Senate Session 2012 - 06 - 27 - 10 - 35 - 54 - 11 - 50 - 49

AND DOCTORS WHO TAKE CARE OF THOSE PATIENTS, AND IS TERRIBLE FOR OUR TAXPAYERS. THANK YOU, MADAM PRESIDENT. I YIELD THE FLOOR. I SUGGEST THE ABSENCE OF A QUORUM. THE THE ROLL. MADAM PRESIDENT? THE SENATOR FROM TEXAS. MADAM PRESIDENT, I UNDERSTAND I ASK FOR ITS -- THERE IS A BILL AT THE DESK, AND THE CALL. SENATE IS CURRENTLY IN A QUORUM MADAM PRESIDENT, I ASK THAT THE QUORUM CALL BE LIFTED. WITHOUT OBJECTION. MADAM PRESIDENT, I UNDERSTAND THERE'S A BILL AT THE DESK, AND I ASK FOR ITS FIRST READING. THE CLERK WILL READ THE TITLE OF THE BILL FOR THE FIRST TIME. A BILL TO IMPROVE INFORMATION SECURITY AND FOR OTHER PURPOSES. S. 3342. I NOW ASK FOR A SECOND READING, AND IN ORDER TO PLACE THE BILL ON THE CALENDAR UNDER THE PROVISIONS OF RULE 14, I OBJECT TO MY OWN REQUEST. OBJECTION HAVING BEEN HEARD, THE TITLE OF THE BILL WILL BE READ FOR THE SECOND TIME IN THE NEXT LEGISLATIVE DAY. THANK YOU, MADAM PRESIDENT. MADAM PRESIDENT, I RISE TODAY BECAUSE WE HAVE INTRODUCED A NEW VERSION OF THE STRENGTHENING AND ENHANCING CYBERSECURITY BY USING RESEARCH, EDUCATION AND INFORMATION AND TECHNOLOGY ACT KNOWN AS THE SECURE I.T. ACT. SENATOR McCAIN AND I, ALONG WITH SENATOR CHAMBLISS, GRASSLEY, MURKOWSKI, COATS, BURR AND JOHNSON, ARE REINTRODUCING THE SECURE I.T. ACT AFTER MAKING IMPROVEMENTS AND CLARIFICATIONS IN RESPONSE TO CONSTRUCTIVE FEEDBACK THAT WE HAVE RECEIVED FROM THE FIRST BILL THAT WE INTRODUCED. WE ARE EMPLOYING RULE 14 ON THIS BILL BECAUSE IT IS CLEAR THAT IT WILL NOT RECEIVE THE BENEFIT OF THE TRADITIONAL COMMITTEE PROCESS AND THE MAJORITY LEADER HAS INDICATED HE INTENDS TO DEBATE THIS ISSUE ON THE SENATE FLOOR IN JULY. SO WHAT THOSE OF US WHO ARE COSPONSORS OF THIS BILL ARE TRYING TO DO IS HAVE OUR VERSION OF A CYBERSECURITY BILL ON THE FLOOR INTRODUCED SO THAT EVERYONE WILL BE ABLE TO SEE IT, AND THEN WHEN THE COMMITTEE BILL IS INTRODUCED WE WILL BE ABLE TO DEBATE THE DIFFERENCES BETWEEN OUR BILLS. THE SPONSORS OF OUR BILL INCLUDE EIGHT RANKING MEMBERS OF COMMITTEES AND SUBCOMMITTEES CYBERSECURITY. THAT HAVE JURISDICTION OVER WE HAVE COMBINED OUR EXPERTISE TO DEVELOP A BALANCED PIECE OF LEGISLATION THAT WE BELIEVE WILL GREATLY ENHANCE OUR COUNTRY'S CYBERSECURITY OF THE INFRASTRUCTURE THAT COULD BE AFFECTED. WE BELIEVE IT IS NOW TIME FOR CONGRESS TO ACT. THE NATION FACES AN EVOLVING ARRAY OF THREATS FROM HACKERS, CRIMINAL GROUPS AND TERRORISTS THAT SEEK TO SABOTAGE NETWORKS, GAIN ACCESS TO SENSITIVE GOVERNMENT INFORMATION AND STEAL VALUABLE INTELLECTUAL PROPERTY. SECURE I.T. IS CENTERED ON CONSENSUS ITEMS T-RBS IT SETS ASIDE CONTROVERSIAL PROVISIONS THAT ARE OF QUESTIONABLE VALUE AT THIS TIME AND WE BELIEVE OUR BILL CAN PASS BOTH CHAMBERS. IT OFFERS A BALANCED APPROACH THAT WILL SIGNIFICANTLY ADVANCE CYBERSECURITY IN BOTH THE PUBLIC AND PRIVATE SECTORS BY FOCUSING ON FOUR ISSUES AND AREAS ON TKH WE BELIEVE EVERYONE CAN AGREE. FIRST, TO FACILITATE SHARING OF CYBERTHREAT INFORMATION AMONG PRIVATE SECTOR ENTITIES AND TO AND FROM THE GOVERNMENT. SECOND. TO BETTER SECURE FEDERAL NETWORKS, INCLUDING REQUIRING FEDERAL CONTRACTORS TO NOTIFY THE FEDERAL LAW ENFORCEMENT AGENCIES OF CYBERATTACKS THAT WOULD THREATEN GOVERNMENT INFRASTRUCTURE. THIRD, TO STRENGTHEN THE ABILITY TO PROSECUTE CYBERCRIME. AND FOURTH, TO PRIORITIZE CYBERSECURITY RESEARCH AND DEVELOPMENT SO THAT OUR NATION WILL CONTINUE TO LEAD THE WORLD IN THIS AREA. SO LET ME START WITH NUMBER ONE. FACILITATE SHARING OF CYBERTHREAT INFORMATION. SECURE I.T. HELPS THE PRIVATE SECTOR COMBAT CYBERATTACKS BY BREAKING DOWN BARRIERS TO SHARING INFORMATION ABOUT THREATS AND VULNERABILITIES. CURRENTLY ANTITRUST LAWS AND LIABILITY CONCERNS INHIBIT PRIVATE COMPANIES FROM EXCHANGING INFORMATION THAT WE BELIEVE IS NECESSARY TO DEFEND AGAINST AND RESPOND TO CYBERTHREATS. I WAS TALKING TO SOMEONE LAST NIGHT WHO IS IN THE VERY HIGH-TECH INTERNET FIELD, AND THERE ARE GREAT CONCERNS ABOUT THEIR COMPANY CALLING A COMPETITOR