Hatch on Debt Limit Resolution of Disapproval
In Speech On The Senate Floor, Utah Senator Says, “Quite simply, it would be folly to approve of yet another debt limit increase without also working to address [entitlement] programs, which are the main drivers of our debts and deficits.”
WASHINGTON – In a speech on the Senate floor today, Finance Committee Ranking Member Orrin Hatch (R-Utah) reiterated the need for concrete, structural reforms to the nation’s entitlement programs a means of reducing the debt and urged his colleagues to join him in supporting S. J. Res. 26, a resolution to disapprove of the President’s exercise of authority to suspend the debt limit. The Senate is slated to vote on the measure later today.
“The debt limit debate provides us with an opportunity to reexamine our nation’s fiscal course and take steps to correct it,” said Hatch. “Sadly, we have a President who appears unwilling to have that conversation. Instead, he apparently wants to press forward full steam ahead on our already unsustainable course, saddling future generations with unheard of debts and broken entitlement promises in the process.”
Hatch continued, “Quite simply, it would be folly to approve of yet another debt limit increase without also working to address these programs, which are the main drivers of our debts and deficits. Therefore, I disapprove of the President’s exercise of an authority to suspend the debt limit, and I urge all of my colleagues to similarly disapprove.”
Earlier this year, Hatch introduced five bipartisan reform ideas that he has presented to President Obama, White House Chief of Staff Denis McDonough and Treasury Secretary Jack Lew.
Below is the text of Hatch’s full speech delivered on the Senate floor today:
Mr. President, during debate over a debt limit increase in 2006, then-Senator Obama stated that: “The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure.”
Leadership, he said: “means the buck stops here. Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.”
Mr. President, at that time, our gross debt was $8.3 trillion. It is now well above twice that, currently standing at $17.1 trillion, which is over 100 percent of the size of our economy.
During that same 2006 debt limit debate, then-Senator Biden said: “My vote against the debt limit increase cannot change the fact that we have incurred this debt already, and will no doubt incur more. It is a statement that I refuse to be associated with the policies that brought us to this point.”
Mr. President, things have certainly changed since 2006.
Now President Obama and Vice President Biden preside over an administration that tells us that raising the debt limit is merely a matter of paying our bills and is a reflection of decisions made in Congress.
Yet, while it is ostensibly true that Congress has the power to raise the debt limit, it is not true that Congress makes spending decisions unilaterally, with no role being played by the Executive Branch.
No amount of spending can be enacted without the President signing it into law.
In addition, the President submits a budget every year. The White House also issues policy statements and veto threats on spending bills on a more or less frequent basis.
And, of course, every administration works with Congress to enact its domestic agenda, which inherently includes setting priorities in federal spending.
So, in short, the commonly repeated notion that questions surrounding spending and the debt limit are Congress’s and Congress’s alone to answer is simply an attempt by this administration to avoid accountability on these issues.
Ultimately, regardless of what President Obama and those in his administration are saying now, both Congress and Executive Branch are to blame for our current predicament.
Let’s take a look at that predicament for a moment, Mr. President.
The President has exercised his authority to suspend the debt limit under the Continuing Appropriations Act of 2014, which he signed into law on October 17.
On October 16, public debt subject to the limit was around $16.7 trillion.
On October 17, the very next day, public debt subject to the limit was over $17 trillion.
In one day, Treasury increased the debt subject to the limit by over $328 billion.
Mr. President, let me repeat that: the debt increased by over $328 billion in a single day.
That brings the increase in total public debt under this administration to more than $6.4 trillion, an amount that is, by all accounts, unprecedented.
Echoing earlier sentiments of the then-Senator Biden, I refuse to be associated with the policies that brought us to this point.
The debt limit debate provides us with an opportunity to reexamine our nation’s fiscal course and take steps to correct it. Sadly, we have a President who appears unwilling to have that conversation. Instead, he apparently wants to press forward full steam ahead on our already unsustainable course, saddling future generations with unheard of debts and broken entitlement promises in the process.
Unfortunately, as the Congressional Budget Office has made clear, over the course of President Obama’s administration, the federal government has recorded the largest budget deficits relative to the size of the economy since 1946, causing our debt to soar. Federal debt as a percent of the economy’s annual output is higher than at any point in U.S. history except for a brief period around World War II.
CBO makes three other things equally clear: 1) our debt path is unsustainable, threating our economy and putting us at risk of a fiscal crisis; 2) the root of our fiscal problem is federal spending, not a lack of revenue; and 3) the main source of our spending problem is our unsustainable entitlement programs.
That being the case, Mr. President, any serious talk about raising the debt limit must include a real, concrete discussion about entitlement reform.
As every credible analyst will tell you, we need to face the fiscal facts and enact serious, structural reforms to our entitlement programs.
So far, President Obama has been unwilling to even engage in this discussion.
These days, every fiscal discussion with the White House begins and ends with demands for additional tax hikes to fuel even more spending.
