Floor Statements

Mr. President, I ask unanimous consent to speak not to exceed 15 minutes.

Mr. President, I come to the floor today to mark an amazing anniversary. And by amazing, I don't mean good. I mean unbelievable. I mean sad. On Sunday we will mark the anniversary--April 29--of the date where it has been 3 years since the Senate has passed a budget. I know a lot of Americans have heard that date, they have heard the talking point that it has been 1,000-and-umpteen days since we passed a budget. But it is not a talking point. It is simply unbelievable. It is jaw-dropping. The U.S. Government is the largest financial entity in the world, and it has been operating now for 3 years without a budget. It is a $3.8 trillion-a-year entity.

I come from the private sector. I am an accountant. When I tell the voters, the citizens of Wisconsin, that the Federal Government hasn't passed a budget, they really are amazed. That is why I call it an amazing anniversary date.

The Senate has not fulfilled a basic responsibility. It is required by law to pass a budget by April 15 of every year. It is a reasonable requirement. It is a reasonable responsibility. The House Republicans have fulfilled their responsibility and have put forward a plan. They have shown the American people what they would do to solve our looming debt and deficit problem. The Senate hasn't.

Why hasn't the majority in the Senate passed a budget? They have all the votes. They have them in the Budget Committee to refer a budget to the floor. They have the votes and they have the number of Members on the floor of the Senate to pass a budget. Why do they refuse? Is it because they have no solutions to our problem or is it that they have a solution, and they simply don't want the American people

to know what it is? ``Trust us. We will take care of us.'' Is it also because they don't want their fingerprints on that solution? They don't want to be held accountable? I think more likely that is the reason we haven't passed a budget here the Senate for 3 years now.

I guess they could claim President Obama's budget is their plan. But the problem with that is President Obama's last two budgets have been so unserious--last year his budget lost in this body of the Senate by a vote of 0 to 97. Not one member of the President's own party gave it a vote. As a matter of fact, not one member of the President's own party was willing to bring that budget to the floor for a vote. Republicans had to do that.

Now this year's budget--3 weeks ago, in the House of Representatives again, the President's budget was brought forward to the House--by a Republican, not a Democrat. It lost 0 to 414. Again, I ask the American people to think about that. Think about what a stunning repudiation that is of leadership. What it really represents is a total abdication of leadership.

The American people deserve better. They deserve far better. They deserve to have a plan. They deserve to have a choice.

The President now has put forward four budgets. He has yet to propose any solution to save Social Security or to save Medicare. Again, the House has provided that plan. They have passed a budget. They have been responsible. Republicans have been willing to be held accountable. That is our job.

It is well past time for the Senate to fulfill its responsibility to bring a budget to the floor--not just vote on one but to work on it and pass one so that we can go to conference and we can reconcile that with the House budget so the United States finally, after 3 years, will start operating under a budget in the next fiscal year.

I know the Budget Control Act sets spending caps. I get that. I get that. Washington is going to make sure it can continue to spend money. But spending money is only half the equation. What is this body going to do in terms of showing the American people what our plan is to live within our means, to get our debt and deficit under control? The American people are waiting.

The result of this embarrassing abdication of responsibility and leadership can be clearly described by a few charts. Let me start going through a couple.

I think most people have seen all kinds of different debt charts. I like this one because it starts in 1987, when our total Federal debt was $2.3 trillion. If we were to pass President Obama's budget and live by it, in 10 years our total Federal debt would be $25.9 trillion.

In the Budget Control Act, this body--Congress--gave President Obama the authority to increase our debt limit by $2.1 trillion. It took us 200 years to incur $2.3 trillion. We will have blown through that $2.1 trillion debt ceiling increase in less than 2 years.

Just in case anybody is still confused, we have a spending problem in this Nation. It is not that we take too little from the American people, it is because we spend too much.

I know the American people are frequently subjected to phrases such as ``Draconian cuts.'' I think this proves we are not cutting anything. In 2002 the Federal Government spent $2 trillion. Last year, or the current fiscal year, it is projected that we will spend $3.8 trillion. We have virtually doubled spending in just 10 years. And the argument moving forward is, according to President Obama, he would like to spend $5.8 trillion in the year 2022. The House budget would spend $4.9 trillion.

Another way of looking at that is 10-year spending. In the 10-year period from 1992 to 2001, the Federal Government spent a total of $16 trillion. From 2002 to 2011, the Federal Government spent $28 trillion. Again, the argument moving forward is that President Obama's budget in 10 years would spend $47 trillion. The House budget proposes spending $40 trillion. You don't have to be a math major or an engineer to do that math. Both $40 trillion and $47 trillion are greater than $28 trillion. We are not cutting spending, we are just trying to reduce the rate of growth. That is an incredibly important distinction. Don't be misled. We are trying to get our debt and deficit under control.

A couple months ago, President Obama said he had the solution. His Buffett rule was going to stabilize the debt and deficit. Here is a little history. I hope the American people look at this.

President Bush, in his first 4 years in office, ran a total deficit of $0.8 trillion--$800 billion. Now, back in Oshkosh, WI, I wasn't happy with that result. I didn't like seeing that deficit spending. His second 4 years didn't improve. He had a total deficit of $1.2 trillion between the years of 2005 and 2008. Again, I don't think there are very many fiscal conservatives who were happy with that result.

Now President Obama has increased that dramatically. During the 4 years of his administration, the total deficit will be $5.3 trillion. That is on total spending of about $14.4 trillion. We are borrowing 37 cents of every $1 we spend and our debt now exceeds the size of our economy. Again, President Obama's solution? I realize this is hard to see, but he has proposed the Buffett tax. If we were to actually enact that tax over 4 years, it would raise some $20 billion. I know you cannot see it, but there is a line there. It does not even fill in the marker lines here. It is $20 billion to solve a $5,300 billion problem. I am sorry, that is not a serious proposal. It is just class warfare.

Let me show one of the problems President Obama refuses to address: the looming bankruptcy of our Social Security Program, the program millions of seniors rely on, that Americans plan their retirement around. We hear all too frequently that Social Security is solvent to the year 2035. No, it is not. It is solvent because of an accounting fiction called the trust fund, which is simply government bonds held by the Government. The analogy I use, it is akin to you had $20 and you spend the $20 and you write yourself a note and put it in your pocket and say I have $20. No, you do not, nor does the Federal Government. It has bonds which, by the way, it can print any day of the week, but it has to sell those bonds.

Social Security went cash negative, which means it paid out more in cash benefits than it took in, in cash receipts by 2010--by about $51 billion. Last year, it was $46 billion in deficit. Through the year 2035, all this red ink represents $6 trillion in additional deficit spending in the Social Security fund. It is insolvent. It is bankrupt. It needs to be addressed. This President refuses to address it.

When we project out and we see another $10 trillion to $11 trillion in increased spending and debt according to President Obama's budget, I am concerned we are not even fully realizing the other risks involved.

Before I get to this chart, let me mention the first one. If we fail to meet the growth targets President Obama is projecting in his budget by just 1 percent, we add $3.1 trillion to that 10-year deficit figure. That is a 30-percent increase. I know when they passed the health care law the American people were told--they were hoodwinked into believing it would actually reduce our deficit. It will not. The way they were going to pay for 6 years' worth of spending is with 10 years' worth of receipts and reductions in Medicare. The receipts come in taxes, fees and penalties on, by the way, drug manufacturers, medical device manufacturers, health care plans. I don't know what economics course members of this administration took, but we do not bend down the cost curve by increasing the costs to providers. That is what they were doing for about $590 billion of that revenue stream to pay for ObamaCare.

The other $665 billion was going to come out of cuts to Medicare, Medicare Advantage, and Medicaid.

We have not imposed the provider reductions under the SGR fix, the doc fix--about $208 billion. What makes anybody believe we will actually impose the $665 billion in savings in Medicare? If we move the 10-year window forward to when ObamaCare kicks in, when the full spending occurs starting about 2016, the total cost of the health care law will not be $1.1 trillion, it will be $2.4 trillion, and that is a conservative estimate, not even taking into account millions of employees who will lose their employer-sponsored care and get put into the exchanges at highly subsidized rates. But using a conservative cost figure of $2.4 trillion and

growth in taxes, fees, and penalties by a reasonable amount, $816 billion, that leaves a $1.6 trillion what I am calling deficit risk. How is that going to be filled? Are we going to borrow it or are we going to take it out of Medicare? Somehow I do not think we will be taking it out of Medicare. Somehow I think we will have to borrow it, if we can.

That brings me to our last chart, interest rate risk. I was never concerned, not even for a moment last year during the debt ceiling debate, that the Federal Government was going to default on any of its obligations. We were going to pay Social Security recipients. We were going to pay our soldiers. We were going to meet every obligation of the Federal Government. The day I fear is the true day of reckoning, the day when creditors around the world take a look at the United States and say: You know what, I am not going to loan you any more money or what is more likely to occur is they will say: I will loan you some money but not at these rates.

If we take a look at the history of the borrowing costs of the United States, from 1970 to the year 2000, our average borrowing cost for the Federal Government was 5.3 percent. Over the last 3 years, from 2010 to 2012, our average borrowing costs were about 1.5 percent. That is a difference of 3.8 percent between these two figures. If we just revert to that average--and by the way, back then the United States was a far more creditworthy borrower--our debt-to-GDP ratio ranged somewhere between 45 percent and 67 percent. Currently, our debt-to-GDP ratio exceeds 100 percent. If we revert to that average borrowing cost, that would cost the Federal Government $600 billion in added interest expense per year. That is 60 percent of the discretionary spending level of $1.47 trillion this year.

