[Pages S8508-S8540]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

PROPOSING AN AMENDMENT TO THE CONSTITUTION RELATIVE TO REQUIRING A
BALANCED BUDGET--S.J. RES. 24--Continued

______

PROPOSING AN AMENDMENT TO THE CONSTITUTION OF THE UNITED STATES
RELATIVE TO BALANCING THE BUDGET--S.J. RES. 10--Continued

The PRESIDING OFFICER (Mr. Webb). The Senator from Vermont.
Mr. LEAHY. Mr. President, it occurs to me that all Senators swear an
oath to support and defend the Constitution of the United States. I
carry a copy around with me. It is our duty. It is our responsibility.
But the pending amendments to the Constitution that are on the floor of
the Senate threaten the constitutional principles that have sustained
our democracy for more than 200 years.
In addressing the Nation's debt and deficit, what is lacking are not
phrases in our Constitution. What is lacking is the seriousness within
today's Congress to act, and the willingness in Congress to cooperate
in forgoing solutions that meet the real needs of our country and its
people. These are human failures, not the failure of our constitutional
framework. Nor are these failures insoluble or inherent. We balanced
the budget and even created budget surpluses less than two decades ago.
Now we are being asked to put the problem once again under the pillow
for another day--this radical partisan proposal would be out of place
in our national charter.
Never in our history have we amended the Constitution--the work of
our Founders--to impose budgetary restrictions that require
supermajorities for passing legislation. Yet now it seems every Member
on the other side of the aisle has joined to put forth a radical
proposal to burden our Constitution with both of these kinds of
strictures.
The Hatch-McConnell proposal is different in kind than any other
amendment to our Constitution. It is not consistent with the design of
our founding document or the stance taken by our Founding Fathers.
It is a bad idea to write fiscal policy into our Nation's most
fundamental charter. It is simply unnecessary. We do not need a
balanced budget amendment to balance a budget. A vote for this
amendment does absolutely nothing to get our fiscal house in order.
Congress can work to continue our economic recovery. We can pass the
appropriate legislation that leads to a Federal balanced budget, just
as we did in the early 1990s.
I remember that very well because I was here. I remember, in this
body, not a single Republican voted to balance the budget. It took the
Democrats in the Senate and the Vice President of the United States to
pass that balanced budget. Not a single Republican voted for a balanced
budget in the House. They gave a lot of speeches on the floor that if
we passed that balanced budget amendment, everything would come to a
screeching halt. Actually, what happened was we passed it, and
President Clinton was able to leave his successor a huge surplus.
With a growing economy, with what we did by votes in the House and
the Senate--not by a constitutional amendment--we were able to create
significant budget surpluses and pay down the debt until those
surpluses were squandered. We have done it before. We can do it again.
We need only work together to make the tough decisions, not to pass
something that is a feel-good, bumper-sticker kind of item which kicks
the can down the road and binds future Congresses to a fiscal proposal
that is fundamentally unsound and the consequences of which are not
understood.
The Republican proposal in the Senate is significantly more radical
than the version the House of Representatives rejected in a bipartisan
vote last month. In fact, the Hatch-McConnell constitutional amendment
is the most extreme of all the pending proposals. The proposal, by its
terms, will neither balance the budget nor pay down the Nation's debt,
something everybody says they want. Instead, at a time of partisan
brinksmanship that has led to the first-ever downgrading of our
country's credit rating this summer and when ideological gridlock is
the Republicans' operating principle, it would require supermajorities
to pass legislation for the first time in our Nation's history. It
would require a supermajority to raise the debt ceiling in times of
economic crisis. Did we learn nothing from the disaster we went through
last summer, which should have been a routine lifting of the debt
ceiling and became a political free-for-all for weeks and months, cost
the American taxpayers billions of dollars and caused people to lose
their retirement money in the stock market? Do we want to do that
again? I hope the Senate rejects this proposal.
Two weeks ago, the Judiciary Committee's Subcommittee on the
Constitution held a hearing to examine the Hatch-McConnell proposal.
All those witnesses, including those who were invited by the measure's
cosponsors, presented thoughtful critiques of this extreme proposal and
voiced serious concerns about its wording. Even Republican cosponsors
discussed possible changes to the language in order to better achieve
their goals. This is not the proposal that Senator Hatch previously
favored. This is one of more than two dozen pending versions. In fact,
we were not told which of the many versions of the proposal would be
pending until yesterday. This proposal has not been considered by the
Constitution Subcommittee or the Judiciary Committee. The House of
Representatives has already voted down a less-extreme version of this
proposal by a bipartisan majority. Yet here is the Senate of the United
States, being forced to vote on some proposal for a constitutional
amendment without doing any of the hard work or the votes that are
expected to accompany an amendment to America's Constitution. This is
no way for the Senate to proceed on a proposed constitutional
amendment. This is not some feel-good resolution. We are talking about
amending America's charter.
The Hatch-McConnell proposal contains many problematic provisions and
it leaves many significant questions unanswered. Section 10 of this
proposal relies on estimates for outlays and receipts. We know that
economists' estimates and recommendations do not always agree. So what
do these proposed constitutional provisions really mean? We know that
estimates are not static but ever changing. What if during the course
of a fiscal year, there was a natural disaster, a terrorist attack, or
a shift in the economy? What then? What if estimates were recalculated
or revised, as employment statistics are every month? Would that make
every penny expended by the Government over a revised estimate
unconstitutional? Would that mean we could not help disaster victims or
could not respond to a terrorist attack?

Another provision would limit total outlays for each fiscal year to
18 percent not 16, not 20, not 17.9 of the previous year's Gross
Domestic Product (GDP). But who is to decide what the ``GDP'' was for a
particular time period? What is to be included and what is not? How
often do those estimates and artificial constructs get revised? Since
when do economic surveys and shifting estimates belong in the
Constitution? And what policy decision justifies the constitutional
permanence of the number 18? I note that not even the budget proposed
this year by Representative Ryan and the House Republicans, with all
its draconian cuts and the end of Medicare as we know it, would satisfy
this arbitrary 18 percent of GDP limit. None of the budgets proposed by
or passed under President Reagan, not one, would have satisfied this
proposal. At the end of the Bush

[[Page S8509]]

administration we survived the worst economic downturn since the Great
Depression and are now in economic recovery. This is not the time to
enact such a measure which would take us in the wrong direction. We
cannot ``cut'' our way to a balanced budget without imposing great
suffering. It would tank the economy rather than aid our continuing
recovery.
Besides its arbitrary nature, limiting outlays to 18 percent of the
previous year's GDP would leave Congress unable to respond swiftly and
effectively to economic downturns and natural disasters. The Hatch-
McConnell proposal would require a two-thirds supermajority to spend in
excess of 18 percent of the previous year's GDP for a specific purpose.
Filibusters and requirements for supermajorities have become routine to
the detriment of the American people. They have stymied congressional
action on behalf of the American people. This proposal would give a
minority in Congress even more power to hold the country and our
economy hostage. Have we not seen what that can mean? Have the lessons
of the last year been lost on the Senate?
The Hatch-McConnell proposal would make permanent bad policy choices.
Section 4 is a transparent attempt to enshrine tax breaks for
millionaires and wealthy corporations by requiring a two-thirds
supermajority to impose any new tax or even to close existing tax
loopholes. We need a balanced approach to fix the deficit problem. And
the wealthiest among us are those who least need a heavy hand on the
scales in favor of their interests.
Let's look at what has happened. We have fought two unfunded wars. It
is the first time in our history that we not only did not pass a tax to
pay for a war we are in but actually passed a tax cut and borrowed
money to pay for these wars. We squandered the surpluses the last
administration inherited, ran up deficits and the national debt.
I would remind everybody, we can achieve a balanced budget. We have
done it before. Working with President Clinton, Democrats in Congress
voted for a balanced budget. But I don't want to hear lectures from the
other side, when every single Republican voted no the last time we had
a successful balanced budget. Our strong economy in the Clinton years
led to budget surpluses. If we are serious about reducing the deficit
and paying down our debt, we need to get to work improving our economy,
getting Americans back to work, and continuing to recover from the
worst economic conditions since the Great Depression.
One of the most glaring problems with this proposal is it provides no
clear enforcement mechanism or standards for enforcement. Section 8 of
the Hatch-McConnell proposal expressly prohibits courts from increasing
revenues to enforce the amendment, but remains silent on judicial
enforcement of the amendment by cutting spending. This proposal assumes
our Federal courts are equipped to enforce this amendment. Do we want
to say we will simply relinquish Congress's constitutional power of the
purse to an unelected judiciary with no budget experience--something no
Congress, Republican or Democratically controlled--has ever done
before? Do we want judges deciding fiscal policy? Do we want judges to
decide whether we cut Social Security or Medicare?
I recently asked Justice Scalia at a hearing before the Senate
Judiciary Committee whether the Federal judiciary was equipped to
handle such a task--the same task my friends on the other side of the
aisle want the Federal judiciary to do. Do you know how he answered? He
laughed. He indicated that budget issues and determining the allocation
of resources is not the judiciary's proper role. Of course he is right,
and I expect this is one area where all nine members of the Supreme
Court would have answered the same. The proponents of this effort to
transform courts into budget-cutting bodies are wrong. The Republican
proposal does not even make clear who, if anyone, has standing to bring
such challenges in court. None of these questions has been adequately
debated or considered. Such a drastic change to the time-honored role
of the judicial branch of our government should not be written into our
Constitution presumptuously.
In addition to all these concerns, the American people need to
understand what the real-world effect of such an amendment would be on
their daily lives. In the Senate Judiciary Committee, we received
alarming testimony from the president-elect of AARP, warning of the
damaging effects such a constitutional amendment would have on Social
Security, Medicare, and Medicaid. He testified that if such a
constitutional amendment were in place today, the average Social
Security benefit would be cut by 27 percent. Maybe that is what Members
of this body want to do, cut Social Security by 27 percent. I do not.
Do they want to balance the budget on the backs of hard-working, lower
income, and elderly Americans by drastically cutting the safety net? I
would say that is not the answer to our economic challenges, especially
as we continue to give tax breaks to millionaires and continue to fight
unfunded wars.
The notion of amending the Constitution to require a balanced budget
is not new. The Senate rejected balanced budget amendments in 1995,
1996, and 1997. We proved after the Reagan and Bush administrations had
tripled the national debt that we could through hard work and
legislation, balance the budget. That is what Congress did in the late
1990s. We helped create hundreds of millions of dollars in surpluses
that were paying down the national debt. Those surpluses were
squandered by tax cuts for the wealthy and two unfunded wars. That is
the cause of our budget imbalance.
We should not, for the first time in American history, amend the
Constitution to set fiscal policy. It is a bad idea. It is even more
irresponsible to consider doing so when we do not yet understand the
full weight of the consequences of who is going to bear the burden.
I have never seen the solemn duty of protecting the Constitution
treated in such a cavalier manner as it is today. I have heard many say
they revere the Constitution. Let us show it the respect it deserves
rather than treating it like a blog entry or a bumper-sticker slogan.
Let us not be so vain in this body to think we know better than our
Founders and better than the constitutional Framers who preserved our
liberties for more than 200 years.
Our constitutional principles have served the test of time. They
deserve protection. I will stand with the Constitution. I will stand
with the Constitution of this country, and I will oppose this ill-
conceived proposal to amend it.
I ask unanimous consent to have printed in the Record my full
statement, and I yield the floor.
The PRESIDING OFFICER. The Senator from Iowa.
Mr. GRASSLEY. Mr. President, I have the good fortune of serving with
Senator Leahy on the Senate Judiciary Committee. He is the chairman; I
am the ranking Republican. In that capacity, we have jurisdiction over
constitutional amendments. So I rise to support S.J. Res. 10, which is
cosponsored by all 47 Republicans.
I am very pleased we are taking up a balanced budget amendment. The
Senate has passed a balanced budget amendment in the past. More
recently, it has come close to passing a balanced budget amendment.
I regret that this amendment has not become law. I believe that had
the Constitution been amended to require a balanced budget, we would
not be faced with the dire budgetary situation that is before us--a
$1.5 trillion deficit for each of the last 2 or 3 years, and maybe as
far as we can see into the future if we don't get things under control.
The balanced budget amendment before us is very straightforward. It
provides that total outlays shall not exceed total receipts unless each
House of Congress, by a two-thirds vote, agrees to do otherwise. It
provides spending discipline. Total outlays cannot exceed 18 percent of
gross domestic product unless two-thirds of both Houses of Congress
vote to waive the cap. The President will be required to submit a
balanced budget to the Congress.
To avoid balancing the budget by imposing tax burdens, new taxes or
increases in total revenue can be imposed only by a two-thirds vote of
both Houses, and the debt limit will be able to be raised only with
concurrence of three-fifths of both Houses.
To provide a level of flexibility in wartime--and that would call for
considerable flexibility because wars are

[[Page S8510]]

never predictable--the provisions on outlays and receipts, total
outlays, and the debt limit can be overcome by less than the normal
two-thirds vote by a three-fifths vote.
To minimize disruption, the amendment will not take place for 5
years.
Finally, the courts cannot enforce the balanced budget amendment by
ordering a tax increase.
Reverence for the Constitution is a sentiment we all share. But the
Constitution provides for an amendment process. When it is necessary,
each generation has amended the Constitution when a guarantee of free
speech or the abolition of slavery or giving women the right to vote
required a constitutional amendment. No one has said reverence for the
Constitution was the end of the matter.
We have reached that point of necessity with the balanced budget
amendment. The Congressional Research Service reports--and I wish to
quote a fairly long quote:

The budget deficit each year from 2009 to 2011 has been the
highest ever in dollar terms, and significantly higher as a
share of GDP than at any time since World War II. Under
current policies, the Federal debt is projected to grow more
quickly than the GDP, leading observers to term it
unsustainable.

That is the end of the quote from the CRS.
The very purpose of the Constitution, according to its preamble--and
I know the preamble is not governing on anything we do or what the
Supreme Court does, but it shows intention--the preamble was meant to
extend the blessings of liberty to ourselves and our posterity--and I
want to emphasize that word ``posterity.'' It is because the growth in
the national debt is unsustainable, as I read from the Congressional
Research Service, that our posterity may not receive the blessings that
several generations of Americans so far have received. It is hard to
imagine an amendment more in keeping with the goals of the Constitution
than this one. Otherwise, runaway debt will expand exponentially. A
permanent spiral can be created in which the debt feeds on itself. We
are kind of in that spiral right now. Is it permanent? I sure hope not.
Take a look at Europe today, where we ought to learn lessons about
the lack of fiscal soundness. Nations there risk default when they
overspend, and they are in that position of almost default now. If we
are not careful, our country, the United States, at some point will
face the same crisis. It is frightening to contemplate, and
particularly frightening as a threat to the blessings we ought to give
to generations after us.
We hear from opponents that Congress can balance the budget now
without a balanced budget amendment, but the fact is it cannot. For
more than 40 years, Congress has been unable to summon the ability to
balance the budget. Statutes that sought to provide a path to a
balanced budget failed.
Let me speak here about a personal involvement I had when I was a
Member of the other body, working with Senator Harry Flood Byrd of
Virginia. The Byrd-Grassley amendment was adopted in either 1979 or
1980. It was a statute that was just a few words. It said Congress
can't spend any more money than it takes in.
Do you know what happened? For several years after that until it was
finally repealed in the early 1990s, Congress delayed it for a year at
a time as part of the appropriations process. So statutes are not a
good way of making this happen. Gramm-Rudman was probably a little more
successful, at least once or twice, but it soon was repealed. By
putting something in the Constitution requiring a balanced budget, it
is going to discipline Congress in a way that statutes cannot provide
discipline; in other words, a constitutional amendment will succeed
where statutes have been proven to have failed based upon the examples
I gave and other examples that can be given.
The only exception was when we had 3 years going into this century
when a financial bubble provided windfall revenues. We all know about
that. I believe it is $568 billion we paid down on the national debt
for 4 fiscal years after a Republican Congress was elected in 1994.
Anyway, except for that, we have not been able to have very sound
fiscal policy. Then because Congress has been unable to control
spending, the budgets have been in deficit and the national debt has
increased. The only way Congress will exercise the discipline to
balance the budget is if the Constitution forces it to do so.
We can say this from some experience, particularly if you believe the
States are the laboratories of our political process and of government
policy, because 46 State constitutions require their budgets to be in
balance. They meet that requirement. As Members of Congress, we do take
an oath to adhere to and defend the Constitution. We take that oath
seriously. If the balanced budget amendment became part of the
Constitution, we would adhere to it or face the consequences from the
voters.
This amendment wisely contains effective tax limitations as an
integral part. I have favored a balanced budget with tax limitations
for more than 20 years. For decades, Federal spending has far outpaced
even the steady and sizable growth in taxes and revenues. Raising taxes
does not produce surpluses. The historical fact is they spur more
spending. For every additional dollar in taxes Congress has raised
since World War II, it seems as though it has given us a license to
spend about $1.13 for every $1 that has come in for additional taxes.
Don't take my word for that. A person who studied that for a long
period of time, Professor Vedder, of Ohio University, has written about
that. You will find his figures just about the same. I think he said on
average since World War II, $1 coming into the Treasury was a license
to spend $1.17 instead of the $1.13 I give here.
Raising taxes, then, would make balancing the budget harder, not
easier. Bring a dollar in here, spend $1.13. You hardly get ahead. It
seems we cannot ever reach an agreement of how high taxes have to be in
this body to satisfy the appetite of Congress to spend money. That is
not just a Democratic problem, that is a problem on both sides of the
aisle here in Congress.
That brings us to this issue about a supermajority requirement for
tax increases. A balanced budget amendment may well encourage tax
increases, fueling greater spending and the continuation of additional
debt and costs in servicing that debt. The failure to balance the
budget is a fiscal issue of greatest importance.
But getting back to our obligations to posterity under our
Constitution, it is also a moral issue. Maybe the moral aspects of it
are more important than the economic aspects of it. Without a balanced
budget amendment, our children and grandchildren will pay for this
generation's chronic inability to live within its means. We live high
on the hog and worry about our children and grandchildren paying for
it.
In the absence of an amendment, the standard of living of future
generations will likely decline. The fears of many Americans that the
next generation will not live as well as this one are in many respects
traceable to decades of fiscal irresponsibility on the part of
Congress. This balanced budget amendment would mean a stronger economy.
It would surely mean good government, as fiscal responsibility ought to
be a part of good government. Obviously people are concerned now about
the problem of jobs. Employers are particularly concerned that Congress
does not have a sound fiscal policy. That leads them not to hire
anybody. A balanced budget is going to mean more jobs.
I believe the American people are willing to do their part to prevent
future generations from being saddled with an unconscionable level of
debt. They are willing to do so even if it means that some Federal
spending they support would be affected. This is especially true if our
budgeting is done fairly.
I believe if one listens closely to the arguments of the opponents of
this measure, one will hear more arguments against a balanced budget
than against a balanced budget amendment. There will need to be
difficult actions taken. It is those difficulties that have prevented
Congress from balancing the budget. Those difficulties are, therefore,
reasons for a constitutional amendment, not reasons against a
constitutional amendment. But balancing the budget is necessary and it
will take an amendment to the Constitution of the United States of
America to make sure it is done consistently.

[[Page S8511]]

We also hear arguments about the need to run deficits when the
economy is in a recession. That kind of brings us to where we are right
now. We have been in a recession for 3 years. The amendment before us
permits Congress to vote to run a deficit in that situation, but be
skeptical of that argument. If deficits and debt gave us a strong
economy, right now we would be in the midst of the greatest economic
boom in our history. Obviously we are not in that economic boom.
Deficits of $1 trillion-plus and a national debt of $15 trillion are
not stabilizing the economy in the way that people who argue that maybe
in a time of recession you ought to have a lot of deficit spending have
claimed.

In fact, I believe the size of the deficit and debt is one reason the
economy is not performing well. The size of looming deficits and debt
is another. The markets are not viewing the debt as stabilizing a weak
economy. Rather, they view it correctly as a drag on the economy. That
is why jobs are not being created. That is why corporations have $1
trillion in their treasuries in the United States, $1 trillion in their
treasuries overseas, $2 trillion that is not being spent, that is not
making corporations any money. It is lying there. They want to invest
it in jobs and machinery and get the economy going and make more money.
On the issue of enforcement, the opponents attack straw men. They say
either that the amendment cannot be enforced, so it is toothless, or
they say the courts will enforce it, leading to chaos. Both of these
arguments cannot be true. This amendment will be enforced by the
President submitting a balanced budget and Congress complying with the
amendment, as do State legislators all over the country. Members take
an oath and voters will punish those who do not obey the constitutional
command.
With respect to the courts, the text of the amendment prohibits
courts from raising taxes. Of course, judicial standing requirements,
ripeness, and the doctrine of political questions will mean that the
courts will continue to lack the power of the purse, as has been the
case throughout 225 years of history of our country.
In the past dozen years, Congress has been unable to balance the
budget even when times are good. Had we passed a balanced budget
amendment when it was before us in the past, we would not have racked
up the huge deficits that now confront us.
We have heard in the past that a balanced budget amendment was not
necessary because Congress could balance the budget on its own. We know
how successful Congress has been doing that. Those arguments were
wrong. Today we face one of the worst debt pictures in our history. If
nothing is done, the future will be even worse. We owe a responsibility
to the American people and to future generations to maintain the fiscal
discipline that has allowed us to be the world's biggest economy.
Our pleas for a balanced budget amendment have been denied by its
opponents in the past. We warned at that time what road lay ahead if we
failed to pass a balanced budget amendment. Time has unfortunately
proved us right. It is not too late if we act now, but time is growing
shorter each year.
I urge my colleagues to do the right thing and enact a constitutional
requirement that the budget be balanced.
I yield the floor.
The PRESIDING OFFICER. The Senator from Colorado.
Mr. UDALL of Colorado. Mr. President, I rise to speak in favor of
legislation I have authored to amend the United States Constitution to
require that Congress balance the Federal budget. The Senate's debate
on the balanced budget amendment, which will occur over the next few
days, is an incredibly important debate. It is a debate that will spark
a wide range of emotions and it will test our policies, goals, and
philosophies. Thus, I want to recognize at the outset that we hold
strong and differing opinions about the wisdom of adding a balanced
budget amendment to our U.S. Constitution. Amending the Constitution is
not something any of us in the Senate takes lightly. In fact, we have
only amended our Constitution some 27 times in the history of our
Nation. Our Founding Fathers in their wisdom designed the Constitution
to discourage amendments. They created a high hurdle to clear before an
amendment can be passed by the Congress and ratified by the States.

I intend today to make a case for why my proposal, which has been
cosponsored by several of our colleagues, meets that elevated standard.
Today I aim to explain why this balanced budget amendment will help
restore the fiscal health of our Nation, protect our national security,
and spur our future competitiveness in the global economic race.
Let me start by discussing some basic facts that color this debate.
First, our government debt now totals over $15 trillion. That is
$48,000 for every man, woman, and child in our country. Let me say that
again: $48,000 for every man, woman, and child. Moreover, we borrow 40
cents of every dollar that the Federal Government spends. The total
amount of public debt now held by us equals 68 percent, almost 69
percent, of our gross domestic product. That reflects a level rarely
seen in our country's history.
Finally, in August of this year, one of the major credit agencies
downgraded our Nation's credit rating because of Congress's inability
to work in a bipartisan manner to reduce our debt. I don't think I have
to tell the viewers that the last thing our struggling economy or job
creation efforts needed was that downgrade. It is little wonder that
Americans hold us in such low regard or that other countries wonder
what we are doing in the Nation's Capitol.
I could go on and on, but I will not. These facts are appalling
enough to most Americans. These are hard-working Americans who balance
their checkbooks on a weekly and monthly basis. It is appalling to me
that Congress is so unable to resist the temptation to spend without
limit while also trying to keep taxes as low as possible. We have even
been willing to watch the debt grow to a level where national security
experts are telling us that our own self-created problem is a bigger
threat than any of our enemies.
In the last several years Congress has taken steps to try to reach an
agreement on how to reduce our deficit and pay down our debt. Many of
us have spent countless hours working in bipartisan groups to chart a
commonsense balanced debt reduction plan. I have not given up hope that
we may eventually reach a comprehensive plan to cut spending, reform
the Tax Code, and shore up programs such as Social Security and
Medicare which are critical to our Nation's middle class. To give up on
that goal would be to say to hard-working Americans, we are not serious
about ensuring that the American dream is within everyone's reach.
After watching Congress struggle to reach even a basic plan to cut
spending or reasonably raise new revenues to pay our bills, I am
convinced we need additional tools that force fiscal discipline. If we
don't put limits on how Congress does its budgeting, the question won't
be whether we can stop the bleeding, it will be how much do we cut to
the bone or even into vital organs the programs that we value. In other
words, without some fundamental reforms now, the foundations of our
government will be severely weakened later.
To be sure, a balanced budget amendment will not solve the problem on
its own, but a reasonable balanced budget amendment would help us
ensure we never get into this position again. Passing my middle-ground,
commonsense balanced budget amendment would send a strong signal to the
financial markets, U.S. businesses, and the American people that we are
serious about stabilizing our budget for the long term. That is the
signal they want to see to give them the confidence to expand and
create jobs.
Before I move to making the case for specifics in my balanced budget
proposal, I want to make a few points about exactly how our
skyrocketing national debt affects all of us. As a start, our debt
threatens investments we need to make. It harms our ability to compete
with countries around the world, it inhibits job growth here at home,
and it dampens our innovative spirit. If we don't address our debt now,
it would sap the economic power that has enabled our Nation to become
the most powerful force on the globe.
Throughout most of our history--perhaps aside from the Great
Depression--our economic strength has enabled the

[[Page S8512]]

United States to create an environment that is good for business. This
strength has then helped our own people on our Main Streets thrive in
communities all over Colorado and across our Nation, and it has meant
that every generation has been able to build on their parents' success,
seize opportunity, and live the American dream. We all know this is
what has made the United States exceptional. But today across our great
country, families are wondering whether the American dream is still
within their reach. Whether you are a college graduate and living at
home because you are unable to find a job or a middle-aged factory
worker laid off for the second or the third time struggling to pay your
bills, our economic future seems a bit tougher.
Our country has endured a terrible economic slump for over 3 years
now. In order to move quickly to turn things around, we need businesses
to hire again. Business and community leaders across Colorado and
elsewhere have told me that in order to have the confidence to do that,
they need to know our national debt is not poised to send our economy
off a cliff. The cochairman of President Obama's bipartisan commission
on debt reduction tapped into that sentiment and called our debt a
cancer that is eating away at our economic health. Beyond pure economic
factors, our growing debt burdens us more broadly.
The former Chairman of the Joint Chiefs of Staff, for whom we all
have enormous respect, ADM Mike Mullen, warned that our national debt
is ``the single biggest threat to our national security.'' By now these
are familiar arguments here on the floor of the Senate. We know the
challenges that confront us. The problem is Congress is not doing what
every economist and every one of us in this body acknowledges we must
do, and that is get our out-of-control budget under control. We all
have our theories for why this is the case. I personally believe that
part of the problem is the nature of Congress itself. We are all
temporary single Members of a greater body. We each have our own
constituents, goals, and responsibilities. It is sure tempting to come
to Washington, fight like hell for our corner of the Nation, and lose
sight of or willfully ignore the bigger picture. As Members of
Congress, it seems as if we are hardwired to fight for results that are
important to our constituents and our political ideologies.