AND SAYING WE'RE SEEING SIGNS OF A POSSIBLE THREAT HERE, AND WE WANTED TO SHARE WHAT THE TYPE OF RED FLAG WE'RE SEEING IS SO THAT YOU WOULD BE ABLE TO CHECK YOUR NETWORKS TO SEE IF YOU'RE GETTING THE SAME THING. THESE ARE TWO COMPETITORS, BUT THIS IS NOT AN ANTICOMPETITIVE SITUATION. IT'S NOT SOMETHING THAT WOULD BE, WE BELIEVE, SUBJECT TO ANTITRUST. THEY'RE STILL COMPETITORS, BUT EVERYBODY WANTS SECURITY FOR ALL OF OUR NETWORKS IN THIS COUNTRY AGAINST ANY KIND OF INTERVENTION, WHETHER IT'S CRIMINAL OR FOREIGN INTELLIGENCE. SECONDLY, OUR BILL'S LIABILITY PROTECTIONS AND LIMITED ANTITRUST EXEMPTION WILL ALLOW THESE COMPANIES TO RAPIDLY RESPOND, SO YOU DON'T HAVE TO GO TO A LAWYER AND SAY, WOULD THIS BE ANTITRUST IF WE CALLED OUR COMPETITOR AND STARTED SHARING THIS INFORMATION RIGHT AWAY? SO IT NEEDS TO BE TIMELY, FAST, AND SAFE. THAT'S THE CRITERIA. SECONDLY, SHARING SHOULD BE A TWO-WAY STREET. OUR BILL SETS UP A FRAMEWORK THAT TIMELY SHARES CLASSIFIED, DECLASSIFIED AND UNCLASSIFIED INFORMATION BY THE FEDERAL GOVERNMENT WITH TRUSTED PRIVATE-SECTOR ENTITIES, WHILE ALLOWING PRIVATE-SECTOR COMPANIES TO SHARE CYBERTHREAT INFORMATION WITH THE GOVERNMENT. SINCE THE INTRODUCTION OF SECURE I.T., WE HAVE BEEN WORKING WITH STAKEHOLDERS IN ALL OF THE AREAS OF INFRASTRUCTURE AND INTERNET ACCESS TO MAKE A NUMBER OF IMPROVEMENTS AND CLARIFICATIONS OF THE BILL. I AM PLEASED THAT WE INTRODUCED THE BILL EARLY, THAT WE GOT THE FEEDBACK FROM THE DIFFERENT STAKEHOLDERS AND WE HAVE NOW BEEN ABLE TO ADJUST TO THOSE THAT WOULD ALSO HELP THE BILL BUT ALSO PROTECT PRIVACY AND PROTECT THE ISSUE THAT WE'RE TRYING TO ADDRESS, WHICH OF COURSE IS SAFETY AND CYBERSECURITY. WE TIGHTEN THE DEFINITION OF WHAT INFORMATION IS SHARED. WE REFINED THE PROCESS FOR SHARING IT. THAT ONLY ESSENTIAL INFORMATION IS SHARED AND THAT IT IS HANDLED APPROPRIATELY. FOR EXAMPLE, IT IS VITAL THAT FEDERAL AGENCIES BE INFORMED IF THEIR SYSTEMS ARE COMPROMISED. OUR BILL REQUIRES FEDERAL CONTRACTORS TO COORDINATE WITH THEIR SUPERVISORY AGENCIES AND TO NOTIFY THEM OF SIGNIFICANT CYBERINCIDENTS THAT WOULD IMPEDE THEIR MISSION. WE HAVE ADDED EXPLICIT AND STRONG PRIVACY PROTECTIONS AND INCREASED OVERSIGHT THROUGHOUT OUR REVISED BILL. AT EVERY STAGE OF INFORMATION SHARING, THERE ARE STATUTORY SAFEGUARDS THAT WILL ENSURE CYBER THREAT INFORMATION IS HANDLED IN A MANNER THAT WILL PROTECT THE PRIVACY AND CIVIL LIBERTIES OF ALL AMERICANS WHILE PRESERVING THE ABILITY TO ADDRESS CYBER THREATS THAT COULD AFFECT THEM AS WELL AS OTHER MEMBERS OF THE PUBLIC. NETWORKS. NUMBER TWO, SECURE FEDERAL NEEDS TO DO A MUCH BETTER JOB OF SECURING ITS OWN NETWORKS. TO ADDRESS THIS PROBLEM, SECURE I.T. PROVIDES NECESSARY REFORMS TO THE FEDERAL INFORMATION SECURITY MANAGEMENT ACT, MODERNIZING THE WAY THE GOVERNMENT MONITORS AND MITIGATES ITS OWN CYBER RISKS. SECURE I.T. REQUIRES AGENCIES TO USE AUTOMATEED REAL-TIME NETWORK MONITORING, UPGRADING THEIR CURRENT PRIMARILY PAPER BASED REPORTING. OUR REVISIONS ALSO ENSURE THAT AGENCIES WILL BE CONTINUOUSLY UPDATING THEIR TECHNOLOGIES TO PREVENT AND REMEDIATE SIGNIFICANT CYBER INCIDENTS. NUMBER THREE, WE PROSECUTE CYBER CRIME. WE UPDATE THE FEDERAL CRIMINAL STATUTES AND STREAMLINE EXISTING CONFUSEING PENALTIES TO FACILITATE THE PROSECUTION OF CYBER CRIMINALS. AND NUMBER FOUR, CYBERSECURITY AND DEVELOPMENT IS ESSENTIAL TO HARNESS INNOVATION AND TO TRAIN I.T. PROFESSIONALS TO COUNTER FUTURE ATTACKS. BY FOCUSING ON THESE FOUR AREAS, MADAM PRESIDENT, WE BELIEVE THAT WE CAN SIGNIFICANTLY IMPROVE THE CYBERSECURITY OF OUR COUNTRY. FACILITATING THE SHARING OF CYBER THREAT INFORMATION IN THE PRIVATE SECTOR, SECURING FEDERAL NETWORKS, STRENGTHENING CRIMINAL PENALTIES FOR CYBER CRIMES AND PRIORITIZING CYBER SECURITY RESEARCH AND DEVELOPMENT. EQUALLY IMPORTANT IS WHAT OUR BILL DOES NOT DO. SECURE I.T. DOES NOT GIVE THE DEPARTMENT OF HOMELAND SECURITY OPEN-ENDED POWER TO REGULATE NETWORKS FOR INFRASTRUCTURE THAT IT DEEMS TO BE CRITICAL. IT DOES NOT GIVE THEM THE POWER