Date: 2011-07-28
Speaker: JACKSON LEE (democrat)
Chamber: H
State: Texas

Mr. Speaker. I rise today in opposition to the "Budget Control Act of 2011." which. like the previous debtceiling bills introduced by my colleagues on the other side of the aisle. attempts to resolve our budget ceiling crisis by demanding sharp cuts to domestic programs that ask average Americans to make lifechanging sacrifices while not asking Americas wealthiest individuals and most profitable corporations to contribute their fair share. In my lifetime. I have never seen such a concerted effort to ransom the American economy in order to extort the American public. While I support bipartisan efforts to increase the debt limit and to resolve our differences over budgetary revenue and spending issues. I cannot support a bill that unduly robs average Americans of their economic security and ability to provide for their families while constraining the ability of Congress to deal effectively with Americas economic. fiscal. and job creation troubles. The Budget Control Act of 2011 cuts $22 billion dollars from the Federal Budget for FY2012. Robert McIntyre. of Citizens for Tax Justice testified before the Senate Budget Committee that tax loopholes for corporations. big business owners and business investors cost the Treasury Department $365 billion dollars in FY2011. We need to change the tone here in Congress. Federal Reserve Chairman Ben Bernanke said it best when he stated in a recently before the House Committee on Financial Services. "We really dont want to just cut. cut. cut." Chairman Bernanke further stated "You need to be a little bit cautious about sharp cuts in the very near term because of the potential impact on the recovery. That doesnt at all precludein fact. I believe its entirely consistent witha longerterm program that will bring our budget into a sustainable position." The Boehner plan does just that it will cut. cut. cut without taking into full consideration the serious cuts to Social Security. Medicare. and Medicaid. This bill is essentially a rehashed version of the same bill that President Obama promised to veto and the Senate vowed to reject. It asks for $917 billion in cuts from domestic spending for a $900 billion dollar increase in the debt ceiling while demanding nothing in revenue from the nations wealthiest. This is nothing more than a ransom note. irresponsibly raising the debt ceiling for only a few months so that in just a short period of time. the American public will be hit again for $1.6 trillion in cuts from Social Security. Medicare. Medicaid. and Veterans benefits. Anyone who believe that this plan will not result in a serious cut to Social Security should consider this . . . Social Security represents 20 percent of all federal spending. making it unrealistic to think such large cuts in mandatory spending will not affect Social Security benefits. I state here today that the Boehner proposal is illconceived and fails to offer a balanced approach to decreasing the deficit. Instead of requiring shared sacrifice. the Boehner plan places the entire burden on the backs of seniors. the middle class and our nations most vulnerable citizens. while doing nothing to close corporate tax giveaways and increase taxes on those most able to afford them. The Boehner plan calls for large cuts in discretionary programs of $1.2 trillion over the next 10 years through strict new spending caps. Most experts predict that the first round of cuts would target discretionary programs. including education. infrastructure. job training and law enforcement. The Boehner plan would then require an additional $1.8 trillion in savings to be identified by the end of the year as a condition for raising the debt ceiling again at that time. Given the magnitude of these additional required savings. it would result in deep draconian cuts in federal entitlement programs such as Social Security. Medicare and Medicaid. A repeal of health reforms coverage expansions. And a dramatic reduction in safety net programs for vulnerable Americans. such as food stamps and unemployment and disability insurance. This is unacceptable. and each is avoidable if corporations and the wealthy are required to shoulder a fair share of this burden. The Speakers plan requires a vote on an illadvised constitutional balanced budget amendment in both chambers of Congress by the end of this year. The details surrounding exactly which proposed constitutional balanced budget amendment will be voted on are unclear. However. earlier proposals that have appeared in the House of Representatives. including H.J. Res. 1. would have a devastating impact on discretionary spending and on our modest economic recovery. Passing an amendment to the Constitution is one of the most serious processes the United States Congress can undertake. requiring a two thirds supermajority of support in both the House and Senate and ratification by threefourths (3/4) of the States. The Founders purposely made the amendment process a long and arduous one. Do my Republican colleagues really expect Congress to capriciously pass an amendment altering our Nations founding document on such short notice. an amendment that will fundamentally change our country without reasonable time for debate. without the opportunity for a hearing or questioning of witnesses. without any reports as to what impact it may have? By tying the fate of whether the United States pays its debt obligations to the historically prolonged Constitutional amendment process. the Republicans who support this bill have demonstrated. at this critical juncture in American history. that they are profoundly irresponsible when it comes to the integrity of our economy and utterly