out of road now. We have come up to the cliff. We cannot kick the can any further. The road is at an end. We are up against some very serious impediments if we don't take the necessary steps to fix the problem.

Again, when I talk about the seriousness of it, over the last few years we have paid lipservice to the issue of spending and debt. I maintain that you have to judge people by what they do and how they vote, not by what they say. We need to debate this issue. As we get into the discussion over raising the debt limit, it creates an opportunity for both sides--Republicans and Democrats--to come together behind a plan that will meaningfully reduce spending in this country, which will deal with entitlement reform, which is needed. We cannot solve this problem in the long term unless we address the issue of entitlement reform and get some limits on spending that will be binding, that we cannot get around.

It is too easy too waive things here and declare an emergency and continue to spend as if there is no tomorrow.

These are serious times. They require serious leadership and serious solutions. That point is no better made than by some of our leaders in this country. As we all know, the chairman of the Joint Chiefs of Staff, ADM Mike Mullen, has said in testimony before Congress that the greatest threat to America's national security is our national debt. I think that is a stunning and powerful statement about where we are and the importance of acting now. We had the former Federal Reserve Chairman, Alan Greenspan, say not too long ago that there is a 50- percent probability that we will face a debt crisis in the next 2 to 3 years. And then, of course, we had Standard & Poors provide a negative assessment to our credit rating in this country. That, too, is something we have not seen before. I hope we are willing to take the necessary steps to avoid our credit rating being downgraded. When you get an assessment such as that, it is not too long that a downgrade in your credit rating follows.

Those are not just anecdotal things, those are fact-based assessments and analysis of where we are. These are people who know the importance of dealing with these issues. If we continue to borrow more money from other places and don't take the necessary steps to fix this, we will continue to put our future of our children and grandchildren at greater risk and in greater jeopardy.

This will not be easy. Obviously, there will be political consequences to any decisions we make. But these decisions are more difficult because we have put them off for so long. The easy decisions, the low-hanging fruit is no longer out there. We have to decide now, are we going to continue to spend and spend and borrow and borrow, to the point where we head over the cliff because we ran out of road, or will we make these decisions now and get serious about providing a stronger and better and more prosperous future for our children and grandchildren?

We cannot act as though the Federal Government doesn't have a spending problem. Those days are gone. We no longer have that luxury; the numbers bear that out. So we need to look at the debt limit and the upcoming vote as an opportunity for Republicans and Democrats to come together behind a plan that will meaningfully address our spending problem.

The status quo is not acceptable. It is going to require leadership from the President, which has been nonexistent so far. I hope he will step forward. It will require leadership from Democrats in the Senate. They control the agenda here and they have the majority. I hope we do a budget this year. We didn't do one last year in the Senate. I think it is important to have that debate, so that the American people see us debating how we are going to spend their tax dollars. That is something every American should expect and deserves from their elected leaders.

I hope we will have a budget markup where we can get these issues out in front not only for us to discuss but also in front of the American people. This is their future we are talking about. If we don't act, we are putting in great peril and jeopardy the future for our children and grandchildren.

I wanted to point out where we have come from and where, in my view, we need to go if we are going to solve this problem. I hope my colleagues will join in that discussion, not only rhetorically but that their actions will follow. We cannot just talk about this; it is time for us to quit talking and start acting.

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

Mr. President, at some time in the not too distant future--there is some speculation about exactly when--our country will be dealing with the issue of exceeding our borrowing authority. In other words, we have maxed out our credit card. That would be the equivalent for the average family when they can't borrow any more money.

So what happens in that event is that Congress has to take action. Congress essentially has to raise the country's borrowing authority. It is called raising the debt limit. We are coming up on that point in time. It could happen sometime in the July-August timeframe. There is some uncertainty as to exactly when that happens, but the point is it will happen.

The reason it will happen is because we have now accumulated $14.3 trillion in debt, and we have hit the limit, the cap, that exists today on our borrowing authority.

Now, $14.3 trillion in the abstract is hard for most people to wrap their heads around because it is such a massive number. If we translate it into individual terms, it amounts to about $46,000 for every single person in the United States, which in and of itself is an astonishing amount.

Our projected deficit this year is $1.425 trillion, which is the largest ever, in nominal terms. According to CBO, it is the second largest as a share of the economy, literally, since World War II. That is as much debt as we ran up from our Nation's founding, going back to the origin of this country up until 1984 or the equivalent, just in this one single year that we are going to rack up in terms of the deficit. The interest on that amounts to about $213 billion every single year or nearly $700 for every person in the United States. That is assuming interest rates stay at these historically low levels.