Let me give you a couple of examples. Democrats are reticent to
support meaningful adjustments in entitlement spending, and many of my
Republican friends turn a blind eye to the revenues needed to support
retiring baby boomers and our national security needs.
My father, who had the great privilege of serving for 30 years in the
House of Representatives as a Congressman from southern Arizona,
witnessed this same phenomenon several decades ago, and he used to
recall the advice that was given to freshmen House Members. That advice
was: ``If you want to get ahead in Congress, do two things--vote for
every appropriations bill and against every tax bill.''
In many ways the Federal budget deficits we face are so daunting
today because too many Members of Congress have taken that advice
literally over the past decades, but also because it is what Americans
expected of us. It is only natural that people want the best of both
worlds. We cannot continue down this budgetary path and hope that the
results will be any different than they have been in the past.
In fact, the results get worse by the day. Based on what I hear from
Coloradans, our constituents are now ready to make a little sacrifice.
They are ready for us to make some tough decisions that may cause a
little budget pain. Americans now get it, and that is why it is time
for some serious action. A balanced budget amendment to our
Constitution is serious action. It would require us to consider our
larger, collective obligation to the national economy.
I will admit that my support of the balanced budget amendment has not
made me particularly popular with some of my Democratic colleagues.
Democrats traditionally have not been big fans of the balanced budget
amendment idea. These days Democrats are suspicious that balanced
budget proposals are a Trojan horse. They look good on the surface, but
actually they are designed to further dismantle government programs
that most Americans value. But a few decades ago Democrats were leading
the charge for a reasonable balanced budget amendment.
Most notably, Senator Paul Simon of Illinois--a progressive and
serious-minded legislator--was perhaps the greatest champion of a
balanced budget, and I want to share with my colleagues some of his
words. In debating the balanced budget amendment in 1993, Senator Simon
said the following, which he addressed to his fellow progressives:

I am here to tell you that the course we are on, unless it
is changed soon, absolutely threatens all of the programs
that you and I have fought for and believe in so strongly.
The fiscal folly that we followed for more than a decade has
brought us to a crossroads. We face a basic decision, whether
through default or through our actions to choose wisely the
course that will lead us away from the brink.
If we do not act, interest payouts will spiral upward until
they consume not only Social Security but health care,
education, transportation investments--every need on our
national agenda. My warning to you today is that a rising
tide of red ink sinks all boats.

That is a powerful warning from a very wise and respected colleague.
His warning is even more serious in December of 2011 than it was in
1993.
There are not any easy answers here, especially since our aging
population and the post-9/11 national security needs have squeezed our
Nation's budget in ways we have seldom seen in our country's history.
But it is time for us to listen to hard-working Americans who are
telling us loudly and clearly, make the tough decisions necessary to
get our national debt under control. So I say to my colleagues here
today, it is time to put aside our political differences, check
ultimatums at the door, work across the aisle, and challenge ourselves
to put our country first.
I want to reiterate a point I made earlier, which is that a balanced
budget amendment is not the sole answer to the problems we face. It is
not a perfect solution, and I recognize that. For example, it will not
help us deal with our current debt, much less reduce it. For that we
need a comprehensive plan along the lines of the recommendations of
President Obama's bipartisan commission. It has been headed by former
Clinton Chief of Staff Erskine Bowles and former Senator Al Simpson.
Two years ago I helped create the Bowles-Simpson Commission, and I
continue to believe its recommendations, which would lower the debt by
more than $4 trillion over the next decade, are the best place to start
on a path toward fiscal soundness. Let's own up to the mistakes of our
past and take charge of the opportunity staring us in the face by
passing the Bowles-Simpson debt reduction plan. That plan would require
all of us to put some skin in the game, and it represents our best path
to balance our books.
I have also fought for bipartisan proposals to create a Presidential
line-item veto to ban earmarks and to enforce pay-as-you-go budgeting.
These should all be and could be and must be tools in our responsible
budgeting toolbox. Even though we have to find the courage to get our
current fiscal house in order, we also need to have stronger rules in
place to ensure Congress is not tempted to fall off the wagon in the
future. In my view, passing a balanced budget amendment to prevent us
from ever again trading fiscal responsibility for political expediency
is a critical step we must take.
That long windup brings me to the balanced budget amendment proposals
under debate in the U.S. Congress today. Let me start by saying that I
was pleasantly surprised to see last month the U.S. House of
Representatives pursue a balanced budget amendment that was more
realistic than what some of my Republican colleagues here in the U.S.
Senate have proposed. The House proposal required a balanced budget
unless three-fifths of the House and Senate agreed there was an
economic downturn, a national disaster, or another emergency that
required temporary expenditures and increases thereon.
It was a straightforward measure, and it was designed to garner a
broad range of support. However, the House

[[Page S8513]]

proposal fell short by nearly two dozen votes, largely because it did
not win enough support from Democrats. As we know, in order for a
balanced budget amendment to succeed, it must be bipartisan. So I was
surprised to see that after the House balanced budget amendment failed,
instead of seeking to find consensus with those who could bring along
additional Democratic votes like me, my colleagues in the Senate on the
other side of the aisle, led by my dear friend Senator Hatch, have
taken an altogether different route.
There are important differences between the two approaches the Senate
will vote on this week, my amendment and Senator Hatch's amendment. So
I want to spend some time differentiating between the two proposals
because they represent two philosophically different ideas. We will
have a vote on both of these proposals later this week.
Balancing our books is a simple equation based on the principle that
our Nation is healthier without an unreasonably large debt load.
Members of both parties can agree on that. Yet Senator Hatch's proposal
goes a number of steps further and seemingly seeks to shrink government
altogether. Not only does it require an unwieldy two-thirds majority to
waive it in case of national emergencies, it also locks in special
interest tax breaks and could weaken Social Security, Medicare, and
other important programs that are supported by a vast majority of
Americans.
Ironically, Senator Hatch's proposal--at least by some analyses--
could jeopardize our national defense as well. Why do I say that?
I see my dear friend on the Senate floor. I look forward to engaging
with him over the course of this important debate.
The Republican proposal prevents government from spending more than
18 percent of gross domestic product, which is less than the historical
average, less than what George W. Bush spent, less than what Ronald
Reagan spent, and less than what is required to care for our Nation's
seniors and protect our homeland against terrorist attacks. Quite
simply, to my way of looking at this, Senator Hatch's alternative
proposal goes too far and has the potential to harm our middle class
and future economic growth.
So what am I proposing? Well, let me tell you what I think my
proposal would do, and I would note that it is cosponsored by a number
of my colleagues from across the country.
My amendment would allow us to avoid the mistakes of the last decade
without locking ourselves into a requirement that could tie our hands
in an emergency. In such a case, if we tie our hands, we could make our
economy worse for the middle class and small businesses and therefore
for all of us.
My balanced budget amendment proposes and incorporates a big dose of
Colorado common sense. It is aimed at finding common ground that both
parties and a big majority of Americans can support. It starts with a
strict requirement for balancing our books. My proposal would then
allow deficits only when three-fifths of the House and Senate vote to
address serious economic downturns or a war or other emergencies.
However, it would also prevent some of the worst mistakes Congress has
made in the past 10 years. For example, it would prevent deficit-
busting tax breaks for Americans who earn $1 million or more per year.
I think the Presiding Officer and I have a fundamental question. We
wonder why we should continue to give tax breaks to the wealthiest
among us during times when we are running huge deficits and aggregating
debt like never before.
My amendment would also create a Social Security lockbox to keep
Congress from raiding the trust fund to hide the true size of our
annual deficits. Right now, the Treasury Department owes close to $3
trillion to the Social Security Administration. What I want to do is to
see that never again is Social Security used as a slush fund to remedy
our budgeting problems.
In sum, my proposal upholds the principle that we should pay for our
government in a responsible manner, with waiver authority to be used
only in exceptional circumstances. I think most Americans could agree
to that. Coloradans certainly do.
I encourage all of my colleagues to acknowledge that passing a
balanced budget amendment will require some flexibility and
cooperation, and my version is designed to do just that. It is meant to
bridge the divide between us.
The American people are demanding that we get our fiscal house in
order. As usual, they are a few steps ahead of us. We have an
opportunity to catch up to the American people. So I am here on the
floor of the Senate today to ask my colleagues of both parties and both
Chambers to support my proposal. As I have said, amending the
Constitution may not be the solution desired by many in this Chamber.
It is not something to be done without great thought. I, therefore,
look forward to an honest and spirited dialog about the balanced budget
amendment. I look forward to discussing the best ways to dig ourselves
out from under our suffocating debt in a way that will encourage
investment and job creation and help Americans and small businesses
feel secure about their economic future. Our children's future depends
on it.
I yield the floor.
The PRESIDING OFFICER (Mr. Franken). The Senator from Utah.
Mr. HATCH. Mr. President, I care a great deal for my colleague from
Colorado, and I appreciate his explanation of his amendment.
Unfortunately, as I view his amendment, it might work as long as you
accept the rachet up of spending and taxing. That is what we are trying
to stop around here. His S.J. Res 24 would be a band-aid on the system.
It does not address the cause of our unbalanced budgets. An amendment
that does not limit spending and does not limit taxes will never solve
this crisis. It is just that simple. And to work, they have to use
budget gimmicks.
I wish to begin by thanking my friend, the ranking member of the
Judiciary Committee, Senator Grassley. In his service on the committee,
he has always been a champion of our limited government, and with his
remarks today he has again proven himself a strong advocate of
constitutional government. So, too, my good friend and collaborator on
a balanced budget amendment, Senator Cornyn, deserves recognition, as
well as my partner in the Senate, Mike Lee, and a whole raft of
others--47, to be exact. Earlier today, Senator Cornyn highlighted
admirably the threat our debt poses to the liberty and prosperity of
all of America's citizens. And although he has not spoken yet, I know
in advance that my friend and colleague from Utah, Senator Mike Lee,
with whom I worked closely in drafting S.J. Res 10, will deliver
powerful remarks later today in support of this amendment and about the
importance of restoring meaningful limits on the power of the Federal
Government.
Today we are engaged in a historic debate. You might not know it from
the amount of time dedicated to the subject, but I am confident that
when the history of our country is written, today will be marked as a
turning point.
Today is the day that every Republican in the Senate stood up for a
strong balanced budget amendment that will begin to restore this
Nation's fiscal integrity. It is the day that conservatives stood up
and supported a constitutional amendment that would reset the limit on
the size and power of a federal government that has grown far too
large. It is the day that the people of this country stood up for
serious constitutional limits on Congress and the President, who have
spent with impunity for far too long.

We are having this debate for a simple reason: Our Nation is now $15
trillion--actually more than $15 trillion and going up every day--in
debt. This chart shows just how much it was just a few minutes ago. It
is important to put this number in perspective.
The Nation achieved the ignominious landmark of a trillion-dollar
deficit in President Obama's first year in office. We are now in our
third straight year of trillion-dollar deficits. The Federal Government
is now borrowing more than 40 cents of every dollar it spends. The
burden of this debt is more than $48,000 for every man, woman, and
child in America.
The Congressional Budget Office projects that interest payments alone
on all of this debt will total $4.5 trillion, crowding out many other
national priorities. For 2010, spending on interest on the national
debt is greater than

[[Page S8514]]

the funding for most other Federal programs. Let's look at that. As you
can see, in 1 year, spending on interest on the national debt is
greater than funding for most programs--$656.7 billion for the
Department of Defense; $414 billion for interest expense; $173 billion
for the Department of Labor; $129 billion for the Department of
Agriculture; $108 billion for the Department of Veterans Affairs; and
just one other I will mention, $92.9 billion for the Department of
Education.
Well, the impact of this quickly escalating debt burden could prove
catastrophic for economic growth and for American families. In a letter
to the then-ranking member of the House Budget Committee, Paul Ryan,
the Congressional Budget Office determined that ``beyond 2058,
projected deficits in the alternative fiscal scenario become so large
and unsustainable that CBO's model cannot calculate their effects.''
That ought to tell you something. In other words, the CBO model crashes
when it even attempts to calculate the impact of all of this debt on
economic growth. Yet all of these numbers might be understating the
Nation's debt burden. What happens if interest rates rise? Right now
they are at historic lows, but that will not always be the case, and we
are figuring on historic lows right now as though they are going to
continue.
According to CBO's alternative fiscal scenario, which is our most
realistic fiscal scenario, debt held by the public will reach 82
percent of GDP by 2021. Now, that is if they are right, and they have
never been right yet over the long term; they are always low. Absent
real fiscal reforms, it will reach 100 percent of GDP by 2035. But this
does not tell the whole bleak story. The fact is, when you include the
IOUs the government has issued to itself, intergovernmental holdings,
our debt is already at 100 percent of GDP--larger than our entire
economy.
When are our friends on the other side going to start thinking about
these things and start realizing that they are taking us right down
into bankruptcy in this country? This debt burden we have is simply not
sustainable. If interest rates go back to their average in the 1990s,
our public debt will increase by 77 percent over even these grim
estimates I have just mentioned. We are spending at historical highs
and going higher, and with interest on the debt taking a larger and
larger share of spending, we need to be very concerned as a nation that
we are entering a debt spiral from which we will have a difficult time
extricating ourselves.
For these reasons, ADM Mike Mullen, former Chairman of the Joint
Chiefs of Staff, concluded that our national debt is the ``biggest
threat we have to our national security.'' For these reasons, Standard
& Poor's issued its historic downgrade of U.S. Treasuries this past
summer.
The impact of this debt is more than academic; it will eventually
lead to higher interest rates for all Americans, undermining the
ability of people to purchase a home, buy a car, or even start a
business. Most importantly, it will fundamentally alter the
relationship of citizens to their government. It will further undermine
personal liberty. It will lead to more government control of the
economy. And it will jeopardize the livelihoods of American business
owners and workers as ever-escalating debt and government spending
embolden those who seek higher taxes to finance this leviation.
The solution to this problem is S.J. Res. 10, the balanced budget
amendment supported by every Senate Republican, all 47 of us.
In the time I have been fortunate enough to serve the people of Utah,
I have sponsored 5 balanced budget amendments and have been an original
cosponsor of 18. These amendments have not been identical. Their
provisions have been honed over time. I am confident this version
strikes just the right balance.
It is the right amendment for the right time. We face a crisis of
spending and a government that has clearly exploded in size. This
constitutional amendment is the only one that will be debated this week
that will address that crisis and would reduce the size of this
Leviathan government.
The President has strongly opposed not only this balanced budget
amendment but any balanced budget amendment. As he said: ``We don't
need a constitutional amendment to do our jobs.'' My goodness. That is
what he said on July 15 of this year.
I wish to spend a few moments considering the President's claim. The
President claimed that a balanced budget amendment is not necessary
because ``the Constitution already tells us to do our jobs--and to make
sure that the government is living within its means and making
responsible choices.''
The President's spokesman, Jay Carney, elaborated in greater detail
on why a balanced budget amendment is not necessary. According to him,
balancing the budget is ``not complicated.'' All that is needed is that
we put politics aside, quit ducking responsibility, and roll up our
sleeves and get to work. Yet all I hear from the White House is that we
have to have more taxes and more spending.
This is the lament of the tough chooser, a term coined by the
journalist Andrew Ferguson. The tough chooser talks a lot about making
tough choices. But when it comes to actually making them, the tough
chooser goes missing.
Tough choosers, concerned about our deficits and debt, voted for
ObamaCare, even though it increased spending by $2.6 trillion and taxes
by over $1 trillion.
Tough choosers reject a balanced budget amendment because all that is
required, in their view, is some tough choosing by legislators. The
problem with this theory is that the so-called tough choosers never
step up.
The past history of the balanced budget amendment is all the evidence
we need that a constitutional amendment is required to force
legislators and the White House to make these tough choices. But given
President Obama's rejection of the balanced budget amendment, it is
worth considering his own actions this year and his personal
contributions to deficit reduction. That record is a weak one of denial
and avoidance.
Following the clear statement of the American people last November
that Washington needed to address deficits and debt, the President had
an opportunity to lead with his fiscal year 2012 budget. Yet this is
how the Washington Post described the impact of that budget. After next
year, ``the deficit will begin to fall, settling around $600 billion a
year through 2018, when it would once again begin to climb as a growing
number of retirees tapped into Social Security and Medicare.''
So the President, who today is telling us that he and Congress are
willing to buckle down and make tough choices to balance the Nation's
books, gave us a budget that did little to put this country on a path
toward long-term fiscal sustainability.
The President's budget landed with such a thud and was so
unresponsive to the desire of the American people to tackle the debt,
that he took a mulligan and attempted a budget do-over in the Spring.
In an April 13 speech at George Washington University, President Obama
offered a revised budget. True to form, he did not stick his neck out
and actually offer anything that could be scored by the CBO. Yet
Republicans did analyze the President's speech, and after stripping out
the gimmicks and the rosy scenarios, they found that far from making
any tough choices, his do-over actually added $2.2 trillion to the
deficit.
This avoidance of tough choosing by Washington's tough choosers is,
unfortunately, the norm.
We have heard the President's argument before. I have heard it now
for 35 years, maybe not just from him but from others as well. We hear
it every time a balanced budget amendment comes to the floor and is
debated in the Senate. The opponents claim there is no need for a
balanced budget amendment; all that is necessary is that we put
politics aside and make the tough choices.
So how is that working out for our country?
When I introduced my first balanced budget amendment in 1979, the
national debt was $827 billion. We thought that was astronomical. In
1982, when the Senate passed a balanced budget amendment that I
cosponsored, the national debt had risen to $1.1 trillion. In 1986,
when the Senate failed by one vote to pass a balanced budget amendment
that I cosponsored, the national debt topped $2.1 trillion. By 1997,

[[Page S8515]]

when this body voted on a balanced budget amendment that I introduced,
the national debt had passed the $5 trillion mark. Today, it is three
times that amount--over $15 trillion.
The record is clear. Absent the constitutional restraint of a
balanced budget amendment, Congress and the President do not make the
tough choices. Instead, they take the path of least resistance. They
gladly disperse Federal dollars today--to grateful special interests--
and then figure out a way to pay for it tomorrow, except they never
figure out the way.
This is not the political and economic philosophy of the Founders,
who warned at the birth of our Republic against debt and overspending.
That is the political philosophy of J. Wellington Wimpy, who would
``gladly pay you Tuesday for a hamburger today.''
A balanced budget amendment is not an abdication of Congress's
responsibility. On the contrary, it would force Congress to live up to
its responsibilities. It would force Congress and the President to make
the choices about national spending priorities they have thus far been
unwilling to make.
I don't think there are many Americans who question whether our
fiscal situation would be better today if we had enacted and the States
had ratified a constitutional amendment when Ronald Reagan was
President.
This is where we are headed as a country if we don't get our fiscal
house in order. We are headed off a cliff. I could have put up a map of
Greece, but that might have understated our predicament.
Yet to hear the opponents of a balanced budget amendment talk, one
would think the problem we face as a country is the amendment, not the
out-of-control spending that demands such an amendment.
These misplaced priorities fundamentally understate how much
government spending is accelerating in this country and the threat this
spending poses for personal liberty, constitutionally limited
government, and free enterprise.
As I noted earlier, our true debt burden is already 100 percent of
GDP. This is very dangerous territory. According to the economists
Carmen Reinhart and Kenneth Rogoff, public debt burdens above 90
percent of GDP are associated with 1-percent lower economic growth.
I ask unanimous consent that a short article outlining their thesis
be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

[From Bloomberg.com, July 14, 2011]

Too Much Debt Means the Economy Can't Grow: Reinhart and Rogoff

(By Carmen M. Reinhart and Kenneth S. Rogoff)

As public debt in advanced countries reaches levels not
seen since the end of World War II, there is considerable
debate about the urgency of taming deficits with the aim of
stabilizing and ultimately reducing debt as a percentage of
gross domestic product.
Our empirical research on the history of financial crises
and the relationship between growth and public liabilities
supports the view that current debt trajectories are a risk
to long-term growth and stability, with many advanced
economies already reaching or exceeding the important marker
of 90 percent of GDP. Nevertheless, many prominent public
intellectuals continue to argue that debt phobia is wildly
overblown. Countries such as the U.S., Japan and the U.K.
aren't like Greece, nor does the market treat them as such.
Indeed, there is a growing perception that today's low
interest rates for the debt of advanced economies offer a
compelling reason to begin another round of massive fiscal
stimulus. If Asian nations are spinning off huge excess
savings partly as a byproduct of measures that effectively
force low-income savers to put their money in bank accounts
with low government-imposed interest-rate ceilings--why not
take advantage of the cheap money?
Although we agree that governments must exercise caution in
gradually reducing crisis-response spending, we think it
would be folly to take comfort in today's low borrowing
costs, much less to interpret them as an ``all clear'' signal
for a further explosion of debt.
Several studies of financial crises show that interest
rates seldom indicate problems long in advance. In fact, we
should probably be particularly concerned today because a
growing share of advanced country debt is held by official
creditors whose current willingness to forego short-term
returns doesn't guarantee there will be a captive audience
for debt in perpetuity.
Those who would point to low servicing costs should
remember that market interest rates can change like the
weather. Debt levels, by contrast, can't be brought down
quickly. Even though politicians everywhere like to argue
that their country will expand its way out of debt, our
historical research suggests that growth alone is rarely
enough to achieve that with the debt levels we are
experiencing today.
While we expect to see more than one member of the
Organization for Economic Cooperation and Development default
or restructure their debt before the European crisis is
resolved, that isn't the greatest threat to most advanced
economies. The biggest risk is that debt will accumulate
until the overhang weighs on growth.

Historical Precedents

At what point does indebtedness become a problem? In our
study ``Growth in a Time of Debt,'' we found relatively
little association between public liabilities and growth for
debt levels of less than 90 percent of GDP. But burdens above
90 percent are associated with 1 percent lower median growth.
Our results are based on a data set of public debt covering
44 countries for up to 200 years. The annual data set
incorporates more than 3,700 observations spanning a wide
range of political and historical circumstances, legal
structures and monetary regimes.
We aren't suggesting there is a bright red line at 90
percent; our results don't imply that 89 percent is a safe
debt level, or that 91 percent is necessarily catastrophic.
Anyone familiar with doing empirical research understands
that vulnerability to crises and anemic growth seldom depends
on a single factor such as public debt. However, our study of
crises shows that public obligations are often hidden and
significantly larger than official figures suggest.

Creative Accounting Devices

In addition, off-balance sheet guarantees and other
creative accounting devices make it even harder to assess the
true nature of a country's debt until a crisis forces
everything out into the open. (Just think of the giant U.S.
mortgage lenders Fannie Mae and Freddie Mac, whose debt was
never officially guaranteed before the 2008 meltdown.)
There also is the question of how broad a measure of public
debt to use. Our empirical work concentrates on central-
government obligations because state and local data are so
limited across time and countries, and government guarantees,
as noted, are difficult to quantify over time. (Until we
developed our data set, no long-dated cross-country
information on central government debt existed.) But state
and local debt are important because they so frequently
trigger federal government bailouts in a crisis. Official
figures for state debts don't include chronic late payments
(arrears), which are substantial in Illinois and California,
for example.

Public and Private Debt

Indeed, it isn't unusual for governments to absorb large
chunks of troubled private debt in a crisis. Taking this into
account, chart 1, attached, shows the extraordinarily high
level of overall U.S. debts, public and private.
In addition to ex-ante or ex-post government guarantees and
other forms of ``hidden debts,'' any discussion of public
liabilities should take into account the demographic
challenges across the industrialized world. Our 90 percent
threshold is largely based on earlier periods when old-age
pensions and health-care costs hadn't grown to anything near
the size they are today. Surely this makes the burden of debt
greater.
There is a growing sense that inflation is the endgame to
debt buildups. For emerging markets that has often been the
case, but for advanced economies, the historical correlation
is weaker. Part of the reason for this apparent paradox may
be that, especially after World War II, many governments
enacted policies that amounted to heavy financial repression,
including interest-rate ceilings and non-market debt
placement. Low statutory interest rates allowed governments
to reduce real debt burdens through moderate inflation over a
sustained period. Of course, this time could be different,
and we shouldn't entirely dismiss the possibility of elevated
inflation as the antidote to debt.

Extremely Rare

Those who remain unconvinced that rising debt levels pose a
risk to growth should ask themselves why, historically,
levels of debt of more than 90 percent of GDP are relatively
rare and those exceeding 120 percent are extremely rare (see
attached chart 2 for U.S. public debt since 1790). Is it
because generations of politicians failed to realize that
they could have kept spending without risk? Or, more likely,
is it because at some point, even advanced economies hit a
ceiling where the pressure of rising borrowing costs forces
policy makers to increase tax rates and cut government
spending, sometimes precipitously, and sometimes in
conjunction with inflation and financial repression (which is
also a tax)?
Even absent high interest rates, as Japan highlights, debt
overhangs are a hindrance to growth.
The relationship between growth, inflation and debt, no
doubt, merits further study; it is a question that cannot be
settled with mere rhetoric, no matter how superficially
convincing.
In the meantime, historical experience and early
examination of new data suggest the need to be cautious about
surrendering to ``this-time-is-different'' syndrome and
decreeing that surging government debt isn't as significant a
problem in the present as it was in the past.

