Appropriations question?  Visit the Committee website.

E-mail
Senator Byrd

Leadership.      Character.      Commitment.

News organizations seeking more information should call Senator Byrd's Communications Office at 202-224-3904.  To hear portions of many of Senator Byrd's speeches, visit the Radio page.  Also, high-resolution photographs are available from many events.

Remarks by U.S. Senator Robert C. Byrd

November 17, 2004

Maxed-Out Government Credit:  Raising the Debt Limit of the United States

Senator Byrd delivered the following remarks as the Senate prepared to vote to increase the debt limit for the United States.  Under the Bush Administration, the debt limit has already been raised by $450 billion in 2002 and $984 billion in 2003.  These increases followed five years in which the debt limit was not raised at all.  The latest increase would be for $800 billion - - bringing the total debt increase under President Bush to more than $2 trillion.  That is the largest total debt limit increase recorded under any President.

As I begin my remarks today, I am reminded of the brutally candid statement by David Stockman, President Reagan's budget director, in December 1981, when it became clear that the Reagan tax cuts would cause massive deficits in the federal budget.  In response to a reporter's queries, Mr. Stockman quipped that "None of us really understands what is going on with all of these numbers."

I wonder how many of us today understand what is going on with all these numbers.   We certainly don't act like we do.  This Administration has plunged the federal government deeply into debt, which, and unless policies change, will mean deficits at historically high levels for the foreseeable future.  Former Congressional deficit hawks -- many of the very same people who, for years, decried deficit spending – seem perfectly content to go along for the ride.

This week the Senate is poised to vote to increase the statutory debt limit for the third time in just three years.  The $800 billion increase we consider today follows a record $984 billion increase signed by President Bush in May 2003 and a $450 billion increase signed by President Bush in June 2002.  In less than three years, under the Bush regime, the debt limit will have soared to the alarming level of $8.2 trillion with no end to the spending and borrowing in sight.

Since January 2001, the gross federal debt has increased $1.2 billion per day.  It has increased $50 million every hour of every day.  It has increased $837,000 every minute of every hour of every day.  It has increased $14,000 every second of every minute of every hour of every day.

Today, every man, woman, and child in the United States owes more than $25,206 on the debt.  In fiscal year 2004, U.S. taxpayers owed $322 billion in interest on the publicly held debt.  These are interest payments that do not educate one child, buy one tank, or provide health care for one senior citizen.

Skyrocketing budget deficits and an ever-increasing, destructive national debt have become not merely facts of life in America today, but a way of life for tomorrow and for the years to come.

Lawmakers may faithfully tout the Administration's line that the White House is serious about cutting the federal deficit, but the American people have yet to see anything that would give them reason to take such claims seriously.  Irresponsible spending does not reflect the values of most Americans who must struggle with their own family budget and foot big federal bills by paying taxes.

For the last four years we have been operating under Bush budgets.  We have been operating under Bush tax cuts and Bush spending bills.  The result has been a Bush deficit of $413 billion for the Fiscal Year 2004 -- the largest deficit in U.S. history -- and an estimated $2.3 trillion in accumulated deficits over the next decade.

The White House will try to blame deficits on the war on terror, but that claim is false.

Let's look at the whole picture.  President Bush reportedly will request an additional $75 billion early next year for the war in Iraq.  That request follows $203 billion already appropriated for Iraq and Afghanistan bringing our total commitment to $278 billion for Iraq and Afghanistan.

The corporate tax bill the president signed into law in October will cost $18 billion in the coming three years to pay for special interest tax breaks, further increasing budget deficits in the short run.

The White House's own budget office is leaking word that the budget deficit will increase, not decrease, next year when the President submits his budget to the Congress.

The President's Social Security privatization proposal is projected to cost a trillion dollars in the coming decade, and his tax and spending proposals will likely add hundreds of billions of dollars more to our nation's budget deficits.