I ask unanimous consent for 2 more minutes.

This is the problem. This is a huge problem. It is one that is being ignored because we simply refuse to address it. This body refuses to pass a budget to lay out a plan to fix it; to stabilize one of our primary metrics, a key one--that debt-to-GDP ratio, stabilize that and start bringing it down. The other is the percentage of government in relation to the size of our economy. One hundred years ago that was 2 percent. Last year, it was about 24 percent, which means 24 cents of every $1 filters through some form of government. I do not find the Federal Government particularly effective or efficient. That is what the private sector does. It is the private sector that creates long-term self-sustaining jobs. It is the private sector we need to rely on to grow our economy and create jobs.

As to the vision for America, we are going to have a very clear choice on the vision for America, between what this administration wants to do with a government-centered society and what Republicans want to do in terms of an opportunity society led by free people, free enterprise, led by freedom. That is our choice. But until the majority party in the Senate lays out their plan, the American people will not have a plan. They will not understand what the plan is for the other side.

Again, let me close by saying it is well past time for the Senate to fulfill its responsibility and pass a budget.

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

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

I ask unanimous consent to enter into a colloquy with my Republican colleagues for up to 45 minutes.

Mr. President, I wasn't here when they passed the Patient Protection and Affordable Care Act. This week will mark the second anniversary of what I call a very Orwellian name for that piece of legislation because I personally do not believe it is going to protect patients, nor do I believe it is going to improve the affordability of our health care system.

The reason I ran for the Senate was primarily because of this law. I certainly recognized how it was going to result in a lower quality of health care, how it was going to lead to rationing, and how it was going to severely limit the amount of medical innovation we enjoy in this country. In particular, I was offended by the political process demonizing doctors and health care providers, demonizing the health care system in order to pass this health care law.

The reason that offended me is a very personal story. It has to do with my daughter who was born with a very serious congenital heart defect, her aorta and pulmonary artery were reversed. So her first day of life, the doctors--who President Obama said would take out a set of tonsils for a few extra dollars--saved her life within the very first few hours of life. Then, 8 months later, when her heart was only the size of a small plum, another incredibly dedicated and incredibly skilled team of medical professionals totally reconstructed the upper chamber of her heart. Her heart operates backwards now, but she is 28 years old and now she is a nurse herself in a neonatal intensive care unit and she is taking care of those babies.

So when they passed the Patient Protection and Affordable Care Act, I knew the health care system that saved my daughter was at risk. I also knew this health care law was in no way, shape or form going to reduce our Federal deficit. It is just not possible. How can we expect to add 25 million people to government-run health care and reduce the deficit at the same time?

The reason they were able to put forward that fiction is they proposed a piece of legislation that would have revenue, fees, taxes, and penalties for 10 years, while at the same time only providing benefits for the last 6 years of that time period. Basically, what they did was to say we will raise revenue for 10 years of about $1.1 trillion, and we will have 6 years' worth of cost, a little under $1 trillion. That was the fiction.

Half of that revenue generated is going to be in taxes, fees, and penalties. Personally, by increasing taxes and increasing fees on things such as medical insurance, on medical devices, and on pharmaceuticals, I don't see how that bends the cost curve down. It would not bend the cost curve down. It is the same logic this President has used when he is talking about high gasoline prices. He says by increasing taxes on oil companies we will reduce the price of gas. It is just not possible. Increasing fees on providers, reducing reimbursement rates to providers is not going to bend the cost curve down. It is basically not going to happen.

The other half of the pay-fors--the other half of that $1.1 trillion--was proposed reductions basically in payments to Medicare providers. Congress, I would say wisely, has not enacted the sustainable growth rate cuts to providers because they realize, if they do that, access for seniors to medical care will be reduced. I don't see how, if we reduce Medicare by $529 billion, that same access also would not be reduced. From my standpoint, I think it is highly unlikely Congress will actually enact that $529 billion worth of reductions to Medicare. When they do not do that, the $143 billion reduction in our deficit, that fiction, will totally go away.

Another reason for that fiction being exposed is because, fortunately, Congress realized the CLASS Act portion of ObamaCare simply wasn't going to save the money they said it was going to save. It simply wasn't sustainable. Budget Committee Chairman Kent Conrad actually called the CLASS Act a Ponzi scheme. So this administration has decided not to move forward with its implementation. In doing so, that is removing $70 billion of revenue from that budgetary fiction.

I know Senator Kyl has been following this very carefully, in terms of

what is going to happen to our Federal budget, and I am wondering if Senator Kyl would want to comment on how he sees the real effect of the health care law on the Federal budget and why that is not going to save us $143 billion in the first year and probably result in far greater costs to the Federal Government if this thing is actually implemented.

I wish to point out, the numbers Senator Kyl is talking about are CBO projections, just using a different timeframe. That isn't even taking into account what I have been talking about is an even more significant risk to the deficit, and that is one particular CBO estimate that says, on net, only 1 million Americans will lose their employer-sponsored care.

There are 154 million Americans who get their employer-sponsored care from employer-sponsored plans. To assume that only 1 million people will lose that coverage and get forced into the exchanges is absurd, particularly when we have a study by a very reputable firm, McKinsey & Company, surveying 1,300 employers, which said 30 to 50 percent of employers plan on dropping coverage and having their employees go into the exchanges. It is pretty easy to understand why that might happen. Right now, the health care law is 2,700 pages; there have been another 12,000 pages of rules and regulations. So employers looking at the health care law are looking at, Do I try and comply with, do I try and understand 15,000 pages of regulations and then pay $20,000 for a family plan--which is the new CBO estimate for a family plan in the year 2016. Do I do that or pay the $2,000 penalty?

With ObamaCare, they are not exposing their employees to a financial risk. They are making them eligible for huge subsidies, $10,000, if they have a household income of $64,000.

So I will throw it over to Senator Sessions on the Budget Committee. My concern is we are not even beginning to contemplate what the effects of that might be. What does the Senator think of that?

Again, it is becoming so complex. It is becoming so expensive. Again, the big difference ObamaCare throws into the equation is, in the past, responsible employers--and most employers truly care about the people who work with them--wouldn't have dreamed of exposing their employees to financial risk that would be obvious if they didn't provide health care insurance. But with ObamaCare, that is not what is happening. Now these exchanges will be available as well as huge subsidies.

I am not aware of too many large Federal subsidies that go unused, and that is my concern. So the equation is totally different now. It is going to be totally different under ObamaCare.

My question for CBO--I know they just conducted a study and did some sensitivity analysis, but they didn't go anywhere near far enough, from my standpoint. I think the largest number of employees they took a look at might have been 20 million individuals. But when we have 154 million Americans getting employer-sponsored care and the McKinsey study saying half of those, more than 75 million--I think we need to take a very serious look at what effect on our budget that would have.

I wish to ask Senator Sessions a question. We have talked about this in the past. I know a lot of people talked about the Medicare cuts being double counted, and I never quite understood exactly what that was. Can the Senator maybe explain a little bit to the American people what that means.

Does the Senator believe those Medicare savings will actually be realized? Does the Senator believe Congress will actually enact those savings?

That is one of my concerns. Let's say we actually do enact those cuts to Medicare and we don't reimburse providers and doctors in some cases to even cover their costs.

I know this is hard to get to, but I have read where only 60 percent of providers are willing to see and treat Medicaid patients. Now what we are going to be doing is adding 25 million new individuals onto Medicaid rolls, where only 67 percent of providers are seeing those.

I would ask Senator Boozman, because he is not only a new Senator but also a doctor and he ran a business, would he comment on that as well. I think he has some comments in terms of how this health care law will be affecting employment and jobs.

I thank Senator Boozman. I think it is extremely important for us, in the next coming weeks and months, to paint a very accurate picture for the American people about what our health care system is going to look like, what our Federal budget is going to look like, the effect on American jobs and our economy, and the effect on our freedoms that we are going to witness if this health care law is fully implemented. I think it is critical we provide the American people that type of information.

Of course I know Senator Roberts has some thoughts in terms of how this health care law will affect jobs and our economy. He has been very good at describing some of the nonsense regulations that are being undertaken by this administration. I want Senator Roberts to share his thoughts about what he thinks--paint us a picture of what is America going to look like under this health care law.

I appreciate the comments of the Senator. He mentioned rationing. What is the Independent Advisory Board for? Do you have a clue? To me that would somewhat lead, potentially, to rationing. I would be suspicious of that. Senator Kyl stood up here. He may have some additional comments.

I remember back in Oshkosh, WI, President Obama famously promised: If you pass this health care law, the average costs per family would decline by $2,500 per year. That is one of those broken promises that Senator Roberts was mentioning earlier.

Earlier Senator Roberts mentioned the U.S. Preventive Services Task Force. Wasn't that the agency that proposed denying women mammograms until they reached the age of 50?

If this is implemented, we are just beginning to see the tip of the iceberg of the assault on our freedom that this is going to represent.