While the deficit spending is, in fact, something that will merely delay taxes in the future that somebody is going to have to pay, at some point this is going to have to be paid off, and that burden, in all likelihood, is going to fall on our children and grandchildren. But it is not just something we will have to deal with down the road because the implications today, the real-time implications of this level of spending and debt, are very real for the economy.

There is a great body of research that has been done. A study done by economists Reinhart and Rogoff found that countries with a debt-to-GDP ratio of more than 90 percent grew at 1 percentage point less than they would have otherwise. That is a body of research that looks at nations over the last half century. It even goes back further than that but particularly in the last half century and particularly developed nations that have gotten up to that level of debt that exceeds 90 percent of GDP. That is where we are today, 93 percent government debt- to-GDP ratio here in the United States.

If you take that assumption that anytime you reach that debt level and you sustain it over a long period of time, it costs you a single percentage point of economic growth every single year, according to the President's own economic team, that results in the loss of about 1 million jobs. If you think about the real-time implications of this level of spending and debt, it means we are losing about 1 million jobs every single year in the economy.

You cannot say this is something down the road, that we can continue to kick the can down the road. The fact is we are running out of road. We keep kicking the can, but we are at the end of the road. If we do not take steps now, not only is it going to put a crushing burden of debt on future generations and jeopardize the very foundation of our economy, it is going to have real-time implications today, not just in the future.

I suggest that as we look at this issue of the debt limit coming up, it presents a unique opportunity. I hope my colleagues on both sides of the aisle, Republicans and Democrats, can come together. If we do not bring this debt-to-GDP ratio back down, we are going to continue to suffer from these job losses, and the impact of that is really very clear.

When the government is out there borrowing more money, it crowds out private investment, so there is less money for private companies and individuals to invest in companies, equipment, plants, housing, training, all those sorts of things, and it spends money on government, on things that are probably less efficient, less necessary, more duplicative, oftentimes downright wasteful when it comes to the programs and the projects that end up being funded. It means instead of investing, having funding for new factories for people to work in, we have more bureaucrats in places such as the EPA or the National Labor Relations Board who are coming up with all kinds of new regulations that are making it more difficult for our small businesses to create jobs. We have more unnecessary Federal property being underutilized that the private sector could use more efficiently.

Unfortunately, the risk to our economy that comes from this out-of- control spending is more than just that, it is more than just the crowding out of private sector investment and the stifling effects of government regulation. We are beginning to face the very real possibility that our country could face a fiscal crisis. Former Chairman Greenspan has suggested that the risk of this occurring in the next few years is nearly 50-50--an alarming thought. Likewise, Standard & Poor's recently warned of a possible downgrade to the U.S. credit rating in the next 2 to 3 years, when they came out with their assessment of U.S. credit, and said they have attached a negative assessment to it. In most cases--at least in a majority of the cases-- within a year's time, that leads to a downgrade of credit rating. That would be disastrous for a country such as ours which has always taken great pride and has been the rock out there when it comes to an AAA credit rating.

It is notoriously difficult to predict ultimately when a debt crisis might occur, but it would be inexcusable for us to continue to spend at these elevated levels without assuming there is even the slightest hint of a risk that this could be very devastating to our country, let alone that risk could be very high. But if it were to occur, we would need drastic spending cuts to drag ourselves out of this fiscal crisis, spending cuts that by today's standards would probably be unimaginable.

But the worst effect of this would be the deep recession it would throw our economy into. Think about that. If we did have a debt crisis in this country, what would that mean? For most people, it is going to mean higher interest rates, it is going to lead to countless job losses, pay cuts for a lot of people if you have job losses, and probably significant loss of savings, which would take a terrible toll on the American people. Those are many of the implications of a debt crisis and the implications it would have on the economy--starting, as I said earlier, with higher interest rates. It would make it more difficult for people to borrow money for a home, for a car, for their business. All those sorts of things would be impacted.

But that does not have to be the case. The reason it does not is because most experts have suggested--and it is really true--that this is the most predictable economic crisis we have ever had. It is not as though we don't see it coming. You see all the warning signs out there. You see all the red flags out

there. It is looking us right in the face. We have an opportunity to do something about it, but it will require that we have the political courage to take on this issue of Federal spending.

