U.S. Senator George V. Voinovich - Fiscal Update!
Posted: Fri Jun 12, 2009 10:23 pm
Floor Speech, By U.S. Senator George V. Voinovich
Fiscal Update
Washington, DC
June 10, 2009
Madame President, I rise today to again call attention to the irresponsible and reckless fiscal path we find ourselves on as a nation, and to urge my colleagues to act now to take the first step toward meaningful, comprehensive tax and entitlement reform through the enactment of the SAFE Commission Act, which I reintroduced with Senator Joe Lieberman. I urge my colleagues to take the time to read a recent letter from Senator Lieberman and I urging your support of this legislation.
The SAFE Commission has broad bipartisan support outside of Congress, the Peter G. Peterson Foundation, Business Roundtable, the Concord Coalition, National Federation of Independent Business (NFIB), Brookings Institution, Heritage Foundation and Committee for a Responsible Federal Budget all back the SAFE Commission concept as the way to tackle tax reform and our entitlement crisis.
As you may know, Madame President, recently Chinese Prime Minister Wen Jiabo publicly voiced his concern about the security of “huge amount of money” China has invested in the United States, saying “ to be honest, I am definitely a little worried.” He then went on to call on the U.S. to “maintain its good credit, to honor its promises and to guarantee the safety of China’s assets.”
Madame President, I hope this frightens you as much as it frightens me. China is the United States’ largest foreign creditor, holding an estimated $1 trillion dollars in U.S. government debt. Though it may be unlikely due to our complex interdependent relationship, if China were to call in that debt, sell off its holdings, or direct its foreign investments away from U.S. dollars, the impact on our economy, and our national security would be devastating. I have been saying for years that we cannot allow the countries that control our debt to control our future.
The fact is that, foreign creditors have provided 70 percent of the funds that the U.S. has borrowed since 2001. And as a result, 51 percent of the privately owned national debt is held by foreign creditors – mostly foreign central banks. These lenders are starting to express significant concerns about the status of our fiscal situation.
And to be frank, they should be concerned, Madame President. Our spending is out of control, and as a result, our debt is skyrocketing. When I arrived in the Senate in 1999, gross national debt stood at $5.6 trillion, or 61 percent of the GDP. The Obama Administration recently projected the national debt to more than double to $12.7 trillion by the end of Fiscal Year 2009. From 2008 to 2009 alone, the federal debt will increase 27 percent, boosting the country’s debt-to-income ratio – or national debt as a percentage of GDP – from 70 percent last year to 89 percent this year.
Alarmingly, those figures don’t count our accumulated, long-term financial obligations, the Peterson Foundation recently pointed out that the federal government has accumulated $56.4 trillion in totally liabilities and unfunded promises for Medicare and Social Security as of September 30, 2008. That works out to be $483,000 per American household, or $184,000 for every man, woman, and child in the country to pay for these unfunded obligations.
To be completely fair to President Obama, our annual deficit and growing national debt have been problems for some time now. To my knowledge, President Bush never once mentioned the debt in any of his state of the union speeches to Congress. But under the Obama Administration, we’ve really exacerbated the problem with an Omnibus Appropriations bill that includes $408 billion in non-emergency spending, a $787 billion stimulus bill and a ten-year proposed budget where the lowest deficit for a single year is larger than any annual deficit from the end of World War II to President Obama’s inauguration.
Madame President, I know we are going through some tough times. Over the past year we’ve been hit by an economic avalanche that started in housing, quickly spread to the financial and credit markets, and then continued onward to every corner of our economy. We are spending money to get out of this economic mess, but we cannot allow that to be an excuse to continue our reckless fiscal path.
We have to start finding ways to work harder and smarter and do more with less. It doesn’t take an economist to realize that our course is unsustainable. I know it, the Obama Administration knows it, and the American people know it, Madame President.