I think the bottom line of this health care law is that it is basically going to increase demand while at the same time reducing supply, and that is not a good thing. It is certainly not the way you bend the cost curve down.

I understand Senator Sessions has a few more comments.

I certainly appreciate Senator Sessions' comments and those of Senator Roberts, Senator Kyl, and Senator Boozman.

There are two points I would like to make. It is important to understand that all these numbers we are talking about are estimates. The Federal Government is not particularly good at making those estimates because if you think back to 1965 when they first passed Medicare, they projected out about 25 years and said that in 1990 it will cost $12 billion. In fact, it ended up costing $110 billion--nine times the original cost estimate.

The other point you were making is, Does it make sense for the Federal Government to take over one-sixth of our economy? When I went back to Wisconsin, I asked that question of thousands of individuals. Do you really believe the Federal Government can take over one-sixth of our economy--the health care sector--and do it effectively and efficiently? I asked that to thousands of people. I have had two brave souls raise their hands. The fact is, the American people do not believe the American Government is capable of doing that.

In closing, I would like to remind everybody what Speaker Pelosi very famously said: We have to pass this bill so we can find out what is in it.

I know Senator Sessions and Senator Boozman are dedicated to making sure we don't have to fully implement the health care law before we did figure out what it truly costs us because it could bankrupt this Nation.

I yield the floor.

First of all, I thank the Senator for his kind comments. He mentioned that Speaker Pelosi famously stated we needed to pass this bill in order to figure out what is in it. I know the Senator from Alabama and I are dedicated to making sure the Obama administration doesn't make sure this law is fully implemented before we understand the true cost of the bill. We simply cannot afford to have the American people and Members of Congress not understand the true cost of the health care law.

I remind everybody that, back in 1965, when they passed the Medicare bill, first of all, the entire bill was less than 300 pages. That is interesting. The provision that applied to Medicare alone was about 124 pages. That compares, of course, with the 2,600- or 2,700-page bill that the Patient Protection and Affordable Care Act was. There are 10,000 pages of regulations just to try to implement this bill.

When they passed Medicare, they estimated it out 25 years and said that in 1990, Medicare would cost $12 billion. In fact, in 1990, Medicare cost $110 billion, which is more than nine times the original cost estimate.

I am new here, but I have been watching this town pretty carefully over the last few decades. I don't believe Washington has gotten any better at projecting and estimating figures--particularly on new entitlements that people want around here. They always tend to underestimate spending in order to pass legislation, particularly a bill such as the health care bill, which was done in partisan fashion, without any kind of support and input from our side.

The point of my question to Secretary Sebelius last week was to try to lay out the broken promises that are occurring, when we have only begun to implement the law. The first broken promise I asked her about was the very famous guarantee of President Obama, who said: If you pass this health care law, every single family in America will see their annual insurance premium go down by $2,500 by the end of his first term. The Kaiser Family Foundation has already conducted a study and has said that, on average, premiums have gone up about $2,200 per year. That is a $4,700 difference in the first 3 years of his administration or only 2 years after it was originally passed.

Had I made that guarantee to my shareholders and management--and that is basically what the President did; he made that guarantee to the shareholders of America--I would not want to face the appropriations committee meeting, where I would have to explain that away. Secretary Sebelius was in a very unenviable position to have to explain how the President promised a $2,500 reduction and there was an increase.

Of course, that is only the first promise. I have a couple more.

The administration also famously said this health care law would not add one dime to the deficit. In fact, the original projections were that it would save $143 billion in the first 10 years. Well, thankfully, the administration has recognized that the CLASS Act was, as Budget Committee chairman Kent Conrad said, a Ponzi scheme. It was simply not financially workable. So they are not implementing it. Because they are not implementing it, they are not going to get $86 billion worth of revenue, so that will eat away at that $143 billion of deficit reduction.

Of course, a couple of weeks ago when President Obama presented his fiscal year 2013 budget, included in that budget was a $111 billion request--or I

guess cost estimate--on the mandatory spending of the health care exchanges. If you add the $111 billion to the $86 billion, that gives you $197 billion of reduced deficit reduction, if that makes sense.

So bottom line here is I think that is broken promise No. 2. I do not believe that in the first 10 years, this thing will actually reduce the deficit. And it is far worse than that. These are the small numbers. This is just the tip of the iceberg in terms of the revisions that will be occurring when we actually start finding out what the true cost of the health care law is.

Exactly. That is broken promise No. 2.

Of course, broken promise No. 3 is also--very famously this President said: If you like your health care plan, you will be able to keep your health care plan, period. No one will take it away, no matter what.

There are a couple of pieces of evidence that prove that is a broken promise. First of all, the CBO, in its initial cost estimate of the health care law, estimated that 1 million people would lose their employer-sponsored care and be put in the exchanges. By the way, that is a gross underestimate, and we will talk about that a little later. But also the Department of HHS has granted 1,200 to 1,700 waivers from basically some of the requirements of the health care law. That indicates that were it not for those waivers--basically employers saying: Listen, we need some relief here--my concern would be, and I think this is probably pretty true, those employers would be forced to drop coverage. And those waivers cover about 4 million Americans.

But let me describe a little bit why I believe the 1 million-person estimate is so understated. There have been surveys of employers conducted in the last year that indicate that employers, when they take a look at the whole cost equation of the health care law, 30 to 50 percent, in one survey conducted by McKinsey & Company, of employers, when asked, plan on dropping their health care coverage shortly after implementation.

If that were to happen--180 million Americans get their care through an employer-sponsored plan. If 50 percent drop coverage, that could mean 90 million Americans--not 1 million but 90 million Americans-- could lose their employer-sponsored care and then get put in the exchanges. We are trying to work with the CBO to find out exactly what that would cost, but in their initial estimate, they estimated that it would be about a $7,000 average subsidy per person in the exchange.

If you deduct for the $2,000 penalty and the deductibility of the health care cost, that subsidy could range anywhere from a $4,000 to $5,000 cost to the government times 90 million. Instead of $95 billion a year, the health care law could cost us close to $\1/2\ trillion if 50 percent of the employers drop their coverage.

This is incredibly scary. And my colleague is fully aware, because he has been a real leader in terms of our debt and deficit, as Admiral Mullen has said, the greatest threat to our national security is our debt and deficit. We can't afford to increase our deficit on an annual basis by close to $\1/2\ trillion. If everybody were to lose their coverage--which, by the way, is exactly what I think this plan was designed to do: lead to a single-payer system, which is what I believe President Obama really wanted--that would cost us close to $1 trillion a year. That represents a deficit risk that will absolutely ensure the final bankruptcy of this Nation.

Well, I worked with former CBO Director Douglas Holtz-Eakin in trying to look at the numbers that are presented, and we don't have enough. We don't have enough information, which is why I am grateful for the fact that Director Elmendorf recognized that there is some credible evidence to cause the CBO to reassess that estimate of 1 million people. So they are working through those numbers right now. Hopefully, they will give us a very full accounting of that in the next couple of weeks. But the work I did with Douglas Holtz-Eakin showed that if 90 million get put in those exchanges, it could cost over $400 billion a year.

That is astounding.

Exactly.

And, unfortunately, we are not even owning up to the current deficit projections. We are not seriously addressing that. So nobody really wants to take a look at the danger inherent in this. Of course, the administration doesn't want to talk about it or admit to it because they want to go full speed ahead to implement it so we will not be able to reverse it. That is the main point.

It is time to put the brakes on the implementation of the health care law before it bankrupts this Nation. We simply can't afford to fully implement it to find out what the true cost is. It will be disastrous for our deficit and debt.

It is essential that we pull back, and it is essential that we put the brakes on this. I guess we can all keep our fingers crossed and hope the Supreme Court rules the individual mandate unconstitutional, and there is no severability clause, so the entire law would be repealed, so we can then actually fix the problems in the health care system with patient-centered, free market-based reforms. That is the way to really address this.

Again, I am an accountant. I have been in hundreds of budget meetings, and when you are presenting your budget to a budget committee, you are armed with the information and you are ready to answer questions.

I was surprised that the Secretary was unable to answer the questions, and particularly when I mentioned the

waivers, she seemed to have no idea what I was talking about. It is her agency, her department that is actually granting those waivers. So that troubles me.

So I appreciate the fact that the Senator has and we have sent a letter to Budget Chairman Conrad requesting, to be fair to Secretary Sebelius, to give her a chance to be fully prepared to come before us and to explain what is this $111 billion in additional requested funds for the exchanges. And I would like to really dig down and talk about this 1 million-person estimate and what is going to be the effect if the administration is wrong, if CBO has been wrong in the previous estimate and the McKenzie study is right and half the people very quickly after implementation get dropped from their employer coverage and put in the exchanges. What effect is that going to have on our budget?

I would love to give and I think it is appropriate to give Secretary Sebelius the opportunity to come before our Budget Committee and have a fair exchange in terms of her explanation for those parts of her budget.

It is $100 billion here, $100 billion there, and it starts adding up to real money, doesn't it.

And so people don't think these 90 million people getting dropped from their employer coverage is a fantasy, it is not. It is realistic. I bought health care for the last 31 years, and the decision an employer is going to make is going to be easy. It is not going to be a complex management decision. Because of the health care law, an employer is going to be faced with saying: OK, I can pay $15,000 for family coverage or I can pay the $2,000 penalty. And because of the health care subsidies, they are not exposing their employees to financial risk, they are making them eligible for huge subsidies. If a household earns $64,000, they will be eligible for a $10,000 subsidy through those exchanges.