Next week, we are going to have an opportunity in the Budget Committee to mark up the 2012 budget, which, incidentally--the budget year starts in a mere 5 months from now. I hope this budget will focus primarily on cutting spending because I think that is the primary driver of our deficits. I am concerned that, instead, it will merely continue to spend too much, borrow too much, and tax too much.

Of course, last year, even though there was a markup in the Budget Committee, there was never a budget brought to the floor of the Senate. The Congress never passed a budget. Nor was there one brought to the floor of the House of Representatives. There was not even a vote on a budget in the House or the Senate last year. We have a $3.8 trillion enterprise called the Federal Government that did not even pass a budget.

I believe the most fundamental responsibility we have to the taxpayers of this country is to come up with a plan about how we are going to responsibly use their tax dollars, to indicate to them that they can expect a good return from those tax dollars by the way we do our budget. Frankly, that did not happen last year. I certainly hope it does this year, but it is going to take some leadership here in the Congress. In the House of Representatives, the Republicans have the majority. They did pass a budget out of the House. I hope the Senate Democrats here will also put a budget on the floor that we will be able to vote on and amend and have a meaningful discussion about spending and debt and what we are going to do to get this country back on a path of fiscal sustainability.

The President, I think you could argue, punted when it comes to the issue of spending and debt, first by saying: I am going to appoint a commission to look at this issue. The economists studied it for several months and came out with some findings and ultimately a report in which they put forward a series of recommendations for dealing with the fiscal crisis. The President sort of distanced himself from those recommendations, chose not to take those or to really engage with that commission and its recommendations, and then subsequent to that submitted a budget this year which, ironically, did not do anything to address the long-term issues of spending and debt but, rather, increased spending over the next decade, massively increased the debt, and increased a lot of taxes on small businesses in this country that are job creators. So you did have this issue: borrowing, spending, and debt continually being advanced and put forward by this President and by many of our colleagues on the other side of the aisle here in the Congress.

The House Republicans put out a proposal that has been criticized by some, but at least they have put forward a plan. They have engaged the issue of what we are going to do to rein in out-of-control spending both in the near term but also in the longer term with the entitlement programs--Social Security and Medicare and Medicaid--which represent 60 percent of all Federal spending. If we do not rein those programs in or come up with a way of reforming those programs so they are viable, when the 80 million baby boomers retire, we are headed for a train wreck. It is inevitable. You cannot, with the numbers facing us and the kinds of deficits we are already running, the amount of debt we have already accumulated, in any way assume we can get out of this crisis absent taking on these issues and coming up with meaningful reforms for Social Security, Medicare, and Medicaid. Whether or not you subscribe to or like the proposals that were put forward by the House Republicans, at least there is a plan out there.

There are a number of suggestions being bandied around here in the Senate. There is a gang of 6 that is looking at some recommendations. As I said, there is going to be a markup we think next week in the Senate Budget Committee. There is now this new commission the President has appointed to look at the issue of, as we approach the vote on the debt limit, what we can do to address spending and debt. But, frankly, we do not have at this point anything in front of us that does deal directly or meaningfully with this issue of out-of-control spending or debt. I hope some of these discussions are fruitful, that they lead to results, and that they at least put alternatives out there we can debate and discuss. But as of right now, the only proposal we have in front of us is the one put forward by the House Republicans. Again, whether or not you like it, it has created a discussion in this country about what we are going to do to fix our fiscal problems.

I believe we ought to at a minimum go back to 2008 spending levels because if we did that, it would take us back to a time before we had these massive runups or increases in discretionary spending. In the last 2 years, we have seen discretionary spending increase by well over 20 percent at a time when inflation in the overall economy was a mere 2 percent. So Federal spending was increasing literally 10 times the rate of inflation over the last 2 years. It makes sense to me that in this fiscal environment where our deficits are literally about $1.5 trillion every single year as far as the eye can see, the least we can do is restrain spending and cut it back to that level we were at in 2008, before we had this massive runup in spending. I think that is a starting point.

I believe we also ought to be looking at the entitlement programs, which, as I said, have trillions of dollars literally of unfunded liabilities. Medicare alone is a $38 trillion unfunded liability. We are currently on a path where that will bankrupt the Nation if we do not make changes.

It strikes me, at least, that you have not only some issues that deal with the near-term spending issues but also those longer term spending issues. In the near term, as I said, if we went back to 2008 levels, we would at least tighten our belts a little bit in a way that I think most Americans would find to be responsible. But the longer term issue, these entitlement programs, have to be taken up.