[[Page S8516]]

Mr. HATCH. Mr. President, while one might quibble with the
particulars of Reinhart's and Rogoff's assessment, failure to take it
seriously, given the recent struggles of the eurozone, amounts to
whistling past the graveyard.
To be clear, the long-term source of our fiscal problem is
overspending, not a lack of revenue. Our friends at the Heritage
Foundation have done an excellent job of putting all this spending into
historical perspective.
I will run through some charts highlighting just how unusual and
unsustainable recent levels of Federal spending have become. Any way we
cut it, spending is up. Federal spending per household is skyrocketing,
even with the $2.1 trillion in deficit reduction achieved by this
summer's Budget Control Act.
In 1965, Federal spending per household was $11,431. In 2010, it was
$29,401. It is projected to hit $35,773 in 2020. That is per household.
Federal spending is growing faster than median income. Between 1970
and 2009, total Federal spending rose by 299 percent, while median
household income has gone up 27 percent in the same time period.
Federal spending that is far out of line with historical averages is
the cause of our annual deficits and total debt--not the much reviled
2001 and 2003 tax relief extended by President Obama and a Democratic
Congress.
Historically, revenues have averaged around 18 percent of GDP. As the
economy recovers, CBO projects revenues to return to that historical
average. Yet spending is going higher and higher.
The end result of all this spending is not pretty to look at. Our
national debt is going to skyrocket. Up to 344 percent by 2050.
The problem the Senate Republican balanced budget amendment is meant
to address is reckless spending. We will hear many arguments against
this amendment. We will hear it prevents tax increases. We will hear it
prevents deficit spending in an economic downturn. We will hear it
hamstrings the Nation in times of military emergency and that it
prevents spending in excess of 18 percent of GDP.
It does no such thing. What it does do is require a broad national
consensus before Congress spends beyond its means. It makes certain
that there is deep bipartisan agreement before raising taxes--a
provision the Nation would have benefited from prior to the decision of
the President and congressional Democrats to drive through $1 trillion
in ObamaCare tax increases on nearly party-line votes, and it demands
wide support for spending in excess of 18 percent of GDP.
As my friends at Americans for Prosperity put it in their letter of
support for the Republican proposal, the amendment ``strikes a balance
between allowing flexibility for some deficit spending in times of
national emergency, while requiring supermajorities in both Chambers to
do so. This assures citizens that the Federal Government will only run
a deficit when there is broad consensus that a genuine crisis demands
it.''
That sounds like pretty good language to me.
I ask unanimous consent that that letter from Americans for
Prosperity be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

Americans for Prosperity,

March 31, 2011.
Dear Senator Hatch and Cosponsors: On behalf of more than
1.7 million Americans for Prosperity (AFP) activists in all
50 states, I applaud you for proposing a balanced budget
amendment to the United States Constitution that includes a
strong limit on total federal spending. Over the past decade
or so, it has become increasingly clear that unless there are
firm constitutional guardrails to constrain federal spending
elected officials are either unable or unwilling to overcome
the institutional forces that facilitate endless profligacy.
Your proposed amendment seeks to establish those guardrails
in a responsible and, hopefully, effective way.
One of the most important provisions in your proposed
amendment is a spending cap that would limit federal outlays
to 18 percent of GDP. This limitation reflects a proper
vision of limited government and the relationship of spending
to GDP in the post-WWII period. Additionally, by insisting
that spending is restrained in order to balance the budget
you guard against the amendment being hijacked and distorted
to advance economically-destructive tax increases.
Your amendment also strikes a balance between allowing
flexibility for some deficit spending in times of national
emergency, while requiring supermajorities in both chambers
to do so. This assures citizens that the federal government
will only run a deficit when there is a broad consensus that
a genuine crisis demands it.
Several other provisions nicely round out your balanced
budget amendment. Your insistence on two-thirds majority vote
to approve tax increases or spending above 18 percent of GDP
is laudable. Your measure to prohibit courts from legislating
tax increases from the bench is important and prescient.
Finally, a five-year transitionary period from ratification
to legal efficacy will give budgeteers enough notice to take
meaningful action without the politically-contentious
transition that could otherwise be used as a pretext to
oppose the amendment.
While it is always difficult to predict how the Judicial
Branch will interpret any portion of the Constitution, the
mere presence of a balanced budget amendment will serve to
compel the tough decision making that is often skirted in
today's federal budget process. It's time for the federal
government to balance its books, and AFP is proud to support
your amendment. I urge your colleagues to support its passage
and I look forward to working with you in the future.
Sincerely,
James Valvo,
Director of Government Affairs.

Mr. HATCH. Mr. President, we will hear there is a reasonable
alternative being offered. But we need to understand this for what it
is. It doesn't put any spending limitations on Congress. It leaves wide
the door for massive tax increases to pay for levels of spending that
are far outside our constitutional traditions. Even the requirement for
balance--that outlays not exceed revenues--lacks strength, if we read
it carefully.
The bottom line is that there is no substitute for the strong
balanced budget amendment being offered by the Senate Republicans.
A number of protaxpayer groups committed to liberty and
constitutionalism have written in support of our balanced budget
amendment--Let Freedom Ring, Americans for Tax Reform, the National
Taxpayers Union, the 60 Plus Association, Americans for Limited
Government, and the Council for Citizens Against Government Waste, just
to mention a few.
I ask unanimous consent that their letters be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

March 30, 2011.
Hon. Jon Kyl,
Hart Senate Office Building,
Washington, DC.
Hon. Orrin Hatch,
Hart Senate Office Building,
Washington, DC.
Hon. Pat Toomey,
Dirksen Senate Office Building,
Washington, DC.
Hon. Mike Lee,
Hart Senate Office Building,
Washington, DC.
Hon. John Cornyn,
Hart Senate Office Building,
Washington, DC.
Dear Senators: We write to encourage your colleagues to
support your Balanced Budget Amendment to the United States
Constitution, signaling the United States Senate is serious
about reforming federal government spending.
The amendment limits spending to 18 percent of Gross
Domestic Product (GDP). Capping spending at this level puts
spending in line with the historical average of revenue
receipts. Since 1970, spending has averaged 21 percent of GDP
while tax revenues have consistently stayed around 18
percent. However, CBO projects spending will explode over the
next decade, averaging over 23 percent of GDP. Capping
spending at 18 percent demonstrates that the government
should be cognizant of its means--and live prudently within
them.
Most importantly, your Balanced Budget Amendment places the
onus of responsible budgeting on lawmakers, rather than
passing the burden onto taxpayers who are already shouldering
the weight of failed ``stimulus'' programs and bailouts. It
does this by requiring any net tax increases to overcome a
two-thirds supermajority in each chamber of Congress.
This clause is vital to keep the debate where it should
be--federal overspending. Americans are not taxed too little;
Washington spends too much. In the same vein, the spending
restraint in the amendment cannot be waived unless a two-
thirds majority agrees to do so.
While the bill could be strengthened to require a
supermajority to waive the spending cap during a declared
war, it does require a vote of three-fifths of the Congress
to approve spending beyond the cap in the times of a military
conflict. What's more, the amendment requires a three-fifths
vote to raise the debt limit, forcing Congress to confront
its poor spending habits rather than simply increasing its
borrowing authority.
Thus, we support the Balanced Budget Amendment and
encourage your colleagues

[[Page S8517]]

to cosponsor the measure to signal lawmakers are serious
about fiscal restraint.
Sincerely,
Grover Norquist,
President, Americans for Tax Reform.
Mattie Corrao,
Executive Director, Center for Fiscal Accountability.
____

National Taxpayers Union,

March 31, 2011.

An Open Letter to the United States Senate: Support the Consensus
Balanced Budget Amendment!

Dear Senator: On behalf of the 362,000 member National
Taxpayers Union (NTU), I write to provide our strong
endorsement of the ``Consensus Balanced Budget Amendment''
(BBA), which is the product of negotiations among advocates
of several BBA measures. We commend Senator Hatch and his
colleagues, Senators Lee, Cornyn, Kyl, McConnell, Toomey,
Snowe, Risch, Rubio, DeMint, Paul, Vitter, Enzi, Kirk, and
Crapo, for introducing this legislation and urge all Senators
to cosponsor the resolution.
NTU has approached the current legislative evolution of the
BBA not merely as an interested observer or even as a
concerned stakeholder. Instead, we view this process through
a 40-plus-year organizational history in which constitutional
limits on the size of government have occupied the central
part of our mission.
Throughout the 1970s and 1980s, my organization helped to
launch and sustain the movement for a limited Article V
amendment convention among the states to propose a Balanced
Budget Amendment (BBA) for ratification, all while pursuing a
BBA through Congress. Our members were elated over the
passage of S.J. Res. 58 in 1982, and the passage of H.J. Res.
1 in 1995 through the House of Representatives. In both cases
the measures, whose provisions varied somewhat, fell short of
enactment in the other chambers of Congress. More recently,
we have provided endorsements to BBA legislation such as S.J.
Res. 3 and H.J. Res. 1.
To our members, a BBA would provide the very lifeblood that
will restore and sustain the financial health of our
Republic. We are therefore elated over the intensifying
interest among Members of Congress and state legislators in a
unified BBA concept. The proposal admirably harnesses this
energy, by combining and refining elements from several
amendments introduced thus far in Congress. These include
strong ``supermajority'' safeguards against reckless tax or
debt increases as well as override provisions to confront the
realities of military conflicts.
Also of great importance is the amendment's spending
limitation clause. Although several types of mechanisms could
answer to the purpose of controlling growth in expenditures,
any such protection incorporating Gross Domestic Product
(GDP) must pay careful heed to historical experience. In this
case, an annual spending cap at 18 percent of GDP is clearly
the most prudent choice. Such a level reflects the share of
economic output that federal revenues have typically
represented since World War II. Given that constitutional
amendments should be designed with a long nod to the past and
an equally farsighted view to the future, 18 percent is a
most stable and logical benchmark.
In addition, setting the expenditure limit at 18 percent
would make a vital contribution toward harmonizing all parts
of the amendment so that the whole functions as intended. An
assumption that spending should normally be linked to the
average and customary federal revenue proportion would by its
very nature give Congress and the President a starting point
that is closer to balance. Indeed, the limit helps to remedy
Washington's increasingly metastasized affliction of tax-
spend-and-borrow, by elevating the concept of expenditure
restraint to its rightful place in policymaking. While the
two-thirds ``supermajority'' override requirement is
essential to ensuring this place, so is the 18 percent cap on
expenditures. If set too high, the spending limit would
merely institutionalize, rather than minimize, deficits.
Recent spending-to-GDP ratios in excess of 20 percent--and
the resulting pressures to borrow or tax even more--ought to
convince fiscal disciplinarians of the need for a carefully-
designed limit.
We understand the political environment within which the
consensus BBA was crafted, and, given our history, we
appreciate the many challenges in the legislative effort that
lies ahead. Yet it is precisely our longstanding devotion to
this reform that gives us cause to make several observations.
Moving forward, Senators must commit to passage of the BBA in
this Congress, not simply another ``test vote'' tied to some
legislative urgency. This means making the Amendment a part
of the Congress's everyday narrative on tax and spending
policy, thereby leading a national discussion that occupies a
primary place in the public square. Nor should the BBA be
held as some proxy to other reform approaches. Indeed,
statutory or regulatory steps to control the nation's
finances are not ``second-best'' substitutes; their very
effectiveness depends upon a constitutional foundation that
will set the boundaries within which they can operate.
Furthermore, supporters of this BBA must reach far and wide
across the aisle to obtain the necessary bipartisan backing
that will ensure passage of the measure. The temptation to
put electoral calculations first is unacceptable to
taxpayers, who (properly) surmise that concerted action to
control deficits cannot wait until after 2012. Likewise,
Senators must engage their House colleagues as well as state
legislators in their capitols back home, many of whom have
both the commitment and the experience to see the BBA through
to passage and ratification.
Through all of these means, and toward the critical end of
enacting a Balanced Budget Amendment, NTU and members pledge
the fullest possible measure of their time, energy, and
resources. Together, we can fulfill this long-overdue
obligation to future generations.
Sincerely,
Pete Sepp,
Executive Vice President.
____

The 60 Plus Association,

Alexandria, VA, March 31, 2011.
Dear Senator Hatch: On behalf of more than seven million
senior citizen activists, the 60 Plus Association thanks you
for introducing the joint resolution proposing an amendment
to the Constitution of the United States relative to
balancing the budget.
Thanks to your outstanding leadership, this effort shows a
solid commitment to restore the fiscal stability of the
United States by balancing the nation's budget.
We applaud your efforts to respond to the overwhelming
concern Americans have to the spiraling debt and out-of-
control spending and cannot stress strongly enough that
senior citizens and soon-to-be-seniors believe that current
budget policy cripples our economic stability and threatens
our nation's future.
Sincerely,
James L. Martin,
Chairman.
____

Americans for

Limited Government,

Fairfax, VA, March 31, 2011.
Senate Minority Leader Mitch McConnell,
361-A Russell Senate Office Building, Washington, DC.
Senator Orrin Hatch,
104 Hart Office Building, Washington, DC.
Dear Leader McConnell and Senator Hatch: As you are well
aware, the nation is risking a fiscal calamity that threatens
a catastrophic default on the $14.2 trillion national debt
and the collapse of the dollar as the world's reserve
currency. If something is not done to bring the nation's
fiscal house into order, soon the debt will become too large
to even refinance, let alone be repaid.
That is why Americans for Limited Government strongly
endorses the Senate Republican Balanced Budget Amendment and
urges all members of the Senate to fight for its immediate
adoption. Soon the gross national debt will become larger
than the entire economy, and by 2021, the Office of
Management and Budget projects it will soar to over $25
trillion.
Interest payments alone threaten to destabilize the
nation's finances very soon. In 2010, the Treasury paid a
total of $413 billion in interest, including $216 billion to
the Social Security and Medicare trust funds. The total
interest is a real obligation that requires real borrowing to
meet, and cannot be readily discounted as revenue to the
entitlement programs when it is in fact a liability to
taxpayers.
The total interest owed on the debt will actually be over
$1.2 trillion in 2021. And since the government never
anticipates the debt being paid down, the number will easily
grow to over $2.4 trillion by 2030. Moody's has warned that
when interest owed on the debt reaches 18 to 20 percent of
revenue, the nation's gold-plated Triple-A credit rating will
be downgraded. The trouble is that the Office of Management
and Budget projects total interest owed for 2011 to be $430.4
billion, which is already 19.79 percent of the projected
$2.174 trillion of revenue. That means time has already run
out.
Currently, the $14.2 trillion national debt already stands
at 95.5 percent of the nation's $14.8 trillion Gross Domestic
Product (GDP). While it is unclear at what percentage of
debt-to-GDP that the debt will become too large to refinance,
the warning signs are already there that we cannot even meet
our current obligations honestly.
Pimco reports that in 2009, 80 percent of treasuries were
purchased by the Federal Reserves, and in 2010, it had to buy
70 percent, bringing its current U.S. debt holdings to $1.3
trillion. As a result, the Fed is the largest lender to the
U.S. government in the world--all with printed money--more
than China or Japan. When the Fed ends QE2 in June, it will
likely keep a high water mark of $1.5 trillion in treasuries
holdings.
Printing money to refinance the debt cannot continue for
long without very severe consequences, including a potential
collapse of the dollar as the world's reserve currency,
hyperinflation, and a complete default on the nation's
obligations. The time to pass the Balanced Budget Amendment
is now, before it is too late and it becomes impossible for
the debt to ever be repaid.
The Balanced Budget Amendment being proposed, once
implemented, will make it possible that for the first time
since 1957, the national debt can be reduced. This must begin
to occur to reassure the nation's creditors that the U.S.
intends to honor its obligations with real money, not with a
``pretended payment'' that economist Adam Smith warned
against.
With the upcoming vote on increasing the national debt
ceiling above $14.294 trillion,

[[Page S8518]]

now is the opportunity to use your leverage not just to get
an up-or-down vote on the Balanced Budget Amendment, but to
get it adopted. To do so, we urge you to take your case
directly to the American people, who will join with you in
fighting to make certain that another increase in the debt
will never again be necessary.
The American people must be advised of these cataclysmic
risks of inaction. There is a very dangerous misconception
that the nation can just continue borrowing and printing
money perpetually. It cannot. Nor will it long endure as the
world's foremost economic and military superpower if it tries
to.
Besides a failure to meet our fiscal obligations, a
national default will mean that the U.S. will be unable to
meet its security obligations around the world, destabilizing
whole regions, and threatening national security. It is
likely for this reason that Chairman of the Joint Chiefs of
Staff, Admiral Mike Mullen, described the debt as the number
one danger facing America.
With a projected $1.645 trillion budget deficit for this
year alone, the hour grows late for real action to rein in
the federal government's unsustainable spending binge. It is
clear that Congress lacks the political will to do what is
necessary on its own. It needs the constitutional limits on
spending, taxation, and the balanced budget requirement
outlined in your amendment to compel it to act prudently when
handling the American people's finances.
We thank you for your work on this critical issue, and urge
you to use all the tools at your disposal, including the
leverage of increasing the national debt ceiling, to ensure
speedy adoption of the Balanced Budget Amendment. If you will
take a courageous stand to save this nation from certain
ruin, the American people will surely stand with you.
Sincerely,
William Wilson,
President.
____

Council for Citizens

Against Government Waste,

Washington, DC, March 31, 2011.
U.S. Senate,
Washington, DC.
Dear Senator, Senator Orrin Hatch (R-Utah) will soon
introduce an amendment to the Constitution requiring that the
federal budget be balanced. This amendment has received wide
support, including that of Senators Mitch McConnell (R-Ky.),
Mike Lee (R-Utah), John Cornyn (R-Tex.), Jon Kyl (R-Ariz.),
Pat Toomey (R-Pa.), John Thune (R-S.D.) and Marco Rubio (R-
Fla.). On behalf of the more than one million members and
supporters of the Council for Citizens Against Government
Waste (CCAGW), I urge you to support this legislation.
Federal spending has ballooned out of control. Taxpayers
are bracing themselves as the nation rapidly approaches its
statutory, record-breaking $14.3 trillion debt limit.
According to the Congressional Budget Office, recession-
depleted tax revenues are scheduled to rebound to their
historical average of 18 percent of gross domestic product
(GDP) by 2018 and reach 18.4 percent by 2021. Federal
spending, which has historically been 20.3 percent of GDP,
however, is projected to reach 26.4 percent of GDP by 2021.
America is on a dangerous trajectory as Congress continues to
increase spending and raise debt ceilings without regard to
incoming levels of revenue. Washington has put taxpayers at
risk by violating a Budgeting 101 rule of thumb: Don't spend
more money than you take in.
This proposed constitutional amendment would ensure that
total outlays will not be allowed to exceed 18 percent of the
U.S. GDP of a fiscal year and will require the president to
submit a balanced budget to Congress that reflects the 18
percent cap. A two-thirds majority vote would be required of
both the House and Senate to override the spending cap,
increase taxes or levy a new tax. Additionally, a three-
fifths majority vote in both Houses would be needed to
increase the debt limit. In times of declared war, a simple
majority vote will be necessary for a specific excess amount
above the 18 percent cap, and in times of military conflict a
three-fifths majority will be required. In order to protect
taxpayers, the amendment prohibits courts from raising
revenue as a means of enforcement.
The federal government has a moral and fiscal
responsibility to Americans that it has simply been shirking.
Congress cannot continue on a spending rampage while ignoring
the nation's balance sheets. This legislation proposes a
practical and necessary constitutional amendment that will
safeguard taxpayers and force Congress to balance the
national budget. All votes on the Balanced Budget Amendment
will be among those considered in CCAGW's 2011 Congressional
Ratings.
Sincerely,
Thomas A. Schatz,
President.

Mr. HATCH. Mr. President, I am so pleased conservative leaders such
as Ed Meese, Dick Thornburgh, and Ken Blackwell have stood in support
of a strong balanced budget amendment.
I ask unanimous consent to have printed in the Record at this point
the op-eds to which I just referred.
There being no objection, the material was ordered to be printed in
the Record, as follows:

[From Bloomberg.com, July 20, 2011]

Deficits Need Balanced-Budget Amendment Fix

(By Dick Thornburgh)

A late entrant in the budget deficit-debt ceiling talkathon
in Washington is increasing support for a constitutional
requirement that the federal budget be balanced every year.
Liberals will no doubt characterize this proposal as a nutty
one, but careful scrutiny of such an amendment to our
constitution demonstrates its potential to prevent future
train wrecks in the budgeting process.
Constitutional budget-balancing requirements are already
available to most governors and state legislatures, along
with a line-item veto and separate capital budgeting, which
differentiates investments from current outlays. They work.
Any debate in Congress will probably include the following
arguments against a balanced-budget amendment:
First, that the amendment would clutter our basic document
in a way contrary to the intention of the Founding Fathers.
This is clearly wrong. The framers of the Constitution
contemplated that amendments would be necessary to keep it
abreast of the times. It has, in fact, been amended 27 times.
Moreover, at the time of the Constitutional Convention, one
of the major preoccupations was how to liquidate the post-
Revolutionary War debts of the states. It would have been
unthinkable to the framers that the federal government would
systematically run a deficit, decade after decade. The
Treasury didn't begin to follow such a practice until the
mid-1930s.
Second, critics will argue that the adoption of a balanced-
budget amendment wouldn't solve the deficit problem
overnight. This is absolutely correct, but begs the issue.
Serious supporters of the amendment recognize that a phasing-
in of five to 10 years would be required.
During this interim period, however, budget makers would
have to meet declining deficit targets in order to reach a
final balanced budget by the established deadline.
As pointed out by former Commerce Secretary Peter G.
Peterson, such ``steady progress toward eliminating the
deficit will maintain investor confidence, keep long-term
interest rates headed down and keep our economy growing.''
Third, it will be argued that such an amendment would
require vast cuts in social services, entitlements and
defense spending. Not necessarily. True, these programs would
have to be paid for on a current basis rather than heaped on
the backs of future generations. Difficult choices would have
to be made about priorities and program funding. But the very
purpose of the amendment is to discipline the executive and
legislative branches, not to propose or perpetuate vast
spending programs without providing the revenue to fund them.
The amendment would, in effect, make the president and
Congress fully accountable for their spending and taxing
decisions.
Fourth, critics will say that a balanced-budget amendment
would prevent or hinder our capacity to respond to national
defense or economic emergencies. This concern is easy to
counter. Clearly, any sensible amendment proposal would
feature a safety valve to exempt deficits incurred in
response to emergencies, requiring, for example, a three-
fifths majority in both houses of Congress. Such action
should, of course, be based on a finding that such an
emergency actually exists.
Fifth, it will be said that a balanced-budget amendment
might be easily circumvented. The experience of the states
suggests otherwise. Balanced-budget requirements are now in
effect in all but one (Vermont) of the 50 states and have
served them well.
Moreover, the line-item veto, available to 43 governors,
would ensure that congressional overruns--or loophole end
runs--could be rejected by the president. The public's
opposition, the elective process and the courts would also
restrain any tendency to ignore a constitutional directive.
In the final analysis, most of the excuses for not enacting
a constitutional mandate to balance the budget rest on a
stated or implied preference for solving our deficit dilemma
through the political process--that is to say, through
responsible action by the president and Congress.
But that has been tried and found wanting, again and again.
Surely the U.S. is ready for a simple, clear and supreme
directive that compels elected officials to fulfill their
fiscal responsibilities. A constitutional amendment is the
only instrument that will meet this need. Years of experience
at the state level argue in favor of such a step. Years of
debate have produced no persuasive arguments against it.
The stakes are high. Perhaps Thomas Jefferson put it best:
``To preserve our independence, we must not let our rulers
load us down with perpetual debt.''
That is the aim of a balanced-budget amendment. Reform-
minded members of Congress should support such an amendment
to our Constitution as a means of resolving future
legislative crises and ending credit-card government once and
for all.
A nutty idea? Not by a long shot.
____

[From the Patriot Post, Apr. 5, 2011]

Hatch and Lee's Balanced Budget Amendment: A Win for America

(By Ken Blackwell)

Senators Orrin Hatch and Mike Lee introduced a Balanced
Budget Amendment (BBA)

[[Page S8519]]

to make it a constitutional requirement for Washington, D.C.,
to end our deficit spending and culture of debt. And our
national grassroots organization, Pass the Balanced Budget
Amendment, is working with them to compel lawmakers to
approve this change to the Supreme Law of the Land.
The BBA requires that the U.S. cannot spend more than it
takes in. There are a few exceptions, such as allowing two-
thirds of the House and Senate to suspend it for a specific
reason for one year, with lower thresholds to respond to a
military threat to our national security or an official,
declared war against a specific nation (not some open-ended
or global military operation).
The amendment is cosponsored by all 47 Senate Republicans.
This raises eyebrows in that the last time a proposed BBA was
voted on, 1997, it enjoyed Democratic support with 66 votes,
falling a single vote short in the Senate.
A separate story here is Utah's leading role. That state's
senior senator, Orrin Hatch, designed one version of the BBA.
Utah's junior senator, Mike Lee, designed another. Both
senators--one tied as the most senior Republican in the
chamber and the other among the newest--then designed a
composite version.
The resulting BBA addresses several major economic
priorities. In addition to forcing a balanced budget, the BBA
caps federal spending at 18 percent of GDP. It also requires
a 60-percent vote to raise the national debt limit. It
requires a two-thirds vote to raise taxes. And in forbids
courts from ordering any tax increase. The BBA thus addresses
multiple aspects of fiscal policy in a full-spectrum response
to America's debt-and-deficit nightmare.
Utah's predominance regarding a constitutional amendment is
no surprise. Hatch is the former chairman of the Senate
Judiciary Committee and was talked up as a potential Supreme
Court nominee years ago. Lee is the only former Supreme Court
law clerk in the Senate, and is already mentioned as a
potential Supreme Court nominee. These two senators may be
bookends in seniority and age, but they are the foremost
constitutional scholars in the Senate.
The Constitution is extraordinarily difficult to amend,
requiring two-thirds of the House and Senate to propose it to
the states, then three-fourths of the states (38) to ratify
it.
To turn the BBA into reality, Senators Hatch and Lee are
working with a national grassroots organization, Pass the
Balanced Budget Amendment, to organize volunteers in every
legislative district in America to mobilize political
momentum.
We are very grateful to have Senators Hatch and Lee as
Honorary Chairman. With their leadership, as well as others
such as Co-Chairman Ken Buck of Colorado, the BBA has the
best chances of passing since America's fiscal mismanagement
began decades ago.
This is not just about economic conservatives. We must
balance our national budget for the sake of our children's
future. And our national debt has now become a national
security concern as well. This is the perfect fusion of the
three legs of the Reagan Coalition, and will benefit all
Americans.
There are also serious political implications. TBBA could
change the national debate. With several GOP presidential
contenders endorsing the idea, this will likely be an issue
for the 2012 elections. Those of us involved at the
grassroots level with this issue and determined on making it
so.
____

[From the Heritage Foundation, July 21, 2011]

Balanced Budget Amendment: Instrument To Force Spending Cuts, Not Tax
Hikes

(By Edwin Meese III)