That's to say nothing of our mounting trade deficits that have cost an untold number of American workers their jobs, or the multi-trillion deficits in the Social Security and Medicare programs that threaten seniors and their retirement and health benefits.

The Bush Administration and the Congress have not had the courage to address this mounting debt and to debate policy changes which might help bring these deficits under control.

It is hard to believe that only two weeks after an intense presidential election campaign in which both sides -- Republican and Democrat -- pledged to reduce the size of the deficit, the Senate's first order of business upon returning is to ignore those campaign promises and pass this debt limit increase without a debate about the ways to reduce our nation's huge deficits.

In his victory speech, George Bush pledged to work with Democrats to unite the country.  I can think of no better way to demonstrate the commitment behind that pledge than drawing on both parties' avowed aversion to these budget deficits and initiating a constructive, bipartisan effort to move to eliminate them.

We know how to do it.  We have done it before.  We have done it in a bipartisan manner.  We have done it successfully -- without budget gimmicks, without Constitutional amendments, without granting imperious presidential powers – just using plain common sense. 

In 1990, President George Herbert Walker Bush and the 101st Congress negotiated budget enforcement tools and demonstrated the courage to implement them.  Every budget guru in Washington -- from Federal Reserve Chairman Alan Greenspan, to Comptroller General David Walker, to former directors of the Congressional Budget Office -- agree those tools worked extraordinarily well in bringing our nation's deficits under control.

Both Republicans and Democrats voted this year to restore pay-as-you-go rules requiring new mandatory spending and new tax cuts to be offset.  President Bush endorsed those budget enforcement mechanisms in his Fiscal Year 2004 budget, but has now flip-flopped and wants to exclude tax cuts from the requirement that they be paid for.

But here we stand, in the midst of renewed pledges by both parties to work together to address our nation's challenges, and, on this issue where so much common ground exists, we are unable to muster the political courage to talk about the wolf at our doorstep.  We will pass this statutory debt increase and then put it out of our minds until we are forced to raise it again.  We all should know the folly of this tactic, and, as the chickens come home to roost in the years ahead, the American people will surely remind us of it.  It is morally reprehensible to deceive the voter by claiming that deficits don't matter.

These destructive debt figures represent a threat to the Social Security system, a threat to affordable health care for working Americans, a threat to the promise of a college education for our nation's youth, and a threat to the financial underpinnings of our economy -- what one editorial in The Washington Post described as "the cold-hearted actuaries of doom."

Economists across the political spectrum are growing increasingly concerned about the effect of these mounting budget deficits on our economy.  The U.S. dollar continues to lose value against the Japanese Yen, the European Euro, and the Canadian dollar.  Investors may soon rather hold the currencies of other nations than our own.  This spells great trouble for our country in foreign policy as well as domestic responsibility.  Republicans and Democrats increasingly view our nation as becoming too dependent on foreign investment -- and with good reason.

According to the Treasury Department, foreign holdings comprise half of our nation's privately held public debt, with much of that debt owed to countries like China and Korea and entities like OPEC and the Caribbean Banking Centers.  To these foreign holders, American taxpayers paid $321 billion in interest payments last fiscal year on money borrowed to finance our government's operations.  Please understand that it is hard to scold China about its human rights policies when we are in debt up to our eyeballs to such foreign entities.

With a $413 billion deficit last year, the Administration must borrow the equivalent of the entire budget for the Department of Defense from foreign countries.  That means the Bush Administration cannot pay our soldiers in Iraq and Afghanistan without having to go hat-in-hand to other countries for a loan, and handing the U.S. taxpayer a hefty interest premium to boot.

It is great political rhetoric to claim that America doesn't have to ask the permission of other nations to defend itself or do anything else for that matter, but when we rely so heavily on other nations to help pay our way in the world, our haughty claims of independence are just so much bluff.  Unfortunately the rest of the world knows what we will not admit.  We are beholden to foreigners to pay our way.

Make no mistake, the threat of budget deficits to our economy is real, and we cannot afford to ignore it any longer.

###