TO DETERMINE WHAT IS CRITICAL INFRASTRUCTURE. INSTEAD, WE TAKE A DIFFERENT APPROACH THAT IS NOT HEAVY-HANDED REGULATORY. IT SETS UP A TRUE PARTNERSHIP BETWEEN THE PUBLIC AND PRIVATE SECTOR TO COMBAT THESE CYBER THREATS. WE WILL NOT IMPROVE THIS COUNTRY'S CYBERSECURITY BY CREATING AN ADVERSARIAL SYSTEM BASED ON A REGULATORY COMPLIANCE STRUCTURE. WE BELIEVE SUBJECTING INDUSTRY TO MORE REGULATION FROM AN AGENCY THAT IS ILL EQUIPPED TO UNDERSTAND THE PRIVATE SECTOR SYSTEMS WILL ULTIMATELY ERODE THE ABILITY OF BUSINESS TO PROVIDE EFFECTIVE, NIMBLE AND INNOVATIVE RESPONSES TO CYBER THREATS. DIVERTING PRECIOUS RESOURCES FROM SECURITY AND INNOVATION TO REGULATORY COMPLIANCE COULD ULTIMATELY HARM SECURITY, NOT IMPROVE IT, WHICH IS WHY WE ARE TAKING THE DIFFERENT APPROACH FROM THE MORE HEAVY-HANDED REGULATORY APPROACH OF THE BILL THAT CAME OUT OF COMMITTEE. NOT WANT AMERICANS TO BE FOOLED INTO A FALSE SENSE OF SECURITY BY IMPOSING AN UNPROVEN PRESCRIPTIVE REGULATORY FRAMEWORK THAT NO AGENCY COULD EFFECTIVELY IMPLEMENT, AND WE DO NOT THINK THAT THE DEPARTMENT OF HOMELAND SECURITY COULD. I ENCOURAGE MY COLLEAGUES ON BOTH SIDES OF THE AISLE TO JOIN US IN SUPPORTING THE SECURE I.T. ACT OF 2012. AND, MADAM PRESIDENT, I WILL JUST REITERATE AGAIN THAT OUR BILL IS SPONSORED BY SENATOR McCAIN AND MYSELF, SENATOR CHAMBLISS, SENATOR GRASSLEY, SENATOR MURKOWSKI, SENATOR COATS, SENATOR BURR AND SENATOR JOHNSON. ALL OF WHOM -- JOHNSON OF WISCONSIN. ALL OF WHOM ARE EITHER RANKING MEMBERS OF FULL COMMITTEES OR SUBCOMMITTEES THAT HAVE A JURISDICTION IN THIS AREA. VERY HARD WITH ALL OF THE DIFFERENT INTERESTS. THE PRIVACY GROUPS, THE GROUPS THAT HANDLE THE PRIVATE SECTOR, THE GROUPS THAT ARE FEDERAL CONTRACTORS TO ASSURE THAT WE ARE DOING THE BEST BALANCED APPROACH THAT COULD POSSIBLY BE DONE TO TAKE THE NEXT STEP WITH A BILL THAT WE BELIEVE WE CAN PASS IN THE SENATE BUT ALSO THE HOUSE AND TO THE PRESIDENT, AND I BELIEVE HE WILL SIGN IT BECAUSE IT IS A MAJOR FIRST STEP FORWARD. THANK YOU, MADAM PRESIDENT, AND I YIELD THE FLOOR. A SENATOR: MADAM PRESIDENT? THE SENATOR FROM SOUTH DAKOTA. I JUST WANT TO INDICATE THAT LISTENING TO THE SENATOR FROM TEXAS' REMARKS ABOUT INTRODUCTION OF A BILL APPARENTLY ON CYBERSECURITY HOW CRITICALLY IMPORTANT THAT IS TO THE COUNTRY. I'M A RELATIVELY NEW MEMBER OF THE INTELLIGENCE COMMITTEE, BUT IF THERE IS ANYTHING I'VE LEARNED, IT'S WHAT A MAJOR THREAT THIS IS TO OUR COUNTRY AND HOW CRITICALLY IMPORTANT IT IS TO ADDRESS IT. I WANT TO COMMEND THE SENATOR FROM TEXAS FOR HER LEADERSHIP AND APPRECIATE THAT SHE AND HER COLLEAGUES HAVE TAKEN THIS STEP OF ACTUALLY INTRODUCING LEGISLATION. MADAM PRESIDENT, I WANT TO THANK THE SENATOR FROM NORTH DAKOTA AND APPRECIATE VERY MUCH THAT HE IS ON THE INTELLIGENCE COMMITTEE AND KNOWS THE SENSITIVITIES AND ALL OF THE STAKEHOLDERS THAT WE MUST WORK WITH IN ORDER TO DO THE RIGHT THING FOR OUR COUNTRY, BOTH IN THE PRIVATE SECTOR AS WELL AS IN OUR GOVERNMENT INFRASTRUCTURE. AS ALWAYS, THE SENATOR FROM IS A PERSON WHO IS VISIONARY AND LOOKING OUT FOR THE BEST INTERESTS OF OUR COUNTRY, AND I HOPE THAT WE CAN COME TOGETHER ON THIS BILL. THANK YOU, MADAM PRESIDENT. I THANK THE SENATOR. I LOOK FORWARD TO REVIEWING HER PROPOSAL. HOPEFULLY TOGETHER WE CAN FIND A WAY TO GET SOMETHING PASSED THAT COUNTRY. WILL FURTHER PROTECT OUR MADAM PRESIDENT, I HAVE SIX UNANIMOUS CONSENT REQUESTS FOR COMMITTEES TO MEET DURING TODAY'S SESSION OF THE SENATE. THEY HAVE THE APPROVAL OF THE MAJORITY AND MINORITY LEADERS. I ASK UNANIMOUS CONSENT THESE REQUESTS BE AGREED TO AND THAT THESE REQUESTS BE PRINTED IN THE WITHOUT RECORD. OBJECTION. MADAM PRESIDENT, I HAVE COME TO THE FLOOR TODAY TO TALK ABOUT THE STATE OF OUR ECONOMY, WHERE WE HAVE COME FROM, WHERE WE'RE HEADED, THE CRITICAL CHALLENGES FACING OUR NATION, AND I WANT TO GO BACK AND REMINDED PEOPLE OF WHERE WE HAVE COME FROM BECAUSE I THINK IT'S VERY IMPORTANT TO PUT IN CONTEXT THE CIRCUMSTANCES THAT WE NOW CONFRONT. THE ECONOMIC CRISIS OF 2008 AND 