bereft of sensible solutions for fixing it. The Speakers plan will result in for $2.7 trillion in deficit reduction and a $2.5 trillion increase in the debt limit in two stages. with the two debt ceiling increases being conditioned upon enactment of an initial set of spending cuts and a later. second deficit reduction measure. I do not believe that Congress should yield its authority to what amounts to a Commission. BOEHNERs plan creates a 12member joint congressional committee to develop a plan for an additional $1.8 trillion in deficit reduction that Congress would vote on in December. In addition the Speakers plan authorizes the president to submit a $900 billion increase in the. $14.3 trillion debt ceiling immediately after enactment of this bill. and a $1.6 trillion increase if the $1.8 trillion deficit reduction measure is enacted. Both debt limit increases would take effect automatically unless Congress enacted resolutions of disapproval. The Speakers plan also requires the House and Senate to vote by the end of the year on a balanced budget amendment to the Constitution. As I have stated before this will tie the hands of congress. Finally. as noted above. the Boehner proposal provides only a shortterm extension of the federal debt ceiling. This means that the gridlock that now prevails in our government will continue for the remainder of the 112th Congress. According to the Center on Budget and Policy. recent reports have suggested that rating agencies will downgrade the U.S. credit rating if the Boehner proposal is enacted. This would result not only in higher interest costs to the federal government but also would raise the. interest rate paid by individuals and families on car loans. credit cards and mortgages throughout the United States. Taken together. all of these factors would undermine the nations fragile recovery. There has been a theme this Congress of focusing on cutting programs that benefit the public good and for the most at need. while ignoring the need to focus on job creation and economic recovery. This bill is wasting a tremendous amount of time when we should be focused on paying our nations bills and resolving our differences. In my district. the Texas 18th. more than 190.000 people live below the poverty line. We must not. we cannot. at a time when the Census Bureau places the number of American living in poverty at the highest rate in over 50 years. cut vital social services. Not in the wake of the 2008 financial crisis and persistent unemployment. when so many rely on federal benefits to survive. like the Supplemental Nutrition Access Program (SNAP) that fed 3.9 million residents of Texas in April 2011. or the Women. Infant. and Children (WIC) Program that provides nutritious food to more than 990.000 mothers and children in my home state. In 2009. there were 43.6 million Americans living in poverty nationwide. According to the 2010 Federal poverty threshold. determined by the US Census. a family of four is considered impoverished if they are living on less than $22.314 per year. Children represent a disproportionate amount of the United States poor population. In 2008. there were 15.45 million impoverished children in the nation. 20.7% of Americas youth. The Kaiser Family Foundation estimates that there are currently 5.6 million Texans living in poverty. 2.2 million of them children. and that 17.4% of households in the state struggle with food insecurity. There is no doubt that we must reduce the national debt. but my Republican colleagues desire for instant gratification through deep spending cuts to benefits. Medicare. Medicaid and Social Security is reckless and threatens the financial security of millions of Americans. Instead of closing corporate tax loopholes to reduce the deficit. the Budget Control Act cuts discretionary spending. and requires Congress to draft proposals to cut at least $1.8 trillion from Medicare and Social Security. This is an outrage. and an insult to the American dream. Forcing Congress to draft plans to cut 1.8 trillion from Medicare and Social Security forces Members to disregard the best interests of their constituents. Medicare guarantees a healthy and secure retirement for Americans who have paid into it for their entire working lives. Protecting Medicare represents the basic values of fairness and respect for our seniors. including the 2.9 million Texans who received Medicare in 2010. Any cuts to Medicaid would be just as damaging. Harris County has one of the highest Medicaid enrollment records in Texas. Limits and cuts to Medicaid funds would significantly hurt the citizens of Texass 18th District. Harris County averages between 500.4300 and 600.000 Medicaid recipients monthly. thousands of people who may not have access to healthcare should Congress sacrifice Medicaid to cut spending. Yes. we must take steps to balance the budget and reduce the national debt. but not at the expense of vital social programs. It is unconscionable that in our nation of vast resources. my Republican colleagues would pass a budget that cuts funding for essential social programs. Poverty impacts far too many Americans and social safety nets provide these individuals with vital assistance Perhaps my friends on the other side of the aisle are content to conclude that life simply is not fair. equality is not accessible to everyone. and the less advantaged among us are condemned to remain as they are. but I do not accept that. That kind of complacency is not fitting for America. As we continue to discuss the necessity of increasing out debt ceiling. I have heard the concerns of many of my constituents and the American people regarding the size of our national debt and the care with which taxpayer