As Congress considers what to do about federal overspending
and overborrowing, conservatives must maintain focus. We must
pursue the path that drives down federal spending and
borrowing and gets to a balanced budget, while preserving our
ability to protect America and without raising taxes. An
important part of that conservative agenda is adoption of a
sound--repeat, a sound--Balanced Budget Amendment. A Balanced
Budget Amendment is not sound if it leads to balancing the
federal budget by tax hikes instead of spending cuts. Thus, a
sound Balanced Budget Amendment must prohibit raising taxes
unless a two-thirds majority of the membership of both Houses
of Congress votes to raise them. Without the two-thirds
majority requirement, the Balanced Budget Amendment becomes
the means for big spenders to raise taxes.
Supporters of the Balanced Budget Amendment rightly want to
force the federal government to live within its means--to
spend no more than it takes in. Because the government has
failed for decades to follow that balanced budget principle,
America is now $14.294 trillion in debt, a debt of more than
$45,000 for every person in the United States.
President Obama is making things worse. In discussions with
congressional leaders, he has pushed hard to get authority to
borrow yet more trillions of dollars and hike taxes. And the
White House reiterated this week that President Obama opposes
amending the Constitution to require the federal government
to balance its budget.
A Sound Balanced Budget Amendment Must Require Two-Thirds
Majorities to Raise Federal Taxes. Like 72 percent of the
American people, The Heritage Foundation favors passage by
the requisite two-thirds of both Houses of Congress and
ratification by the requisite 38 states of an effective
Balanced Budget Amendment to become part of our Constitution.
Heritage has made clear that an effective Balanced Budget
Amendment must control spending, taxation, and borrowing;
ensure the defense of America; and enforce, through the
legislative process and without interference by the judicial
branch, the requirement to balance the budget. A sound
Balanced Budget Amendment will drive down federal spending
and end federal borrowing.
To date, Congress has proposed one largely sound Balanced
Budget Amendment for consideration--Senate Joint Resolution
10, often called the Hatch-Lee Amendment after its main
proponents. It has a number of important features, such as an
annual federal spending cap of not to exceed 18 percent of
the economy's annual output of goods and services (called the
gross domestic product, or GDP) that Congress cannot exceed,
except by a law passed with two-thirds majorities in both
Houses of Congress or in specified circumstances involving
military necessity.
A crucial feature is included in section 4 of the Balanced
Budget Amendment proposed by Senate Joint Resolution 10:
``Any bill that imposes a new tax or increases the statutory
rate of any tax or the aggregate amount of revenue may pass
only by a two-thirds majority of the duly chosen and sworn
Members of each House of Congress by a roll call vote.'' The
requirement that no tax hikes occur without the approval of
290 Representatives and 67 Senators is essential in a sound
Balanced Budget Amendment. Without the requirement for two-
thirds majorities for any tax increase, the Balanced Budget
Amendment becomes a sword for big spenders to use to raise
taxes, instead of a shield to protect Americans from tax
hikes. Those who seek to anchor into our Constitution a
requirement to balance the budget must always remember that,
if the only requirement is ``balance,'' that can be achieved
two ways--cut spending or hike taxes. A sound Balanced Budget
Amendment will balance the budget by driving down federal
spending and not by driving up federal taxes.
Balanced-Budget States that Allow Simple Majorities for Tax
Hikes Face Situations Very Different from that of the Federal
Government. Some look at the experience of states that have
requirements in their constitutions for a balanced state
budget and draw the wrong conclusion about the need for two-
thirds majorities for taxation. They mistakenly conclude that
a requirement merely for simple majorities in state
legislatures to raise taxes suffices to keep state taxation
under control and therefore that a federal Balanced Budget
Amendment should require only simple majorities in Congress
to raise taxes. But the balanced budget requirement at the
state level occurs in a very different context from such a
requirement at the federal level.
As a practical matter, state legislators regularly work and
live among the people they represent, often do their
legislative work face-to-face with their constituents, and
often depend upon direct contact with voters to persuade
voters to keep the legislators in office. As a result, state
legislators tend to be closely attuned and responsive to the
need of their constituents for reasonableness in taxation. In
contrast, U.S. Senators and Representatives spend much of
their time distant from the people they represent, often deal
with their constituents through the insulation of large
staffs, and amass large campaign funds through political
fundraising that allow them to depend more upon expensive
mass communications than upon direct contact with voters to
persuade the voters to keep them in office. As a result, U.S.
Senators and Representatives tend to be less directly attuned
and responsive to the need of their constituents for
reasonableness in taxation than state legislators are.
Accordingly, while a requirement for merely simple majorities
in state legislatures to raise taxes may suffice to keep
taxes under control in that state, simple majorities are not
likely to keep taxes under control at the federal level--as
the experience of federal tax increases in the last 50 years
proves.
Some who recognize the need for taxpayer protection by
requiring supermajorities, rather than just simple
majorities, of the two Houses of Congress to raise taxes
think a supermajority of three-fifths of both Houses would
suffice. While three-fifths would add a modicum of taxpayer
protection in the House, three-fifths would add little if
anything in the way of taxpayer protection in the Senate,
which already often requires a three-fifths majority to
proceed to consideration of legislation. The existing three-
fifths rule in the Senate has often failed to protect
taxpayers from federal tax increases in the past. A sound
Balanced Budget Amendment would add protection for taxpayers
in both Houses of Congress by a requirement for two-thirds
majorities of the membership of both Houses to raise taxes.
Conclusion: Adopt the Two-Thirds Majority Requirement for
Tax Hikes, to Make the Balanced Budget Amendment the
Instrument of Spending Cuts and Not Tax Hikes. America's
soon-to-be New Minority--people who pay federal income tax--
need protection from unreasonable taxation. When all
Americans have the right to vote, but only a minority has the
duty to pay the federal income taxes from which all Americans
benefit, the risk is high that a non-taxpaying

[[Page S8520]]

majority will elect a Congress pledged to adopt taxation that
oppresses the taxpaying minority The impulse to seek
something for nothing has regrettably taken root in the
American body politic in the past century. The requirement in
the Balanced Budget Amendment of a two-thirds majority of the
membership of both Houses of Congress to raise taxes will
protect a taxpaying minority against oppressive taxation.
As Congress continues on the path toward adopting a joint
resolution to recommend a Balanced Budget Amendment to the
states for ratification, Congress should ensure that the
Amendment includes a requirement for approval by two-thirds
of the membership of the two Houses of Congress for tax
hikes. Absent such a requirement, the Balanced Budget
Amendment will encourage tax hikes instead of spending cuts
as the means to balance the budget, making the Amendment the
friend of the tax, spend and borrow crowd, instead of the
friend of those who believe in limited government, free
enterprise, and individual freedom.

Mr. HATCH. While a number of liberal groups committed to more
government spending have lined up against our proposal, there is hardly
a groundswell of support for the Democratic alternative. In fact, the
lack of support for that proposal demonstrates more than anything I can
say that it is a proposal designed with politics in mind. It is
designed to provide cover for Members who want to say they support a
balanced budget amendment while opposing the only amendment that would
actually reduce government spending.
The bottom line is that not all balanced budget amendments are
created equal. The Senate Republican amendment is one to restore
liberty and constitutional government by reducing the size and power of
Washington. By contrast, the Democrats' alternative promises more of
the same. It does nothing to rein in spending or address the fiscal
crisis this Nation faces. The differences between these proposals
highlight clearly the distinctions between conservatives in Congress
and the President and his supporters.
Although I am ever hopeful, I am realistic about the chances the
Senate will pass S.J. Res. 10 tomorrow. I suspect the vote for the
Senate Republican amendment will be as low as any the Senate has taken
on a balanced budget amendment. This, though, shows how stark the
differences have become between the two parties. The Democratic Party
is now openly the party of tax and spend, the party of bigger and
bigger government.
That is why today's debate and tomorrow's vote represents what Ronald
Reagan called ``a time for choosing.''
As President Obama's speech in Kansas showed the other day, he is not
backing away from his goal of fundamentally reordering American society
in a way that transforms individuals and businesses into the arms of
the State. The President, having completely abandoned the political
middle and thrown in with the far left to secure his reelection, is now
arguing that it is wrongheaded to believe one's success in life is
owing to one's own hard work. Because the President seems to believe
that individual success is ultimately not the result of personal effort
but, instead, due to society, adherence to and respect for property
rights, and the simple notion that one owns the fruit of one's labors
becomes for him and his supporters a quaint artifact of an earlier era
in American history.
The candidate of hope and change has turned out to be the President
of spreading the wealth around. To succeed, he has embraced the
politics of envy and class warfare that is far outside the mainstream
of our political heritage.
The Republicans' balanced budget amendment offers nothing so
grandiose. All we seek is the restoration of some limits on the power
of the Federal Government and meaningful reductions in spending, and we
give the time to get there too in our amendment. All we promote is a
decent respect for the right to one's own wages and the freedom
promised in our Declaration of Independence.
The Senate Republican balanced budget amendment secures these
blessings of liberty, and I urge every one of my colleagues to support
it.
The opponents of this amendment will say it is somehow improper to
constitutionalize a requirement for a balanced budget. Hogwash. Many of
those same individuals do not bat an eye when five unelected Justices
on the Supreme Court rewrite the Constitution to fit their own
preferred policy goals. Yet it is somehow inappropriate for the Senate
to send a balanced budget amendment to the people in the States for
ratification.
What are they afraid of? The Constitution ultimately belongs to the
sovereign American people. It is only law because of their sovereign
actions of ratification and amendment.
It seems odd the Democratic Party that claims Thomas Jefferson as its
founder would oppose giving the American people a voice on this
foundational constitutional issue. After all, if President Obama, the
progressive Democrat, was so confident in the strength of his
arguments, he could rest easy knowing the people would decline to
ratify a balanced budget constitutional amendment.
So what are they so afraid of? Why are they so afraid to send this
amendment to the people for ratification? Thirteen States could defeat
this amendment. All they need to do is get 13 States to go against this
amendment. That is what it would take to defeat it. That is all it
would take. But it would be the people who would decide, not just a
bunch of people here. If that is all the opponents of this amendment
need, why are they so worried about sending it to the States for
ratification? Why the lack of confidence in their powers of persuasion?
I can tell you why. The people of this country would ratify this
amendment so quickly its opponents' heads would spin. Those who oppose
sending this balanced budget amendment to the States for ratification
know the people are eager to ratify it. That is certainly the case in
Utah. Earlier this year, Utah passed S. Con. Res. 201 expressing
support for S.J. Res. 10, the balanced budget amendment I introduced,
along with my friend and colleague from Texas, Senator Cornyn, and my
friend and colleague from Utah, Senator Lee, as well as 44 other
Senators, all of whom deserve credit for this amendment.
I commend to my colleagues the Utah Senate's Concurrent Resolution
201 of the 2011 Second Special Session.
Mr. President, I take the instruction from Utah's State
representatives very seriously. The Utah Legislature made it clear it
supported ratification of this amendment, and I am confident if the
Members of this body listen to their own State legislatures--49 of
which are required to balance their own budgets--similar instructions
would follow.
Here is the bottom line. Liberal special interests oppose the Senate
Republicans' balanced budget amendment because they know the people
would ratify it. And if the people ratified it, the government-funded
gravy train would come to an end.
I look forward to this debate today. It is an important one, and I am
confident that eventually the American people will ratify a balanced
budget amendment and restore the promise of America's Declaration of
Independence and Constitution for future generations.
Mr. President, I yield the floor.
The PRESIDING OFFICER. The Senator from Kentucky.
Mr. PAUL. Mr. President, I rise today in support of the balanced
budget amendment. In fact, it is beyond me to imagine how anybody in
this body could oppose a balanced budget amendment. I ran my election
last year primarily on this fact--that government spending was out of
control and the debt was consuming our country and that we needed new
and more serious rules to bring the budget under control.
We have tried in the past. This body passed Gramm-Rudman-Hollings
with bipartisan support in the 1990s and immediately began to evade it.
This body passed pay as you go and then proceeded to disobey their own
rules 700 times. And we wonder why 9 percent of the people approve of
Congress? It is because we cannot even obey our own rules.
So we need new rules. We need a balanced budget amendment that would
be an amendment to the Constitution because we do not adhere to the
rules we pass. This body is literally out of control.
Now, the other side says: Trust us. Trust us. We can balance the
budget. The other side hasn't passed a budget this year or last year--
not just a balanced budget, the other side can't pass any budget. So I
think we need new and stronger rules to force us to do

[[Page S8521]]

what is right, do what every American family has to do; that is,
balance their family budget. A nation is no different. A nation has a
printing press and can run deficits for longer, but there are
ramifications.
The enormous debt we are accumulating as a country--we are borrowing
$40,000 every second. During the time of my 5-minute speech, we will
have borrowed millions of dollars. So there are ramifications. We have
to pay for our debt in some way. We can either tax people or we can
borrow--we are at the limits of both--or we can simply print the money.
But as we print money to pay for our debt, we destroy the value of the
existing currency. So those who have savings, those who are on fixed
incomes--senior citizens, the working class--those who use every penny
of their paycheck to pay for their needs are being robbed on a daily
basis by inflation. Inflation is the end result of debt.

If we look at the approval of Congress being 9 percent, and we
contrast that with how much of the public is for a balanced budget, 75
percent of the public--Republicans, Democrats, and Independents--would
vote in favor of a balanced budget amendment. Yet this body is out of
touch because we can't get anybody from the other side even to talk to
us about a balanced budget amendment. We worked for months to see what
it would take to make one acceptable to the other side, and we got
nowhere.
We need to balance our budget because the debt is a threat to our
country. This is not just me saying this. The Chairman of the Federal
Reserve has said our debt is unsustainable. Admiral Mullen, part of
this administration, has said our debt is the greatest threat to our
national security. Erskine Bowles, who led the deficit commission and
has been known as a Democrat, said we are approaching the most
predictable crisis in our history, and it will be a debt crisis.
All throughout Europe there is a debt crisis: Italy is having trouble
paying its debt; Greece is underwater; Portugal, Spain, and Ireland are
all tenuously holding on and trying to pay their debts. That European
crisis, that destruction of the Euro, is coming this way. Our debt now
equals our economy.
Senator Hatch mentioned we have a $15 trillion debt and a $15
trillion economy. Many economists say when our debt approaches 100
percent of GDP--where ours is now--we are losing 1 million jobs a year.
So this is having a drain on the here and now. It is not just that this
debt is being passed on to our kids and grandkids. The debt is
affecting jobs.
When I talk to college kids, I say: The chance of you getting a job
depends on what we do with the debt. If we continue to finance our
spending through debt, you will not have a job. You will have less
likelihood of getting a job.
Now, some say it would be too hard to balance the budget. It is just
too far out of whack. We can't do it. It is pretty bad. We are
borrowing 40 cents on every dollar. If we look at the spending,
borrowing 40 cents on every dollar is remarkable. When we look at our
budget, the revenue coming in is being consumed by entitlements and
interest. Everything else we spend--national defense, roads, everything
else--the rest of the 40 percent of the budget is being borrowed. It is
out of control.
Can you imagine any business or any family in this country borrowing
40 percent every year, year after year after year? It can't be done.
There are ramifications and a day of reckoning is coming.
Some say: How could we ever balance our budget? I will tell you how.
If we cut 1 percent of spending--this is called the penny plan--cut one
penny out of every dollar in Federal spending for 6 years and freeze
spending for 2 years, the budget will balance in 8 years. If we were to
pass a balanced budget amendment and send it to the States, there is a
5-year window in the amendment, plus it takes a couple of years to
pass, so it would be about 8 years.
So we could balance the budget in 8 years simply by cutting one penny
out of every dollar. One might ask: How could that be, when they are
cutting trillions of dollars and not balancing the budget? The reason
is, when they talk about cutting spending around here, they are always
talking about cutting proposed increases in spending. They are never
talking about real cuts in spending. What I am talking about is a real
cut.
We spend $3.8 trillion in our budget this year. One percent is $28
billion. Next year, we would spend $3.8 trillion minus $38 billion. A
real cut of 1 percent each year for 6 years balances our budget in 8
years. It could happen, but it is going to take some resolve.
People need to understand the alternative. The alternative, if we do
nothing, is that our debt is going to consume us as a nation. We have
been warning about this for some time. Senator Hatch has been active.
The last time we voted on this was in 1997. Fourteen years later we
have had a significant revolution at the polls, and people are anxious
to say: Do something, protect us from this mountain of debt. Yet there
is still great resistance in this body.
I would say people in this body who vote against the balanced budget
amendment do so at their own peril and do it against the will of the
people. If they think it is so important to continue to accumulate
debt, and that debt is fine, they should vote against this amendment.
But they are thumbing their nose at the people. They are thumbing their
nose at the American people who are very worried about our Republic and
very worried about this debt.
So, Mr. President, I rise today in support of the balanced budget
amendment and encourage my colleagues to give serious thought to voting
for this amendment.
The PRESIDING OFFICER. The Senator from Louisiana.
Mr. VITTER. Mr. President, I too rise in strong support of the
balanced budget amendment--the strong, meaningful, balanced budget
amendment presented on this side of the aisle because it is an
important, necessary effort to rein in the biggest economic problem and
threat we have facing us.
I want to dovetail and expand on some of Senator Paul's comments,
with which I certainly agree.
First of all, I hope it is perfectly clear that our debt--our
growing, unsustainable level of debt--is a clear and present danger and
an immediate danger to our Republic, to our democracy, to our economy,
and to our future.
Overspending has been a problem for quite a while in Washington. It
has been a problem under Republican and Democratic administrations and
Congresses. But forever it was a problem because we were passing on
these big debt figures, this big burden to our kids and grandkids, and
we were kicking the can down the road. It was a problem for the future
which we should correct now but largely a problem for the future.
As Senator Paul said, that is not true anymore. It is an immediate
threat right now. It is not a question of just our kids and grandkids;
it is a question of next month, next year, whether we avoid a crisis,
as is brewing in Europe, which could be the biggest hit to our economy
since the Great Depression, bigger than what we went through in 2008.
So this issue is an immediate threat, and it is not some esoteric issue
about balance sheets. Again, as Senator Paul said, it is an immediate
threat to the health of our economy, to the prospect and ability of
Americans, including young Americans coming out of college, to get good
jobs, to settle into good careers.
The second thing, which I hope is obvious, is that to get ahold of
this problem, to deal with this threat, Congress needs enforced
discipline. We need a fiscal straitjacket because we have proven,
unfortunately, over and over, under Democratic and Republican
majorities, under Democratic and Republican Presidents, that we are not
going to do it on our own. We need the enforced discipline--the fiscal
straitjacket, if you will--of a balanced budget amendment.
Why do I say this? Well, even knowing the threat we face right now,
what does Congress do? Congress passes a debt plan. We pass cuts. While
the so-called cuts of $2.1 trillion sounds like a lot of money--it is
in some sense--it is largely cuts to the growth of government spending.
Even under this plan that Congress recently enacted, we are still
racking up new debt. We are still adding on $7 trillion to our already
unsustainable level of debt in the next decade, increasing it 50
percent, from $15 trillion to $22 trillion. That is the best we can do
without enforced discipline even in the crisis atmosphere

[[Page S8522]]

we have now, even with the understanding we have now. I hope that
proves we need this enforced discipline. The balanced budget amendment
Republicans have put forward gives us that discipline we need.
First of all, I wish to compliment so many who have worked with me on
it--Senator Hatch, Senator Lee, many others. I was in the working
group, and I was in several meetings to get the details right because
the devil is in the details. We don't need a fig leaf. We don't need a
talking point. We need a balanced budget constitutional amendment that
will work.
The details are right in this proposal, and it will work. Why do I
say this? Well, within 5 years of ratification, under the amendment,
Congress must pass a budget, the President must submit a proposal that
is balanced, but not only that, the size of the Federal Government is
limited to 18 percent of GDP. That is the long-term historical average
of revenues in modern history. That is where we need to be. That is not
my decision; that is not the decision of a single Member of Congress;
that is the average of where revenues have been in the modern period.
It requires a strong supermajority to ensure that we don't continue
the practice of exceeding spending caps with gimmicks and emergency
spending for things that are not truly emergencies. For instance, a
two-thirds vote of both Houses is required for a specific deficit for a
fiscal year. A majority vote is required for a specific deficit when we
have a declared war, and it needs to be a declared war in that
instance. A three-fifths vote is required for a deficit during a
military conflict and--this is important--with the requirement
specifically that that is ``necessary by the identified conflict.'' In
other words, the overage from a balanced budget is only for that
conflict, not just a general exemption. A two-thirds vote of each House
is required to increase taxes, and that is important so that this is
not just a mechanism for ever-increasing tax rates that will quickly
stagnate the economy. A three-fifths vote of each House is required to
increase the debt limit, which is also important.
The details are important. I am confident we have gotten the details
right in this proposal.
We also have a Udall proposal, a Democratic balanced budget
constitutional amendment. Unfortunately, I think that gets the details
very wrong. I am pleased that Senator Udall and Democratic colleagues
on the other side are committed to the notion of a balanced budget
constitutional amendment. That is important, and that is progress. But
the devil is in the details, and I am afraid they got some of those
details very, very wrong. For instance, there is a huge loophole
exemption for whenever the country is in a military conflict--not just
a formally declared war but any military conflict. Unfortunately, we
are going to be in that situation for a lifetime under the present war
against terror, so that is a huge, gaping loophole. Under that
loophole, the amount beyond a balanced budget which is allowed isn't
specific to that conflict, it is just a general exemption. So it is a
big loophole.
There are other loopholes too. Social Security is completely exempt
from this structure. I think that is a big mistake because that is part
of our budget situation and because we need this very enforced
discipline to fix and to save Social Security. That is one of the top
items I want to fix and save. That is one of the first places we need
this enforced discipline to fix and save Social Security.
I urge all of my colleagues to come together behind this important
and necessary enforcement tool. The American people recognize the
problem. They recognize this--a strong, meaningful balanced budget
amendment--as an important part of the solution. They want us to act in
a positive way, and I urge that support for this balanced budget
amendment and for that solution.
Mr. President, I yield the floor.
The PRESIDING OFFICER. The Senator from South Carolina.
Mr. DeMINT. I wish to thank my colleague from Louisiana, who has made
great points about where we are.
I do think it is good news that we are talking about balancing the
budget, but unfortunately, as we often do, this is really a political
show more than a real attempt to actually balance the budget. The whole
process is set up to fail.
We know the President has said that we don't need to balance our
budget and that it is an extreme idea. The majority leader here in the
Senate has called a bill that cuts spending and caps spending and sends
a balanced budget amendment to the States to ratify the worst
legislation he has ever seen. Nancy Pelosi, the Democratic leader in
the House, has said that to balance the budget would cost jobs and that
we would do it on the backs of the poor. Now we are to believe that our
colleagues on the Democratic side here are serious about working with
us to balance the budget.
The situation is too serious to just play politics, and I know from
talking to a number of my Democratic colleagues that they feel the same
way, that they know we need to balance the budget. It is very difficult
for them as a party because a lot of their platform is based on more
promises for government and more government spending.
In effect, a balanced budget amendment that meant we couldn't spend
more than we were bringing in would change politics in Washington
forever, which is something we have to do. But at least we are
discussing the idea of balancing the budget.
We know that the President's budget, the only budget we have seen--we
haven't seen one out of the Senate in the last several years--increased
our debt another $10 trillion over the next 10 years. It didn't balance
it.
Just about every Republican voted for a budget, a 10-year budget
offered by Senator Pat Toomey that balanced in 10 years without cutting
Social Security or Medicare. So we can do it. We can do it without
hurting Americans. If we do it now, we can actually control our own
destiny rather than what we see across the Atlantic in Greece and other
European countries. They lost control of their destiny. They are now in
the control of other countries and of fate. But America is still in a
position that, if we make the decisions now to begin the process to
balance our budget, even if it took 10 years, we could save our country
and perhaps save freedom for the world. But there is no question that
if we continue on the same course we are on today, we will bankrupt our
Nation, lose control of our destiny, and change the world forever. But
at least we are talking about balancing the budget, and maybe that is a
good first step.
Today, the Democrats have offered a weak alternative to the
Republican balanced budget so that they can say they are for it. Again,
I think that is important to get on record, that we are at least for
the idea of stopping spending more than we are bringing in. For the
past 2\1/2\ years, as I mentioned, the Senate Democrats, who are in
charge here, haven't even produced a budget, let alone the idea of
balancing one. President Obama, as I said, proposed a budget that
doubled the national debt in the next 10 years. That is not responsible
leadership at a time when we are already at an unsustainable debt
level.
Despite all the bipartisan promises to cut spending, Washington is
still voting to make government bigger and more expensive than ever.
And this includes some Republicans joining the fray here to just
increase spending. Federal spending went up 5 percent in the first 9
months of the year despite all the hoopla about us doing something
about spending.
There is one way to judge whether we are cutting spending or not,
despite all the rhetoric here and the Washington-speak. If we want to
know whether we are spending more, we just have to ask ourselves: Are
we spending more than we did last year? The answer is yes. And we are
going to spend more next year than we did this year, based on the bills
we are passing this week and next. So this isn't austerity. It is
gluttony. It is political gluttony.
Since Obama became President, the debt limit has been raised four
times. The debt is rising faster and higher than ever. Yet the Senate
refuses to pass a budget or cut spending. We must budget and balance
the budget or we are going to bring down our whole country.
Republicans have offered a strong balanced budget amendment that
limits government spending to 18 percent of gross domestic product--
GDP--and

[[Page S8523]]

requires a two-thirds majority to raise taxes, and it has earned the
support of every Republican in the Senate. That is pretty unusual for
us. Passage of that amendment should have been tied to the last
increase in the debt limit, but it wasn't. President Obama was given
another $2 trillion to borrow, and Americans received nothing in
return, no cuts in spending.
The Democratic amendment differs in three ways from the Republican
amendment.
What Republicans are trying to do is to reduce the level of spending
relative to our total economy and to make sure it is difficult to raise
taxes to balance the budget. And we should all agree on that. We
shouldn't go back to the taxpayer every time we spend too much. The
emphasis should be on reducing our spending. But the Democratic
amendment doesn't cap spending to the historical levels, which means we
can balance the budget by raising taxes and continuing to increase
spending. So our amendment is designed to cap that spending at a
certain level.
Secondly, the Democratic balanced budget amendment does not require a
supermajority to raise taxes. So during regular order here, we can
increase taxes to meet the requirement to balance the budget. It would
be a nice safeguard for the American taxpayer that we would at least
have to get a supermajority to raise taxes in order to balance the
budget.
For some reason, the Democratic balanced budget amendment inserts
just an element of class warfare, saying that we cannot decrease taxes
on those making over $1 million. It doesn't sound like something we
would do anyway, but it is not something that should be part of a
constitutional amendment that we send to the States to ratify.
The strong Republican balanced budget amendment would force both
parties to find ways to cut spending and reform entitlements. Those are
the things we have to do. The weaker Democratic version does not do
that because it preserves the status quo where it is easier to raise
taxes than cut spending, which is where we are today.
For the past 2\1/2\ years, Senate Democrats have not produced a
budget, let alone a balanced one. President Obama proposed a budget
this year that doubled the national debt. Again, that is not a budget;
that is a loan application and this country cannot continue to operate
based on more borrowed money and more spending and more threats of
raising taxes.
If we want to get the economy going and balance our budget, we have
to cut spending. That is the whole idea of the Republican balanced
budget amendment. Let's get serious about saving our country and the
freedoms for which so many have fought. If we do not do it soon, we
will lose control of our destiny.
I yield the floor.
The ACTING PRESIDENT pro tempore. The Senator from Texas.
Mrs. HUTCHISON. Madam President, I rise today to join many of my
colleagues, as Senator DeMint has said, to endorse the balanced budget
amendment that Republicans are offering. We have 47 Republicans in the
Senate and there are 47 cosponsors and supporters of this approach to a
balanced budget. Our approach addresses the fundamental problem in
America and that is government spending. Big problems require bold
action. Today's staggering national debt, $15 trillion, is crippling
our economy. We must take action to stop it.
The 40-year average of total U.S. Federal Government spending is 20.8
percent of gross domestic product. For 2011, Federal spending was 24.1
percent of GDP. Looking forward, if we stay on the same course we are
on, Federal spending is projected to be 40 percent of GDP in 2046, and
by 2085 it will reach 75 percent of GDP. We are reading a lot of
stories about European countries that are doing exactly what we are
talking about how the future for America will look like if we do not
curb spending right now.
Some of my colleagues on the other side of the aisle think increasing
taxes will reduce the deficit. However, the facts state otherwise. The
trajectory of government spending, as I have outlined, could not be met
with tax increases. There are not enough tax increases if you went to
100 percent rate of tax. There would not be enough to support that kind
of government spending.
In addition to that, as we have been saying, increasing taxes is
going to lower the capability of our small businesses to hire. That is
what we are trying to spur right now, more employment. It is going to
take systemic changes in government spending to get the debt and
deficits down in this country. Lower spending is the only way we can
have the systemic changes that are necessary to lower the government
burden so the debt begins to get less and less.
My colleagues across the aisle have proposed their solution with a
different approach to a balanced budget amendment. In our opinion, it
is flawed because it fails to include a supermajority requirement to
raise taxes and it separates Social Security from the Federal budget.
That might seem like a good idea on its face, to assure that Social
Security never goes under because there would not be a connection
between Social Security and the Federal budget, but in fact as we speak
today it is part of our Federal budget because the Social Security
outlays exceed what is coming in revenue from Social Security.
Excluding Social Security from our Federal budget would not solve our
deficit spending or shore up Social Security's finances for current and
future generations. Right now, Social Security is on a glidepath toward
insolvency.
I firmly believe that entitlement reform is vital to any long-term
solution to our Nation's financial problems. It is essential that we
assure the markets that long-term financial challenges are being
confronted, and that includes entitlement reform so that Social
Security will be on a glidepath toward solvency rather than the other
way around.
Earlier this year I proposed a modest Social Security reform that
would gradually increase the retirement age so it more closely
resembles today's actuarial tables and life expectancy. It would
decrease the annual cost of living slightly by adjusting it if
inflation exceeds 1 percent. If inflation exceeds 1 percent, then you
would have a cost-of-living adjustment. Otherwise, you would not.
In addition to spending reduction and entitlement reform, we need
long-term progrowth tax policies in place, not constant threats of tax
increases. When we hear our small business people talking about why
they are not hiring--because I think probably every one of us in this
Senate as we travel around our States and in the country asks our small
business people why aren't you hiring? Why aren't you adding to our
economy?--they say two things. They say, No. 1, the regulations of this
country are driving them down. It is like a blanket over their
capability to produce, get more traction and hire people. So it is
overregulation that we are seeing rampant in this administration.
The second thing is our President is always talking about tax
increases. He talks about it every time I see an interview or a speech.
Those people out there need to pay more taxes. You know what, if you
are being constantly threatened with more taxes, you know you have to
look at your budget and adjust, and that adjustment usually means you
are not going to hire people if you know your expenses are going to go
up through regulations and more taxes.
If we are going to make conditions in this country better for private
sector job growth in this country, which certainly would lead to a
stronger economy, we have to address spending and tax policy. Our
balanced budget amendment moves forward on these fronts. We reduce
spending responsibly, to put our country on a fiscally responsible
path. We can shift the spending trajectory in this country by passing
the balanced budget amendment and implementing a long-term plan that
caps Federal spending. The Federal Government has grown exponentially
in the last few years. We cannot sustain that. That is not a
responsible position when we know unemployment is almost 9 percent. We
have to have policies that will encourage employment. That is the way
to grow revenue.
We can grow revenue, but not by taxing the people who are hiring.
Rather, we can do it by giving them a regulatory playing field that is
responsible

[[Page S8524]]

and not overbearing, and by making sure we have not only a tax policy
that encourages hiring but one that is stable and predictable.
If taxes are going to change every year, that is not predictable and
it is not stable. I hate it when I talk to an international company and
I am talking to someone in that company--maybe the CEO, or chief
financial officer--and I say, why are you moving that part of your
company overseas? They will invariably say: Because there is a better
regulatory environment.
That is shocking. It is shocking for an American CEO to say we can
better predict what the conditions for regulations are in foreign
countries than we can in America. That is not the foundation to revive
our economy.
We have a balanced budget amendment that we believe addresses the
issues of this economy. It will put caps on Federal spending. It will
start bringing down the size of government to meet the gross domestic
product of our country. Right now it is off balance and we need to put
it right so we do start hiring in this country in the private sector.
Hiring in the government sector is not a long-term growth strategy. We
need jobs in the private sector for permanency and we will do that with
a balanced budget amendment that puts caps on spending. Systemic change
is what is necessary in this kind of environment. I hope Members on
both sides of the aisle will look at these amendments and realize we
could help the jitters in the market get calmed by addressing this in a
long-term way.