According to a poll conducted by the Peterson Foundation, American’s concern for the growing national debt takes second place only to their concern for their own jobs. The American people know that we cannot continue to ignore our ballooning national debt and our continued deficit spending which is projected to be $2 trillion for this year alone.
The Obama Administration knows that we can no longer ignore this crisis. Peter Orszag, the Obama Administration’s OMB Director has even said “I don't want to sound like the boy crying wolf, but it is a fact that, given the path that we are on, two things: One is we will ultimately wind up with a financial crisis that is substantially more severe than even what we are facing today if we don't alter the path of Federal spending; and secondly, that if we were on that path in the future and something like we are experiencing today occurred, we would have much less maneuvering room to fight those fires, because we will have already depleted the fire truck.”
I am disappointed in Peter Orszag. As OMB Director, he has forgotten his commitment to entitlement and tax reform that he so boldly and loudly called for as CBO director. You would think that a change in title would not cause such a memory loss on as important an issue as the financial health of our country. To me it can only mean one thing: that Peter Orszag’s boss, President Obama, must not be serious about addressing the growing national debt or worse yet doesn’t understand the fiscal crisis we are in or even worse than that he just doesn’t care.
Just last Friday, the Washington Post ran an op-ed taking the Administration to task for lacking a plan on just how we start to dig our country out of this fiscal mess. The article details Treasury Secretary Geithner’s trip to Beijing two weeks ago where he went to reassure China, the world's largest holder of Treasury debt, that lending money to the U.S. government is still a wise thing to do. Mr. Geithner <http://treas.gov/press/releases/tg152.htm>insisted that, "in the United States, we are putting in place the foundations for restoring fiscal sustainability."
In a moment that all Americans should consider a wake-up call, Secretary Geithner was met with laughter when he <http://www.washingtonpost.com/wp-dyn/content/article/2009/06/01/AR2009060101784.html>told a group of Chinese students that their country's assets were "very safe" in Washington. Madame, President, I would like to submit this Washington Post article for the record. This week as you know, President Obama announced a plan to reenact statutory pay-as-you-go (PAYGO). However, four policies - renewing the 2001/2003 tax cuts, patching the Alternative Minimum Tax (AMT), updating physician's payments in Medicare, and modifying the estate tax - would be exempt from these rules. I believe this is intellectually dishonest. This does not reflect the high standards the President has set for his administration and is more like the smoke and mirrors of the past that got us to where we are today.
Maya MacGuineas of President of the Committee for a Responsible Federal Budget puts it like this: "It is like quitting drinking, but making an exception for beer and hard liquor. Exempting these measures from PAYGO would increase the ten-year deficit by over $2.5 trillion dollars. That's not fiscal responsibility."
Today, I am reiterating my call for President Obama and Congress to begin now to enact the first pillar of meaningful tax and entitlement reform through the enactment of the SAFE Commission Act, I recently reintroduced with Senator Joe Lieberman. I am asking my colleagues to step up and look at this legislation and to read the dear colleague we sent last week with materials from the Peterson Foundation. Included with the dear colleague is a DVD called IOUSA. I encourage you to watch as it portrays our fiscal crisis vividly.
The SAFE Commission would create a vehicle, much like we do for the BRAC process, to take on the tough issues of social security, tax reform, and creating (by a vote of 13 of a 20 member committee) recommendations that would then be fast-tracked through a special process and brought the floor of both chambers for a vote, we could break the logjam in Washington and show the American people and the world we are serious about getting the nation back on track.
Madame President, for the life of me, I can’t understand why President Obama doesn’t support the SAFE Commission Act. In the next election, our fiscal crisis is going to be a key issue. I understand Obama’s priorities are healthcare and climate change, but this issue cannot be sidelined. If I were him, I would see the creation of an entitlement commission as a great bipartisan solution to this problem.
We all came to Washington to serve and we have a responsibility to leave this place better than we found it. We have a moral responsibly to address our fiscal crisis. Our children and grandchildren will have to work harder than we have to maintain the same lifestyle. We owe it to them to act on this issue now.