money is spent. I. too. am concerned about these issues. for to burden future generations of Americans with tremendous amounts of debt should not be a way to avoid our fiscal responsibilities to the American people. However. the task of resolving our debt ceiling crisis must take precedence over other concerns. including political ideology. The game is up. and the American people understand that increasing the debt ceiling has nothing to do with any new spending and everything to do with paying off the obligations that we have already agreed to and promised to pay. Prior to the existence of the debt ceiling. Congress had to approve borrowing each time the federal government wished to borrow money in order to carry out its functions. With the onset of World War I. more flexibility was needed to expand the governments capability to borrow money expeditiously in order to meet the rapidly changing requirements of funding a major war in the modern era. To address this need. the first debt ceiling was established in 1917. allowing the federal government to borrow money to meet its obligations without prior Congressional approval. so long as in the aggregate. the amount borrowed did not eclipse a specified limit. Since the debt limit was first put in place. Congress has increased it over 100 times. in fact. it was raised 10 times within the past decade. Congress last came together and raised the debt ceiling in February 2010. Today. the debt ceiling currently stands at $14.3 trillion dollars. In reality. that limit has already been eclipsed. but due to accounting procedures by Treasury Secretary Geithner. the debt limit can be artificially avoided until Congress must act now in order to avert a crisis. Never in the history of America has the United States defaulted on its debt obligations. We must be clear on what this issue means for our country. America has earned a reputation as the worlds most trusted borrower. United States Treasury bonds have traditionally been one of the safest investments another country or investor could make. For investors around the world. purchasing a U.S. Treasury bond meant that they held something virtually as safe as cash. backed by the full faith and credit of the United States government. In turn. with the proceeds from the bonds. the federal government of the worlds largest economy is able to finance its operations. If the United States defaults on its debt obligations. the financial crisis that began in 2008 would pale in comparison. according to economic experts. The ensuing economic catastrophe would not only place the U.S. economy in a tailspin. but the world economy as well. The fact that Congress. a body that typically has its fair share of political battles. has never played political chicken when it came to raising the debt ceiling should give us all pause. and is a testament to the seriousness with which we must approach this issue. However. this time around. my Republican colleagues have created an impasse based upon an ideological commitment to spending cuts. While I understand and share the concern of my Republican colleagues with respect to deficit spending. and will continue to work with them in order to find reductions. now is not the time to put ideology over pragmatism. The reality is that. on August 3rd. the United States will begin to default on its debt obligations if the debt ceiling is not raised. This unnecessarily places the American public and the economy between a rock and a hard place. Either Congress sides completely with the radical agenda of the Tea Party. which irresponsibly pulls the chair out from under the average American while polishing the throne of the wealthiest. This detour into a spending debate is as unnecessary as it is perilous. as increasing the debt ceiling does not obligate the undertaking of any new spending by the federal government. Rather. raising the debt limit simply allows the government to pay existing legal obligations promised to debt holders that were already agreed to by Presidents and Congresses. both past and present. Moreover. the impending crisis would have already occurred were it not for the extraordinary measures taken by Treasury Secretary Timothy Geithner. including the suspension of the investment in securities to finance the Civil Service retirement and Disability Fund. as well as the redemption of a portion of those securities already held by that fund. If the United States defaults on its obligations on August 3rd. the stock market will react violently to the news that for the first time in history. America is unable to keep its promises to pay. Not once in American history has the countrys full faith and credit been called into question. Once America defaults. investors who purchase U.S. bonds and finance our government will be less likely to lend to America in the future. Just as a person who defaults on a loan will find it harder to convince banks to lend them money in the future. a country that defaults on its debt obligations will find it harder to convince investors to lend money to a government that did not pay. Showing the world that the United States does not pay its debts makes the purchasing of that debt less desirable because it requires the assumption of more risk on the part of the investors. The proponents of this bill are putting the country at serious risk of losing its status as the worlds economic superpower. Our allies will lose faith in our ability to manage global economic affairs. Our status in the world will be diminished. which will undermine our leverage on the world stage that allows us to command the respect and compliance of other nations when it comes to decisionmaking. This bill will reduce Americas ability to