Now, I know that probably sounds pretty good, but the problem is, when we are already running $1.3 trillion a year deficits, we can't afford to add another $\1/2\ trillion per year to those deficits, if that were to happen. We simply can't afford it.

That is essentially it.

And if you don't drop coverage, you are denying the people who work with you the chance of taking advantage of a $10,000 subsidy.

We have created an incentive in this health care law for employers to drop coverage and a high-level subsidy to get coverage for the people who work with them. We have created that incentive, and when government creates incentives, when government dangles a huge subsidy in front of people, we know the history of how that works--people take advantage of those subsidies. And that is my concern.

Sure. Because they know their cost is going to be $2,000 per employee.

The Senator was telling me a story earlier about some employers in Alabama that because it is a low-margin business, they simply can't afford to offer health care. The result of the health care law--why doesn't the Senator tell the story.

Again, this law will cost jobs. It is going to blow a hole in our deficit, and we haven't even talked about the quality aspect; how it is going to harm the health care system, how it will lead to rationing, and the type of medical motivation.

The Senator heard the story about my daughter and these marvelous surgeons. When my daughter was first born with a serious congenital heart defect, one of these wonderful human beings came in at 1:30 in the morning and saved her life. Then, 8 months later, when her heart was the size of a plum, they reconstructed the upper chamber of her heart so that now her heart operates backward.

We are going to limit those types of innovations that saved my daughter's life. We are not going to have that type of advancement in medicine if the government takes over control of our health care system.

So the effect on our budget--the uncertainty in terms of how it is going to destroy and explode our deficits versus the harm it is going to cause the quality of care--leads to rationing, lower innovation. When it is all put together, I think the greatest single priority we have to have moving forward is we have to make sure the brakes are put on this health care law, that it is repealed, and, again, replaced with patient-centered, free market-based reforms.

Absolutely. Look at the name of it, the Patient Protection and Affordable Care Act. It is not going to protect patients.

If we are going to lower the quality of care, if it is going to result in rationing, if it limits innovation, how does that protect patients?

The affordable care act, the Senator just ticked off the three reasons it is not going to be affordable: It is going to drive up costs. It is not bending the cost curve down. It is a fiction. The health care law is a fiction. I am so appreciative of the Senator's efforts at again making sure that, before this bill is fully implemented--we both are dedicated to making sure the American people fully understand the full, true cost of this health care law both on quality and the effect on our budget.

Exactly. That is why I am so thankful that CBO Director Elmendorf understands there is some pretty credible evidence to have the CBO revisit that estimate.

I spoke with him last week. It looks like they are working hard to provide us that information. I am looking forward to seeing that and seeing what their revised estimate is for the number of people losing their coverage, but even more important, to figure out what that per person cost is.

Maybe we will not agree. He might do a very economic analysis. Certainly, somebody such as myself who actually bought health care understands the mindset and the decision of an employer. But even if we disagree on the number of people, if we have that total dollar amount of cost per person in that exchange, we will be able to show that to the American people. So if he comes up with X and I say, no, it is X plus 30, 40, 50 million people, then at least the American people have that information, and they can judge for themselves what they think the realistic estimate is for people losing their coverage and getting their insurance through the subsidized exchanges. That information is what the American people deserve, and that is why I am so appreciative of the Senator's efforts. I know he is going to be, just with me, making sure that, again, we know what the true cost of this health care law is before we implement it.

I thank the Senator for his leadership.

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

I ask unanimous consent to speak as in morning business for up to 10 minutes.

Mr. President, I come to the floor today to pay tribute to America's sons and daughters who have fallen in the line of duty--citizens of this great Nation who gave their lives to preserve the liberties upon which America was founded, the finest among us who, because they cherished peace, risked their lives by becoming warriors on our behalf.

What could be more sacrificial than the lives our service men and women choose to lead? They love America, so they spend long years separated from their loved ones, deployed in faraway lands. They revere freedom, so they sacrifice their own so that we may be free. They defend our right to live as individuals by yielding their own individuality in that noble cause. They value life, yet bravely ready themselves to lay down their own in humble service to their comrades- in-arms, their families, and their Nation.

For more than 234 years, our service men and women have served as guardians of our freedom. The cost of that vigilance has been high. Since the Revolutionary War, more than 42 million men and women have served in our military and more than 1 million of those selfless heroes have given their lives. Wisconsin has borne its share of that great sacrifice. Since statehood, 27,000 of Wisconsin's sons and daughters have died in military service. Since September 11, 2001, we have lost 143 brave souls with ties to Wisconsin. Since I took office last January, 13 more have perished. Statistics cannot possibly convey the weight of these losses. After all, statistics are merely numbers that could never fully communicate the qualities of these fine men and women whose promising lives were cut far too short. Statistics say nothing of their unfulfilled hopes and dreams. So instead of numbers such as 1 million, 27,000, 143, or even 13, I would like to ask everyone to think for a moment about a much smaller but still staggering number, the number 1.

Each of these men and women was a loved one cherished by family and friends. Each was a loss to their community and to this great Nation. Each paid a price that we must never forget. We must also remember the sacrifice made was not theirs alone. Every family member and friend left behind experiences profound loss, sadness, and grief. The tragedy multiplies; it is not contained. For those left behind, the pain may slowly subside, but the wound will never heal.

Two weeks ago I had the privilege of bearing witness to the sacrifice of one of Wisconsin's fallen heroes and the courage of those he left behind. On February 22, a grateful Nation laid 1LT David Johnson of Mayville, WI, to his final rest at Arlington National Cemetery. I was honored to join David's loving and proud parents Laura and Andrew, his sister Emily, and his brothers Matthew and Michael as they said their final goodbyes. Out of sheer coincidence Michael was already scheduled to intern in my office this week and is with us today. It is fitting that we acknowledge his loss and sacrifice.

The Johnson family loved their brother and son. They loved him dearly and our hearts go out to them. I pray that they find God's peace and comfort today and in the tough times ahead as they deal with this overwhelming and tragic loss.

Lieutenant Johnson was only 24 years old when he died of injuries suffered after encountering an improvised explosion device on January 25 while leading his men in Kandahar Province, Afghanistan.

In addition to Lieutenant Johnson, today I would also like to pay tribute to the other Wisconsin heroes who gallantly gave their lives since I took office last January.

Since then Wisconsin has lost SSgt Jordan Bear, U.S. Army. Staff Sergeant Bear, age 25, of Elton, WI, died March 1, 2012, in Kandahar Province, Afghanistan; SSgt Joseph J. Altmann, U.S. Army. Staff Sergeant Altmann, age 27, of Marshfield, WI, died December 25, 2011, in Kunar Province, Afghanistan; SPC Jakob J. Roelli, U.S. Army. Specialist Roelli, age 24, of Darlington, WI, died September 21, 2011, in Kandahar Province, Afghanistan; SGT Garrick L. Eppinger Jr., U.S. Army Reserve. Sergeant Eppinger, age 25, of Appleton, WI, died September 17, 2011, in Parwan Province, Afghanistan; SGT Chester D. Stoda, U.S. Army. Sergeant Stoda, age 32, of Black River Falls, WI, died September 2, 2011, while on recreational leave from duties in support of the war in Afghanistan; CPL Michael C. Nolen, U.S. Marines. Corporal Nolen, age 22, of Spring Valley, WI, died June 27, 2011, in Helmand Province, Afghanistan; SPC Tyler R. Kreinz, U.S. Army. Specialist Kreinz, age 21, of Beloit, WI, died June 18, 2011, in Uruzgan Province, Afghanistan; Private Ryan J. Larson, U.S. Army. Private Larson, age 19, of Friendship, WI, died June 15, 2011, in Kandahar Province, Afghanistan; SGT Matthew D. Hermanson, U.S. Army. Sergeant Hermanson, age 22, of Appleton, WI, died April 28, 2011, in Wardak Province, Afghanistan; SPC Paul J. Atim, U.S. Army. Specialist Atim, age 27, of Green Bay, WI, died April 16, 2011, in Nimroz Province, Afghanistan; CPL Justin D. Ross, U.S. Army. Corporal Ross, age 22, of Green Bay, WI, died March 26, 2011, in Helmand Province, Afghanistan; Finally, 1LT Darren M. Hidalgo, U.S. Army. First Lieutenant Hidalgo, age 24, of Waukesha, WI, died February 20, 2011, in Kandahar Province, Afghanistan.

May God bless and comfort their loved ones with peace. May he watch over those who have answered the call and are serving today and those who will serve in the future. May God bless America.

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

Mr. President, I ask unanimous consent that Michael Johnson from my office be granted the privilege of the floor during today's session.

Mr. President, I thank Senator Portman. Again, I so value his experience. Being the head of OMB himself, he understands these numbers.

What I have been trying to do over the last couple days is, I have been trying to figure out where is this $4 trillion worth of deficit reduction.

I have a chart on the debt in the Chamber. I have shown this chart in the past. I like this--I do not like it, but I like this depiction of the debt. It goes back to 1987, when our Federal debt was $2.3 trillion. It took us 200 years to incur that much debt, and we just entered an agreement--I did not vote for it, but we entered an agreement to increase the debt ceiling by $2.1 trillion, and we will blow through that in about 2 years.