2009 WAS THE WORST RECESSION SINCE THE GREAT DEPRESSION. BY THE WAY, THIS WAS NOT THE CREATION OF BARACK OBAMA. HE INHERITED THIS MESS. HE HAS DONE REALLY QUITE A GOOD JOB OF GETTING US MOVING IN A BETTER PROTECTION, BUT MORE OF THAT LATER. REMEMBER IN THE FOURTH QUARTER OF 2008 -- THAT'S THE LAST QUARTER BEFORE THIS PRESIDENT TOOK OFFICE -- THE ECONOMY WAS ACTUALLY SHRINKING AT A RATE OF ALMOST 9%, AND IN THE FIRST MONTH OF 2009, WE LOST 800,000 JOBS. THE HOUSING MARKET WAS IN CRISIS. HOME BUILDING AND SALES WERE PLUMMETING. WE FACED RECORD FORECLOSURES. THE FINANCIAL MARKET CRISIS WAS COLLAPSE. THREATENING GLOBAL ECONOMIC IN FACT, I WILL NEVER FORGET BEING CALLED TO A MEETING IN THE CAPITAL, IN 2008 IN THE FALL, AND I WAS THE LAST ONE TO ARRIVE. IT WAS THE LEADERS OF THE HOUSE AND THE SENATE, REPUBLICANS AND DEMOCRATS, AND THERE WAS THE CHAIRMAN OF THE FEDERAL RESERVE AND THE SECRETARY OF THE TREASURY AND THE BUSH ADMINISTRATION TELLING US THEY WERE GOING TO TAKE OVER A.I.G. THE NEXT MORNING, AND THEY TOLD US IF THEY DID NOT, THEY BELIEVED THERE WOULD BE A FINANCIAL COLLAPSE IN THIS COUNTRY WITHIN DAYS. I TELL YOU, THAT GETS YOUR ATTENTION. BUT THAT'S THE CIRCUMSTANCES LATE 2008. THAT WERE BEING CONFRONTED IN LET'S GO TO THAT NEXT SLIDE, IF WE CAN. SINCE THAT TIME, WE HAVE SEEN A DRAMATIC IMPROVEMENT. HERE'S THE ECONOMY IN THE FOURTH QUARTER OF 2008 BEFORE PRESIDENT OBAMA TOOK OFFICE, SHRINKING AT A RATE OF ALMOST 9%, AND IN THE SUBSEQUENT QUARTERS, IT TO SHRINK UNTIL IT BEGAN TO GET BETTER IN 2000 -- LATE 2009, FRANKLY BECAUSE OF STIMULUS AND TARP THAT HELPED START TO TURN THINGS AROUND, AND SINCE THAT TIME, WE HAVE HAD CONSISTENT GROWTH IN THE ECONOMY. NOT AS ROBUST AS WE WOULD LIKE, BUT NONETHELESS CONSISTENT GROWTH. A RATHER REMARKABLE TURNAROUND GIVEN HOW SERIOUS THE ECONOMIC DOWNTURN WAS. WE ALSO SEE THE SAME PATTERN WITH RESPECT TO THE PRIVATE SECTOR JOBS PICTURE. AGAIN IN JANUARY OF 2009, IN ONE MONTH ALONE, WE LOST MORE THAN 800,000 JOBS. THOSE WERE PRIVATE SECTOR JOBS. MONTH. MORE THAN 800,000 JOBS IN A AGAIN, IN ABOUT 2009, THINGS BEGAN TO TURN. WE GOT BACK TO GROWING JOBS. IN FACT, WE HAVE HAD OVER 4.5 MILLION JOBS IN THE PRIVATE SECTOR CREATED SINCE THE TURNAROUND BEGAN. AND AGAIN, JOB GROWTH NOT AS ROBUST AS WE WOULD LIKE BUT NONETHELESS QUITE A REMARKABLE TURNAROUND FROM WHERE IT WAS. MADAM PRESIDENT, WHEN WE LOOK BACK AT THE ECONOMIC CRISIS AND WE LOOK AT WHAT WAS DONE, WHAT WE HAVE SEEN LOOKING AT PREVIOUS CRISES IS THAT ECONOMIC RECOVERY IS SHALLOWER AND TAKES MUCH LONGER AFTER A FINANCIAL CRISIS, SO YOU CAN'T COMPARE THIS TO THE GARDEN-VARIETY RECESSIONS THAT WAR II. WE HAVE FACED SINCE WORLD I THINK WE HAVE HAD NINE RECESSIONS SINCE WORLD WAR II, BUT THIS WENT FAR BEYOND A TYPICAL RECESSION. FINANCIAL SECTOR. THIS WAS ENORMOUS DAMAGE TO THE AND LOOKING HISTORICALLY, HERE'S WHAT DR. REINHART OF THE PETER PETERSON INSTITUTE FOR INTERNATIONAL ECONOMICS AND DR. VINCENT REINHART OF THE AMERICAN ENTERPRISE INSTITUTE HAVE FOUND IN THEIR RESEARCH." REALLY PER CAPITA G.D.P. GROWTH RATES ARE SIGNIFICANTLY LOWER DURING THE DECADE FOLLOWING SEVERE FINANCIAL CRISES. IN THE TEN-YEAR WINDOW FOLLOWING SEVERE FINANCIAL CRISES, UNEMPLOYMENT RATES ARE SIGNIFICANTLY HIGHER THAN IN THE DECADE THAT PRECEDED THE CRISIS." NOW, MADAM PRESIDENT, THAT'S THE CIRCUMSTANCE WE'RE IN. THAT IS NOT THE FAULT OF PRESIDENT OBAMA. HE INHERITED THIS MESS. AND THE FACT IS AFTER A FINANCIAL CRISIS, IF YOU LOOK BACK HISTORICALLY, IT TAKES UP TO TEN YEARS TO RECOVER. LET'S GO TO THE NEXT SLIDE. AND FOR THOSE WHO SAY WELL, THE FEDERAL GOVERNMENT RESPONSE DIDN'T WORK, HASN'T MADE ANY DIFFERENCE, I DON'T THINK THAT'S TRUE. I DON'T THINK THAT WILL STAND UP TO SCRUTINY. TWO OF THE MOST DISTINGUISHED ECONOMISTS IN THE COUNTRY, ALAN BLINDER, WHO IS FORMER DEPUTY CHAIRMAN OF THE FEDERAL RESERVE, AND MARK ZANDI, WHO IS ACTUALLY ONE OF THE ECONOMIC ADVISORS TO THE JOHN McCAIN CAMPAIGN, SAID "WE FIND THAT ITS EFFECTS" -- TALKING ABOUT THE