Madame President, I yield the floor.
Fiscal Update
Washington, DC
June 10, 2009
Madame President, I rise today to again call attention to the irresponsible and reckless fiscal path we find ourselves on as a nation, and to urge my colleagues to act now to take the first step toward meaningful, comprehensive tax and entitlement reform through the enactment of the SAFE Commission Act, which I reintroduced with Senator Joe Lieberman. I urge my colleagues to take the time to read a recent letter from Senator Lieberman and I urging your support of this legislation.
The SAFE Commission has broad bipartisan support outside of Congress, the Peter G. Peterson Foundation, Business Roundtable, the Concord Coalition, National Federation of Independent Business (NFIB), Brookings Institution, Heritage Foundation and Committee for a Responsible Federal Budget all back the SAFE Commission concept as the way to tackle tax reform and our entitlement crisis.
As you may know, Madame President, recently Chinese Prime Minister Wen Jiabo publicly voiced his concern about the security of “huge amount of money” China has invested in the United States, saying “ to be honest, I am definitely a little worried.” He then went on to call on the U.S. to “maintain its good credit, to honor its promises and to guarantee the safety of China’s assets.”
Madame President, I hope this frightens you as much as it frightens me. China is the United States’ largest foreign creditor, holding an estimated $1 trillion dollars in U.S. government debt. Though it may be unlikely due to our complex interdependent relationship, if China were to call in that debt, sell off its holdings, or direct its foreign investments away from U.S. dollars, the impact on our economy, and our national security would be devastating. I have been saying for years that we cannot allow the countries that control our debt to control our future.
The fact is that, foreign creditors have provided 70 percent of the funds that the U.S. has borrowed since 2001. And as a result, 51 percent of the privately owned national debt is held by foreign creditors – mostly foreign central banks. These lenders are starting to express significant concerns about the status of our fiscal situation.
And to be frank, they should be concerned, Madame President. Our spending is out of control, and as a result, our debt is skyrocketing. When I arrived in the Senate in 1999, gross national debt stood at $5.6 trillion, or 61 percent of the GDP. The Obama Administration recently projected the national debt to more than double to $12.7 trillion by the end of Fiscal Year 2009. From 2008 to 2009 alone, the federal debt will increase 27 percent, boosting the country’s debt-to-income ratio – or national debt as a percentage of GDP – from 70 percent last year to 89 percent this year.
Alarmingly, those figures don’t count our accumulated, long-term financial obligations, the Peterson Foundation recently pointed out that the federal government has accumulated $56.4 trillion in totally liabilities and unfunded promises for Medicare and Social Security as of September 30, 2008. That works out to be $483,000 per American household, or $184,000 for every man, woman, and child in the country to pay for these unfunded obligations.
To be completely fair to President Obama, our annual deficit and growing national debt have been problems for some time now. To my knowledge, President Bush never once mentioned the debt in any of his state of the union speeches to Congress. But under the Obama Administration, we’ve really exacerbated the problem with an Omnibus Appropriations bill that includes $408 billion in non-emergency spending, a $787 billion stimulus bill and a ten-year proposed budget where the lowest deficit for a single year is larger than any annual deficit from the end of World War II to President Obama’s inauguration.
Madame President, I know we are going through some tough times. Over the past year we’ve been hit by an economic avalanche that started in housing, quickly spread to the financial and credit markets, and then continued onward to every corner of our economy. We are spending money to get out of this economic mess, but we cannot allow that to be an excuse to continue our reckless fiscal path.
We have to start finding ways to work harder and smarter and do more with less. It doesn’t take an economist to realize that our course is unsustainable. I know it, the Obama Administration knows it, and the American people know it, Madame President.
According to a poll conducted by the Peterson Foundation, American’s concern for the growing national debt takes second place only to their concern for their own jobs. The American people know that we cannot continue to ignore our ballooning national debt and our continued deficit spending which is projected to be $2 trillion for this year alone.