But if we take a look at the debt President Obama in his latest budget is projecting 10 years into the future, it is $25.9 trillion. In last year's budget, it was about $26.3 trillion. Again, I am trying to do the math. If we reduce the deficit by $4 trillion, one would think that final debt figure would also be reduced, and it simply is not.

I realize the President is talking about a balanced approach. But you know as well as I do we have a spending problem, and that is what the next chart is trying to portray.

If we take a look at 10-year spending, in the 1990s, our Federal Government spent $16 trillion in total. In the last decade, we spent $28 trillion. In President Obama's budget for last year, he was projecting spending over 10 years of $46 trillion. In his new budget-- just 1 year further into the future--he is projecting $47 trillion over 10 years.

Again, I do not see where there is $4 trillion worth of deficit reduction. I am an accountant. I am going to continue to look through the budget. I am afraid I am not going to truly come up with it.

I think what is very disappointing about President Obama's budget is that he simply is not grappling with what we all realize. I think everybody in Washington realizes what is driving our debts and deficit long term is Social Security and Medicare spending.

Just a quick little chart in terms of where we are in terms of Social Security. In 2010, we went cash negative, which means the amount of the payroll is not covering the benefits--by $51 billion in 2010, $46 billion last year. By the year 2035, we will accumulate $6 trillion in deficit spending in Social Security alone, and the President's budget is silent on Social Security. The President's budget is silent on Medicare.

He has had 4 years. Why doesn't he propose something? The only thing he is proposing is a tax on millionaires. He is asking Congress to hop on board and let's pass corporate tax reform. Why doesn't he propose it? There is actually a growing consensus about progrowth tax reform.

I want to agree with this President on something to enact something. But he needs to lead, and he is not leading on these issues.

I want to finish my little part by talking about those millionaires on whom President Obama wants to raise taxes.

I have been doing an awful lot of telephone townhall meetings. Last week, we had a very interesting call. After a couple of my constituents from Wisconsin asked me why I would not support a millionaires' tax, we had a call from an elderly woman, and I could tell she was afraid. She was scared. She said: Senator Johnson, I am so concerned about what is going to happen to our taxes. My husband and I have been building a business all our lives. All our assets are wrapped up in that business, and now my husband has been sick for 2 years. He has not been able to work in the business. I have been trying to make a go of it, and now we are going to have to sell the business. In maybe 1 year, when we sell this business, I might report one million dollars' worth of income, and I am so concerned: Am I going to be paying that 15-percent tax on my retirement fund, which is my business, or am I going to be paying a 30- percent tax?

The fact is, that is whom this President wants to punish--people such as that woman in Wisconsin who has her entire retirement wrapped up in her business, and she is going to sell it. That is on whom President Obama wants to double the tax.

Again, I think that puts a face on the type of people President Obama wants to punish. I think that is a tragedy. I

would like to see the President lead on the debt and deficit issue far better than he has.

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

Mr. President, I ask unanimous consent to speak for not more than 15 minutes.

Mr. President, I come to the floor this afternoon before the debate on President Obama's just-submitted budget descends into the arguments over the smaller little details that, quite frankly, are not going to have that great of an effect on our whole debt and deficit issue. What I would like to do is take a look and ask the American people to take a look at the larger picture. I would like to do it with a few charts and graphs.

The first chart I would like to put up really describes, from my standpoint, the root cause of the problem. It really is the size, the scope, all of the rules, all of the regulations, all of the government intrusion into our lives and the cost of government. What this graph depicts is that as of last year the Federal Government was 24 percent of the size of our economy. So 24 cents of every dollar our economy generates flows through the Federal Government. When you add on State and local governments, which are about 16 percent, the total take of government at all levels of the United States now--last year was 39.2 percent. Again, 39 cents of every dollar flows through some form of government.

I do not find government particularly effective or efficient at so many things they do. To make this relative, we are watching what is happening to Greece right now. It is in flames because that social experiment is collapsing. But if you compare the United States in terms of its size of government to European-style Socialist nations, you can see that Norway spends 47 percent of its GDP on government; Greece, which we just mentioned, 50 percent; Italy, which hit a mini debt crisis of its own, 52 percent; and France is 55 percent. Unfortunately, America has arrived at the lower limit, the lower level of European- style socialism. That is not a good metric.

The next chart I want to describe--so many people, I understand, want a balanced approach: revenue and spending reform to address the debt and deficit issue. Listen, I want more revenue too, but I think we need to raise revenue the old-fashioned way--by growing our economy. Everything we do in this country, everything we do here in Washington needs to be targeted toward economic growth.

But I think what this chart describes is the fact that we have a spending problem. It is not that we tax Americans too little; it is because we spend way too much. Ten years ago our Federal Government spent $1.9 trillion. Last year we spent $3.6 trillion. We doubled spending in just 10 years. And, of course, the President's budget that he just unveiled today will spend $3.8 trillion in 2013.

In the argument moving forward, nobody is talking about cutting spending. All we are talking about is reducing the rate of growth in spending. You can tell by the chart. According to President Obama's budget, 10 years in the future, in the year 2022, he is proposing spending $5.8 trillion. Last year's House budget would have spent $4.7 trillion. That is what the argument is about--spending $3.6 trillion last year and increasing it to either $5.8 trillion or $4.7 trillion.

Another way of looking at that is taking a look at 10-year spending numbers. In the nineties--a very successful decade--the Federal Government spent $16 trillion over a 10-year period--$16 trillion. Over the last 10 years, we spent $28 trillion. And, again, the debate moving forward is President Obama, in his just-released budget, wants to spent $47 trillion over the next 10 years. The House budget from last year would have spent $40 trillion. By the way, when you hear about that $6 or $7 trillion of Draconian cuts, that is what we are talking about. All we are talking about is reducing the rate of growth in spending in the size of government.

You have seen an awful lot of charts describing the Nation's debt and how it has exploded. I like this chart because we start it on September 30, 1987, when our entire Federal debt stood at $2.3 trillion. It took us 200 years to incur $2.3 trillion worth of debt. Last year, in the Budget Control Act, we gave the President the authority basically--I didn't, I voted against it, but this body gave the President the authority to increase the debt ceiling by $2.1 trillion. We will blow through that debt in around 2 years. Think of that.

So you can see what is happening. In 2001, we were at $5.8 trillion. In 2008, right before President Obama entered office, we were at $10 trillion. Currently we are at about $15.4 trillion, and in the President's just-released budget, he is proposing adding about $10 trillion to our debt over the next 10 years, to come in at a whopping $25.9 trillion. The question is, Will we really be able to borrow that much or are we going to face the day of reckoning, when world investors take a look at the United States and say: You know, I am not going to loan you any more money. What is more likely to happen is they will say: I will loan you some money but at dramatically higher interest rates. That is what we need to be concerned about. That is what a debt crisis is going to be. Take a look at Greece. Take a look at Italy.

One more chart I want to put up shows the extent of the problem of the unfunded liabilities together with the debt. Now, this is actually last year's chart. We have not been able to get the new one printed yet. But last year the trustees of both Medicare and Social Security published the unfunded liability of those two programs. When you add those unfunded liabilities to the Federal debt and what we owe Federal retirees, the total liability of the United States as reported last year was $99 trillion. The new figure for this year--the accountants in the Federal Government have rejiggered the figures, and now they are claiming it is only $72 trillion. But whichever figure you take, if you compare that to the private net assets of the United States--that is, household assets, small business assets, large business assets--that number is $79 trillion. So the Federal Government has made promises and incurred debts that are equal to or exceed the entire net private asset base of the United States. Now, that is the definition of a problem. That is the definition of a huge problem that unfortunately this President and this town are not grappling with. We are not coming to terms with that.

Let me specifically hone in on one of those entitlement programs-- Social Security. In 2010 we went net cash negative in Social Security, which means the amount of taxes collected were $51 billion less than the benefits that were paid out. Last year we were $46 billion in the red. If we take a look at this chart, what we see, without reforming the program, without providing the reforms that would actually save Social Security, within the next 24 years, by the year 2035, we will incur a $6 trillion cash deficit in Social Security. Again, when you take a look at the President's budget this year, is that even being addressed?

The House budget addressed Medicare last year, and people like my Congressman from Wisconsin were demonized for doing it. Here you had an individual who had the courage to first of all acknowledge the problem and then put forward a proposal, and he is demonized. Political demagoguery is not going to solve our problem. A serious budget is what we need to solve the problem.

Because we are not serious about even putting forward a budget--and unfortunately, in this body, the majority leader is saying he will not even bring a budget to the floor for a vote; there is no need to. We are only going to incur $10 trillion more debt in the next

10 years. I want the American people to think about that. I have been involved in business for 33 years. I am an accountant. This is the first time I have been involved with a financial entity--and let's face it, America is the largest financial entity in the world--where I have been working with an entity that does not have a budget. That is a national scandal. We need to correct that.

But let me talk about some of the deficit risks, because we are not serious, we are not even addressing, much less--we are not acknowledging. It starts with what I started talking about earlier in terms of not dealing with the debt and deficit issue dramatically increases our risk of higher interest rates, higher interest expense. The CBO reports that for every 1 percent increase in the interest expense--let's face it--times $15 trillion, times 10 years, that would add $1.5 trillion to our debt--$1.5 trillion. Greece--when they hit their debt crisis, their interest rates spiked by 8 percent. If that happened here, it would cost us $1.2 trillion. It would wipe out all discretionary spending. That is the day of reckoning we need to avoid by putting forward serious proposals.