FEDERAL GOVERNMENT ACTIONS TO DEAL WITH THE CRISIS, THAT ITS EFFECTS ON REAL G.D.P., JOBS AND INFLATION ARE HUGE AND PROBABLY AVERTED WHAT COULD HAVE BEEN CALLED GREAT DEPRESSION 2.0. THEY WENT ON TO SAY -- "WHEN ALL IS SAID AND DONE, THE FINANCIAL AND FISCAL POLICIES WILL HAVE COST TAXPAYERS A SUBSTANTIAL SUM, BUT NOT NEARLY AS MUCH AS MOST HAD FEARED AND NOT NEARLY AS MUCH AS IF POLICYMAKERS HAD NOT ACTED AT ALL. IF THE COMPREHENSIVE POLICY RESPONSES SAVED THE ECONOMY FROM ANOTHER DEPRESSION, AS WE ESTIMATE, THEY WERE WELL WORTH THEIR COST." MADAM PRESIDENT, TWO OF THE MOST DISTINGUISHED ECONOMISTS IN THE COUNTRY TELLING US HAD WE NOT TAKEN THE ACTIONS THE FEDERAL GOVERNMENT DID, WE WOULD HAVE HAD A DEPRESSION, A DEPRESSION. THEY ALSO LOOKED AT WHAT WOULD HAVE HAPPENED WITHOUT THE FEDERAL RESPONSE ON THE JOBS FRONT, AND HERE'S WHAT THEY FOUND, RUNNING THEIR ECONOMETRIC MODELS. THE GREEN LINE IS THE JOBS WITH THE FEDERAL RESPONSE. THE RED LINE IS THE ESTIMATE OF WHAT WOULD HAVE HAPPENED WITHOUT THE FEDERAL RESPONSE. YOU WILL SEE, THEY FIND A DIFFERENCE OF ABOUT EIGHT MILLION JOBS. IN OTHER WORDS, WE HAVE EIGHT MILLION MORE JOBS THAN WE WOULD HAVE OTHERWISE HAD HAD THE FEDERAL GOVERNMENT DONE NOTHING. I JUST SAY THIS TO MY COLLEAGUES WHO SAY WELL, STIMULUS TARP, THAT DIDN'T WORK BECAUSE WE'RE NOT GROWING AS RAPIDLY AS WE WOULD LIKE. BUT LET'S THINK BACK. WHAT WAS HAPPENING WHEN THOSE STEPS WERE TAKEN? THE THE ECONOMY WASN'T GROWING, THE ECONOMY WAS SHRINKING. WE WEREN'T GETTING MORE JOBS. WE WERE LOSING JOBS AT A RECORD RATE. SO, MADAM PRESIDENT, TO THOSE WHO SAY NONE OF THESE FEDERAL ACTIONS WERE SUCCESSFUL, I SAY I DON'T THINK THAT'S WHAT THE RECORD SHOWS HERE. I THINK WHAT THE RECORD SHOWS IS THEY DIDN'T ACCOMPLISH ALL WE WOULD LIKE, BUT THEY REALLY LED TO QUITE A DRAMATIC TURNAROUND FROM THE WORST RECESSION SINCE THE GREAT DEPRESSION. AND HERE ARE POSITIVE SIGNS WE SEE NOW THAT ARE FACTS. THEY'RE NOT PROJECTIONS, THEY'RE FACTS. WE HAVE HAD 27 CONSECUTIVE MONTHS OF PRIVATE-SECTOR JOB GROWTH, 11 CONSECUTIVE QUARTERS OF REAL G.D.P. GROWTH, THE UNEMPLOYMENT RATE IS DOWN FROM THE 2009 PEAK, MANUFACTURING HAS EXPANDED FOR 34 CONSECUTIVE MONTHS, THE U.S. AUTO HAVE RETURNED TO PROFITABILITY, AND STATE REVENUES ARE NOW SHOWING SIGNS OF IMPROVEMENT. SO HE, AGAIN, THIS -- SO, AGAIN, THIS ISN'T POLITICAL TALK. THESE ARE FACTS, AND FACTS MATTER. AND THE FACTS DEMONSTRATE THERE HAS BEEN QUITE A REMARKABLE TURNAROUND. AGAIN, THESE AREN'T WROA PROAJECTIONS, THESE ARE FACTS. OCCURRED. THESE ARE THINGS THAT HAVE MADAM PRESIDENT, IF WE THEN COMPARE TO THE UNITED STATES' PERFORMANCE TO OTHER COUNTRIES WITH WHOM WE COMPETE, WE CAN SEE THE UNITED STATES HAS REALLY DONE THE BEST IN TERMS OF THE COMPARISONS HERE. SOME DEVELOPING NATIONS HAVE CERTAINLY DONE BETTER THAN WE HAVE, BUT IF YOU LOOK AT THE DEVELOPED WORLD, THE UNITED STATES IS REALLY DOING THE BEST. WE'RE DOING -- HERE'S OUR ECONOMIC PERFORMANCE. THE TOP LINE. FAR BETTER THAN THE EURO ZONE, ALL THE EUROPEAN COUNTRIES, THAT'S THE GREEN LINE. IS THE RED LINE, WE'RE DOING MUCH BETTER THAN THEM AND MUCH BETTER THAN THE UNITED KINGDOM. SO IF WE LOOK AT HOW WE HAVE DONE COMPARED TO THE REST OF THE WORLD, WE'RE REALLY DOING MUCH BETTER AT LEAST IN TERMS OF THE DEVELOPED NATIONS. MADAM PRESIDENT, WE KNOW THAT EUROPE HAS GONE IN A SOMEWHAT DIFFERENT DIRECTION. THEY HAVE IMPOSED AUSTERITY AND WITHOUT REGARD TO GROWTH POLICIES. AND HERE ARE THE HEADLINES FROM THE INTERNATIONAL HERALD TRIBUNE , AUSTERITY IS STRANGLING EUROPE. AND I'VE PULLED OUT A PARAGRAPH BECAUSE I THINK IT SPEAKS VERY WELL OF WHAT HAS BEEN THE EFFECT OF THE EUROPEAN STRATEGY. THE DIRECTION OF EUROPEAN AND FINANCIAL POLICY MUST CHANGE. AWAY FROM PURE AUSTERITY TOWARD GROWTH. GREECE, IRELAND, PORTUGAL, ITALY AND SPAIN HAVE MADE SUBSTANTIAL PROGRESS IN THEIR FINANCES. BUT THE PROGRESS AND STABILIZING -- BUT THE ECONOMIC AND POLITICAL SITUATION IN THESE COUNTRIES SHOWS THAT US A EXPERT -- AUSTERITY ALONE IS CRISIS. NOT