The balanced budget amendment we are offering--and we will vote on
tomorrow--is the best approach. It is looked at by people in the real
world, the business world, the hiring world. They are saying what they
need is stable regulatory environment and taxes that are not
confiscatory so they will have the ability to hire more Americans and
create greater revenues through people who are working and producing--
people who are going to pay taxes, people who are going to export and
keep our economy on a growth pattern rather than one that continues to
sit there with a high unemployment rate that is stagnating our country.
I yield the floor.
The ACTING PRESIDENT pro tempore. The Senator from Wyoming.
Mr. BARRASSO. Madam President, I rise today to join with the Senator
from Texas and agree with her about the need for a balanced budget
amendment to the Constitution and agree with her comments about the
economy in this country and our need to focus on jobs and debt and the
spending. I agree with her and I agree with the majority of the
American people. That is why I am here today to talk about the balanced
budget amendment to the Constitution.
We are at a time in the calendar year where the holidays are rapidly
approaching. Americans across the country are looking very closely at
their budget. That is what families do, they look at their budget and
they consider what costs are out there and what money is available to
deal with those costs. They are looking at gifts and travel and holiday
celebrations. They are carefully balancing their regular monthly
expenses with these additional special costs in order to avoid starting
the new year with a mountain of new debt. Americans understand there
are consequences for irresponsible spending. Folks know if they make
decisions which they later decide were not the best decisions, then by
New Year's Day bills will come due and they will have real concerns.
Formulating a responsible budget is not always easy, but it is
absolutely necessary. It is the right, the reasonable, and the
responsible approach. The problem is, unlike the rest of this country,
Washington does not seem to be concerned about responsible budgeting.
In fact, Washington does not seem to be concerned about any kind of
budgeting. In Washington, the President is responsible for submitting a
budget every year. Congress is then responsible for passing a budget
every year. It has not happened this year; it did not happen last year.
The House of Representatives did their job when they passed Paul Ryan's
budget, but this body, the Senate, did nothing. In fact, this Senate
has not passed a budget in over 950 days.
What has happened in the last 950 days? Well, in 2010, the Chairman
of the Joint Chiefs of Staff said: ``The single biggest threat to our
national security is our debt . . . '' The single biggest threat to our
national security is our debt. Washington did nothing.
A year ago this month, the President's bipartisan commission made
recommendations to rein in the debt. The recommendations have been
largely ignored. More recently, the Joint Select Committee on Deficit
Reduction failed to present a plan to cut $1.2 trillion from the
deficit as required by the legislation. Our national debt is now over
$15 trillion. Our credit rating has been lowered for the first time in
the history of this great Nation. So here we are, $15 trillion in debt
and no real plan to get out of it. The American people deserve better.
They expect better.
Back home in Wyoming folks understand the importance of balancing
budgets and living within their means. What they don't understand is
why Washington doesn't get it. A constituent from my hometown of
Casper--Mike Brewster is his name--wrote to me earlier this year. Folks
in Wyoming like Mike get it. Mike wrote:

One of the values that makes our state and our communities
so strong is being financially solvent. We do not spend more
than we make. If we max out our credit cards, we don't ask
for higher credit limits, we cut our spending. To do anything
else would label one a fool.

Referring to the national debt, he went on in his letter and said:

Let's be clear; this is a crisis. This crisis wasn't caused
by a lack of revenue; it was caused by spending way beyond
our means. The only logical solution is to reduce spending--
that is the ``Wyoming Way.'' That is what your constituents
would have to do if they had the same mess in their personal
finances, and that is what you must do to properly represent
us.

Mike is absolutely right, this is a crisis. It is a crisis that could
have been prevented and a crisis where we need to solve it by doing the
right thing. If we are going to balance Uncle Sam's checkbook, we need
to stop charging everything under the Sun to the taxpayers' credit
card. That means we need to stop spending more than we take in, and in
order to achieve this, I believe that now, more than ever, we need a
balanced budget amendment to the Constitution.
Amending the Constitution is not something I take lightly. This is
the single most important document in our Nation's history, and I am
very hesitant to suggest amending it. However, Washington's
unwillingness and inability to be responsible stewards of taxpayers'
dollars has left us no choice. We need to begin the long road to
financial recovery by balancing each and every budget. We do it in
Wyoming, and Washington should follow suit.
The balanced budget amendment is not a new idea. In fact, a bill that
would have sent a balanced budget amendment to the States for
ratification failed by one vote in 1997 right here in the Senate. Over
the years many Democrats who serve in the Senate today have voiced
their support for a balanced budget amendment.
Senator Sherrod Brown, Democrat of Ohio, said:

Before I ask for your vote, I owe it to you to tell you
where I stand. I'm for . . . a balanced budget amendment.

That was what he said in 2006.
Debbie Stabenow had another similar quote in 2000: ``I crossed the
line to help balance the budget, as one of the Democrats that broke
with my party.''
Senator Harry Reid, the majority leader, said back in 1997 when they
were voting on a balanced budget amendment: ``I believe we should have
a constitutional amendment to balance the budget. I am willing to go
for that.''
Senator Tom Harkin said: ``Mr. President, I have long supported a
balanced budget amendment. I expect to do so again . . . ''
We could go on and on with Democrats who in the past stood up to
support a balanced budget amendment.
It seems to me if folks on the other side of the aisle are serious
about balancing the budget, they will support the only balanced budget
resolution with teeth. The Republican plan imposes real spending
discipline that cannot be undermined by simply raising taxes on hard-
working Americans. If we are going to amend the Constitution, we need
to make sure the balanced budget requirement cannot be easily
sidestepped by either party. The Republican plan does just that.

[[Page S8525]]

Our creditors will not wait for a politically convenient time to
collect our debts. We simply cannot afford to wait any longer to reduce
those debts. Irresponsible, unsustainable spending and debt has
consequences, consequences we simply cannot afford to pay.
If you don't believe me, look at Europe. Everyone in this body needs
to take a long, hard look at Europe and then decide what future they
want for our great Nation. This is not about doing what is right for
Democrats or Republicans; it is about doing what is right for all
Americans and for this entire country.
As Art Middlestadt from Cheyenne, WY, said in a recent e-mail:
Allowing our children to suffer the consequences of Washington's
reckless budgeting is unconscionable. Well, this is about showing Art
and the rest of America that we hear them and we understand them.
Families know this, individuals know this, and the sooner Washington
knows this, the better.
I urge all of my colleagues to vote in favor of balancing the Federal
budget.
I yield the floor.
The ACTING PRESIDENT pro tempore. The Senator from Oklahoma.
Mr. INHOFE. Madam President, one of the things about a debate such as
this is that I have something I always do, and that is I will sit down
and cross off things I was going to say that somebody else has already
said. Unfortunately, almost everything has been said, but there are a
few things that have not. I wish to put this in a more of a historic
perspective.
I can remember back in 1968. In 1968 I was elected to the Oklahoma
State Senate, and at that time we were all concerned about the deficit
spending and the debt in this country. I remember so well a kind old
gentleman from Nebraska. He was U.S. Senator Carl Curtis. Carl Curtis
contacted me--because I was kind of an aggressive person at that time--
and said, I have an idea. I have been up here trying to pass a balanced
budget amendment to the Constitution and I have been trying for years
to do it. One of the primary objections they have is they could never
get the majority, the three-fourths necessary to ratify the
Constitutional Amendment. He said, this is my idea: Let's go ahead and
get three-fourths of the States to preratify a budget-balancing
amendment to the Constitution. I thought that was an ingenious idea,
and so we did.
I passed a resolution in the Oklahoma State Senate in 1968 that said
we were going to preratify it. In fact, we came within one State of
having the three-fourths necessary to do that; not that that would have
preratified it, but it would have taken away the argument that Carl
Curtis had that they objected to in that they would never be able to
ratify this in the States. I thought that was a great idea. We came
close to doing it way back in 1968. I remember this very well. I was
trying to impress upon the American people how much that debt was, and
at that time the debt was $240 billion. I said, if you take dollar
bills and stack them up, by the time you get to $240 billion, it is the
height of the Empire State Building. That was only $240 billion.

A lot of the groups and Members who are opposed to passing the
balanced budget amendment think we don't need one. They actually
believe Congress and the President can balance the budget without any
enforceable accountability. But in 1986 when the amendment failed by
one vote--and I remember that year so well because that was the year I
was elected to the House of Representatives here in Washington--the
national debt at that time was $2.1 trillion. By 1997, when the Senate
considered the amendment again, the debt had risen to over $5 trillion,
and it got up to about $10 trillion when this President took office,
and that is where this all starts.
What has happened since President Obama has been in office is
something that is totally unprecedented in the history of this country.
In the years he has been there, it has gone up 42 percent. I was
concerned back in 1968 with $248 billion, and now the increase in this
short period of time has gone from $10 trillion to $15 trillion.
I think everyone knows the need to reduce spending is evident. We
don't have to do anything more than look across the Atlantic. I think
my friend from Wyoming covered that pretty well. When you stop and
think what has happened to these countries over in Europe--and it is
not just Greece and Italy; there are other countries too. They could
not resist their insatiable appetite to spend money they did not have.
What has happened there is happening in this country. I agree with my
friend from Wyoming, we are right behind Europe in this case.
I remember, and probably everyone in this Chamber remembers, during
your elementary years reading about the history of this country. A guy
named Alexis de Tocqueville came to the United States. He came here,
oddly enough, to study our penal system. That was back in the founding
years of this country. When he got here, he was so impressed with the
wealth of our Nation that he stayed and wrote a book. In this book he
talked about how one plot of land was given to each person who came
over and they were able to keep the benefits of their hard labor, and
the prosperity was indescribable at that time. It is said in the last
paragraph of the de Tocqueville book that once the people of this
country find they can vote themselves money out of the public trust,
the system will fail. That is why I say this is not an ordinary time.
This is not 1968, 1986, 1997, where we tried this before. This is to
the point where we will realize the accuracy of de Tocqueville's
prediction.
It has been publicized recently that 47 percent of the people are not
paying Federal taxes and not paying income taxes. That is dangerously
close to that 50 percent he was talking about several hundred years
ago. So this year Washington has been patting itself on the back with
the Budget Control Act we passed in August which cut spending by $900
billion over the next 10 years. We are slowly starting to chip away at
appropriations bills. These have not been as advertised. They have not
come close to solving the problem. This is demonstrated by the fact
that next year's deficit is still expected to be right around $1
trillion. I know this is kind of offensive to some of the people who
participated in this great committee that was charged with the great
responsibility of finding $1 trillion over 10 years.
When I talked to a large chamber group in Oklahoma on Monday
morning--we had over 500 people there--I said: Can you understand what
is happening here in terms of the request that has been made of coming
up with $1 trillion over 10 years?
As the Senator from Wyoming said, the President submits a budget. It
is not the Democrats, not the Republicans, not the House, not the
Senate. It is the President. He has now submitted three budgets. In his
three budgets he has had deficits each year of almost $1.5 trillion.
I remember in 1997 going down to the floor when Bill Clinton was
President of the United States, and that was the first $1.5 trillion
budget to run the country. That was $1.5 trillion to run the entire
United States of America. Yet this President has come up $1.5 trillion
in deficit over and above the revenues we had each year for 3 years.
If you have the requirement of coming up with $1 trillion over 10
years and yet this President has increased the deficit by almost $5
trillion in the short period of time--it probably will be $6 trillion
by the time the last budget is realized--then how in the world are you
ever going to dig out of this? Well, the answer is you cannot.
Further, when I was talking to the people in Oklahoma on Monday, and
I said, the requirement for the first year was $44 billion--if you take
$44 billion as a requirement to cut spending in the first of 10 years
and yet the President has had an increase of $1.5 trillion in his
budget for 1 year, obviously that is not much of a requirement.
Obviously, that is not much of a requirement. That is not going to
do. So to me that demonstrates what we are not able to do without
having a balanced budget amendment to the Constitution. The amendment
we have makes it difficult to raise taxes. It also requires that the
President and Congress pass a balanced budget each year. It does
something else that is very significant. The amendment would also limit
the amount of spending allowed to 18 percent of GDP, which is the
historic level of revenue the Federal Government has collected since
World War II.
So it covers these things. People complain about it, saying: Well, we
do

[[Page S8526]]

not know. There could be times of crisis. There could be times of war.
This has it built in. If we are in a declared war, you do not have to
follow the guidelines in the balanced budget amendment. In fact, you
could actually violate it because that is in times of war. We
understand that. If it is not a declared war, you can do it with a
supermajority. So this has those built in safeguards to take care of
contingencies that we cannot determine what they are right now, such as
war, such as a crisis we have.
Now, some of those people--not too many people will come to the floor
and say this, but in their own minds they still believe this idea that
more government spending can actually make the economy grow. And I do
not know how they can still believe that after what they call the
American Recovery and Reinvestment Act. It was $825 billion. That was
supposed to be a stimulus package. That was supposed to stimulate the
economy. Yet only 3 percent of that actually went to things that
specifically would stimulate the economy, such as roads, bridges, and
things we were supposed to do. It was all financed with extra
government debt and with projects such as Solyndra, which has gotten a
lot of attention recently, and other projects. It was more social
engineering. We all know that. So we know you cannot increase spending
to pull us out of the situation we are in. They also said that would
cause the unemployment rate to get down to well below 8 percent. Of
course, we know now that it did not do that. So none of the projections
actually came to be realized. The economy is still very weak despite
the fact that the President was able to secure nearly $1 trillion in
stimulus spending. It did not help this time. It is not going to help
again. It never helped in the past.
To enforce the amendment, the courts would be prevented from
mandating tax hikes. Further, to raise the debt limit, a three-fifths
majority of both Chambers--both, not just one--would be required.
So it does take care of all of these contingencies that I think would
be necessary and answers the complaints that people have who say it
would be dangerous to have a balanced budget amendment.
I know it works. The funny thing about it, when they say it will not
work, look at the laboratories we have for the Federal Government. My
State of Oklahoma, balanced budget amendment. It has all of these
things built into it. In fact, it is not as generous as the one we are
advocating. But nonetheless, I remember my years in the State
legislature. We would get up toward the end of the year, and they would
say: Well, wait a minute, we can't do that because we can't go into a
deficit. If the States can't do it, we can pass the same thing.
So I would merely say, try to put it in the historic perspective. If
you do that, then you will see why it is a sense of urgency that 47
percent of the people are on the receiving end of government. It would
turn around and get to that point where, as Tocqueville said, we cannot
go beyond.
Remember in 1968 the Carl Curtis thing. That was a $240 billion
deficit; 1986, $2.1 trillion; in 1990, it was up to $10 trillion. It
took all of that time to get up to $10 trillion. That has almost
doubled with this one administration, with this President. So this is
not business as usual. This is not like the balanced budget amendments
have been in the past. They are structured very much the same way, but
the sense of crisis is here.
I have 20 kids and grandkids. What we do here is not going to affect
me personally, but it is going to affect future generations. This is an
opportunity to really do something meaningful.
I urge the support of S.J. Res. 10, a strong balanced budget
amendment to the Constitution.
I yield the floor, and I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant editor of the Daily Digest proceeded to call the roll.
Ms. AYOTTE. Madam President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Ms. AYOTTE. Madam President, I rise today to join my colleagues in
expressing my clear and unequivocal support for a balanced budget
amendment to our Constitution, Senate Resolution 10.
With our out-of-control and unsustainable debt threatening nothing
less than the American dream and the opportunities that will be
available for our children and our grandchildren, we need to pass a
meaningful balanced budget amendment, and this, in my view, can be one
of the single most important steps we can take to get America's fiscal
house in order and to save our country from looming insolvency.
Madam President, 49 States in this country have some requirement to
balance their budget. The Federal Government should be no different. My
home State of New Hampshire has a legal requirement to balance its
budget and has long followed this commonsense tradition of fiscal
responsibility.
This is a subject I have discussed extensively with my constituents
over the last year while I have done townhall meetings throughout our
State focusing on our Nation's debt crisis. I have done a PowerPoint
presentation to show my constituents the hard numbers on the fiscal
state of this country. And it is deeply troubling where we are today: 3
straight years of $1 trillion-plus deficits, over $15 trillion dollars
in debt, Medicare and Social Security on a path to insolvency as early
as 2024 and 2036, respectively, and nearly half of our debt--47
percent--currently is being held by foreign entities, and the single
biggest foreign holder of our debt is China.

I also talk about spending and deficits in terms of how it relates to
your average New Hampshire family. In New Hampshire, if you use
Washington's budgeting logic where we are borrowing 40 cents of every
single dollar--in 2008, the New Hampshire median household income was
$66,000. If you used Washington logic, the amount that family would
spend would be $107,000 or $41,000 more than they earned. That would
never fly in New Hampshire where families sit around their kitchen
tables and they use their common sense to balance their budget. Yet in
Washington we continue to perpetuate this borrowing to sustain our
government every day.
If you look at where we are, one of the most troubling statistics
that really impacts our economic growth is the share of our gross debt
to the size of our economy or our GDP. That is now 100 percent. Just 5
years ago, that ratio was closer to 60 percent.
As many of us in this Chamber are aware, economists Carmen Reinhart
and Ken Rogoff have concluded in a study that over the past century,
for nations that reach where we are, where total debt reaches over 90
percent of the size of our economy, there is a negative impact on
economic growth. And we can expect lower job growth and fewer economic
opportunities. We certainly cannot afford that in this troubling time
for Americans.
So not only do we need to get our fiscal house in order because it is
the right thing to do so we are not dependent on other countries such
as China to fund our government, we also need to do it so we can
provide opportunities for future generations of Americans.
New Hampshire citizens understand we cannot keep spending money we do
not have. They make those commonsense decisions on their own family
budgets. Small business owners in New Hampshire are astounded when I
tell them our Federal Government is operating without a budget. They
would never run their businesses without a budget. But they do not
understand why Congress cannot even perform such a basic function of
passing a budget blueprint.
It has now been 958 days since the Senate last passed a budget. I
have to say that I was really honored and excited to be the newest
appointment to the Senate Budget Committee. However, I have been
incredibly, incredibly disappointed that we have not in that committee
done the hard work that needs to be done, the thing that is right for
this country--to sit down, to make the hard choices, to put together a
budget blueprint and to pass a Senate budget, to have the robust debate
on the Senate floor about how we prioritize our spending and how we
live within our means. The American people deserve better. They deserve
us to do our job and to pass a budget for our country that is fiscally
responsible.

[[Page S8527]]

In that time, in those 958 days that the Senate has not passed a
budget, the Nation's debt has increased by $3.9 trillion. When you
think about it, it is deeply troubling. I am hopeful that if we bring
forward and pass the requirement of a balanced budget amendment to the
Constitution, it will also force Congress to do the basic function of
putting together a responsible and balanced budget for our country.
I cannot emphasize enough the urgency of passing this budget control
measure, the balanced budget amendment, Senate Resolution 10. I think
it is important for my constituents and the American people to know, if
we pass the balanced budget amendment in this body, in the Congress,
this is putting the question to you, to the American people, to decide,
do you want the Federal Government to balance its budget?
So when we pass an amendment to the Constitution, we are simply
sending along to the States the decision of should we amend our
Constitution. I cannot think of anything more important than sending
that question to the American people, to our State legislatures, to
decide should we live within our means; should we be bound by the same
requirements the States have, by the same common sense we find at home
to balance our budgets and live within our means.
Madam President, for fiscal year 2011 we spent 24.1 percent of our
GDP. That is well above the historical spending average of a little
over 18 percent, if we go back to 1960 where the revenue we had has
come in. So we are at a huge trajectory of spending at 24.1 percent.
Yet in 2011 our revenues only accounted for 15.4 percent of our economy
because of the difficult times we are in relative to our economic
growth.
Under the Republican proposed balanced budget amendment, we put the
handcuffs in place that are needed to put us on a path to eliminate
this by capping Federal spending at the historical level of revenue at
18 percent. Why is this important? It is important because we can't
continue to spend well beyond our means. We have to acknowledge that a
meaningful balanced budget amendment will also cap Federal spending at
its historical levels.
It is not difficult to see what will happen if we don't get control
of our fiscal situation right now. Budget shortfalls will only get much
worse, driven by massive increases in entitlement spending and interest
payments, and the reality is the failure to act will result in America
going the way of what we see happening in Europe right now, the way of
Greece, Italy, and Ireland: our economy in tatters and our standard of
living greatly diminished.
We cannot let that happen to our country. We must act now. We must
pass this balanced budget amendment in the Senate and send that
question to the House and also send that question to the States so the
people of this country can decide if we should be responsible and have
to balance our budget. Left unchanged, Medicare, Social Security,
Medicaid, and other mandatory health programs alone will eventually
grow to consume every single dollar of the revenues our government
takes in.
Without reform, the Social Security trustees project the program will
be insolvent by 2036. As a result, beneficiaries may see a benefit cut
of 23 percent in just 25 years. The Medicare trustees project it is
even more immediate and dire. The Medicare trustees project Medicare
will be insolvent by the year 2024.
It doesn't have to be that way. We need to show the political will
and courage to reform these programs, make them sustainable, and to
reform them and preserve them for those like my grandparents, who are
relying on them, and for future generations to know that these programs
will be there. But if we fail to take this challenge on now and
continue to kick the can down the road, then these programs will be
greatly diminished, and they will continue on an unsustainable path
that is bankrupting our country.
In this debate, it is important to remember that in 1997 the balanced
budget amendment failed to pass this body by only one vote. At that
time, our national debt stood at $5.4 trillion. We now have a $15
trillion debt. That debt equates to about $128,000 per household. That
is a huge amount of money to an average household. Under the Budget
Control Act, which I opposed last August, the debt will be allowed to
reach a new limit of $16.4 trillion, left unchecked.
Congress has raised the debt limit 79 times since 1960, and in just 4
short months since the debt limit was last increased, over $700 billion
has been added to our debt, since we took that action in August.
Speaking of the debt limit, the Republican-backed balanced budget
amendment will require a congressional supermajority to raise the debt
ceiling. That means three-fifths of both Chambers will have to approve
unless it is a time of war. That would require a majority in a time of
war. That is a very important measure because we can't continue to
increase the debt limit without addressing the underlying drivers of
this fiscal crisis that faces our country.
I also want to briefly touch on taxes. The Republican version of the
balanced budget amendment, S. Res. 10, would require a supermajority to
raise tax rates. We have a spending problem, not a revenue problem.
Under S. Res. 10, a two-thirds approval of both Houses of Congress
would be required for any bill ``that imposes a new tax or increases
the statutory rate of any tax or the aggregate amount of revenue.''
My friends on the other side of the aisle are proposing an
alternative--S. Res. 24--to the balanced budget amendment that I have
just described. While this proposal sounds good, it fails to squarely
address the magnitude of the challenges we face. It doesn't apply to
all spending. It also doesn't contain a cap on spending. It does
nothing to strengthen our entitlement programs, and it does nothing to
make it harder to raise taxes. It does nothing to make it more
difficult to raise the debt ceiling. In my view, it is insufficient to
be meaningful to pass along to the States for a vote.
The Republican alternative contains the elements that I just talked
about--a balanced budget, spending caps, a supermajority to raise
taxes, and making it more difficult to raise the debt ceiling, unless
and until we address the underlying causes of our fiscal crisis.
This issue is deeply personal for me. I fundamentally believe all of
us have a duty to make this country stronger than we found it. As the
mother of two young children, Katherine, now 7, and Jacob, 4 years old,
who are both very excited for Christmas, I want the American dream to
burn as brightly for them as it has for me. It is not too late for our
country or for this body to make the tough decisions that will put our
country on a fiscally responsible path.
I feel a solemn duty to make sure we make those choices now and that
we don't continue to kick this can down the road to future generations
and burden them with a debt they did not incur. The last thing I want
is for my children to ask me: Mom, you knew we were going bankrupt.
What did you do to save our country?
Now is the time for courage. All of us recognize the enormity of the
fiscal challenges we face, as well as the dire cost of continued
inaction in this body. The Republican balanced budget amendment
provides a solid foundation that will set our Nation on a fiscally
responsible path. This is an urgent need that we have right now. We
cannot do what we did in 1997 and fail to pass the balanced budget
amendment. We should send this question to the States and let them
decide, let the people of this country decide: Should we live within
our means? Should we balance our budget? Should we deal with this debt
crisis now and make sure our children and all children and our
grandchildren will have the same opportunities we have been blessed to
have in the greatest country on Earth?
I urge my colleagues to support S. Res. 10.
The ACTING PRESIDENT pro tempore. The Senator from North Dakota.
Mr. CONRAD. Madam President, I agree with the Senator from New
Hampshire on some of what she said with respect to facing up to our
deficit and debt. This debt does present a clear threat to our country,
and it must be confronted. I agree with her entirely on the question of
the importance of that and the priority of it.
I disagree entirely with respect to this amendment that is before us.
I came to the Senate floor to address this balanced budget amendment
because I believe it would be a profound