Another risk we are really not talking about is what happens if we do not grow according to the projections the President lays out in his budget or the CBO projects? Well, again you look to the CBO. For every 1 percent we miss our growth targets by, add $3.1 trillion to our debt and deficit over the next 10 years--$3.1 trillion.

Another risk is the true cost of the health care law. Thirty-seven Republican Senators sent a letter to CBO Director Elmendorf pleading with him to please reassess the very unrealistic estimates the CBO made in terms of the number of employees who will lose their employer- sponsored care.

Their estimate says only 1 million. But we have studies that were conducted that say 30 to 50 percent of employers will drop coverage. When that happens, when the employees who lose their employer-sponsored care and get dumped into the exchanges at highly subsidized rates, the cost of ObamaCare will not be $95 billion a year; it will more likely be $\1/2\ trillion to $1 trillion a year. Multiply that over 10 years and we can see the depth of risk inherent in the health care law. It needs to be repealed.

The last point I wish to make is a key part of President Obama's supposed deficit reduction in his budget is a tax on millionaires, which, by the way, is defined by couples making over $250,000. That is interesting math right there. Two points: I said earlier we should not enact anything in Washington that would harm economic growth. Increasing taxes will do that. That is what CBO says, and that is what the Federal Reserve Chairman Bernanke says. It just makes common sense. I want any American who would think that is a good idea to ask themselves one question: How many jobs will that tax increase create? How will that tax increase actually help us grow our economy? The answer is, it will not.

There is an interesting study just released on Maryland's millionaires' tax they enacted in 2007. When they passed that tax, they estimated it would raise $330 million. The facts are in. That tax increase only generated $120 million--only 36 percent of what they originally estimated. President Obama is hoping to raise $1.5 trillion with the millionaires' tax. Maybe it is only $1 trillion; I have not seen the details. Take that number and multiply it times 36 percent, then look at the harm it will cause economic growth and reduce it even further. It simply will not work. It might feel good, but it will do great harm to our economy. To sum it all up, what this country needs is real leadership. We need the President to lead. We need a serious budget. We need the Senate to pass a complete and serious budget for 2013.

With that, I yield the floor and suggest the absence of a quorum.

I thank Senator Lautenberg for his longstanding leadership on this issue. It is timely for him to raise it again now in the wake of the IAEA's recent report on Iran's illicit nuclear activities and in the midst of our efforts in the Banking Committee to ratchet up the pressure on Iran's leaders through additional sanctions. As President Obama noted last week when he imposed a new round of sanctions using the tools Congress gave him, Iran's government has persistently refused to abide by its international obligations, and it is time to turn up the heat in an effort to persuade its leaders to come clean on their nuclear program. While U.S. sanctions enacted last year, multilateral sanctions, and other efforts have slowed Iran's nuclear program and damaged its key revenue-generating energy sector, it remains my urgent priority to strengthen sanctions further to ensure that Iran effectively has no choice but to change its current path. That is why we are acting to sanction Iran's Central Bank today as well. On the issue you have raised, I think it is long past time for U.S. subsidiaries to withdraw from doing business in Iran. That is already happening due to U.S. and other international pressure on the business and financial sectors. Firms realize the huge risks this activity poses, reputationally and otherwise, to their companies. I note that it is already a violation for American subsidiaries to engage in sanctionable activity in Iran's energy sector and certain other activities under U.S. sanctions laws. It is also a violation of U.S. trade law for a U.S. firm to do business of any kind in Iran via a subsidiary. What that means is that if a U.S. parent is acting through its subsidiary, directing its activity, that violates U.S. law. The balance that has been struck so far is that we have directed our law, including our trade embargo, to U.S. companies and what U.S. companies do. Foreign subsidiaries are not, by definition, U.S. persons. But I agree with you that we can and should do more to stop the foreign subsidiaries of American companies from doing business with Iran, and I intend to address this problem in our upcoming legislation to expand Iran sanctions.

I agree that we must address the problem of foreign subsidiaries of U.S. companies doing business in Iran not being penalized for it under U.S. law. I know that, as in the past, there will be opposition from some in the business community, and elsewhere including European and other foreign governments who have long objected to the extraterritorial application of U.S. laws to reach companies organized under their jurisdiction. They will argue that the activities of U.S. subsidiaries are not legally U.S. persons, but are rather foreign persons organized under other countries' laws, and so should not be reached by U.S. law. But I am committed to working with my friend and with my committee members to address this issue.

We all agree that interactions by the international financial community with Iran's financial system should be severely reduced, not least because such interactions pose serious risks for the international banking system. But we do not want to do it in a way that could have negative consequences for some of our closest allies or for ourselves. We want to be careful that we don't end up shooting ourselves in the head and Iran in the foot.

I know my colleagues have worked in the last week, including over the Thanksgiving holidays, to make the provision more effective and to provide for additional targeting by the President, building in a national security

waiver, a lag period for implementation of the crude oil sanctions, and other measures. But I think the provision could use further refinement. That is why I had hoped to be able to address this issue through the more deliberative committee process.

Even though I have concerns about some of the effects of this amendment in its current form, I will support it as a signal of my support for tightening the financial and economic noose around Tehran and for further isolating its government as a means of prompting it to turn aside from its current path and come clean on its nuclear program. Even so, these implementation issues should be addressed in conference prior to the legislation being finalized.

Finally, I want to remind my colleagues that the Banking Committee is working expeditiously to adopt new comprehensive sanctions legislation and I hope will be ready to bring that legislation to the full Senate soon. It will complement and reinforce the Comprehensive Iran Sanctions and Accountability Act, CISADA, enacted a little over a year ago, and international diplomatic efforts led by the President to further isolate Iran and ratchet up the pressure on its leaders. I think all of us would agree that the most effective sanctions are those that are imposed and enforced by a coalition of nations, and the administration's success in building and sustaining a coalition to do precisely that is to be commended. I look forward to working with my colleagues on that effort.

Exhibit 1

Department of the Treasury,

Washington, DC, December 1, 2011.

Hon. Carl Levin

Chairman, Committee on Armed Services, U.S. Senate,

Washington, DC.

Dear Chairman Levin: I am writing to address amendment 1414

to S. 1867, the National Defense Authorization Act for Fiscal

Year 2012, regarding the imposition of sanctions on foreign

financial institutions that conduct business with the Central

Bank of Iran (CBI).

The Obama Administration's determination to prevent Iran

from acquiring nuclear weapons is unwavering. We are resolved

to build and sustain as much pressure as necessary to bring

Iran to meet its international obligations and address the

international community's grave concerns with its nuclear

program. I know that you and your colleagues in the Senate

share this commitment.

We understand that this amendment was offered in this

spirit. However, I am writing to express the Administration's

strong opposition to this amendment because, in its current

form, it threatens to undermine the effective, carefully

phased, and sustainable approach we have undertaken to build

strong international pressure against Iran. In addition, the

amendment would potentially yield a net economic benefit to

the Iranian regime.

We have steadily increased the pressure on Iran by

tightening sanctions, closing loopholes, and encouraging

other countries to do the same. Congress has been absolutely

critical in providing some of the tools that we have used to

accomplish that goal, and we are seeing genuine results. The

collaborative approach the U.S. has taken with our

international partners has led many to impose sanctions on

Iran that were not even contemplated three years ago,

including on Iran's energy sector.

Iran's greatest economic resource is its oil exports. Sales

of crude oil line the regime's pockets, sustain its human

rights abuses, and feed its nuclear ambitions like no other

sector of the Iranian economy. We are committed to doing as

much as possible to reduce Iran's oil revenue while

concurrently working to stabilize global oil markets. Today,

the United States does not permit the import of Iranian

crude. Other countries have already begun to reduce their

consumption of Iranian crude and the Administration is

working hard to discourage anyone from taking advantage of

the responsible policies of these countries. Our closest

allies are seriously considering curtailing their own crude

purchases altogether in the near future and we are doing

everything possible to encourage them to make the right

decision.

However, as currently conceived, this amendment threatens

severe sanctions against any commercial bank or central bank

if they engage in certain transactions with the CBI. This

could negatively affect many of our closest allies and

largest trading partners. Rather than motivating these

countries to join us in increasing pressure on Iran, they are

more likely to resent our actions and resist following our

lead--a consequence that would serve the Iranians more than

it harms them. Further, there is a substantial likelihood

that this amendment, particularly if passed into law at this

time and in its current form, could have the opposite effect

from what is intended and increase the Iranian regime's

revenue, literally fueling their suspect nuclear ambitions.

The Administration is prepared at your convenience to share

the details of our analysis on this point, in a classified

briefing.

The Obama Administration strongly supports increasing the

pressure on Iran significantly, including through properly

designed and well-targeted sanctions against the CBI. The

Administration has several legislative proposals to both

enhance and expand the Comprehensive Iran Sanctions,

Accountability, and Divestment Act (CISADA) and to strike at

the CBI that we would like to discuss with you and your

colleagues. We intend to work with our partners to achieve

the objectives of this amendment, but in a fashion that we

believe will have a greater and more sustainable impact on

Iran. We ask that you continue to work with us on ways to

improve this amendment and to consider other, more immediate

and more effective steps that we can take to accomplish our

shared goals while we work with our partners to bring about

the effects this amendment is intended to achieve.