There are a series of proposals that would deal with that, one of which is a balanced budget amendment to the Constitution. That, frankly, is something I support. I have supported it since I was in the House of Representatives; I have been a cosponsor of that. In fact, when I first got to Congress back in 1997, there was a vote here in the Senate on a balanced budget amendment which failed by one vote. It would take 67 votes in the Senate--two-thirds of the Senate--to approve a balanced budget amendment. It failed by one vote.

I assume, had it passed at that time in the Senate, we would have been able to pass it in the House of Representatives because we did have large majorities and we could have sent it on to the States. It takes 38 States to ratify it, but since most States already have balanced budget amendments in their constitutions, I suspect they would like to see their Federal Government operate with the same sort of fiscal discipline. But it did not pass at that time. I cannot imagine how different our world would be today had it passed 15 years ago and how different this fiscal picture would have looked because it would have put a straitjacket on Washington, DC--something we desperately need. Congress needs discipline imposed upon it. It has not demonstrated historically the capability to deal with these fiscal issues absent some sort of mechanism that puts a straitjacket on the Congress so it cannot spend money.

The balanced budget amendment is something I think we ought to have a debate about, and I hope we do. In the lead-up to the vote on this debt limit, this is one of the proposals we hope to have considered.

As I said before, there are so many States around the country that have balanced budget amendments to their constitutions. Our State of South Dakota is a good example. In the State of South Dakota, the legislature cannot go home until the budget is balanced. That is a requirement. Many States across the country have that same sort of requirement. It is an imperative that requires these States every single year to put their books in order. That is something which is desperately lacking here in Washington, DC, and I hope, again, we could enact a balanced budget amendment.

There are several that have been proposed. I am a cosponsor of a couple of

different versions of that, but we have 47 Republicans who are on a balanced budget amendment, and I hope our colleagues on the other side will join us in at least bringing that to a vote, putting it before the American people, and engaging them in a debate about how best to solve our Nation's fiscal problems. I think they would agree that a balanced budget amendment is a very simple, straightforward way in which to do that.

I also believe we ought to reform our budget process because it is clearly broken. We have a dysfunctional budget process when we cannot pass a budget, when we have a $3.8 trillion enterprise such as the Federal Government and we do not even pass a budget. In most years, typically, we have--if there is a budget that passes, the appropriations bills that follow it are supposed to be completed by the end of the fiscal year, on September 30. Those deadlines routinely are missed.

Typically, what happens is we end up with a big so-called omnibus spending bill at the end of the year that wraps all the various appropriations bills into one massive spending bill, which I do not believe serves the taxpayers very well. It certainly does not allow us, as Members of Congress, to do the appropriate oversight that we should do on various individual agencies of government.

When we throw it all into one big spending bill, as so often happens around here, we lose the transparency and the accountability that is necessary to an effective functioning government. So I believe we ought to reform the budget process.

One of the ways I would do that is to go to a biennial budget. Instead of passing a budget every single year, we would do it every other year. We do it in the odd-numbered years, the years when people are not running for reelection. Because what happens in a year when people are running for reelection is they decide the best way to gain the favor of the voters is to provide more money for this particular program or this program or this constituency or that constituency. As a consequence, there is a momentum to spend more and more money. It strike me that one of the ways we could address that is to do a budget in the odd-numbered years when Members of Congress are not running for reelection. Then, in the even-numbered years, when they are, we look at ways of not how can we spend money but how can we save money. We do more oversight, which is something that is desperately lacking, because many of these Federal programs and agencies so often times sort of do their own thing, absent the appropriate level of oversight. I believe we have a responsibility, as Members of Congress, with whom the legislative responsibility, the power of the purse is entrusted by the Constitution, to do the right types of oversight.

I came across recently a good example when the Government Accountability Office came out with a report. In that report they referenced several different programs. In fact, they dealt with about one-third of all Federal spending. But in examining that one-third of Federal spending, they concluded that there are all kinds of duplications and redundancies in Federal spending.

I will just give a couple by way of example. They discovered that there are 82 programs, spread across 20 different Federal agencies, that deal with the issue of teacher training, that are designed to focus on the issue of teacher training.

Well, I suspect it is arguable about whether that is something the Federal Government ought to be doing in the first place, but it is certainly--I think any American would agree--absolutely insane to have 82 different programs in 20 different agencies doing the same thing.

Something else they discovered was that there are 56 Federal programs that are focused on the issue of teaching financial literacy. I have said this before, and I mean it sincerely, of all places, Washington, DC, should not be leading or doing instructions on financial literacy. But that being said, it is 56 programs spread across 10 different agencies. Do we need that?