[[Page S8528]]

mistake for this country. In fact, I believe if this amendment were in
force today we would be in a depression. I believe adopting this
amendment would have and could have disastrous consequences for the
economy and for the future strength of this Nation.
I would like nothing more than to have a balanced budget. I believe
in balanced budgets. I believe this debt represents a clear threat to
the country. But I do not believe a constitutional amendment is the way
to achieve it. I believe the way to achieve it is for us to make the
decisions to balance the budget, to cut the spending, to raise the
revenue, to actually balance the budget--not leave it to a
constitutional amendment or to unelected judges or to the States but to
make those decisions here and now.
I have been part of the fiscal commission where 11 of 18 of us agreed
to a plan to get our debt under control. I have also been a part of
four Democrats and four Republicans who have produced a plan that would
get us back on track.
Here are the key provisions in the proposal before us. First, it
would require the adoption of a balanced budget each year unless two-
thirds of the House and the Senate voted to waive the requirement.
Second, it would cap spending at 18 percent of the prior year's gross
domestic product, again, unless two-thirds of the House and the Senate
voted to waive the requirement.
We have not had a spending level of 18 percent of GDP in as long as I
can remember. So that is a formula I think that goes against the
reality of the needs of this country--not only the need for support for
education but also for our national defense.
It would prohibit passage of any bills that increased revenue unless
two-thirds of the House and the Senate voted to waive the requirement.
The Senator just showed a chart that showed revenue at the lowest level
it has been in 60 years as a share of our national income. Again,
revenue is the lowest it has been in 60 years. This constitutional
amendment would say it would take a two-thirds vote to change it.
Really? Revenue is the lowest in 60 years, and we are going to have a
two-thirds vote to change it? Boy, that is a guarantee we are not going
to have the necessary revenue to balance the budget anytime soon.
It would require a three-fifths vote in the House and Senate to
increase the debt limit.
Here are what I see as the key problems with this proposal. First,
most important, it would restrict our ability to respond to economic
downturns. It would effectively block the implementation of
countercyclical policies. This would only compound economic declines
and possibly throw us into a recession or even into a depression.
Two of the best known economists in this country did a review of what
would have happened absent a Federal response after the events of late
2008. Alan Blinder, former deputy head of the Federal Reserve, and Mark
Zandi, the head of Moody's Economics, a former campaign adviser to John
McCain, did an analysis of what would have happened in this economy
absent the Federal response--the TARP and the stimulus. Their
conclusion is that had we not had that Federal response, we would be in
a depression today. We would have 16 percent unemployment. We would
have 8 million more people unemployed.
This amendment would have prevented that response. What a mistake,
what a profound mistake. Further, this amendment uses Social Security
funds to calculate balance and subjects the Social Security Program to
the same cuts as other Federal spending. Further, it shifts ultimate
decisions on budgeting to unelected and unaccountable judges.
Finally, The State ratification process for a balanced budget
amendment could take years to complete.
We don't have years. We need to act now, and we don't need an excuse
for inaction by saying: Oh, we passed a balanced budget amendment to
the Constitution that will not take effect for God knows how long.
Here are some additional problems that are specific to this proposal.
The 18 percent of GDP spending cap is Draconian and unrealistic,
particularly given the retirement of the baby boom generation and
rising health care costs. The restriction on legislation that raises
revenue would effectively prevent any increase in revenue, even if it
is part of a bipartisan, balanced debt reduction plan.
What a profound mistake that would be. Again, I repeat: Revenue as a
share of our national income is the lowest it has been in 60 years.
Spending as a share of our national income is the highest it has been
in 60 years. So this proposal would absolutely handcuff us on the
revenue side of the equation, locking in deficits for God knows how
long. It doesn't make sense.
Making it more difficult to raise the debt limit, this proposal
increases the likelihood of default. We saw the turmoil created by our
near default this summer. Why would we want to make an actual default
far more likely to occur?
We can also see that on our current course, by 2021, spending on
Social Security, Defense and other nonhealth care spending and interest
alone will reach more than 18 percent of GDP. What is missing?
Medicare. If we stay on our current course, under this balanced budget
amendment, Federal spending on Medicare would have to be completely
eliminated. Let me repeat that. On our current course, by 2021,
spending just on Social Security, Defense, nonhealth care spending, and
interest alone will reach more than 18 percent of GDP. What is missing?
Medicare. Medicare would have to be completely eliminated if we aren't
to change what we are doing with Social Security, not to change what we
are doing with Defense and other nonhealth care spending. Obviously, we
can't do anything about the interest expense. That has to be paid.
It is notable an 18-percent spending limit is so unrealistic that
even the House Republican budget would violate this restriction in
every single year. Let me repeat that. This 18-percent restriction on
spending is so unrealistic that even the House Republican budget would
violate this provision in each and every year of its life.
Norman Ornstein, a respected scholar at the American Enterprise
Institute--a Washington think tank--described a balanced budget
amendment as a very dumb idea. In a column in Roll Call earlier this
year, he wrote:

Few ideas are more seductive on the surface and more
destructive in reality than a balanced budget amendment. Here
is why: Nearly all our states have balanced budget
requirements. That means when the economy slows, states are
forced to raise taxes or slash spending at just the wrong
time, providing a fiscal drag when what is needed is
countercyclical policy to stimulate the economy. In fact, the
fiscal drag from the states in 2009-2010 was barely countered
by the Federal stimulus plan. That meant the Federal stimulus
provided was nowhere near what was needed but far better than
doing nothing. Now imagine that scenario with a Federal drag
instead.

Mr. Ornstein has it exactly right. A balanced budget amendment would
have a devastating impact on our economy at the worst possible time.
Mr. Ornstein is not alone in that sentiment. Macroeconomic Advisers, a
leading economic forecaster firm, had this to say in a company blog
posted in October:

If actually enforced in fiscal year 2012, a balanced budget
amendment would quickly destroy millions of jobs while
creating enormous economic and social upheaval. The effect on
the economy would be catastrophic.

Let me repeat that. The effect on the economy would be catastrophic.
Continuing the quote:

No model could capture the ensuing chaos and uncertainty,
which would make matters far worse.

Macroeconomic Advisers went on to conclude that enforcing a balanced
budget amendment in 2012 would result in 15 million fewer jobs.
Let me repeat that: 15 million fewer jobs. That is largely in line
with the Blinder and Zandi analysis of what would have happened absent
the Federal response to the economic downturn.
Here is what Bruce Bartlett, a former Reagan administration economic
adviser, wrote in a New York Times online column in November:

The idea of mandating a balanced budget through the
Constitution is dreadful. And the proposal that Republican
leaders plan to bring up is, frankly, nuts. The truth is that
Republicans don't care one whit about actually balancing the
budget. If they did, they would want to return to the
policies that gave us balanced budgets in the late 1990s. Of
course, no Republican favors such policies

[[Page S8529]]

today. They prefer to delude voters with pie-in-the-sky
promises that amending the Constitution will painlessly solve
all our budget problems.

We must absolutely address the Nation's deficit and debt. Our friends
on the other side have that exactly right. Our economic future depends
on our ability to put the budget back on a sound long-term path. That
is why I believe what is actually needed is for us to put our energy
and effort into writing a budget that actually balances, cutting the
spending, raising the revenue, making the tough choices. That is the
best way forward.
A balanced budget amendment to the Constitution is not the answer,
and this balanced budget amendment is particularly troubled. It would
restrict our ability to respond to economic downturns, it would impose
a Draconian and unrealistic spending cap, and it would effectively
prevent any increase in revenue, even if it is part of a bipartisan
balanced deficit reduction plan.
I urge my colleagues to reject this amendment.
On a separate matter, let me just say when my colleague said we don't
have a budget, we do have a budget. I sometimes think our colleagues
missed out on what happened on August 2. We passed the Budget Control
Act. The Budget Control Act provided a budget for this year and for
next year. That is the budget we are operating under. It was passed in
the Budget Control Act on August 2.
So when they put up these signs that say we haven't had a budget for
958 days or 858 days, that is not right. We do have a budget. They may
not particularly like the budget. They certainly may not like the way
it was done because it wasn't done through the regular process. It
wasn't done as a budget resolution. It was done as a law. Budget
resolutions are not signed by the President of the United States; they
are purely a congressional document. The Budget Control Act is actually
a law. It imposed a budget for this year and next year and 10 years of
spending caps. That is the law of the United States. That is a budget.
For my colleagues to stand and say we don't have a budget, it almost
makes me wonder, did they miss out on the debate and the passage and
the signing of the Budget Control Act? I tell my colleagues, that is
our budget. It is in law. It is not just a resolution, it is the law of
the land.
I thank the Chair, and I yield the floor.
The PRESIDING OFFICER (Mr. Blumenthal). The Senator from Utah.
Mr. HATCH. Mr. President, I have listened with a great deal of
interest to my good friend and colleague, and I do care a great deal
for him. He has been budget chairman for quite a while. Frankly, he has
been a lone voice over on that side, trying to get all of us to live
within our means. I have great respect for him for at least trying.
But we call budgets line-by-line discussions of just exactly what are
the inflows and outgoes as determined by the Budget Committees. He
hasn't been able to pass a budget mainly because he can't get his side
together to do it. It is a disgrace not for him but because our
colleagues will not do it. Nobody wants to do that because if they
truly had a budget, that would mean we would have to get spending under
control. We can't just keep doing it by adding taxes. We have a low
rate of income coming in right now mainly because spending is
completely out of whack.
I listened to my colleague very carefully. I have to say he made a
tremendous case for the constitutional balanced budget amendment
because he kept going on and on about all the problems we have. He
didn't mention we have been spending 25 percent of the GDP. Usually,
that is around 20 percent. So 25 percent is a whopping amount of money.
Our former CBO Director said: I guess the new normal will be somewhere
around 23 percent. We have been spending around 20 percent, while the
revenues are around 18 percent. Now they are spending 25 percent of our
GDP.
If there was ever an argument as to why we need some restraint in the
Congress of the United States, it is, No. 1, they can't get a budget
over there. We have a darned tough enough time over here when we are in
charge. No. 2, we are spending this country blind. I think the
distinguished Senator made that case eloquently. I think it is both
parties too. But there is certainly one party that is much more used to
spending than the other--I have to say that--and it is not the
Republican Party.
Look, all I heard in this last dissertation was what a rough road to
hoe our country has. This amendment allows for 5 years to gradually
reach a point where we can live with a balanced budget constitutional
amendment. What it does is send a message to everybody in this body and
the other body, over in the House of Representatives, that the game is
over. We better get it in shape in 5 years. Some people don't think we
can do it in 5 years. I am not so sure we can, but we have to try.
Let me tell you, this country is in real trouble. My distinguished
colleague and friend, whom I admire greatly because he does tell it the
way it is--though sometimes has his own interpretation as to the way it
is--made a pretty darned good case that we are out of control. I have
only been here 35 years, but I have to say I haven't seen many days
where we have even come close to a balanced budget, and I have seen
spending after spending after spending and demands for taxes so they
can spend more. Both sides are at fault, in my opinion, but one side
much more than the other.
I just wanted to make these points, because, my gosh, he made a great
case for the balanced budget constitutional amendment. Frankly, I don't
see how anybody listening would say the current way we are doing things
is the right way to do it. Yes, this amendment would put constraints on
Congress, and they would be tough constraints, but don't buy this
argument there is no way we can raise revenue or no way we can spend
under certain circumstances.
It is just that you have to have a supermajority vote to do it, and
you are going to have to make a case for it for the first time, in my
time here, I will tell you that.
I don't think anybody in this country thinks Congress is doing what
is right with regard to raising taxes and spending. I have to say that
I have watched it for all these years I have been in the Congress, and
it is not working because we don't have the constraints that make us
have to make it work. That is what this balanced budget amendment is
all about.
What they offer as a balanced budget amendment wouldn't put
constraints on anything. It is just there so they can have something to
vote for so they can say they voted for a balanced budget amendment. It
is anything but a balanced budget amendment.
Ms. COLLINS. Mr. President, I rise today to talk about the urgent
need for our government to begin living within our Nation's means. We
face a very grave fiscal crisis, one that threatens America today and
the American dream for future generations. It demands that we get our
Nation's fiscal house in order. So I am pleased the Senate is now
debating a balanced budget amendment to our Constitution.
In February 1997, a month after I came to the Senate, I went to the
Senate floor to urge my colleagues to pass a balanced budget amendment
to the Constitution to prevent our growing debt from swallowing our
future prosperity. Unfortunately, that effort came up one vote short.
Since that time, our national debt has ballooned to an astonishing
$15.1 trillion.
Sometimes when we deal with large numbers, it is easy to lose sense
of what they mean and difficult to put them into context. What $15.1
trillion in debt means is that a child born today will automatically
inherit a debt burden of more than $48,000. That debt has been largely
accrued not for that child's benefit but for our own. It is difficult
to imagine a more egregious example of taxation without representation
than forcing our children and grandchildren to bear the future tax
burden for today's excesses.
Unfortunately, as we have seen over the last decade, the addiction to
budget deficits is not simply a Democratic or Republican problem. Both
parties have had a difficult time showing restraint when it comes to
spending. We have had Gramm-Rudman-Hollings, the Deficit Reduction Act,
and the Budget Enforcement Act, and yet deficits not

[[Page S8530]]

only persist but have grown larger. The fiscal year that ended on
September 30 marked the third consecutive year in which the United
States has run deficits in excess of $1 trillion. Deficits have become
a part of the way that Washington does business. Spend now and let
someone else deal with the consequences later.
Those spendthrift ways are catching up with us. Our skyrocketing debt
has become a drag on our economy and a threat to our future prosperity.
We simply do not have the luxury of putting off difficult decisions. We
are consistently spending more than we take in, and by a large margin.
In the last fiscal year, government outlays totaled 24.1 percent of
gross domestic product--the second highest level, after 2009, since
World War II. Despite the very serious warning signs that we are on the
wrong fiscal course, this marks the second consecutive year that the
Senate has not even bothered to pass a budget resolution.
It is progress that the Budget Control Act that passed last summer
includes caps on discretionary spending, and I have worked very hard
with my colleagues on the Appropriations Committee to put together
responsible and thoughtful spending bills that live within those caps.
But, as my colleagues know, the biggest driver of our long-term debt
and deficits is not discretionary spending but the mandatory spending
that continues to balloon on autopilot.
Like many of my colleagues, I had hoped that the so-called
supercommittee, which was created by the Budget Control Act, would be
able to reach bipartisan agreement to reform mandatory spending and
change our fiscal trajectory. Unfortunately, that bipartisan agreement
remains elusive as both parties failed to come up with a deficit
reduction plan that was capable of winning a simple majority of panel
members. Instead, we have automatic spending cuts that are set to kick
in, which could have very serious consequences for our national
defense. Again, Congress has avoided making difficult choices about our
national priorities.
The events currently unfolding across the Atlantic, with European
leaders scrambling to stop the debt contagion that threatens the
economic prosperity of the continent, should be a clear warning signal
to us of what could come if we do not stem the tide of red ink that is
engulfing our Nation. We must put in place structural reforms that will
permanently force Washington to align expenditures and revenues.
Every day when I enter my office building, I am reminded of the
famous quote attributed to its namesake, Senator Everett Dirksen. The
wry observation he offered some four decades ago--``A billion here, a
billion there, and pretty soon you're talking about real money''--seems
tragically quaint today. I am convinced, now more than ever, that a
balanced budget constitutional amendment is what is needed to address
our growing debt and deficits.
Mr. McCAIN. Mr. President, I come to the floor today to discuss my
support of S.J. Res. 10, which would require a balanced budget
amendment to the Constitution. Let me start off by saying that we need
this amendment to protect the American taxpayer and bring back fiscal
discipline to Congress. We need this amendment not because the American
taxpayer is taxed too little, it is because Washington in particular,
Congress--spends too much. Finally, we need this amendment to show the
American taxpayer that we are serious about eliminating waste, fraud,
abuse, and duplication from the Federal budget and are serious about
putting our country back on a path to prosperity, not bankruptcy.
The Nation's debt now stands at the unsustainable level of $15.1
trillion. The Federal Government is borrowing 40 cents of every dollar
spent. According to the CBO, by 2021 debt held by the public will reach
82 percent of GDP. Without real and meaningful action by Congress to
reform the way we do business, the Nation's debt will balloon to well
over 100 percent by 2035. CBO projects that the cost of simply paying
the interest on all of this debt will total $4.5 trillion over the next
decade. And we wonder why there is so much uncertainty in our economy,
why businesses are not expanding and creating jobs that we so
desperately need, why the approval rating of Congress is at alltime
lows--and, may I add, justifiably. The writing is on the wall, and that
writing says that Congress can no longer allow politics and special
interests to direct how hard-earned taxpayer dollars are spent. We must
make hard choices now and live within our means as every American
family is required to do.
The President has said that we do not need a balanced budget
amendment to the Constitution to cut spending and balance the budget.
While that may be true, it is not the reality. When the Senate passed a
balanced budget amendment in 1982, the national debt was $1.1 trillion.
In 1997, when the Senate failed by one vote to pass a balanced budget
amendment, the national debt was over $5 trillion. Today, it is over
$15 trillion. Unfortunately, Congress has proven time and time again
that they are unable to cut spending and must be required by law to do
so. S.J. Res 10 is a strong, meaningful, and commonsense balanced
budget amendment that will reassure financial markets and the American
people, therefore, providing confidence that our economy so desperately
needs.
First and foremost this constitutional amendment will require the
President to lead by example and submit a balanced budget to Congress.
Since being elected, President Obama has failed to send a balanced
budget to Congress for consideration.
S.J. Res. 10 would also require Congress to pass a balanced budget
that limits outlays to 18 percent of GDP. In addition, it would require
a vote of two-thirds of both Houses of Congress in order to raise taxes
on the American people. This provision is vitally important to ensure
that we are not punishing the American taxpayer by making them pay for
out of control spending by Washington. Finally, S.J. Res. 10 would
require a vote of three-fifths of both Houses of Congress to increase
the Nation's debt limit. This constitutional amendment also includes
limited waivers that would, for example, allow Congress during a
declaring of war to enact deficit spending or to raise the debt limit
by a simple majority vote.
My colleagues on the other side have brought forth their own balanced
budget amendment; however, their proposal fails to ensure that Congress
will make the hard choices necessary to solve our current and long-term
fiscal crisis. For example, the Democrats' balanced budget amendment
does not apply to Social Security spending. According to the 2011
report by the Social Security Trustees, Social Security faces permanent
deficits unless the Congress reforms the system. In fact, the program
is projected to face a deficit of $46 billion this year. The Social
Security disability trust fund is projected to become insolvent in
2018. We cannot be serious about solving our Nation's financial
problems unless we include the Social Security Program, which is one of
the largest drivers of future debt. In addition, their balanced budget
amendment does not cap spending at 18 percent of GDP, it does not
require a supermajority of Congress to raise taxes and does not require
a supermajority of Congress to raise the debt limit. As we know too
well, Congress has never voted against raising the debt limit.
This week, the Senate has the ability to show the American people
that they are serious about fixing our fiscal crisis by adopting this
balanced budget amendment to the Constitution. This balanced budget
amendment is a vital step in ensuring that future generations will have
the same opportunities that all of us here in this body have
experienced. I urge my colleagues to support S.J. Res. 10.
I yield the floor.
The PRESIDING OFFICER. The Senator from Georgia.
Mr. ISAKSON. Mr. President, I see the distinguished majority whip on
the floor. I would like to propound a UC, and if he disagrees, please
tell me. I would like to be recognized for 5 minutes, followed by
Senator Shaheen from New Hampshire for 5 minutes, followed by Senator
Enzi for 5 minutes.
The PRESIDING OFFICER. Is there objection?
Mr. DURBIN. Reserving the right to object, I would just like to add
my name at the end of the queue for at least 5 minutes.
Mr. ISAKSON. With no objection from me.

[[Page S8531]]

The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. ISAKSON. Mr. President, I appreciate the time.
I first thank Senator Hatch from Utah for 16 continuous years of work
on the balanced budget amendment. It was his fight in 1995 that brought
that amendment to the floor within one vote of passing in the Senate,
and it is his fight today to bring it back for another vote.
I have listened to a substantial number of the speeches, and I come
back to three points.
Facts are stubborn, and there are three facts: First, we are spending
too much; second fact, we are promising too much to our people; and
third fact, we are borrowing too much.
I ran a real estate company for 22 years. Real estate is all about
borrowing and leverage, but you learn a lesson in real estate and you
learn it very painfully. There is such a thing as good leverage and
there is such a thing as too much leverage, and our country is at the
breaking point on leverage.
We have a process problem in the Senate and the House. We can't deal
with our financial fiscal affairs, our promises to our people or our
borrowing, and it is time we change the paradigm.
I support a balanced budget amendment because if it is ratified by
three-fourths of the States and becomes a part of the Constitution, it
forces the Congress to just say no on spending when we are spending too
much, it forces the Congress to look at entitlements and recognize that
we can only promise that which we can afford, and it forces us to look
at debt and recognize when we are in too much debt and we have become
overleveraged.
I want to put in a plug for something Senator Shaheen and I have been
working on for a long time, and it is a fundamental process change
called a biennial budget where you appropriate in odd-numbered years
for 2 years, not 1, and you spend that even-numbered year, the election
year, overseeing your expenditures and your programs to find savings,
to find waste, and to try to balance your budget. If we changed our
process and forced ourselves to do something like that, we wouldn't be
facing the catastrophic consequences we are today.
I thank the Senator from New Hampshire for being on the floor and
recognize her for her leadership on the issue, also, as one from a
State that does biennial budgeting, as do 20 of the 50 States in the
United States of America.
I will tell you an interesting story about biennial budgeting. The
nation of Israel got in financial difficulty 4 years ago. They were
borrowing too much, they were spending too much, and they were going in
debt too much. Israel asked around the world: What should we do to
change our fundamental process? And they changed to a biennial budget.
Two years later, their GDP was better, their deficit ratio was down,
and GDP had gone up about 7.5 percent in 2 years, all because they got
their fiscal house in order.
So while some will argue that you can't do a balanced budget because
it won't work, some will say 18 percent is too much, some will say you
just can't do this and you just can't do that, there is one thing we
can't do anymore; that is, spend beyond our means, borrow beyond what
is good for our children and grandchildren, and promise to our seniors
and those in poverty that we can deliver more than we can deliver.
If we face the day of reckoning now and we reprioritize our
entitlements, if we put our Tax Code on the table and reform it and we
cut spending where we can, we can come up with a trifecta that will
take this debate to ancient history, and we will begin getting the
United States of America back in good fiscal soundness. That is what a
balanced budget amendment starts, and I hope the end of it is that
process and a biennial budget as well.
I thank the President for the time, and I yield to the Senator from
New Hampshire.
The PRESIDING OFFICER. The Senator from New Hampshire.
Mrs. SHAHEEN. Mr. President, I thank my colleague from Georgia for
his very thoughtful comments.
Senator Isakson has been working on a biennial budget for a very long
time. I was pleased to join him in this session of Congress. And I
agree with him. I believe this is one of the ways we can encourage more
oversight of our spending and hopefully address some of the budget
issues we face. So I appreciate and share his beliefs that this is an
important change we should make.
I am actually on the floor not to speak on the balanced budget
amendment, however, but to talk about what I believe is very important
for us to do before the end of this year; that is, address the
extension of the payroll tax cut.
In November, the private sector added 140,000 new jobs to our
workforce. In fact, businesses have now created 100,000 jobs in each of
the last 5 months. This is a positive trend we haven't seen in the past
5 years. While this is encouraging, we still have a long way to go
because more than 13 million Americans remain unemployed and millions
more are underemployed. These individuals and their families are
struggling to make ends meet during this holiday season.
At this time last year, Congress passed bipartisan legislation to put
more money into the pockets of working Americans. We cut payroll taxes
for workers--an effort that increased take-home pay for the average
household by almost $1,000 in 2011. This tax cut isn't just good for
families on a tight budget, it is good for our fragile economy. In New
Hampshire, the payroll tax cut has meant an extra $600 million in our
communities.
There are some who want to allow this tax cut to expire at the end of
the year. But let's be clear. If the tax cut expires, this would mean
the average family would see their taxes increase by $1,000 next year.
This would mean taking $120 billion out of our Nation's economy, money
that would no longer be spent at our supermarkets, at our retailers,
and at our gas stations. That doesn't make sense.