Sincerely,

Timothy F. Geithner.

I ask to be recognized for not more than 10 minutes.

Mr. President, I rise to speak in support of the McCain amendment, which is Jobs Through Growth Act. I do not think there is any question that the No. 1 solution to the deep financial hole in which we find ourselves in this country today is in economic growth. The fact is, we do find ourselves in a very deep financial hole. Within a day or two, or certainly within the next week, we will surpass the $15 trillion landmark in this country. That would be a problem, $15 trillion worth of debt, if our economy was $100 trillion large, but it is not. It is about $15 trillion large. So our debt-to-equity ratio has now reached 100 percent, which is a very dangerous metric.

In order to understand how that affects our economy I ask people to understand or think about how their own personal economy is affected if they are in debt, too deep into personal debt. The fact is, when you are in debt over your head you simply cannot increase your consumption because any extra money you have, just beyond the basics, is spent servicing that debt.

The exact same dynamic happens with our Nation. We find ourselves in way too much debt. Unfortunately, there is no end in sight. The last 3

years we added $4 trillion to our Nation's debt, and the prospect for this year is that we will add another $1 trillion. During President Obama's term we will have added $5 trillion to our Nation's debt. This scares consumers, and it scares business investors as well. We all recognize when the government gets into this much debt and spends so much money that it does not have, eventually it will have to take from all of us--either in the form of inflation or in the form of taxes.

We are simply not coming to grips with the problem. I like to put things into historical perspective as we talk about supposedly cutting our budgets. Ten years ago, in 2001, our Nation spent $1.9 trillion. This year we spent $3.6 trillion. We doubled spending in just 10 years. The debate in which we are engaged right now is whether, according to President Obama's budget, 10 years in the future we will spend $5.7 trillion or, as the House budget calls for, $4.7 trillion.

Let's take a look at 10-year spending. In the last 10 years we spent $28 trillion. Again, the debate is whether in the next 10 years we spend $46 trillion, as President Obama budgeted, or whether we would spend only $40 trillion.

I don't care how we look at it, $40 or $46 trillion is not a cut in comparison to $28 trillion. Unfortunately, the supercommittee that is charged with finding $1.2 trillion worth of savings is at an impasse, and it is at an impasse because it looks like my colleagues on the other side of the aisle have walked out. I am afraid they simply do not want a deal because President Obama is already in reelection mode, and he does not want a result so he can run against a do-nothing Congress.

I am one Senator who came here willing to work with anybody willing to acknowledge the problem and who is willing to work with me, work with our side to seriously address the problem. That is exactly what the six Members, the Republicans on that committee, were trying to do.

We all recognize the No. 1 solution to our debt and deficit crisis is economic growth. What is holding back growth? It really is the high level of uncertainty, the lack of confidence. I say to a great extent that lack of confidence and high level of uncertainty was caused by President Obama's agenda. There is no doubt about it. He came into office in tough economic circumstances, but his policies have made the situation far worse. They have moved us 180 degrees in the wrong direction.

I mentioned the $15 trillion worth of debt. President Obama's budget would have added $12 trillion, but that understates the problem because we underestimate the cost of health care. That will add trillions of dollars as more employers drop coverage and people go on the exchanges at highly subsidized rates. The fact we are not achieving the projected growth rates in those budgets will add trillions. If we only average 2.5 percent growth, that will add $3 trillion to our debt and deficit over the next 10 years.

What do global investors, what do American investors take a look at when they look at the U.S. economy? If we are going to be investing in business, if we are going to grow our economy. If we look around the world and say where are there economies growing, it is not the United States. It is China, it is India, it is in places like Brazil. Strike 1.

Take a look at the tax environment and look at the United States, with one of the highest tax rates in the world, at 35 percent, and strike 2.

Then we look at the regulatory environment and we are going to realize, according to President Obama's own Small Business Administration, that the cost of complying with Federal regulations is $1.75 trillion. Think about that. Put that in perspective. That is a number that is larger than all but eight economies in the world. It is 12 percent the size of our economy. That is what we burden our job creators with each and every single year. Strike 3.

We need a growth agenda. We need to recognize that America needs to be an attractive place for business expansion and job creation. The Jobs Through Growth Act recognizes that and it utilizes pieces of legislation that are already available to actually address the problem. We need a credible plan to restrain the growth in government.

As I pointed out earlier, that is all we are doing. We are not cutting government, we are just restraining the growth in government. We absolutely need dramatic, significant tax reform. Our marginal tax rates are too high, our Tax Code is 70,000 pages long and costs $200 billion to $300 billion to comply with. We need to utilize our God- given natural resources in this country. We need an energy utilization policy that will create hundreds of thousands if not millions of jobs over the next decade or two.

We need free trade. It must be fair, but we need to recognize as these billions of people around the world seek to improve their lives and develop their economies, it actually offers us a phenomenal market opportunity. We cannot be afraid of that. We need to embrace it. We need to understand that we do not have a choice whether we are going to compete in this world. We must compete, and we are certainly capable. We have the finest, most productive workers in the world.

Finally, we absolutely need regulatory reform. Part of the Jobs Through Growth Act is a bill I introduced a couple of months ago called the Regulation Moratorium and Jobs Preservation Act of 2011. It is a pretty simple bill. It basically says until our economy gets back on its feet again we will stop issuing new rules and new regulations that harm economic growth until the unemployment rate drops below the level it was when President Obama took office, which would be 7.8 percent. It is a reasonable proposal, one I hope can gain bipartisan support.

I have to believe every Member of Congress, like me, is visited daily by businesses in their district and in their State. They are coming to Washington and calling us on the phone and describing the harm that President Obama's regulatory agencies are inflicting on their ability to create jobs.

I urge all of my colleague to support the very sensible legislation, the Jobs Through Growth Act.

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

I thank the Senator. First of all, I thank the Senator for his leadership on this issue. I share your concern about the dysfunction of not only this body, our Budget Committee, but Washington in general. I mean, Washington is broken.

We are currently conducting business as usual here in Washington, and it is bankrupting our Nation.

Certainly having spent 34 years as a manufacturer, I recognize you have to have a good process if you are going to have a good product. And because our process here is so broken, that is one of the reasons we are bankrupting this Nation--because we don't have a good process. It is, to me, unbelievable that in the Senate we haven't passed a budget now in--what is it--805 or 806 days? Over 2 years we have not passed a budget yet in this body. As an accountant--that is my background--I had to produce a budget on time for a wide variety of sizes of businesses, and it is simply unbelievable to me when I know how hard individuals and businesses work to produce a budget. And, by the way, they generally present those budgets on time. They don't miss the budget dates. But they actually produce a budget, and there is an awful lot of work that goes into those budgets.

I come here after 34 years in business, and I come here to the Senate understanding, again, not because I want to be a Senator but because I realize we are bankrupting this Nation, that America is in peril. I get here, and I hope to get on the Budget Committee so I can actually start solving this problem. I get on the Budget Committee, and I am ready to roll up my shirt sleeves and start working on the problem. What did we hold? I think we had six hearings on the President's budget, a budget that was so unserious that it lost in this body 0 to 97. Not one Member of the President's own party thought it was serious enough or maybe it didn't spend quite enough for them. Maybe it didn't tax enough for them. But, for whatever reason, not one member of the President's own party decided to vote for that budget. I think that is a stunning repudiation.

It is very disappointing, quite honestly, because right now, as our country faces bankruptcy, we are hungry for leadership and we are not getting any. The fact is if the President were serious about addressing this issue, if he were serious about attacking this problem, he would have been coming to us months ago to negotiate in good faith to prevent the bankrupting of America, but that hasn't happened.

So what is happening now? For the last few weeks we have been holding some secret meetings, far from the view of the American public. I am not sure, is that how we are going to solve the financial future of America? I came here to work. I came here to be engaged in debate. I was hoping we would have a very open process under general order, but that is not what is happening. What I am afraid is we are going to end up with a deal that is going to be dropped in our laps with a couple of days to go, like with the health care law, like Dodd-Frank. All of a sudden we get these thousand-page bills dumped in our laps with no time to review, and then you start to see the unintended consequences. That is a real shame.

I just came from a press conference where every Member of the freshman class--we had a meeting this morning--and we were talking about, what can we do? I mean, we all came here in a very sincere desire to actually solve the problem. One of the things we talked about is how President Obama, rather than being serious about this, rather than tackling the problem, is willing to scare seniors and members of our military. We thought that was over the line. So we sent a letter to the President today asking: Please, step to the plate. Seriously address the problem. Stop scaring our seniors. Work with us. We want to help you solve the problem.

I appreciate the kind words. My background is in accounting, and I have been in business for 34 years. I have produced budgets for people on time. I have had people produce budgets for me on time. I look at the process--or the lack of a process here as absurd. Think about it. I have certainly produced budgets for smaller businesses--let's say a $10 million company. They would go through an awful lot of detail to draw up a budget. Talk about a little bit larger business, maybe a $1 billion-per-year business. There would be a lot of people involved, a lot of detail, and all that information filters up to the top. Then you come here to Washington and you see business as usual. I just want to make sure the American people understand how absurd this process is, the fact we haven't passed a budget in the Senate in over 2 years.