That is the kind of thing that gets lost. That is the duplication and inefficiency and waste we all talk about. Yet, because we do not do the oversight we need to, many of these things just continue year after year.

Going to a biennial budget, where every other year we do a budget and then in the even-numbered years, the election years, we are doing oversight, we might actually think of ways to save money for the taxpayers as opposed to spending it.

So a biennial budget, to me, makes sense. I would make the budget resolution we pass binding because right now it is not. As a consequence, it often gets waived. I believe we need to have buy-in from the President. Right now, the budget resolution is passed by the House and the Senate, but the White House does not engage on that. So we do not have teeth in this thing that holds everybody accountable when it comes to spending. Too often that gets waived.

We need to change the way we do things around here with regard to declaring emergencies. Right now, if we want to spend money outside the parameters of the budget, everybody says: Well, it is an emergency. So declaring an emergency has become the norm rather than the exception. It has become the routine in the Congress. We have all these emergency designations which allow Congress to spend and spend. Again, there are not any constraints. It is high time we change that.

So I would make a number of changes in our budget process, which I think would lead to more transparency, more accountability, a more efficient, better-run Federal Government.

That being said, it is not the Federal Government that is going to lead us back to an economic recovery and getting people back to work. It is the hard-working entrepreneurs, it is the small businesses, it is the people in this country who roll up their sleeves every day and go to work trying to make this country stronger and more prosperous.

We are blessed because we have a nation that was founded on some core principles, one of which is economic freedom. We believe in free enterprise and free markets. It is a system that has worked extraordinarily well for this country. Look anywhere else around the world to try and find a rival to what the hard-working entrepreneurs in this country and those basic core economic principles have been able to accomplish. We cannot find one.

It is because of those four principles and the incredible ingenuity, innovation, creativity, and hard work of the American people that we have the greatest economy in the world. But that economy, as I said, is very much in jeopardy if Washington does not get its spending habits under control. Because we continue to crowd out private investment, we continue to make it harder for entrepreneurs to create jobs.

As we talk about the whole issue of spending and debt, one final point I would like to make--because there is this discussion right now about whether there ought to be tax increases. Everybody says: Well, revenues are down relative to historical averages. That is true. But one of the reasons I believe revenues are down is because there are literally trillions of dollars sitting on the sidelines in this country that are not invested because of the economic uncertainty based upon policies coming out of Washington--uncertainty about tax policy, uncertainty about regulations.

We have this tax and regulatory environment that is paralyzing the American economy. So businesses out there that have funds they could deploy, capital they could put to work in this country, are not doing it because they are worried about what Washington might do next.

We have tax policy that is going to expire at the end of 2012. It is very hard to make decisions when tax policies are temporary. It is very hard to make decisions when you do not know what that regulatory agency is going to do to you next. They have consistently--these regulatory agencies--come up with more and more ideas about how to make it more costly, more expensive, more difficult to do business in this country.

I have alluded to a couple. The EPA is a good case in point. It is one that comes into play a lot in my State of South Dakota because we are primarily an ag economy and small businesses. Many of those policies are directed at production agriculture and energy development and all those sorts of things

that allow our economy in my State to grow and to prosper.

So I think one of the reasons tax revenues are down, people are not investing. When they are not investing, they are not turning those resources over. They are not taking realizations, and they are not paying taxes. We need to get investment capital put to work. We need to get people put back to work. The best way to do that is to provide economic certainty: tax policies, regulatory policies that are reasonable and that provide incentives, not disincentives, for investment.

Today, we have tax and regulatory policies that are doing absolutely the opposite. They are discouraging investment, and, as a consequence, I think we have a lower level of revenues. But the real problem, the real problem, is not revenues, it is spending. That is abundantly clear.

If we look at where we have been for the last 40 years in terms of what we spend as a percentage of our overall economy, that average is about 20.6 percent. That is a 40-year average, historical average, we spend on our Federal Government as a percentage of our entire economy. This year we will spend 25.3 percent of our entire economy on just the Federal Government.

That does not include spending on State and local governments. When we add that up, it is over 40 percent of every $1 we spend in this country is spent on government. So what we see is the government is growing relative to our total economy, and the private economy, those folks out there who are creating the jobs in our private economy, is shrinking relative to the size of the government. That is a trend we have to reverse. It starts with getting spending under control. This is not a revenue problem. This is not a tax problem. As much as many of my colleagues would like to make it that, we flatly cannot look the facts in the face and come to any other conclusion but that spending in Washington is out of control, it has to be reined in.