Independent economists have predicted that allowing this tax cut to
expire could cost our economy 400,000 jobs next year. Some have even
predicted that the United States could face another recession if we
don't take action.
Members of this body have also suggested that this tax cut would
starve Social Security of needed revenue and endanger this bedrock
program's solvency. With Americans relying so heavily on Social
Security to meet basic needs, this is a serious charge and one we
should take seriously. However, the program's Chief Actuary has written
that this tax cut does not hurt Social Security's finances. Instead,
this proposal contains provisions to require that the Social Security
trust fund be made whole.
I recently supported Senator Casey's proposal to not only extend
payroll tax cuts for employees but also to expand them to increase the
average family's take-home pay by an additional $500 next year. This
proposal would have cut employer payroll taxes, making it easier for
small businesses to keep current workers and hire new ones. That
proposal was fully paid for with a 3-percent tax on people earning more
than $1 million in a year. Because of the way it was paid for, the
legislation was blocked. My friend from Pennsylvania, Senator Casey,
also introduced a compromise plan that I supported. But again,
unfortunately, it did not pass.
I think that particularly now, at this time of the year, at this
critical stage for our economy, everyone should agree on preventing tax
increases for working families. There are some competing ideas about
the best way to accomplish this, and I welcome that debate, but
Congress simply cannot afford to saddle middle-class families with a
$1,000 tax increase in the midst of an uneven recovery. It isn't right
for our small businesses, it isn't right for our communities, and it
isn't right for the economy.
Time is running out to extend the payroll tax cut. I urge my
colleagues to support this effort.
The PRESIDING OFFICER. The Senator from Wyoming.
Mr. ENZI. Mr. President, I rise today to discuss the issue I raised
during my maiden speech on the Senate floor in 1997; that is, the need
to pass a constitutional amendment requiring a balanced budget.
I am disappointed that we were unable to pass a balanced budget
amendment in 1997. I commend Senator Hatch for his efforts then. We got
within one vote. We had 66 votes and we needed 67. Had we gotten that,
we

[[Page S8532]]

wouldn't be in this mess today. In 1997, our national debt was $5.4
trillion. Today, it is an astonishing $15 trillion. Without immediate
action, that number will continue to increase to a level that is even
more unsustainable.
Time and time again, the Federal Government has proven it is
incapable of the fiscal discipline needed to spend within its means.
Time and time again, the Federal Government has spent more money than
we brought in. It has led to the situation we currently face where we
are borrowing more than 40 cents on every dollar we spend and where we
are being threatened with further downgrades in our credit rating.
In fiscal year 2010, the government brought in slightly more than
$2.2 trillion in revenue. At the same time we collected $2.2 trillion,
we spent $3.5 trillion. In other words, we overspent by $1.3 trillion.
That is $1,300 billion. That is an astonishing amount of spending, and
it cannot be sustained. I encourage everybody to write these numbers
out with all of the zeroes sometime and see what we are talking about.
We have a spending addiction that must be controlled. For years we have
tried to hide it, disguise it, or ignore it. We have acted as if it is
OK to keep spending money we don't have. We no longer have that option.
The world today is different from the world of 1997.
We have seen riots in other nations where their fiscal situations
were out of control. If we don't act now, we could see similar events
in this country. We can either balance our budget or go broke--even
more broke than we already are.
Balancing the budget is not a revolutionary idea. Responsible
families balance the amount they spend with the amount they make or
they go bankrupt. Businesses balance the amount they spend with the
amount they bring in or they go bankrupt. Most States have amendments
requiring them to balance the amount they spend with their revenue.
Wyoming's Constitution requires a balanced budget each and every year,
and they do it. If people in Washington understood budgeting the way
Wyoming does, we would be in a much better place right now. If
families, businesses, and States can balance their budgets, there is no
reason the Federal Government cannot balance its budget.
There are two options the Senate is considering today, and I am
pleased there is consensus from both sides of the aisle that a balanced
budget amendment would help us. Although that is the case, there is no
doubt in my mind that the version introduced by Senator Hatch is far
superior to the version introduced by Senator Udall.
The Republican balanced budget amendment gets to the heart of the
problem, which is the need to rein in out-of-control spending. The
Republican resolution requires that we get spending down to historical
revenue levels and forces us to make the tough choices about which
programs will no longer be necessary. It also prohibits Congress from
raising taxes until a supermajority of Members support such a tax
increase. This is an important provision because the default solution
for our out-of-control spending should be cutting spending, not raising
taxes. This bill also goes into effect 5 years after ratification,
which gives us the ability to transition to a balanced budget.
I have a penny solution bill out there, a 1-cent solution where we
cut 1 percent from every dollar we spend for 7 years. At the end of 7
years, the budget would balance. So it is not something that is
undoable. We can balance the budget.
While I am pleased that my Democratic colleagues have a balanced
budget amendment, the alternative they offer does not address the heart
of the problem. It does not include a spending cap to ensure that we
move spending to an acceptable level. It does not include a requirement
for a supermajority to raise taxes, which will allow proponents of tax
increases to more easily work to balance a budget on the backs of the
American taxpayers. And the American taxpayers are only 49 percent of
the people working right now. The American people are not the ones who
cannot get spending under control. They should not see tax increases
simply because Congress can't do its job.
We need to pass the Hatch amendment, and we need to pass it now,
because I must also remind my colleagues that passage of a strong
balanced budget amendment is the first step. If we pass a balanced
budget amendment, it still must be ratified by the States. Three-
fourths of the States have to pass it for it to become a part of the
Constitution. That will take time, and with a $15 trillion debt we
don't have a lot of time left. There is speculation that 2 years might
be the outside. This isn't going to balance for 5 years. Two will
create some substantial cuts and tax increases.
Passage of the balanced budget amendment by three-fourths of the
States is a tough test. Because of the magnitude of what we are trying
to do, it should be. However, we need to give the States this
opportunity to force the Federal Government to come to grips with its
finances, as the State governments are required to do.
Why should we give the States the opportunity to ratify a balanced
budget amendment? Because I found that the best decisions are made
closest to the people. State governments are closer to the people than
the Federal Government and they are generally better at addressing the
needs of the people of their State. Giving the States the opportunity
to ratify the amendment will bring the budget closer to the people and
would allow the American people to decide how they want Washington to
spend their hard-earned money. Most of the American people get it and
they are asking us to get it and do a balanced budget amendment.
Amending our Constitution is an extraordinary measure. It is not
something I take lightly. We are in an extraordinary time. We have a
budget deficit that is out of control and a national debt that is
ballooning to levels that are unsustainable. We need a balanced budget
amendment so we can begin to get our Nation's finances back in order.
I commend Senator Hatch for his bill and appreciate him offering it.
I hope my colleagues will support it. It is essential for our country.
I yield the floor.
The PRESIDING OFFICER. The Senator from Illinois.
Mr. DURBIN. Mr. President, there are very few things on which Members
of Congress agree, but one of the things that binds us and unites us is
the common oath we take to uphold and defend this document. This
document is not just another resolution, another law; it is the
Constitution of the United States. For more than 220 years this
document has guided our Nation and inspired other nations toward
democracy. I think it is fitting that we swear an oath to uphold and
defend it.
But I think we also have to look at this document not just with
respect but with humility, humility because we know the words contained
have managed to guide our Nation so successfully for so many decades
and centuries. Those who are bold enough to suggest they would change
the wording of this document have to expect to have hard questions
asked as to whether it is appropriate and whether what they are setting
out to do is consistent with this great document and the needs of our
Nation.
I can recall when Senator Hatch chaired the Senate Judiciary
Committee and I was a member. There was a day when they asked me, as a
member of the Judiciary Committee, to give permission for three
constitutional amendments to be considered in the same day. I objected,
which was my right. I said to Chairman Hatch at the time: You can call
two constitutional amendments on Thursday but, call me old-fashioned, I
don't think we ought to amend the Constitution more than twice a day.
The point I was trying to make was to suggest to my colleagues to at
least have some humility and maybe even hesitancy to suggest they can
change for the better the wording of this great Constitution.
It has been changed, there is no question about it. From the moment
it was written until a few years later, Thomas Jefferson called for the
Bill of Rights. Many say that was essential for the ratification of the
Constitution. It included some basic rights that we now revere in this
country. So the first package of amendments, the Bill of Rights, has
become an integral part of the original document because they were
adopted so quickly--added so quickly.

[[Page S8533]]

But in the 220 years since 1791, when the Bill of Rights was added--
in the 220 years we have only amended this document 17 times and only
for the most serious of matters. Consider what our amendments have
done. They have ended the practice of slavery. They have established
the principle of equal protection. They have assured the right of women
in America to vote, among other things. They have provided for
succession in case of Presidential disability, and they have addressed
some of the most fundamental issues facing our Nation.
Now some Members of Congress believe we should enshrine in our
Constitution their views of what the Federal budget should look like.
They want to radically reshape our constitutional framework in order to
relieve Congress of its political and moral responsibility to make
tough choices about taxing and spending. They want to tie the hands of
Congress on budget decisions and pass important decisions on to another
branch of government, our Federal judiciary.
That is not what the Founding Fathers intended. The Constitution
gives the power of the purse expressly to Congress. Fulfilling this
constitutional duty carries some political risk, but we all signed up
for that job. Members of Congress should not try to change the
Constitution to avoid their duty to make tough and important decisions.
These days, some in Congress would rather take a red pen to the
Constitution than to reconsider an anti-tax pledge they have made to a
Washington lobbyist named Grover Norquist. Mr. President, 40 Republican
Senators, all of whom are cosponsors of this amendment, have taken a
pledge, a public oath to Grover Norquist when it comes to the issue of
taxes. I believe my colleagues who are indentured politically to Grover
Norquist need to get their priorities right. Our oath to support and
defend the Constitution is much more important than any allegiance to
any Washington lobbyist.
Congress has balanced the budget not just in my lifetime but in my
term of service. We ran a budget surplus in fiscal years 1998 through
2001. There is nothing stopping us now from getting our fiscal house in
order except a lack of political will. We simply do not need to go to
the extreme of amending the Constitution to get this job done.
It is also clear a balanced budget amendment proposal has many
unanswered questions and concerns and it is our responsibility to ask
those questions. I held a hearing as chairman of the Constitution
Subcommittee of the Judiciary, well attended by Members on both sides
of the aisle, with witnesses telling us the pros and cons of a balanced
budget amendment. That is the way the process should work. Now we come
to the floor to consider two versions of a balanced budget amendment.
It is interesting, when the balanced budget amendment came before the
House of Representatives, opposition to it was bipartisan. Even the
Republican chairmen of the House Rules Committee and the House Budget
Committee voted against the Republican version of the balanced budget
amendment brought up in the House.
A few weeks ago, when we held this hearing, witnesses told us why we
should have pause, if not reject, this notion of a balanced budget
amendment. First, it would cause harm to the economy. I cannot say it
any better than Senator Conrad did moments ago. Our budget in
Washington is designed to not only serve the needs of the nation but to
help our economy get on track and stay on track. In fact, when things
go bad in our economy, as they have in the last several years, our
budget steps in with countercyclical measures such as unemployment
compensation to put our economy back on track. The balanced budget
amendment before us today is going to make that more difficult to do.
The forecasting firm Macroeconomic Advisers told us what would have
happened with this balanced budget amendment if it had been in place
today. They said such an amendment would double the unemployment rate
in America, cause the gross domestic product to shrink by 17 percent,
and destroy millions of jobs. That is something my Republican
colleagues will not acknowledge, and they should. If we cannot spend in
times of recession, even when receipts are low, we fail to turn the
recession around and of course we leave many unemployed Americans with
no help when they desperately need it.

There is also a provision in the Hatch-McConnell balanced budget
amendment that would increase the risk of default on our national debt
by requiring a three-fifths vote in each House to raise the debt limit.
I might tell my colleagues who follow this, only 3 of the last 11 debt
ceiling increases passed both Chambers by a three-fifths vote; 3 of the
last 11. If you enjoyed the debt limit standoff of a few months ago and
the threat of not only closing down our Government but closing down our
economy, you would enshrine it in the Constitution with the Republican
balanced budget amendment.
It always strikes me as odd, if not hypocritical, that Members come
to the floor and give speeches about how much they support a war
effort, or spending for a given issue, and then when it comes time to
raise the debt limit, which is part of the bargain, they are nowhere to
be found. They want to be there for the press release saying, I am for
the war, but when the debt limit needs to be increased to pay for the
war they become fiscal conservatives and are nowhere to be found. I
think there is some political hypocrisy in that.
Another concern no one has answered that I commend to my colleagues
was exemplified by the testimony of Professor Alan Morrison of George
Washington University Law School. He asked the basic question: Who is
going to enforce this amendment? If in fact Congress does something in
violation of the amendment, who can sue? And which court would consider
it? It is a valid question because ultimately this will end up in the
courts. The courts will have to make some rather unique decisions. What
are the outlays and receipts of the United States? What was the gross
domestic product? These are issues which many in the court may find
challenging if not impossible to deal with on a timely basis. The
longer it takes to resolve those issues the more uncertainty there will
be about our Nation's economy and its economic future.
Do we want to put the courts in charge of budget decisions? Former
Solicitor General and Judge Robert Bork said ``the result . . . would
likely be hundreds, if not thousands, of lawsuits around the country,
many of them on inconsistent theories and providing inconsistent
results.''
Those who support the amendment look for stability and certainty. My
guarantee is turning this over to the Federal courts will give you
neither.
The nonpartisan Congressional Research Service looked at balanced
budget amendment enforcement on August 3 and said:

The experience of State governments indicates that concern
over judicial involvement in budgeting is realistic. In some
States the judiciary has become involved with the operation
of various aspects of budgeting to impose budget balancing
remedies [like] requiring tax increases, limiting
expenditures generally or preventing implementation of
specific spending laws. The possibility that the Federal
courts could invoke such remedies prompts concern about the
potential such actions would have for causing a significant
shift in the balance of power among the branches of the
Federal Government.

Even former CBO Director Douglas Holtz-Eakin, who was called in by my
Republican colleagues to testify at our hearing in support, conceded
``the question of enforcement remains a challenge that should be
thoughtfully considered.''
I might add, parenthetically: No kidding. Enforcement of this is
critical. How can the Senate consider passing a balanced budget
amendment without answering first the question of enforcement? It would
create tremendous uncertainty.
I would say the balanced budget amendment that has been sponsored by
all the Senate Republicans raises particular concerns. Under this
proposal, spending would be capped at 18 percent of gross domestic
product each year, a level far below the Draconian budget suggested by
Congressman Paul Ryan that would end Medicare as we know it.
The Senate Republican proposal enshrines the Republican philosophy in
requiring a two-thirds vote in each House on any bill that increases
taxes or revenue without any ability to waive that two-thirds
requirement, even in time of war.

[[Page S8534]]

The effect of these reforms would devastate programs such as Medicare
and Social Security while giving constitutional protection to tax
expenditures currently enjoyed by corporations and the wealthy. This
proposal is not sensible, it is not fair, it would not serve our
country well.
In short, our hearing made it clear there has not been a balanced
budget amendment proposed that would actually be enforceable and that
would not cause great collateral damage to the economy.
I have served on several efforts, and continue to, in an effort to
reduce spending, to find new revenue, and to balance our budget. I will
tell you that it takes political will. This kind of approach, this idea
that somehow we can pass a constitutional amendment and be done with
our responsibility is not only shortsighted, I think it is
counterproductive. I think it will make our situation worse instead of
better. I thank Senator Mark Udall for his offering on his balanced
budget amendment. It is a better approach, and while I don't support a
balanced budget amendment, if I were to support any balanced budget
amendment it would be the Udall amendment. But I don't believe amending
the Constitution at this point in time is the right way to approach
this. I do not believe either amendment achieves it without creating
terrific uncertainty in our future about enforcement.
I urge my colleagues to oppose efforts to amend our Constitution. I
urge them, instead, to show political courage and work hard right now
in a bipartisan way to address our fiscal challenges. That is what the
American people expect of us.
I yield the floor.
The PRESIDING OFFICER. The Senator from Arizona.
Mr. KYL. Mr. President, I want to express my support for the
Republican-offered balanced budget amendment, a measure I worked on
with Senators Toomey, Lee, Hatch, and Cornyn, and thank those Senators
for their leadership on the issue.
As Americans know, Washington has a spending problem. The Federal
Government's fiscal position is unsustainable. It now borrows more than
40 cents of every dollar it spends. Indeed, our debt has climbed to
over $15 trillion and will continue to grow and threaten our economy
and our jobs and our way of life unless we do something about it.
Opponents say Congress should do its job. Sure, it should, but it has
not. Events during the last 30 years have shown that Congress cannot be
counted on to make the tough choices necessary to control spending and
to balance the budget. Here is a little history. When the Senate passed
a balanced budget amendment in 1982, that national debt was $1.1
trillion. In 1986, when the Senate failed by one vote to pass the
balanced budget amendment, the national debt topped $2.1 trillion. By
1997, when the Senate again failed by one vote, the national debt was
over $5 trillion. Today the debt is over $15 trillion. So there is no
evidence that Congress has been willing to or able to reduce the debt
without the Constitution requiring it.

The Republican balanced budget amendment simply requires Congress to
do its job. It includes real reforms that would help the government
live within its means, including having the President submit a balanced
budget to Congress every year.
The balanced budget amendment does not etch rules into stone. Any of
its requirements can be waived by a supermajority of the Congress; that
is, if there is a real national consensus to do so. Let's remember we
are in a crisis today because of deficit spending. Raising taxes and
getting deeper in debt have been far too easy for Congress.
The Republican balanced budget amendment contains two key enforcement
mechanisms that Congress would have to abide by. First, Congress would
have to limit spending to 18 percent of the gross domestic product from
the preceding calendar year. The balanced budget amendment would also
prohibit spending from exceeding total revenues in a given year. Why 18
percent? Well, if the goal is to balance the budget, the only way to
succeed is to limit the Federal spending to the level of revenue that
the economy is willing to bear.
According to the Congressional Budget Office's August Budget and
Economic Outlook, from 1991 to 2010--the most recent period of time--
revenues averaged 18 percent of gross domestic product, and that is why
that number is selected.
It is notable that the Democratic alternative does not contain a
spending cap. It also contains a lower threshold of votes for waiving
the balanced budget amendment, which, of course, would make deficit
spending much easier.
The second mechanism in the Republican balanced budget amendment is a
prohibition on any bill that increases taxes from becoming law unless
approved by two-thirds of a rollcall vote of Members in each Chamber.
When Congress cannot get its hands on enough revenue for its spending
priorities, the temptation is always to look for more revenue and raise
taxes. Well, it should be more difficult to take more money from the
American people and to increase the size of the Federal Government.
Moreover, raising taxes is not a productive solution to budget
deficits. Not only does projected revenue usually fail to materialize,
higher taxes discourage work, production, savings, and investment which
all results in lower revenues in future years. So we cannot balance the
budget by raising taxes.
On the issue of tax increase restrictions, the Democratic alternative
again falls short. It does not contain a mechanism to make it more
difficult for Congress to raise taxes. In fact, it does the opposite.
It contains a provision that makes it more difficult to lower taxes
collected from American job creators.
Some of our friends on the other side of the aisle will paint a
doomsday scenario that they say would result from the Republican
balanced budget amendment, one that would mean immediate changes and
draconian cuts. That is not accurate. As we know, Congress cannot amend
the Constitution. We can only propose an amendment for States to
consider in a ratification process that takes a long time. If it
passed, the balanced budget amendment would not become effective until
5 years after ratification by three-fourths of the States. So it is not
like we have some immediate concern that next year's budget is going to
suffer if the balanced budget amendment were to pass.
Let's not punt again on getting our spending under control. Let's not
keep kicking the can down the road. Let's put on some real constraints
so Congress will have to do its job, the job the American people expect
it to do.
I urge my colleagues to vote in favor of the Republican-offered
balanced budget amendment.
The PRESIDING OFFICER. The Senator from Ohio.
Mr. PORTMAN. Mr. President, I rise today to join Senator Kyl in
supporting the balanced budget amendment that Senators Lee and Hatch
have crafted. I commend them for their hard work, and I particularly
thank Senator Hatch for his principled leadership over the years in
this effort. In the mid-1990s he almost got us to a balanced budget
amendment to send to the States, and this time I hope he--showing his
leadership again--will be successful.
Washington's runaway spending and crippling debt burden underscore
the need for us to have a balanced budget in this country. If
Washington doesn't stop spending more than it takes in, I fear there
will be an economic collapse, and, perhaps more profoundly, it will
threaten the very foundation of our Nation--the freedom of individuals
to thrive and to prosper.
There is plenty of evidence to show that the huge debt burden we have
is already crippling the economy. There was a recent study done by
respected economists Carmen Reinhart and Kenneth Rogoff that shows that
the debt burden of 90 percent of the economy will reduce a country's
economic growth by 1 or 2 percentage points. Our gross debt right now
is 100 percent of our economy. Growth this year is likely to be closer
to 2 percent total, pretty weak growth. So 1 percent to 2 percent more
would mean a 50-percent or even a 100-percent growth increase in this
country. This means over 1 million new jobs could be created right now
if we didn't have these huge deficits building up annually to a record
debt that is now over $15 trillion.
It is unacceptable that we have the economic growth that we do
because it

[[Page S8535]]

is keeping people from achieving the opportunities they seek at a time
when there are almost 22 million Americans who are unemployed or
underemployed, and we need to do everything we can to give the economy
a shot in the arm. Part of it is getting our fiscal house in order and
stopping this record deficit and debt. We should not condemn people to
chronic unemployment through inaction in Washington.
However much lawmakers at times want to do the right thing, it seems
as though the political system and the budget rules around here create
a bias for spending and deficits. When I left the post as Director of
the Office Management and Budget in the last Presidential
administration--that was in 2007--the budget deficit was $161 billion,
which is about 12 percent of today's budget deficit, and I thought that
was way too high. In fact, that year I proposed, on behalf of the
President, a budget that actually balanced over a 5-year period because
at that time we were so concerned about growing deficits and debts.
Again, that was only 12 percent of today's deficit.

In that time, as OMB Director, I was convinced that we need to have a
discipline in Washington to balance the budget because we need to have
some incentive to prioritize. Washington, again, seems to have this
bias toward spending and deficits that I think can only be resolved
through what 49 States have, which, again, is this power to be able to
tell the elected representatives that we have to figure out how to
prioritize; we have to figure out how, at the end of the day what every
family in America does, what every business in America does, which is
to figure out how not to spend more than we take in.
Study and experience led the Founders of our country to create the
best system of government ever devised: a Republic with enumerated
powers. Similarly, study and experience should lead us to enact a
balanced budget amendment. The times demand it. We need to reverse this
system's bias in favor of deficits and debts. We need a balanced budget
amendment in order to preserve the Founders' vision of a limited
government of enumerated powers.
But the fact is, Congress has not been able to get its spending under
control through any other means. Some have called for a far higher tax
rate. In other words, instead of dealing with the spending that is
increasing dramatically--by the way, spending has gone up 21 percent
just in the last three years. But instead of dealing with that, people
say: Why don't you just raise taxes to catch up with the spending? That
way we would have a balanced budget through higher and higher revenues.
I guess what I would say is, Congress has a spending problem not a
revenue problem. The growth in the entitlement programs, of course, is
the long-term driver of this spending problem. The cost of these
entitlements, along with interest on the debt, is projected to squeeze
out the cost of every other Federal program within the next couple of
decades, leaving little to nothing for other government priorities.
People say, well, the revenues as a percent of our economy are
relatively low now, and that is true. Coming out of the recession, we
have not had the growth we had hoped for and that has resulted in lower
tax revenues coming in.
Historically, tax revenues have been 18 percent of our economy. Today
they are lower than that and closer to 14.5 to 15 percent. Spending has
been at about 20 percent of our economy historically since World War
II. Today, that spending is over 24 percent of our economy.
What happens over the next several years, based on the Congressional
Budget Office analysis, is the revenues begin to increase as a percent
of the economy even if the 2001 and 2003 tax relief is not continued.
In that case, the revenues increase even more dramatically up to 21
percent or 22 percent of the economy.
So the fact is, the spending is on a trajectory to go up from a
historic 20 percent to 24 percent now to 30 percent to 40 percent to 50
percent over the decades. We cannot catch that spending with enough
taxes. It simply cannot be done and have a viable economy. So we have
to deal with the spending side of the ledger. Even if we do raise taxes
to chase the trajectory, we will upset that balance between the Federal
Government and a free, robust private sector that encourages innovation
and gets people back to work.
If the Federal Government ends up taxing every dollar of earnings, we
will have taken away the space for Americans to pursue and enjoy the
rewards of their hard work, risk-taking and innovation. The Founders
might have used another phrase to describe what a free economy
promotes: life, liberty, and the pursuit of happiness. Today we are
talking about how we ensure that we have economic growth so that we can
bring back the jobs, and that will not happen through the level of
taxation that would be required to catch up to the record levels of
spending.
To address Washington's natural inclination toward taxing and
spending, a successful balanced budget amendment needs to do more than
just require the outlays be less or equal to receipts. Again, it should
include a spending cap because of the problems I have talked about with
regard to the projections by the nonpartisan Congressional Budget
Office over the coming years and decades. It should also demand a
supermajority should Congress seek to enact antigrowth tax hikes.
I think this balanced budget amendment, crafted by Senators Hatch and
Lee, by doing that strikes a good balance. It also addresses the
concern about a balanced budget amendment limiting the Federal
Government's ability to spend in a time of war. If there is a
declaration of war against a nation-state, a majority vote in both
Houses would allow for deficit spending. If the Armed Forces are
engaged in a military conflict that has not been given a full
declaration of war, a three-fifths vote in both Houses would allow for
deficit spending. This is in keeping with the intention of the
Founders.
In Federalist 34, Alexander Hamilton drew a distinction between
monarchies and republics. He said, the chief source of expense in every
government was defense spending. But republics, Hamilton counseled,
should not use this to live beyond their means. He wrote:

There should be as great a disproportion between the
profusion and extravagance of a wealthy kingdom in its
domestic administration, and the frugality and economy which
in that particular become the modest simplicity of republican
government.

Washington has spent and overspent. This has led us away from that
frugality that was the intention of our Founders. A balanced budget is
the only way to get back to frugality and to that ``modest simplicity
of republican government.'' And that is republican with a small ``r.''
If we don't restrain spending through a balanced budget amendment, we
will effectively inhibit and ultimately undermine the liberty of the
Americans. We will threaten the American dream, the hope that each
generation is able to pass on to the next generation a better life so
that they are able to flourish and to meet, again, their achievements,
their objectives in life through opportunity that can be created
through a growing economy.
It is time for Congress to prioritize. It is time for Congress to
make tough decisions. We should do it with the discipline of a balanced
budget. Time has shown us there is a need for a requirement to make
those decisions.
My home State of Ohio has that discipline. In fact, over the past
year, Ohio has had to make some tough decisions to close a budget gap
of about $8 billion. Here in Washington, we have a budget gap that is
far higher. This year the government will bring in about $2.2 trillion
and spend about $3.7 trillion. This gap is huge and growing, and just
as 49 States do, we need to discipline Washington to force Congress to
make these tough decisions to prioritize on behalf of the American
people so that we don't have this crippling effect on economic growth,
so that we can begin to see the kind of robust recovery we hope for
coming out of the recession.
For all these reasons I urge my colleagues to join me in support of
the Hatch-Lee balanced budget amendment.
I yield the floor and note the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. BROWN of Ohio. Mr. President, I ask unanimous consent that the
order for the quorum call be rescinded.