Of course, the President will occasionally resurrect offers he’s made in past failed fiscal negotiations to entertain small entitlement changes, including, for example, movement to a different price index for certain cost-of-living adjustments.
But, at the same time, the President and his administration have made clear that even those small entitlement changes will only be on the table if tax hikes are delivered first.
That is the President’s precondition for even entertaining tax reform or entitlement reform, even on the heels of a more than $630 billion tax hike at the beginning this year and another $1 trillion in revenue delivered courtesy of Obamacare.
Mr. President, entitlement reform is not an option, it is a necessity.
Structural reforms to our health care entitlements should not hinge on another tax-and-spend operation.
And, structural reforms to Social Security should not be held hostage to another tax hike.
Earlier this year, I personally presented to the President, in detail and in writing, five reform proposals relating to Medicare and Medicaid that have received bipartisan support in the past. I asked him to consider the proposals and have since asked members of his administration to likewise give the proposals consideration.
I did not wait until an impending debt limit debate. Rather, I put my proposals forward in a good faith effort to begin timely discussions.
Unfortunately, thus far I’ve not received a response. And, the clock on Medicare and Medicaid keeps ticking.
The situation with Social Security isn’t much better.
The Trustees of the trust funds embedded in the Social Security system, including top administration officials such as the Treasury Secretary, have, in no uncertain terms, urged Congress to act quickly on reforming the retirement and the disability insurance programs to move them toward sustainability.
Quite simply, it would be folly to approve of yet another debt limit increase without also working to address these programs, which are the main drivers of our debts and deficits.
Therefore, I disapprove of the President’s exercise of an authority to suspend the debt limit, and I urge all of my colleagues to similarly disapprove.
Mr. President, the recent debt limit impasse and the impasse of 2011 also provided a good deal of information about lack of accountability of the Treasury Department and of our regulatory agencies.
I currently serve as the Ranking Member of the Senate Finance Committee, which has oversight responsibility toward the Treasury Department. To fulfill those responsibilities, I have been asking questions of Treasury about debt and cash management procedures.
And, I have repeatedly been stonewalled.
For example, when we have approached the debt limit, I have asked questions about how much cash our nation has in the till, only to find that Treasury won’t tell me and that they prefer that Congress rely on estimates from think tanks and Wall Street firms.
Furthermore, during the most recent debt limit impasses, administration officials were busy frightening seniors, our troops, and financial market participants about whether or not they would be paid in the event that Treasury were to run out of cash. Officials also identified threats of massive financial instability stemming from a breach of the debt limit, and of potential disruptions from a downgrade of the rating on U.S. government securities.
So, naturally, I asked Treasury and, in fact, every voting member of the Financial Stability Oversight Council—or FSOC - to provide Congress and the American people information regarding the plans they had in place to respond to such catastrophes.
Mr. President, out of close to 20 letters that I sent to FSOC members, I received only two responses. Apparently, the FSOC, which was empowered by the so-called Dodd-Frank Act to monitor and respond to emerging threats to financial stability, does not identify or share response plans with respect to any threat that could emerge as a result of government policies.
That being the case, I believe that we should strip the FSOC of any notional oversight of financial stability and call it what it really is: another unrestrained executive agency created only to enact additional regulations.
After the fact, we have found out that Treasury and some financial regulators had plans for how to respond to a debt limit breach or a ratings downgrade. Yet, none of these plans were shared with Congress.
Mr. President, put simply, if we’re going to empower a federal regulatory body like the FSOC to develop contingency plans to respond to threats to financial stability, then that body should be required to share those plans with the American people. Sadly, thus far, that hasn’t been the case.
Another thing I have learned from our recent debt limit impasses is that we need to take a closer look at Treasury Department’s use of so-called extraordinary measures, which have become all too ordinary.
These “extraordinary measures” are merely ways for the Treasury Department to temporarily delay facing a debt limit increase by issuing shadow debt. For example, Treasury can simply declare a debt issuance suspension period and stop issuing debt that it normally would issue while, instead, effectively telling the lender: don’t worry, I’ll pay you back later with interest.
I believe that authority to use these types of extraordinary measures needs to be reexamined.
As you can see, Mr. President, there are a number of problems that need to be confronted with regard to our nation’s ever-growing debt.
Like I said, we need to work together to address our nation’s unsustainable entitlement programs. Otherwise, any effort to rein in our debts and deficits will amount to little more than tinkering around the edges.
In addition, we need to improve information sharing between Congress and the Executive Branch on issues relating to our debt.
The Treasury Department and our financial regulators have a lot to do with maintaining the depth, liquidity, and efficiency of the market for Treasury securities. And, Congress has a duty to exercise oversight over these functions. Unfortunately, the administration, far more often than not, opts to keep Congress in the dark on these issues.
This has to stop.
Mr. President, by using his authority to suspend the debt limit through February 7, 2014, President Obama has opted not to confront any of these serious issues. Instead, he’s leading us even further down a path that we all already know is unsustainable.
That being the case, I plan to vote in favor of the resolution of disapproval of this debt limit suspension and I urge my colleagues to do the same. I yield the floor.