We have to attack the issue, not only of discretionary spending--the part we annually appropriate for--but these entitlement programs which if not addressed are not only going to bankrupt the country but ensure that there is not a Medicare Program and a Social Security Program available to future generations of Americans.

These are very tumultuous times. There is a lot of uncertainty. I think the jobs numbers that came out this morning again point to how fragile this economic recovery is. It is so dependent upon good, sound policies coming out of Washington. For better or worse, small businesses, entrepreneurs now, unfortunately, tend to be partners with Washington, DC, because there is so much policy coming out of here, whether it is tax policy, regulatory policy, that impacts their bottom lines every single day.

We need to get out of the way to keep those taxes low, to get Federal spending under control, to make sure the regulatory framework in which our businesses operate represents the minimum level and not the maximum level that we can do to make it more difficult for small businesses to grow and to create jobs. If we can do those types of things, address the issue of spending and debt, take it on in a meaningful way, deal with this issue of reforming our Tax Code and making sure our tax rates stay low on businesses in this country and make sure regulations and regulatory policies coming out of Washington, DC, are not the impediment they are today to investment and job creation, I think we can get this country back on track.

But that is where it starts. If we want to create jobs, if we want to grow this economy, if we want to make it more prosperous and stronger for future generations, those are the steps, in my view, we have to take. I hope we get started soon. I do not think we can afford to wait.

A lot of people around here think these are all political exercises that we will go through the hoops and the motions, and we will wait to solve this until after the next election. We cannot afford to wait. The time is now. If we do not do it, we are going to put in great peril future generations and their ability to enjoy the same standard of living, the same quality of life we have enjoyed.

That is not fair to them. That is why I believe the time to start is now and the time to get this budget process--not only the reforms of the process but the spending restraints in place--is today.

I yield the floor.

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

Mr. President, today we are going to vote on last year's unfinished business. We are going to vote on a continuing resolution that will fund the government through this fiscal year, which ends on September 30. The proposal we have before us in order to fund the government through the end of the fiscal year certainly is not perfect. In fact, there are many--myself included--who would like to see it make deeper reductions in spending. That said, we will be voting on a proposal that will cut spending by around $40 billion this year, and when you look at baseline spending over the next decade actually saves over $300 billion over the 10-year period.

What strikes me about that is that it will be the first time in a long time that we have done something about reducing spending. That is not something routinely or traditionally done here. In fact, we are going to reverse a trend that began a long time ago but accelerated a couple years ago when nonnational security discretionary spending increased by almost 25 percent in the last 2 years.

This is an important first step. Granted, it is a first step, and in a minute, I am going to get to the bigger issue, but it is critical that we send a message and signal to the American people that we have heard their voices loudly and clearly and we get what they want us to do; that is, to get spending under control, shrink the size of the Federal Government, to get it to live within its means, and to quit spending money that we do not have in Washington. That is something that has been happening here for a long time. It has taken on a whole new dimension in the last couple of years.

As we talk about the unfinished business of last year, trying to get a measure in place that will fund the government through the end of the year, that will reduce spending by about $40 billion, we are talking about the smaller part of overall spending when we look at the macroeconomic view or pull back to what some would say to the 30,000- ft. view and look at spending over the next decade. In fact, we had someone testify in the Finance Committee yesterday, the former Comptroller General David Walker. He put it well when he said talking about funding in the continuing resolution is like arguing about the bar tab on the Titanic. We are on a sinking ship, and we need to do everything we can in the short term, getting maximum amount of spending reduction, but then we need to pivot and start talking about the next big battle, and that is the battle over the 2012 budget. Ironically, we are just now getting to the 112th Congress's business because we are wrapping up the business of the 111th Congress. The Democratic leadership here didn't pass a budget last year or a single appropriations bill. As a consequence, we are voting here now on a continuing resolution to do last year's business to get us through the end of this fiscal year before we can start the work of the 2012 budget, which is where I think the big debate will begin about how we get this country back on a more reasonable fiscal path.

We have seen a couple of developments here in the last 2 weeks or so that bear on that debate. One is last week, when we had the introduction by the House Republicans of a budget plan, a 10-year budget plan that was very aggressive in trying to take on the issue of spending and debt, very aggressive in trying to put progrowth policies in place that would help grow the economy and create jobs and that gets our economy back on track in this country. That was kind of the big discussion last week.