[[Page S8536]]

The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. BROWN of Ohio. Mr. President, I ask unanimous consent to speak as
in morning business for up to 10 minutes.
The PRESIDING OFFICER. Without objection, it is so ordered.
(The remarks of Mr. Brown of Ohio pertaining to the submission of S.
Res. 347 are printed in today's Record under ``Submitted
Resolutions.'')
Mr. BROWN of Ohio. Mr. President, I yield the floor.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. LEVIN. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER (Mr. Bennet). Without objection, it is so
ordered.
Mr. LEVIN. Mr. President, Congress cannot absolve itself of the
responsibility to balance the budget by passing a constitutional
amendment. Congress has an existing constitutional duty to control the
purse. If Congress has the will to balance the budget, it can do so. If
it does not have that will, no constitutional amendment can be a
substitute.
We knew that in 1996, which I believe was the last time the Senate
seriously evaluated a balanced budget amendment. While we did not pass
the balanced budget amendment, we did adopt budgets and policies that
created the first surpluses in decades, enabling the United States to
begin to reduce its debt load. Unfortunately, that fiscal sensibility
was washed away by irresponsible, unfunded Bush tax cuts in 2001 and
2003 and two unfunded wars. Once again, we find ourselves in a deep
fiscal hole.
We can and must dig ourselves out of it, as we did in the 1990s, by
taking a balanced approach, restoring revenues, and making sensible
spending cuts. But that is not a constitutional question. That is a
political one. Can we, as a Congress, pass the tough measures needed to
restore fiscal discipline?
I have proposed a seven-point plan for reducing the deficit.
Bipartisan commissions have proposed making spending cuts and
increasing revenues and realistic folks from all parts of the political
spectrum agree Congress needs to address revenues, as well as spending,
if we are to achieve real deficit reduction.
Congress needs to make tough choices and is failing to do so. One
more procedural promise--this time in the form of a constitutional
amendment--is not going to get the job done.
While the details of the two amendments before us differ in many
respects, there are real questions as to how either could be enforced.
For instance, the Udall amendment says:

The Congress shall enforce and implement this article by
appropriate legislation, which may rely on estimates of
outlays and receipts.

What would happen if Congress failed to adopt the implementing
legislation that lives up to the terms of the amendment? If it does not
have the will to make cuts and raise revenues, what makes people think
Congress will be able to agree on implementing legislation?
The amendments raise far more questions than they answer. For
example, would a court be willing to hear a case alleging a failure by
the Congress to fulfill its duties or would a court treat such a
challenge as a political question that is beyond its reach? Who would
even be able to bring a case alleging a violation? Who would the case
be brought against and what would the remedies be?
Could a judge nullify a budget or a law on the basis that it somehow
violated the amendment? Which appropriations bill pushed us over the
limit--the last one adopted?
Would a judge have the power to put the budget in balance by ordering
specific spending cuts? How would those cuts be identified and set?
Would the judge be tasked with reviewing the entire Federal budget and
then making cuts? Would the judge be able to compel Congress to enact
cuts? What would happen if Congress failed to comply with such an
order? Does the judge make changes and substitute his or her priorities
for those of Congress?
These same questions could be asked about revenue increases as well.
A judge cannot mandate revenue increases under the McConnell amendment.
The resolution, apparently, would allow judges to make spending cuts,
however. But that dangerous shift of power to the judiciary arises only
by implication in the McConnell resolution. What is explicit under
McConnell is that taxes and revenues can only be raised by a two-thirds
vote. So even closing loopholes to end tax dodges and raise revenue
would require a supermajority. That is the opposite of a balanced
budget amendment provision. That makes it more difficult to balance the
budget.
The American people do not need new processes or hollow promises.
They do not need a constitutional amendment that raises more questions
than it answers. They need Congress and the President to do our jobs. A
balanced budget amendment will not force Congress and the President to
do anything, because it is, as a practical matter, unenforceable. And
when it does not work, public cynicism would only deepen. It already is
plenty deep. There is only one way to balance the budget. That is with
the willpower to make the hard choices. Those of us elected to public
office have that obligation now. And if we fail, we as individuals will
be judged by our own electorate.
I yield the floor.
The PRESIDING OFFICER. The Senator from Utah.
Mr. LEE. Mr. President, I stand today to urge my colleagues to
support one of the most important pieces of legislation that has come
before this body in decades, Senate Joint Resolution 10, the Hatch-Lee
balanced budget amendment proposal.
The reason why I insist this is so important is because of a crisis
we are facing today. We have accumulated about $15 trillion in
sovereign debt on behalf of the United States--$15 trillion. It works
out to about $50,000 for every man, woman, and child in America. This
is an amount of money that could represent an expensive car. It could
represent a college education. It could represent all kinds of things.
But it represents ultimately debt that Congress has incurred, debt that
Congress cannot afford to continue to incur at this same rate, which we
are doing every day. We are adding to that debt at an unsustainable
rate of about $1.5 trillion every single year.
Here is why that is so distressing to me. As the White House itself
acknowledged a few months ago, we are now within about a decade,
perhaps much less, of owing about $1 trillion a year just in interest
on our national debt. Currently we are paying a little over $200
billion a year in interest. By the end of this decade, that number is
likely to rise to an astounding $1 trillion a year. We could reach that
number much sooner than that. It could happen perhaps in half that
amount of time if interest rates suddenly started to climb, as they
easily could do, particularly given the fact that we are about 350
basis points below the historic average for yield rates on U.S.
Treasury instruments, the means by which our governmental debt is
financed.
We have to get this problem under control now, because if we wait
until then, until we have to pay $1 trillion a year in interest on our
national debt, it will be too late to do anything. By waiting, by
postponing the day of our accountability, we will have made a choice, a
devastating choice, that will prove to signal the downfall of the
greatest economy the world has ever known. We cannot allow that to
happen--not now, not on our watch, not when the stakes are this high.
If we have to make up that difference, the difference between the
$200 billion a year we are paying now and the trillion a year we will
have to be paying in interest on our national debt a few years from
now, that money has to come from somewhere. That money is not something
we can expect simply to obtain through an increase in taxation.
Over the long haul, we have learned that our tax system is capable of
generating a revenue stream equaling a little over 18 percent of all of
the revenue that moves through the American economy every single year--
a little over 18 percent of our gross domestic product. As this chart
shows, that percentage remains relatively constant. It has remained
that way for many decades, going back to at least 1960. It averages out
a little over 18 percent of gross domestic product.

[[Page S8537]]

That remains true even when we go back 30 years or so when our top
marginal income tax rates were approaching 90 percent. The economy
finds a way to produce no more than a little over 18\1/2\ percent--a
little over 18 percent of GDP. So we cannot just raise taxes at that
point in order to generate more revenue, because our income tax system,
no matter how we tweak it, no matter how high we raise top marginal
rates, is not capable of generating that much revenue. What we do when
we simply ratchet up those tax rates, if anything, is we shrink the
size of our economy. We chill economic growth to the point where we are
actually generating less revenue, not more. So we cannot tax our way
out of that problem, nor can we at that point simply borrow our way out
of that problem. In other words, we cannot borrow an additional $800
billion a year on top of the present-day $1.5 trillion a year we are
borrowing, because if we did that, our interest rates would go up that
much more. That would make our decision that much more crippling on our
economy.
There are a lot of reasons why this matters. My colleague from Ohio,
Mr. Portman, acknowledged a few minutes ago that this chills job growth
when we have this much debt. It is also true that this impairs our
ability to fund every conceivable government program from defense to
entitlements, such that if we wait in order to make the necessary
changes to the way we spend money in Washington, we will wait at our
own peril. We will wait at the peril of those who have become dependent
on those very government programs that will have to have their budgets
slashed immediately, abruptly, severely. We cannot afford to do that.
Those who have become dependent on Social Security, on Medicare, on
Medicaid, on other entitlement programs, on supplemental nutritional
assistance, would be devastated if all of a sudden we cut off funding
for those programs, we had to slash those budgets by 30, 40, 50 percent
overnight. It is these abrupt changes that prove most difficult for
our economy to absorb.

I have often said it is something that we can analogize to being on
top of a large building. Let's say our $15 trillion debt can be
compared to a 15-story building. If you need to get down off of that
building, you need to get to the ground floor. If you want to do it
quickly, you could decide to jump. If you decide to jump, it is not the
fall that will kill you, it is the abrupt halt at the end of that fall.
So you need to do something to cushion the fall, to slow it down a
little bit so it can be accomplished gradually, so nobody gets hurt.
That is where the balanced budgeted amendment comes in. The Hatch-Lee
balanced budget amendment, Senate Joint Resolution 10, would bring
about severe, significant, systemic changes, but it would do so
gradually so that the cuts, while significant over the long haul, are
not abrupt, so that the impact is not severe, other than avoiding the
severeness of the impact that would otherwise occur.
We have to get down from that 15-story building, from that $15
trillion debt. We do that through a balanced budget amendment, one like
Senate Joint Resolution 10, which contains a 5-year delayed
implementation clause. That would give us time to work out a phased-in
glidepath toward balancing our budget. That is what we need do in order
to protect and preserve our economic stability, our jobs market, and
our ability within the Federal Government to fund everything from
defense to entitlements.
Those who ignore the need for this amendment ignore the fact that our
spending continues to escalate. I want to talk about how much we have
spent as a country as a percentage of our overall economy, as a
percentage of our gross domestic product. Between the early 1790s and
the early 1930s, the Federal Government spent, on average, between 2
and 4 percent of gross domestic product every single year with only two
notable exceptions, once during the Civil War and the second time
during and in the immediate aftermath of World War I. With those two
exceptions, Congress's spending was modest, between 2 and 4 percent of
GDP.
That all started to change in the early 1930s when we reached the
double digits during peacetime for the first time in our history. We
have, unfortunately, never retreated from that cycle. Federal spending
today, as a percentage of GDP, stands close to 25 percent, meaning that
for every dollar that moves through the American economy, a quarter of
that goes to Washington, is sucked in by the Federal Government, and
cannot move on and help to continue to stimulate the economy.
That pattern of increased Federal spending as a percentage of GDP is
expected to increase in the next few years. It is expected, based on
the data provided by the Congressional Budget Office, to reach 26.4
percent of GDP within the next 10 years, by 2021. Some say that figure
is too optimistic and that it could actually be much higher than that,
it could be significantly higher than 30 percent. At a minimum, we know
it will be 26.4 percent or more unless we take pretty significant steps
to control our spending.
So I find it interesting that many are saying we do not need to make
changes, that we can somehow have Congress do its job, that Congress
needs to follow the Constitution and do its job and balance its budget.
Let me tell you the problem with that. First of all, there is nothing
currently in the Constitution that restricts Congress's power to borrow
money. Clause 2 of article I, section 8 of the Constitution gives us
power to do that, and we have done it. We have done it again and again
and again. We have done it so many times in recent years that we have
almost lost track.
Congress first placed a statutory limit on the acquisition of new
Federal debt in 1917, which was the Second Liberty Bond Act. Since
1962, Congress has altered the debt limit through 74 separate measures,
and has raised it 10 times since 2001, in the last 10 years.
Since 1990, the debt limit has been raised by a total of $10.1
trillion. Nearly half of that increase has occurred in the last 4
years, since late 2007. So this is not a situation in which we are
seeing the normal growth of government spending, either in normal
numbers, in numbers adjusted for inflation, in numbers measured as a
percentage of GDP. By any metric, the amount of Federal spending and
the amount of debt acquisition has grown exponentially, giving us this
hockey stick-like curve in the acquisition of Federal debt.
We cannot continue this practice. We especially cannot continue it
given the fact we know that the natural limit on our ability to receive
revenue through the income tax system is a little over 18 percent of
GDP. So we have to have something in place that keeps us from spending
more than we take in. That cannot possibly by accomplished, in my
opinion, without something that ups the ante, something that makes it
structurally more difficult on a permanent basis for Congress to engage
in deficit spending and to spend more than 18 percent of GDP. That is
why there are a few critical features in Senate Joint Resolution 10,
the Hatch-Lee balanced budget amendment proposal, that I think any
viable balanced budget amendment proposal ought to have. First, it
needs to apply to all spending. Second, it needs to cap spending at 18
percent of GDP. It also needs to require a supermajority vote in order
to exceed that percentage of GDP spending limit in order to raise taxes
or in order to raise the debt limit. Without these kinds of provisions,
this kind of redundant protection against the inexorable growth of
Federal spending generally, and the inexorable growth of deficit
spending in particular, our debt will crush the very programs we
purport to be protecting.
Those who plot against this say we cannot limit spending to 18
percent of GDP or else we will hurt program X, Y or Z. While they are
making this argument, it is in reckless disregard of the fact that
those same programs will be jeopardized if we continue to borrow
recklessly, without structural spending restraint or reform on the
horizon.
Others have argued we don't need this because somehow it is
unenforceable. I am not quite sure what they mean. Perhaps they don't
know what a court would do with it. They are forgetting we have other
provisions in the Constitution that raise the vote threshold, which is
essentially what the Hatch-Lee balanced budget amendment does. In other
words, we have other provisions in the Constitution that are followed
routinely, without the need for litigation, just based on Members of
Congress taking an oath to uphold the Constitution, as we are all
required to do pursuant to article VI. Those are complied with every
day.

[[Page S8538]]

For instance, we all know none of us will dispute the fact that it
takes a two-thirds supermajority vote in both Houses of Congress to
override a Presidential veto. It takes a two-thirds supermajority vote
in both Houses of Congress to propose a constitutional amendment. It
takes a two-thirds supermajority vote in the Senate to ratify a treaty.
We don't dispute the fact that these vote thresholds exist. We don't
have to wait for the courts to intervene for us to enforce them within
Congress. We follow them. That is what this would do.
This says that because Congress has the ability to destroy itself,
destroy the economy, destroy the very government we have created
through reckless, indefinite, perpetual deficit spending, we must
protect Congress from itself--perhaps better said, we must protect
people from Congress by requiring that Congress approve any amount of
money spent in excess of what Congress brings in or in excess of 18
percent of GDP or in excess of the debt limit by a supermajority vote.
We have to have that. It will be followed, and it is absolutely
necessary.
It is interesting that few, if any, of my colleagues will dispute the
fact that Congress should balance its budget. There is perhaps a
difference of opinion--maybe even a widespread difference of opinion--
as to how best we should try to close this gap, how best we should
close the gap between the money Congress brings in each year through
the tax system and the money it spends. There is widespread dispute
about where cuts need to be made. I think we all agree we need to
balance our budget.
That begs the question, if we all agree, as I think we all do, then
why can't we agree we need to adopt a permanent structural mechanism
that will be embodied in the Constitution that will ensure that
actually happens? This proposal remains agnostic as to where cuts will
be made. All it says is if we are going to spend more than we take in
or more than 18 percent of GDP or raise taxes or the debt limit, we are
going to do it by a supermajority vote. That is something the American
people support. In fact, 75 percent of the American people support the
basic principle that Congress should not, for example, spend more than
it takes in each and every year.
That brings me to the question of why it is that we should support
S.J. Res. 10, the Hatch-Lee balanced budget amendment, and not another
proposal--for example, S.J. Res. 24, which I might refer to
alternatively as the ``Trojan horse'' balanced budget amendment or as
the ``do nothing'' amendment proposal, which purports to be a solution
when, in fact, it is not, for one simple reason: It gives Congress
unfettered discretion to exempt itself out of the budget balancing
requirement it contains. This would, in effect, I am certain, render
this amendment, were it to take effect, virtually a dead letter
provision.
We have seen what Congress does when it has the option of exempting
itself out of statutory spending caps--in the pay-go rule, the Gramm-
Rudman-Hollings Deficit Control Act, and in other statutory provisions
such as this. Congress giveth and Congress taketh away. Congress has
become a walking, breathing waiver unto itself. When Congress is given
the option of saying: I know we are supposed to balance the budget, but
we don't feel like it today, it ends up doing that. All Congress would
have to do under S.J. Res. 24--the ``do nothing'' amendment proposed--
is simply acknowledge that the United States is involved in a military
conflict, and by simple majority vote it can exempt itself out of these
provisions entirely.
By contrast, the Hatch-Lee balanced budget amendment proposal
acknowledges that in a time of war or military conflict, it may be
necessary to spend more than we take in. But in the case of an armed
military conflict, it requires a three-fifths supermajority vote, and
in either a war or another armed military conflict, it specifically
provides that in that war or conflict, any overage, any amount spent
above and beyond what Congress brings in has to be limited to that
required to prosecute that war or that military conflict effort. That
is a huge difference. We can't simply give Congress the option of
complying with a balanced budget amendment provision only when Congress
feels like it. This is a little akin to telling an alcoholic they have
to give up drinking, while leaving an open container of whiskey on the
table and requiring that person to walk past that bottle or even to
carry it around every day. It doesn't work. You have to take it out of
the house. You certainly have to take it out of the possession of the
recovering alcoholic.
This is the challenge of our time--to figure out how to prevent
Congress's chronic abuse of its own borrowing authority from collapsing
under its own weight, from bringing about the economic collapse of the
United States of America.
We have to have these structural spending reform mechanisms because
our government is run by imperfect people. Benjamin Franklin has often
been quoted for a line that says: ``He'll cheat without scruple who can
without fear.'' When looking at Congress today, we might say Congress
will spend more money than it has whenever it possibly can, whenever it
has the option of spending more.
As Madison said: ``If men were angels, no government would be
necessary. And if angels were to govern men, neither external nor
internal controls on government would be necessary.''
We are, as human beings, not angels, and our government isn't run by
angels either. This is why we need the structural permanent spending
reform mechanism. We cannot afford to accept a substitute, a cheap
imitation, a ``Trojan horse'' balanced budget amendment such as S.J.
Res. 24, because if we adopt something such as that, we will create the
illusion to the American people that we are actually undertaking
efforts to control our out-of-control deficit spending program when, in
fact, we are doing nothing. Because it is always the case that we are
involved in a military conflict somewhere. Congress will always be able
to muster a simple majority, saying we cannot be expected to balance
our budget because of that.
We have to draw that line in the sand and stand for those who support
everything from defense to entitlements. We have to stand for our
children and our grandchildren, those who will come after them, those
who are not yet old enough to vote, those who have not yet been born
and whose parents have yet to meet. Those people are not here to vote
against us as we spend their money.
This is a particularly pernicious form of taxation without
representation. We fought a war over two centuries ago over that
practice, and we won that war. We should not subject our children,
their children, and their grandchildren after them to that same
practice. This is contrary to liberty, contrary to economic prosperity.
We cannot stand for it to occur anymore.
We have two choices. One choice involves supporting, passing, and
submitting to the States for ratification of the Hatch-Lee balanced
budget amendment proposal, putting in some permanent restraint, at long
last, on Congress's self-destructive borrowing capacity.
The other option can take many forms. It can take the option of
supporting S.J. Res. 24, which doesn't solve the underlying problem, or
it can take the form of doing nothing at all. If we do nothing, we have
still made a choice--a devastating choice--a choice that will inure to
the detriment of the American people and of the Federal programs that
we all rely on, the Federal programs that people rely on to keep them
safe, protect them from the ravages of nature, and protect them from
the conditions of poverty we seek to avoid in this country. It is,
after all, the objective of us all to seek a better, more prosperous,
more safe country, but we jeopardize all those interests the longer we
allow this practice of perpetual deficit spending to continue.

At the end of the day, we have to face our own constituents. Those
who choose not to vote for the Hatch-Lee balanced budget amendment will
have to face their constituents and tell them why they were unwilling
to stand for a proposition so basic as we should balance our budget.
There is no excuse, based on the fact that we cannot do this
overnight, because it has a delayed implementation clause. It will not
take effect until 5 years after it has been ratified by the States. In
the meantime, we will be able to set in motion a sequence of

[[Page S8539]]

events, a series of implementing bills that will allow us to put
ourselves on a smooth glidepath toward balancing our budget. We will be
able to do that. Those who vote against this cannot look their
constituents in the eye and tell them they did everything they could do
to get our out-of-control spending habits or our out-of-control deficit
spending habits under control.
I urge each of my colleagues to do this for themselves, for the
programs they want to save, and for their children and grandchildren.
Our prosperity, our success as Americans, our survival as a nation, and
the success of our government requires nothing less.
I yield the floor and suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. KIRK. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. KIRK. Mr. President, I rise to talk about the balanced budget
amendment. It is obvious America's government is spending, taxing, and
borrowing too much. That is why Congress should approve the balanced
budget amendment to the Constitution. It was a good idea when Thomas
Jefferson supported it, and it is an even better idea today.

America is a great experiment in self-government. Self-government
requires self-control. Early thinkers about America's democracy worried
about the capacity of the government to borrow in a way that would
cripple our freedom.
Children cannot vote, but the Congress of their parents can put our
kids into debt. We should fight fiscal child abuse by ending such
borrowing that hurts our kids' long-term economic future.
In recent days, we witnessed clear warning signs that the days of big
borrowing are ending, not because Congress has changed its free-
spending ways but because lenders are increasingly worried that they
will never be repaid. This summer, America lost its triple-A credit
rating, according to Standard & Poor's. This loss of confidence mirrors
a crisis in Europe reflecting a collective judgment that Greece and
Ireland and Portugal and Spain and even Italy may not be able to repay
the amount of money they have borrowed. As Prime Minister Thatcher
reportedly said, ``Eventually governments run out of other people's
money.''
In this environment, it is important to show how we are different
from Europe. If we approve the balanced budget amendment and cut
spending, we will restore confidence in the Federal debt, in America's
economy, but most important, in the ideal of self-government.
America owes $15 trillion or about $40,000 for each new American
born. For their sake, we need to restrict the ability of the current
generation to obligate young Americans to pay their debts.
Should this amendment fail, we will wound the long-term credit of the
United States. More deeply, we will hurt the ideal of self-government
and self-control that is the foundation of our freedom.

Egypt

I would like to take this moment to talk about another issue; that
is, we as Americans support freedom and democracy and the rights of all
peoples. But, as Gaza taught us in 2006, free elections by themselves
do not make up a democracy. There are times when people are offered a
chance to elect party leaders who offer them only one election to
affirm a dictatorship. We can also learn from the year 1938 that the
dangers of ignoring developments abroad are huge. Now, in the wake of
the Arab Spring, we turn away from that region at our own peril.
On November 28, the first stage of the Egyptian elections began,
which will inaugurate a new electoral system forming a bicameral
legislature. This first stage determines about 30 percent of the 498
seats for the government's lower chamber, called the People's Assembly.
Before Egyptians arrived at the polls, protesters filled Tahrir
Square in Cairo. As a result, over 40 Egyptians were killed. Many are
objecting to the military's interference in the electoral process and
the decision to force elections well before secular parties had time to
build their capacities. According to public polling and sources on the
ground, this will likely hand an electoral victory to the Muslim
Brotherhood and more radical Islamist elements within the Egyptian
society. Although elections will last until March of 2012, the
prediction of a Muslim Brotherhood victory is already becoming a
reality. Early data shows an alarming trend of Islamist domination of
the Egyptian Parliament.
On December 5, the High Electoral Commission announced that leaders
of the Freedom and Justice Party, the political arm of the Muslim
Brotherhood, had received a plurality of 36 percent of the vote, while
the secular Egyptian Bloc had gained less than 12 percent. When we
include the runoff elections, which took place last week, it appears
that the Muslim Brotherhood has won 73 out of 150 seats or 49 percent
of the currently contested outcomes. This is the same party that led a
pre-election rally of 5,000 chanting ``one day we shall kill all the
Jews'' and ``Tel Aviv, Tel Aviv, Judgment Day is coming.''
While many expected the Brotherhood to do well, there were other
surprises. Salafist parties, made up of anti-Western hardliners who
follow a particularly radical version of Islam, are also faring
particularly well. Surpassing predictions, they received 24 percent of
the vote in the first round.
Importantly, these elections also included the so-called liberal
districts of Cairo and the Mediterranean port city of Alexandria. The
weakness of liberal parties--namely, their inability to reach out to
voters effectively with a serious agenda--is now fully exposed.
Islamists are taking full advantage of deeply rooted networks that
extend from the mosques into Egypt's poor districts. Their grip in the
traditionally conservative areas of Alexandria proved particularly
tight, and these areas are also home to a majority of the Coptic
Christian community.
It is clear that if Islamist parties and candidates continue their
currently won gains in other elections, they will capture 60 percent of
the national vote in Egypt. This will situate the new Egyptian
Parliament around deep ideological differences between Salafis, the
Muslim Brotherhood, and liberal groups, making the Brotherhood the
power brokers between Egyptian left and right.
What does this all mean? By January, the United States could face an
Egypt defined by a hatred of Israel and many of the freedoms we hold
dear--a freedom of expression, of women's rights, and the right to
practice any religion. This Egypt counts Iran as a friend and poses a
threat to the Camp David Peace Accords, which have served as the
cornerstone for Egypt's strategic position for 30 years.
Do we expect that an Islamist-led Egypt will prevent weapons from
arriving in the hands of Hamas? Will an Islamist-led Egypt help
preserve a free South Sudan? Will an Islamist-led Egypt act to protect
Coptic Christians who make up about 10 percent of Egypt? Will we see
continued violence, as we saw on October 9 in Maspero, which killed 27
civilians and injured hundreds? Will an Islamist-led Egypt do what we
expect with more than $1 billion of U.S. foreign assistance? Will they
continue to share intelligence and to work against terrorism? These are
all questions that may become critical issues for the national security
of the United States very shortly.
All of this instantly prevents foreign investment and tourism that
would help the Egyptian economy. The IMF has forecasted a little over 1
percent growth for the Egyptian economy next year. They said inflation
will top 11 percent, while almost 12 percent of Egyptians will be out
of work. Recently, the Egyptian pound traded at its lowest level
against the dollar in 7 years.
This time last year the region was on the threshold of exciting
change, but today Egypt sits instead on the threshold of a very
dangerous path.
The United States--and especially our State Department in
particular--should do what it can to keep Egypt attached to peace and
good relations with the West. The United States is now on the verge of
a historic defeat and reversal of American interests in Egypt.
Currently, if there is an Obama administration plan for handling a new
Islamist Egypt that rejects peace with

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Israel and allies with Iran, I don't know it, and I don't know if
anyone does. We must keep our finger on the pulse of this process.
Liberal voices in Egypt must work to preserve the democratic goals of
the January revolution.

Recently, I had the privilege of meeting some of Egypt's best and
brightest young liberal leaders. They would like to build a free Egypt
that respects women's rights and religious minorities and the rule of
law. I was encouraged in meeting with them but only hope that the
coming election is not like a 1930s election in Germany, where people
in Egypt are given one choice--to affirm a dictatorship--and then that
is the end.
If a radical Islamic government arises in Egypt--one that disavows
the Camp David Peace Accords and no longer acts as a stable strategic
partner in the Middle East--then we will look back on the recent
election in Egypt and its successors in December and January as the
turning point for a historic reversal of the United States.
My hope is that the State Department watches this very carefully. My
hope is that we have a plan to make sure this critical country stays
within the U.S. orbit. But my fear, given the recent elections in
Egypt, is that we have already lost quite a bit of ground.
If current trends continue, then by the middle of next year we will
have a Muslim Brotherhood government in command of the Suez Canal, in
charge of Cairo--the second center of learning in the Arab world--along
the border of our Israeli allies, friendly to Hamas, friendly to Iran,
and hostile to Europe and the United States. My hope is that over the
holidays we will work very hard and diligently with our allies--and
especially liberal forces in Egypt--to make sure that reversal doesn't
happen.
With that, Mr. President, I yield the floor, and I suggest the
absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. REID. Mr. President, I ask unanimous consent the order for the
quorum call be rescinded.
The PRESIDING OFFICER (Mr. Udall of Colorado). Without objection, it
is so ordered.

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