THE WAY TO RESOLVE THE ON THE CONTRARY, THERE IS A DANGER OF HALF STRANGLING NATIONAL ECONOMIES WITH A STRICT POLICY OF US AUSTERITY. WE WOULD THEREFORE BE WELL ADVISED TO CUSHION HARSH US AUSTERITY MEASURES WITH PROGRAMS FOR GROWTH. MADAM PRESIDENT, I BELIEVE THERE'S A LESSON IN THAT FOR US AS WELL. I AM AN UNVARNISHED DEFICIT HAWK, HAVE BEEN MY DESIRE CAREER, HAVE CALLED REPEATEDLY FOR TO US GET OUR FISCAL HOUSE IN ORDER, I BELIEVE IT'S IMPERATIVE THAT WE DO BUT IT IS ALSO IMPERATIVE THAT WE RECOGNIZE THAT YOU DON'T IMPOSE AUSTERITY ON A WEAK AND STRUGGLING ECONOMY, YOU'LL ONLY MAKE THINGS WORSE. BACK ON FINANCIAL -- A MORE SUSTAINABLE FINANCIAL PATH HAS TO BE DONE IN A MEASURED WAY. ABSOLUTELY WE NEED A LONG-TERM PLAN TO TAKE ON OUR DEFICITS AND DEBT. I'VE MADE THAT SPEECH 500 TIMES. ABSOLUTELY THAT HAS TO BE DONE. BUT THAT'S GOT TO BE DONE IN A PHASED WAY AND THE AUSTERITY SHOULD NOT BE IMPOSED UNTIL WE'RE ON A STRONGER GROWTH PATH. I THINK ECONOMIC HISTORY TELLS US THAT, AND THAT'S A LESSON WE NEED TO LEARN. MADAM PRESIDENT, WHAT IS HOLDING BACK THE U.S. ECONOMY FROM A STRONGER RECOVERY? WELL, WE'VE IDENTIFIED THESE ELEMENTS. NUMBER ONE, THE EUROPEAN DEBT AND FINANCIAL CRISIS HAS THROWN A CLOUD OVER GLOBAL MARKETS, AND THEY ARE STILL OUR BIGGEST TRADING PARTNERS. SO A CHILLING OF ECONOMIC ACTIVITY IN EUROPE HAS HAD AN ADVERSE EFFECT ON OUR OWN ECONOMIC PERFORMANCE. SECOND, THE IRAN/MIDDLE EAST SITUATION HAS THREATENED TO DISRUPT OIL SUPPLIES. THAT CREATES UNCERTAINTY BECAUSE WE KNOW IF THE STRAITS OF HOME MUSE WERE CLOSED -- STRAITS OF HORMUZ WERE CLOSED, ECONOMIC ACTIVITY WOULD WEAKEN AND WE WOULD BE HURT. THAT HAS LED COMPANIES EVEN THOUGH THEY HAVE $2 BILLION ON THEIR BOOKS TO BE CAUTIOUS ABOUT EXPANDING HIRING. MADAM PRESIDENT, FEDERAL, STATE, AND LOCAL GOVERNMENT CUTBACKS HAVE ALSO CREATED ECONOMIC DRAG. I'LL GO TO THAT ISSUE IN A MOMENT. THE POLITICAL DEADLOCK ON FISCAL ISSUES HERE IN CONGRESS HAS CREATED UNCERTAINTY, AND WE FACE OF COURSE THE THREAT FROM THE FISCAL CLIFF. THE FISCAL CLIFF IS THE FACT AT THE END OF THIS YEAR ALL OF THE BUSH TAX CUTS ARE GOING TO EXPIRE WHICH MEANS AN AUTOMATIC AMERICAN. TAX INCREASE FOR VIRTUALLY EVERY SPENDING CUTS, $1.2 TRILLION IN THE SO-CALLED SEQUESTER, ABOUT EVENLY SHARED BETWEEN DEFENSE AND NONDEFENSE. THAT WOULD REDUCE DEMAND, THAT WOULD FURTHER REDUCE ECONOMIC GROWTH. AND, OF COURSE, THE HOUSING MARKET CONTINUES TO POSE A THREAT AT LEAST IN MANY PARTS OF THE COUNTRY, CERTAINLY IN NEVADA AND ARIZONA AND FLORIDA AND PARTS OF CALIFORNIA. THE HOUSING MARKET CRISIS STILL LEAVES AN OVERHANG. MADAM PRESIDENT, I THOUGHT THIS ARTICLE IN "THE NEW YORK TIMES" ON SATURDAY, MAY 5 WAS VERY INTERESTING BECAUSE I THINK IF WE GAVE A QUIZ 0 THE AMERICAN PEOPLE LISTENING TO THE DEBATES HERE THEY WOULD CONCLUDE THE GOVERNMENT HAS GOTTEN BIGGER AND ADMINISTRATION. BIGGER DURING THE OBAMA BUT IT'S NOT TRUE. YOU KNOW, A PREVIOUS PRESIDENTS -- A PREVIOUS PRESIDENT SAID FACTS ARE STUBBORN THINGS AND THESE ARE FACTS. THE GOVERNMENT, IF YOU TAKE STATE, LOCAL, AND FEDERAL GOVERNMENT AND YOU COMBINE THEM, THE GOVERNMENT IS GETTING SMALLER IN THE UNITED STATES. IN FACT, AGAIN, I PULLED OUT A PARAGRAPH. FOR THE FIRST TIME IN 40 YEARS THE GOVERNMENT SECTOR OF THE AMERICAN ECONOMY HAS SHRUNK DURING THE FIRST THREE YEARS OF A PRESIDENTIAL ADMINISTRATION. SPENDING BY THE FEDERAL GOVERNMENT ADJUSTED FOR INFLATION HAS RISEN AT A SLOW RATE UNDER PRESIDENT OBAMA. BUT THAT INCREASE HAS BEEN MORE THAN OFFSET BY A FALL IN SPENDING BY STATE AND LOCAL GOVERNMENTS WHICH HAVE BEEN SQUEEZED BY WEAK TAX RECEIPTS. IN THE FIRST QUARTER OF THIS YEAR THE REAL GROSS DOMESTIC PRODUCT FOR THE GOVERNMENT INCLUDING STATE AND LOCAL GOVERNMENTS AS WELL AS FEDERAL, WAS 2% LOWER THAN IT WAS THREE YEARS EARLIER WHEN BARACK OBAMA TOOK OFFICE. MADAM PRESIDENT, ALL THE TALK WE HEAR ON THIS FLOOR ABOUT THE IS BLOVIATION, BLOVIATION. BLOVIATION. YOU KNOW, LET'S GET REAL. THE GOVERNMENT OF THE UNITED STATES IS SHRINKING. FACTS ARE STUB BOASH -- STUBBORN THINGS. MADAM PRESIDENT, MADAM PRESIDENT, THIS IS WHAT'S HAPPENING TO THE U.S. GOVERNMENT WORK FORCE UNDER THIS PRESIDENT. 