The President, I believe, felt left out of that discussion, so yesterday he decided to make a speech in which he would lay out his vision for the next decade and how we address the big challenges this country needs to tackle. I would describe that speech as a do-over because the President's first trip to the plate was really his budget, which he submitted a couple of months ago. That budget was conspicuously bereft of any effort to address the really big challenges facing the country. It didn't talk about how we are going to reform entitlements, didn't address tax reform, and it actually increased spending--increased taxes and increased the debt dramatically over the next decade. It nearly doubled the gross debt from $13 trillion or $14 trillion to over $26 trillion, and that is using I think pretty optimistic economic assumptions.

That being said, because the President didn't address any of the big issues in his budget and because the House Republicans put a proposal forward last week which would, I think he felt as if he needed to get in the game. So yesterday he made a stridently partisan speech in which he tried to put forth a plan. I would argue that speech yesterday was very long on politics and very short on substance. There wasn't a lot in there to really sink your teeth into if you are someone who believes seriously that we need to make reforms in entitlement programs. There was the usual prescription for dealing with the deficit and the debt, which consisted of increasing taxes. There are tax increases in here, tax increases in the President's proposal on small businesses--the job creators in our economy.

I would point out to my colleagues that half of all small business income is taxed at the individual level because many small businesses allow the income from that business to flow through to their individual tax return. In fact, the number of small businesses that would be impacted by his proposal employ about 35 million people in our economy. So you are talking about raising taxes on the job creators, on the people who really are employing people across this country, and that was a key element in the President's prescription for dealing with the fiscal crisis this country faces.

Another element of the President's plan was relying on this proposal that was part of the health care reform bill to squeeze provider payments under Medicare to try to wring a little more out of Medicare. He relies on an independent payment advisory board which would be empowered to go ahead and make reductions, to make cuts in provider payments. What is interesting about that is the health care reform bill last year did make some significant cuts to providers, not to reform Medicare but to create the new health care entitlement program, which, when it is fully implemented, will cost $2.5 trillion. So that is what the President used--any savings that were achieved in Medicare last year. So when he talks

about now using this independent payment advisory board to make further reductions in provider payments, it is relying on the same old tried- and-true formula. I say tried and true, but it is actually a tried-and- failed formula that has been in place before.

There is no reform in this proposal. There is nothing new or innovative that says: Let's figure out a way to solve this Nation's fiscal problems, something that actually gets at the heart of the problem and doesn't use the same old failed prescriptions that have been used in the past.

I frankly don't know what is going to happen. If you continue to cut payments to physicians and to hospitals, you will find fewer and fewer medical providers who are going to serve Medicare and Medicaid patients in this country. It is as simple as that. When you lose a little on each transaction, on each customer or each patient you serve, you have to cost shift and make up for it by shifting more of the cost over to private payers, which continues to drive health care costs for everybody who is not receiving their health care from some government program even higher and higher. So there wasn't anything in there that I would suggest really gets at this problem.

Also conspicuously absent from that speech was anything to do with reforming Social Security. We all know Social Security is also a program which ran a deficit last year. It looks as if it will be in the black this year but next year it starts running deficits and runs them well into the future. We have to make that program solvent, not just for the senior citizens who are benefiting from it today, those who are nearing retirement age, but for the next generation. The President decided to punt on that subject as well.

So, as I said, the speech yesterday was long on politics, short on substance, and short on a meaningful discussion about how we get at and address and fix these enormous fiscal challenges we face.

The other thing the President does is he uses a 12-year timeframe. We normally operate here on a 10-year budget window. That is what the House and the Senate do. It is typically what the White House does when it submits a budget to Congress. So he stretched that out to 12 years, perhaps maybe to lessen the impact of some of the few reductions he does make in his budget, but nevertheless it is a very different schedule, in terms of the proposal he makes, relative to the one that came forth last week from the House Republicans.

The reason this whole debate is important is because we continue to spend and spend as if there is no tomorrow, and it is money we just flat don't have. This year, we will take in $2.2 trillion, spend $3.7 or $3.8 trillion, and we are going to run a $1.6 trillion deficit. I have said this before on the floor, but it is now 1:20 in the afternoon today, and by tomorrow, Friday, at 1:20 in the afternoon, we will have added over $4 billion to the Federal debt. That is the rate at which the spending and debt problem is going today. We cannot continue on this path.