The Obama Administration knows that we can no longer ignore this crisis. Peter Orszag, the Obama Administration’s OMB Director has even said “I don't want to sound like the boy crying wolf, but it is a fact that, given the path that we are on, two things: One is we will ultimately wind up with a financial crisis that is substantially more severe than even what we are facing today if we don't alter the path of Federal spending; and secondly, that if we were on that path in the future and something like we are experiencing today occurred, we would have much less maneuvering room to fight those fires, because we will have already depleted the fire truck.”
I am disappointed in Peter Orszag. As OMB Director, he has forgotten his commitment to entitlement and tax reform that he so boldly and loudly called for as CBO director. You would think that a change in title would not cause such a memory loss on as important an issue as the financial health of our country. To me it can only mean one thing: that Peter Orszag’s boss, President Obama, must not be serious about addressing the growing national debt or worse yet doesn’t understand the fiscal crisis we are in or even worse than that he just doesn’t care.
Just last Friday, the Washington Post ran an op-ed taking the Administration to task for lacking a plan on just how we start to dig our country out of this fiscal mess. The article details Treasury Secretary Geithner’s trip to Beijing two weeks ago where he went to reassure China, the world's largest holder of Treasury debt, that lending money to the U.S. government is still a wise thing to do. Mr. Geithner <http://treas.gov/press/releases/tg152.htm>insisted that, "in the United States, we are putting in place the foundations for restoring fiscal sustainability."
In a moment that all Americans should consider a wake-up call, Secretary Geithner was met with laughter when he <http://www.washingtonpost.com/wp-dyn/content/article/2009/06/01/AR2009060101784.html>told a group of Chinese students that their country's assets were "very safe" in Washington. Madame, President, I would like to submit this Washington Post article for the record. This week as you know, President Obama announced a plan to reenact statutory pay-as-you-go (PAYGO). However, four policies - renewing the 2001/2003 tax cuts, patching the Alternative Minimum Tax (AMT), updating physician's payments in Medicare, and modifying the estate tax - would be exempt from these rules. I believe this is intellectually dishonest. This does not reflect the high standards the President has set for his administration and is more like the smoke and mirrors of the past that got us to where we are today.
Maya MacGuineas of President of the Committee for a Responsible Federal Budget puts it like this: "It is like quitting drinking, but making an exception for beer and hard liquor. Exempting these measures from PAYGO would increase the ten-year deficit by over $2.5 trillion dollars. That's not fiscal responsibility."
Today, I am reiterating my call for President Obama and Congress to begin now to enact the first pillar of meaningful tax and entitlement reform through the enactment of the SAFE Commission Act, I recently reintroduced with Senator Joe Lieberman. I am asking my colleagues to step up and look at this legislation and to read the dear colleague we sent last week with materials from the Peterson Foundation. Included with the dear colleague is a DVD called IOUSA. I encourage you to watch as it portrays our fiscal crisis vividly.
The SAFE Commission would create a vehicle, much like we do for the BRAC process, to take on the tough issues of social security, tax reform, and creating (by a vote of 13 of a 20 member committee) recommendations that would then be fast-tracked through a special process and brought the floor of both chambers for a vote, we could break the logjam in Washington and show the American people and the world we are serious about getting the nation back on track.
Madame President, for the life of me, I can’t understand why President Obama doesn’t support the SAFE Commission Act. In the next election, our fiscal crisis is going to be a key issue. I understand Obama’s priorities are healthcare and climate change, but this issue cannot be sidelined. If I were him, I would see the creation of an entitlement commission as a great bipartisan solution to this problem.
We all came to Washington to serve and we have a responsibility to leave this place better than we found it. We have a moral responsibly to address our fiscal crisis. Our children and grandchildren will have to work harder than we have to maintain the same lifestyle. We owe it to them to act on this issue now.
Madame President, I yield the floor.