2009. OBAMA TOOK OFFICE IN JANUARY OF THIS IS MILLIONS OF FEDERAL, STATE, AND LOCAL EMPLOYEES. WE HAD MORE THAN 22.5 MILLION EMPLOYEES. FEDERAL, STATE, AND LOCAL LOOK WHAT'S HAPPENED. DO WE HAVE MORE GOVERNMENTS IN -- EMPLOYEES IN GOVERNMENT TODAY THAN WHEN PRESIDENT OBAMA TOOK OFFICE OR DO WE HAVE LESS? WE HAVE LESS AND A LOT LESS. THIS CHART SHOWS VERY CLEARLY THE NUMBER OF EMPLOYEES HAS GONE DOWN DRAMATICALLY, DRAMATICALLY IURING THE YEARS OF THIS ADMINISTRATION. MADAM PRESIDENT, FACTS ARE STUBBORN THINGS. WEAKNESS? WHAT IS UNDERLYING OUR CURRENT WELL, BEFORE THE BUDGET COMMITTEE WE HAD DR. JOEL PRAKKEN, THE CHAIRMAN OF MACROECONOMIC ADVISORS. THIS IS THE TESTIMONY HE GAVE EARLIER THIS YEAR. THE NUMBER-ONE PROBLEM THAT SMALL BUSINESSES SAY THEY HAVE TO DEAL WITH RIGHT NOW IS LACK OF DEMAND. ATTENTION? COLLEAGUES, ARE WE PAYING CAN WE PASS A QUIZ? WHAT IS THE PROBLEM? THE PROBLEM IS A LACK OF DEMAND. FURTHER, TAX INCREASES OR FURTHER SPENDING CUTS WILL ONLY WEAKEN DEMAND IN THE SHORT TERM. SO WE GOT TO BE PAYING ATTENTION TO WHAT WE DO HERE. SOME OF OUR COLLEAGUES SAY JUST SLASH SPENDING SOME MORE. MAKE GOVERNMENT EVEN SMALLER. DEMAND. GUESS WHAT THAT WILL DO TO IT WILL WEAKEN IT. THAT WILL MAKE THE ECONOMIC RECOVERY EVEN MORE TEPID, EVEN WEAKER. THAT IS NOT THE ANSWER. YES, IT IS ABSOLUTELY THE CASE OVER THE LONGER TERM. WE HAVE GOT TO BE AGGRESSIVE AT REDUCING SPENDING, REFORMING ENTITLEMENTS AND REFORMING THE TAX SYSTEM. I'VE BEEN PART OF VIRTUALLY EVERY EFFORT HERE TO DO THAT. PART OF THE BLOALS SIMPSON AND THE GROUP OF SIX, BUT WE'VE GOT TO BE ABLE TO WALK AND CHEW GUM AT THE SAME TIME AND WE NEED TO UNDERSTAND WHAT WE NEED HERE IS A TWO-STEP STRATEGY. ONE, STRENGTHEN GROWTH IN THE SHORT TERM AND THEN PIVOT AND DEAL WITH OUR DEFICITS AND DEBT OVER THE LONGER TERM. BUT WE CANNOT GET CONFUSED ABOUT THIS AND THINK THAT THE ANSWER IS TO IMPOSE -- IMPOSE IMMEDIATE AUSTERITY NOW. ALREADY IMPOSED A FAIR AMOUNT OF US AUSTERITY WHICH I'LL GET INTO IN A MINUTE WITH THE BUDGET CUTS THAT WERE INCLUDED IN THE BUDGET CONTROL ACT PASSED LAST YEAR. MADAM PRESIDENT, I WANT TO REPEAT THE TESTIMONY OF DR. PRAKKE NORTHWESTERN. THE NUMBER ONE PROBLEM THAT SMALL BUSINESSES SAY THEY HAVE TO DEAL WITH RIGHT NOW IS LACK OF DEMAND. THEY DO NOT SAY ACCESS TO CAPITAL, THEY DO NOT SAY BURDEN OF REGULATION. THEY SAY THEIR ORDER BOOKS ARE THIN. COLLEAGUES, LET'S PAY ATTENTION TO WHAT THE PROBLEM IS. WEAK DEMAND. WE'VE GOT TO TAKE STEPS TO STRENGTHEN DEMAND IN THE SHORT TERM WHILE AT THE SAME TIME PUTTING IN PLACE A LONGER-TERM PLAN TO GET US BACK ON TRACK WITH OUR NATION'S FINANCES. WHEN WE LOOK AT THAT WEAK DEMAND, ONE REASON WE HAVE A WEAK DEMAND IS WE HAVE MADE WEAK INVESTMENTS IN INFRASTRUCTURE. WE ARE COMPARED TO OUR GLOBAL COMPETITORS. CHINA IS INVESTING 9% OF THEIR PUBLIC SPENDING ON INFRASTRUCTURE. EUROPE, 5%. HERE WE ARE, AT 2.4%. ONE OF THE REASONS WE HAVE A WEAK RECOVERY IS WE ARE NOT INVESTING SUFFICIENTLY IN ROADS, BRIDGES, AIRPORTS, RAIL, AND AS A RESULT, OUR INFRASTRUCTURE ACROSS AMERICA IS BECOMING SECOND RATE. MADAM PRESIDENT, THAT'S ABOUT AS CLEAR AS IT CAN BE AND I HEAR MY COLLEAGUES SAY, WELL, OUR PROBLEM IS THE SENATE HAS NOT PASSED A BUDGET IN OVER A THOUSAND DAYS. YOU KNOW, SOMETIMES I WONDER IF OUR COLLEAGUES PAY VERY CLOSE ATTENTION TO WHAT THEY'RE VOTING ON HERE. BECAUSE LAST YEAR INSTEAD OF A BUDGET RESOLUTION, WE PASSED THE BUDGET CONTROL ACT, A LAW. NOW, WHAT'S THE DIFFERENCE BETWEEN A RESOLUTION AND A LAW? I THINK ALMOST ANY HIGH SCHOOL STUDENT CAN TELL YOU A RESOLUTION IS WEAKER THAN A LAW. AND AND YET OUR COLLEAGUES CONTINUE TO COME TO THE FLOOR AND COMPLAIN AND SAY WE HAVE NOT PASSED A RESOLUTION IN MORE THAN A THOUSAND DAYS. THAT'S TRUE. WHAT WE DID DO IS PASS A LAW CALLED THE BUDGET CONTROL ACT. WE PASSED IT LAST YEAR OVERWHELMING VOTE HERE IN THE