compete with a surging China. Furthermore. any investors that do continue to purchase U.S. Treasury bonds will demand much higher interest rates in order to cover the increased risk. Once a default occurs. investors figure that the chance of the United States defaulting again is much greater. and will require the government to pay higher rates of interest in order to make the loan worth the risk for investors to take on. Imagine the impact on our stock market if we do not pay our debts. As we have seen throughout the recent financial crisis. a bad stock market hurts not only big businesses and large investors on Wall Street. but small businesses and small investors as well. Families with investments tied to the stock market. such as 401(k)s. pension plans. and savings. will once again see the value of their investments drop. The American people are tired of the uncertainty of the value of their retirement accounts. We must not allow another wild fluctuation to occur due to default and add to the uncertainty still lingering in the minds of citizens. The Speakers plan is a short term fix for a long term issue. It is a patch rather than a proper repair. BOEHNERs plan requires that Congress address debtceiling once again in a short span of time. which will once again lead to market uncertainty in a time when we are trying to rebuild our nation. This plan is not good for Wall Street and it is not good for the American People. The Speakers bill is a shortterm debt limit increase that will only ensure that Congress will go through this exact same standoff again in the next few months. Shortterm proposals risk further uncertainty and the potentially damaging downgrade of the U.S. credit rating. The markets have made it clear that a shortterm extension is not sufficient and could result in very serious consequences. While Democrats support deficit reduction. we support doing it in a balanced way that provides certainty to the economy. As if another stock market crisis were not enough. the housing market would take another hit if America defaulted. Higher mortgage rates in a housing market already weakened by default and foreclosures would cause a further depression of home values. destroying whatever equity families might have left in their homes after the housing crisis. Moreover. the longterm effects would reduce spending and investment in the housing market. Increasing the debt ceiling is the responsible thing to do. Congress has already debated and approved the debt that an increased ceiling makes room for. However. my Republican colleagues have chosen to use this as an opportunity to hold the American people hostage to their extreme agenda. Even prominent Republicans like Senator JOHN MCCAIN and Christine Todd Whitman have criticized the radical elements of their party who insist upon holding up the entire political process in order to flaunt their extreme. irrational. and unrealistic ideology. Senator MCCAIN has called the Tea Partys stance and the way they have conducted themselves during this manufactured crisis "bizarre". and I am inclined to agree. Their agenda for this country is even too radical for Speaker BOEHNER. with the Tea Party vowing to reject their leaders own bill. They live in a world that is not the world that the American people live in. In their world. they believe that taxes are always too high. even on people making over a billion a year in a struggling economy. that any increase in revenue is fundamentally wrong. even if it comes from large corporations who use tax loopholes at the expense of our jobcreating small businesses. that investing anything in our economic future above tax revenues is impermissible. even in the midst of an economic downturn. and that tax cuts for the wealthy are always the nations top priority. even at the expense of people that depend on Social Security. Medicare. Medicaid. and Veterans benefits to survive. These beliefs place them on the fringe of American society. and yet due to the nature our political process. they have held up the entire government and placed our economy on the precipice of a turbulent second recession. If Congress cannot find a resolution then Congress will open the possibility that the President may invoke the Fourteenth Amendment to United States Constitution. Section four. which states "the validity of the public debt of the United States . . . shall not be questioned." The argument can be made that if Congress will not resolve our nations pending default then the President to protect the interest of our nation must act. The President would then have to consider his powers under the Fourteenth Amendment which may grant him the authority to raise the debt ceiling. on his own through executive order and if Congress fails to raise the debt limit by the August 2. 2011 deadline. As a body we should not place the President or our country in this position. For those reasons I urge my colleagues to consider the constituents in their home districts who would be hurt by this bill. I urge my colleagues to return to the world in which the vast majority of Americans live. in a world in which our shared destiny is determined by reasonable minds and good faith efforts to compromise. Federal Reserve Chairman Ben Bernanke warned that defaulting could "throw the financial system into chaos." and "destroy the trust and confidence that global investors have in Treasury securities as being the safest liquid assets in the world." Instead of injecting ideological spending cuts and Constitutional amendments into the traditionally nonpolitical business of raising the debt ceiling. we must work quickly to pass a bill that makes good on our debt obligations and restores confidence in American credit.