We now have the President--at least he has finally gotten engaged this last week. They are meeting behind closed doors. Is it really true they are going to produce a budget over the course of a couple of meetings--a budget for the Federal Government that would be $3.7 trillion, $3,700 billion worth--and they

are going to do this behind closed doors, just a couple of people? That is an absurd process.

The fact is, I am glad the President finally acknowledged Medicare is unsustainable. That is a sad fact. I wish it weren't so, but the first step, of course, in any process of being healed is to acknowledge that you have a problem. So I am glad the President finally acknowledged Medicare is unsustainable. But if he was really serious about structural reform, if he was really coming to the table in good faith, he would have come to the table 6 months ago. He would have been sitting down in good faith with Republican Senators, Republican Members of Congress, who understand how urgent the problem is, who want to work with this President, who want to work with anyone who is willing to seriously address the fact that we are bankrupting this Nation.

So, again, I find this process absurd. And I would ask the American people to please think about what is happening here. Rather than an orderly process, rather than a process being conducted in the light of day, we are doing it behind closed doors, and there will be something dropped, I am afraid, in our laps with no time to review it--another of these bills nobody has time to read. And that is what the financial fate of America rests on? I don't think so. It should not be that way.

Absolutely. The floor is the Senator's.

Well, obviously it makes more sense to actually use them to make us more competitive so that global capital actually flows to the United States to create jobs here.

I am a long-term job producer. I certainly recognize it is the private sector that creates long-term self-sustaining jobs. I am afraid that is what our colleagues on the other side of the aisle and President Obama simply don't understand.

I am often asked, Are you surprised by anything in Washington? I will tell you one thing I am not surprised about is that their solution is increasing taxes. Let's face it, we just undertook a $4 trillion experiment in Keynsian economics. We are down more than 2 million jobs since that grand experience began when President Obama became elected. It doesn't work. And now for the Democrats and President Obama proposing $1 trillion, $2 trillion or, as was pointed out, as much as $2.8 trillion in new taxes? What is that? That is actually taking money out of the private sector where real jobs are created. That would be the wrong direction. That would be a big mistake. That is why the Republicans are united in saying increasing taxes at any time, particularly in a weak economy, is the wrong prescription.

Getting our debt and deficit and spending under control, a balanced budget amendment is the solution. It can actually be enacted very quickly. We don't have to face the crisis that President Obama and the Treasury Secretary are trying to whip up here.

First of all, I thank the Senator for his leadership. He has been talking loudly and clearly about the fact that we should not have recessed this week. I know President Obama tried to claim credit for that. It is because of the Senator's leadership and the members of the Republican conference in the Senate who said: No, we are bankrupting America and we need to stay here and start debating this issue.

Unfortunately, that is not what we have been doing this week. It is sad. One word I have used all the time now that I have come to Washington is ``unbelievable.'' It is simply unbelievable that tomorrow will mark 800 days that we haven't passed a budget.

My background is in business for the last 34 years. I have had to produce budgets on time. I have had people produce budgets for me on time. In business--even a small business--it is inconceivable that if you tell a colleague to make sure to have the budget on your desk by April 15 that it wouldn't be there; 99.9 percent of those accountants and controllers would have a budget on time, on April 15.

We are dealing with the United States of America. We are talking about our financial future, the fate of America. The Democrats in the Senate have failed to meet that obligation for 2 years in a row. That is simply unbelievable, and it is so incredibly irresponsible. Really, I think the Senate has been guilty of willful neglect. The phrase I have used is that the Senate has been ``fiddling'' while America is going broke. That is sad.

As the Senator pointed out as well, what does the financial future of America rest on? Some secret talks--talks between a few individuals going out behind closed doors far from the view of the American public rather than in an orderly process where a plan is presented that can be viewed by the American public, that can be debated openly the way our Founders envisioned on the floor of this Senate, this historic floor; instead of using the process that we should have been using, what is going to happen? Are we going to have a result, a negotiated settlement drop in our laps a couple days before this deadline date? Is that what is going to happen? Is that really how the financial fate of America is going to be decided?

I personally find that process disgusting. That is why I stood last Tuesday on the floor of the Senate and said unless we start seriously addressing this problem, the bankrupting of America, in the open, in the bright light of day, I was going to begin to object. I was going to begin to withhold my consent.

I was heartened by the support I got from my Republican colleagues because, let's face it, we understand how urgent the situation is. We understand how dire our financial situation is. We are willing to sit down and work with anybody who will seriously address the fact that we are driving America toward bankruptcy. But we need a willing partner, and up to this point in time I haven't seen one.

The fact that the only plan we have seen is the President's budget, 4.25 inches thick, 2,400 pages long--how many thousands of manhours did that document take to produce? It was so unserious it would have added more than $12 trillion to our Nation's debt in the next 10 years. It would have continued the bankrupting of America. It would have made us go broke. It was so unserious, it failed in the Senate by a vote of 0- 97. Not one Democratic Senator found that bill serious enough to give it a vote. That is the only plan I have seen.

I woke up this morning to a couple of news reports, and there was more detail about what the administration might plan to do fed to reporters than fed to a Member of Congress.

I am sorry to be so blunt about this, but that is a disgusting process. The American people deserve far better. I guess today what I am standing here saying is, I want to see a plan, and I want to see a budget, and I want to see it to give us enough time so we can actually analyze it and debate it and pass the real structural reforms so that we can actually solve this problem. I am calling on the President and I am calling on the Democrats in this Senate to produce that plan so we can have an open debate on it. That is kind of how I am thinking.

I would like to pick up on Senator Blunt's point about just how unserious this week has been.

Just in comparison to business, about 5 years ago I bought a business out of bankruptcy. I watched those business owners over the course of 2 or 3 years struggle to make a go of that business. You would not believe the number of hours those people, those hard-working Americans put in to save that business. It didn't work. They went into reorganization under the bankruptcy laws. I bought that business out of bankruptcy. I saw how incredibly hard my team worked to make that business survive, and it did survive. These are individuals putting in 16, 17, 18, 20 hours a day to make a product, to build a good life for themselves and their families, to provide employment, jobs.

This is the American spirit. That is the entrepreneurial spirit. That is what Americans do day in and day out, whether they own a business or whether they contribute their effort: their labor to make their business successful, the one they work for successful. That is what Americans do.

What has this President done? What has this Congress done? What has this Senate done?

In the last 6 months since I have been here, we passed six laws, six bills that have become law. Three of those had to do with the continuing resolutions of last year's business: funding the government for this year. Those were laws that should have been passed 1 year ago, but it was left over for us to do that.

We had two bills to extend the PATRIOT Act. If we take a look at how that was even done, it was last minute, rush-rush, very little time for debate. We couldn't even get amendments in there.

Then, of course, the other one is we kind of cleaned up a little bit a little part of the health care law that dealt with 1099s, which would have been a nightmare. It would have cost billions of dollars to comply with and not brought in any revenue. So we finally got that off the books, thankfully.

The other bills we have debated, we spent 16 weeks debating three bills. The total dollar amount of those bills is $20 billion. That is about \1/2\ percent of what this Federal Government will spend this year. So we have spent 16 weeks debating \1/2\ percent of our $3.6- trillion-a-year budget. That, in my mind, is the definition of being not serious.

Of course, we have said it has been 799--tomorrow it will be 800-- days since we actually passed a budget. This week we spent 15 hours of debate. We call it a sense-of-the-Senate resolution? It should be called the nonsense of the Senate. That is what has been occurring this week, and it is a tragedy. It is a tragedy.

But, again, that is why I stood up and started to object. I will continue to do that until we actually start getting serious, until we actually see a plan, a budget that we can start debating.

Well, the reason I ran is because we are bankrupting the Nation. I love America. We love America. When I watch what is happening, and when I saw how broken Washington was, when I saw them pass the health care law, from my standpoint that was the straw that broke the camel's back.

Our first child, my daughter Carey, was born with a very serious congenital heart defect. Dedicated doctors and surgeons saved her life the first day. Then 8 months later, when her heart was the size of a plum, another dedicated surgical team of dedicated professionals totally reconstructed the upper chamber of her heart. Her heart operates backwards now. But she is 28 years old, and she is a nurse herself in a neonatal intensive care unit.

When I heard President Obama say these doctors, that they will take out a set of tonsils for a few extra bucks, I found that outrageous. Then when this Congress and this President signed the health care law, I know the result of that. It is designed to lead to a government takeover of our health care system.

All we have to do is take a look at Canada and Britain. We don't have to theorize what that is going to result in. It will lower the quality of care. It will result in rationing, and the medical innovation to save my daughter's life and millions of others--it really is America where medical miracles are created. I think that innovation is going to come to a grinding halt.

So that is just the quality aspect of the health care bill, but it is going to destroy our budget.

I wrote a piece with Douglas Holtz-Eakin, ex-CBO Director. Rather than $93 billion a year, when this bill kicks in, as it is designed to do, and a large percentage of Americans lose their health care employer coverage and get dumped into the exchanges, we are talking about a $\1/ 2\ trillion or maybe $900 billion.

I see we are running out of time, but that is why I ran, because we are bankrupting America.