Some people would argue--the President and some of our colleagues on the Democratic side--that the way you fix this is ``have a balanced approach'' that raises taxes, that there has to be a tax increase as a part of this. I don't think the American people ought to have their taxes raised until we demonstrate a willingness to get at the heart of the problem.

The problem here in Washington is not a revenue problem, it is a spending problem. The numbers bear that out. If you look at the last 40 years of American history, the average amount we spend on the Federal Government as a percentage of our total economy is 20.6 percent. A little over one-fifth of our entire economic output is spending by the Federal Government. This year we will spend over 25 percent of our total economy on the Federal Government. So we have seen the Federal Government, in relation to our total economy, grow by about 20 percent over the historical average just in the last couple of years. In the last 2 years of this administration, we have added almost $3.5 trillion to the Federal debt.

As I said before, spending increased--non-national security, discretionary spending increased in the last 2 years by almost 25 percent at a time when inflation in the overall economy was only growing at 2 percent. So you have the Federal Government spending at somewhere on the order of 10 times or more than 10 times the rate of inflation. You can't defend or justify that to the American people.

The American people have a right to know we are serious about getting spending under control, as evidenced by the report of the Government Accountability Office a few weeks back where they looked at about one- third of the overall government to determine where there was duplication and where there was wasteful spending. They came up with a number of conclusions in that report, one of which was that there are 82 programs--82 programs--at the Federal Government that deal with teacher training spread across 20 agencies or so of the Federal Government.

Can you believe this--56 programs that teach financial literacy. Imagine Washington, DC, lecturing or instructing anybody around this country about financial literacy, of all things, but there are 56 programs spread across 10 different agencies or departments of government that deal with financial literacy. I mean, the American people have to be thinking, get serious.

This is the kind of thing that outrages and frustrates the American people. That is why I think they want us to singularly focus on reducing spending and getting this debt under control not by raising their taxes in the middle of an economic downturn, particularly taxes on our small businesses that will create the jobs to get the economy back on track but by reducing spending. That is where this debate ought to be centered. Regrettably, as I said, the President, in his speech yesterday, immediately latched on to the idea that we need to raise taxes on our small businesses, on our job creators.

Well, we are going to have the chance, after the vote today on the continuing resolution--assuming that it passes--and then wrapping up last year's unfinished business, to shift to this debate about the debt limit. The debt limit will be the next major issue coming along that will present an opportunity for both Republicans and Democrats to engage in a debate about how to solve this country's fiscal problems, starting with measures we put in place that put caps on spending.

We have to get spending under control, and then we will have a debate about the 2012 budget. It is unclear to me at this point whether the Senate will do a budget at all. The House of Representatives clearly will. They passed it out of their Budget Committee, and they are going to vote on it today. They are going to put forward a plan that does reduce spending by over $6 trillion over the next 10 years, that brings reforms to our Tax Code, that lowers marginal income tax rates on our businesses and our individuals, and that hopefully will create economic growth and development out there and create jobs.

It is a budget that changes the way we look at some of these traditional entitlement programs, insulating and protecting everybody who is over the age of 55. And that is the ironic thing about it, because our colleagues on the other side get up and immediately attack this proposal as cutting benefits to senior citizens. The House plan that was put forward does not impact anybody over the age of 55. So if you are retired today and drawing Medicare benefits or if you are nearing retirement age, under this particular proposal, you are unaffected. It would affect those younger than 55 who are beginning to look at the retirement years and wondering whether any of these programs are even going to be around for them. We can make those programs sustainable and viable for younger Americans who are willing to look at these things in a new way. The House budget does that.

It makes reforms that put the patient back in charge, the consumer back in charge, that I think draws on the great impulses of tradition in this country--competition, choice, allowing people to have more opportunity and more flexibility to choose a plan that works for them.

It seems, at least to me, that we have to get to a new model because the current model clearly doesn't work. It is an example of government spending that, if it perpetuates, has a $38 trillion unfunded liability in Medicare alone and has further unfunded liabilities in Social Security.

We have a major problem in this country, and it needs to be addressed. It starts with the debate on the debt limit and then hopefully on the 2012 budget. I am glad to see the President finally having a proposal out there and engaging in this debate. Unfortunately, his vision is the wrong vision for the future of this country. But it is high time the American people saw us have this debate, take these issues on, and let's hope we can come together behind a proposal that will reduce spending, reduce debt, and put us more on a fiscal footing that is good for future generations and that gets this economy going and creates jobs.

Mr. President, I yield the floor, and I suggest the absence of a quorum.