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[Congressional Record Volume 155, Number 3 (Thursday, January 8, 2009)]
[Senate]
[Pages S196-S197]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

                               CBO REPORT

  Mr. CONRAD. Madam President, first of all, I wish to thank Senator 
Whitehouse for his contributions to this Chamber. He has been an 
outstanding Member. He serves on the Budget Committee with me. He has 
developed a special expertise on health care which is so badly needed.
  I wish to comment very briefly on the CBO report we received today in 
the Budget Committee hearing on the fiscal outlook. It is truly jaw-
dropping. There is a $1.2 trillion deficit for this year, before any 
economic recovery package is passed. Add to the debt even higher: $1.6 
trillion will be added to the debt of the country, and, again, that is 
before any cost of an economic recovery plan.
  If one factors in an economic recovery plan, we could be looking at 
an increase in the debt of $2 trillion this year alone. To put that in 
context, we have a gross debt of the United States of $10.6 trillion 
roughly today.
  So I think it is imperative that while we put together an economic 
recovery plan, which we must, we also are cognizant of the very serious 
long-term fiscal condition we face as a nation.
  There is a front-page story in the New York Times today indicating 
that the Chinese, the biggest financers of our debt, have a reduced 
appetite for

[[Page S197]]

American dollar-denominated debt because they have their own economic 
issues, their own need for the use of capital at home. This could have 
enormous consequences for us going forward in terms of interest rates 
and what it will take to attract foreign capital to float this economic 
boat.
  One final point. Last year, of the new debt financing for this 
country, 68 percent of it came from abroad. Madam President, 68 percent 
of our new debt financing came from abroad. The fact that the Chinese, 
who have been the most significant contributors to financing that debt, 
are expressing a reluctance to take on more of our debt, do more of our 
debt financing, should send a warning signal to all of us as we fashion 
long-term fiscal and economic policy.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Rhode Island.
  Mr. WHITEHOUSE. Madam President, I wish to ask, through the Chair, a 
question of the distinguished chairman of the Budget Committee with 
respect to the $10 trillion debt the country is now carrying.
  At the time the current administration that is leaving office came 
into office 8 years ago, my understanding is the situation in America 
was rather different. It is my understanding that at that time we were 
actually looking at surpluses in our country, and the $10 trillion 
deficit is largely the responsibility of the policies that have been 
followed over the past 8 years.
  Mr. CONRAD. The Senator is exactly right. The debt of the country at 
the beginning of the last administration was about $5 trillion. They 
have approximately doubled the debt of the country on their watch, 
dramatically more than doubled foreign holdings of U.S. debt. So the 
current administration, the outgoing administration, has left the 
incoming administration in a very deep hole, not to mention the 
economic difficulties and the extreme need for an economic recovery 
plan to give lift to this economy.
  Mr. WHITEHOUSE. So through the good times, we could have been laying 
money aside so that when this situation came, we would be in a strong 
economic condition. Instead, by squandering all those years, we have 
put the incoming administration in a very challenging position.
  Mr. CONRAD. Yes, not only the incoming administration, the whole 
country because our ability to cope with an economic downturn, the 
flexibility is substantially limited by what has already been done to 
dramatically increase the debt, as the Senator described, in good 
economic times. Unfortunately, that is the reality we now confront.
  Today's news by the Congressional Budget Office of not only the $1.2 
trillion deficit this year but massive deficits as far as the eye can 
see should sober us all.
  Mr. WHITEHOUSE. I thank the very distinguished chairman of the Budget 
Committee for being willing to engage in this colloquy with me.
  Mr. CONRAD. I thank the Senator from Rhode Island and look forward to 
working with him on the Budget Committee as we attempt to come up with 
a plan to deal with these multiple challenges.

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