UNITED STATES SENATE. BIPARTISAN VOTE. IT ALSO PASSED IN THE HOUSE OF REPRESENTATIVES, AND WAS SIGNED INTO LAW BY THE PRESIDENT. A BUDGET RESOLUTION NEVER EVEN GOES TO THE PRESIDENT. A BUDGET RESOLUTION IS PURELY A CONGRESSIONAL DOCUMENT. SO A LAW IS STRONGER THAN ANY RESOLUTION. AND IT'S TRUE, WE DIDN'T PASS A BUDGET RESOLUTION LAST YEAR. PASSED A LAW. CALLED THE BUDGET CONTROL ACT. AND THAT LAW IN PART SAID THE ALLOCATIONS,ING A RE GATSZ AND SPENDING LEVELS SET IN SUBSECTION B-1 SHALL APPLY IN THE SENATE, IN THE SAME MANNER AS FOR A CONCURRENT RESOLUTION ON THE BUDGET. BE. THAT'S ABOUT AS CLEAR AS IT CAN THE BUDGET CONTROL ACT SAYS THAT THE SPENDING LEVELS WILL APPLY IN THE SAME MANNER AS A BUDGET RESOLUTION. SO ALL THESE SPEECHES THAT HAVE BEEN GIVEN, WE HAVEN'T HAD -- WE HAVE NOT HAD A BUDGET RESOLUTION IN A THOUSAND DAYS, IS NOT TELLING PEOPLE THE REST OF THE STORY. INSTEAD OF A BUDGET RESOLUTION, THE BUDGET CONTROL ACT. WE PASSED A BUDGET LAW CALLED WHAT DID THAT LAW DO? ONE OF THE THINGS IT DID WAS CUT SPENDING $900 BILLION OVER THE NEXT TEN YEARS. I CAN TELL YOU, IT PUT IN PLACE TEN YEARS OF SPEND CAPS. TEN YEARS OF SPENDING CAPS. A TYPICAL BUDGET RESOLUTION ONLY DEALS WITH ONE YEAR. THE BUDGET CONTROL ACT, THE LAW THAT WE PASSED LAST YEAR PUT IN PLACE TEN YEARS OF SPENDING CAPS, SAVING $900 BILLION. IN ADDITION, IT SAID WE'RE GOING TO CREATE A SPECIAL COMMITTEE TO DEAL WITH THE ENTITLEMENT PROGRAMS AND THE TAX SYSTEM, AND WE'RE GOING TO SAY TO THAT SPECIAL COMMITTEE IF YOU CAN COME TO AN AGREEMENT, YOU WILL NOT FACE A FILIBUSTER, YOU WILL NOT FACE DELAYS, YOU WILL BE ABLE TO BRING THAT PROPOSAL RIGHT TO THE FLOOR OF THE UNITED STATES SENATE AND GET A VOTE. AND THEY FURTHER SAID BUT IF YOU DON'T AGREE, THERE WILL BE TRILLION OF SPENDING CUTS IMPOSED. AND OF COURSE WE ALL KNOW NOW AGREE. THE SPECIAL COMMITTEE COULDN'T AND SO THAT ADDITIONAL $1.2 TRILLION OF SPENDING CUTS IS NOW THE LAW OF THE LAND ON TOP OF THE $900 BILLION OF SPENDING CUTS THAT WAS IN THE BUDGET CONTROL ACT AS WELL. SO LET'S DO THE MATH. $900 BILLION OF DISCRETIONARY SAVINGS IN THE BUDGET CONTROL ACT PLUS THE SEQUESTER, THE $1.2 TRILLION OF ADDITIONAL SPENDING CUTS FOCUSED ON DEFENSE AND NON-DEFENSE DISCRETIONARY SPENDING FOR A TOTAL OF $2.1 TRILLION OF SPENDING CUTS THAT WERE IN THE BUDGET CONTROL ACT PASSED LAST YEAR THAT IS NOW THE LAW OF THE LAND. THAT IS THE BIGGEST SPENDING CUT PACKAGE IN THE HISTORY OF THE UNITED STATES. THINK FACTS ARE STUBBORN THINGS, AND WE NEED TO REMIND OUR COLLEAGUES OF WHAT THE FACTS ARE. HERE'S ANOTHER UNFORTUNATE FACT. WE ARE BORROWING 40 CENTS OF EVERY DOLLAR WE SPEND HERE. YOU CAN DO THAT FOR AWHILE. YOU CAN'T DO IT -- YOU CAN'T DO IT ENDLESSLY. MADAM PRESIDENT, WE ARE BORROWING 40 CENTS OF EVERY DOLLAR THAT WE SPEND, AND SO WE'VE GOT TO DEAL WITH THAT. WHAT DOES IT MEAN IN TERMS OF OUR DEBT? IT MEANS THIS IS WHAT'S HAPPENING TO OUR DEBT. GROSS DEBT AS A PERCENTAGE OF OUR GROSS DOMESTIC PRODUCT, UNDER WHAT'S CALLED THE C.B.O. ALTERNATIVE FISCAL SCENARIO -- THAT'S THEIR PREDICTION OF WHAT WE MIGHT DO HERE -- SHOWS THE DEBT, THE GROSS DEBT IN THE UNITED STATES IS GOING TO BE 104% OF OUR GROSS DOMESTIC PRODUCT AT THE END OF THIS YEAR. 104% OF OUR GROSS DOMESTIC PRODUCT. AND IT SHOWS IF WE DON'T DO ANYTHING, THAT'S GOING TO GO UP TO 119%. OUR GROSS DEBT WILL BE 119% OF THE SIZE OF OUR ECONOMY BY 2022 IF WE DON'T DO ANYTHING. THAT IS NOT A PATH THAT WE SHOULD ALLOW TO BE FOLLOWED. WHY NOT? BECAUSE THE BEST ECONOMIC ANALYSIS THAT HAS BEEN DONE BY ROW DEPART -- BY REINHART AND ROGOFF, GROWTH IN A TIME OF DEBT FOUND THAT ONCE YOU GET A GROSS DEBT OF MORE THAN 90% OF YOUR G.D.P., YOUR FUTURE ECONOMIC PROSPECTS ARE DIMINISHED. THAT DOESN'T HAPPEN ALL AT ONCE. IT'S NOT LIKE YOU FALL OFF A CLIFF WHEN YOU GET TO DEBT, GROSS DEBT THAT'S 90% OF YOUR G.D.P. IT'S MORE LIKE A LONG, SLOW DECLINE IN TERMS OF YOUR FUTURE ECONOMIC PROSPECTS. SO, MADAM PRESIDENT, HERE'S WHAT AFTER STUDYING 200 YEARS OF ECONOMIC HISTORY, 44 DIFFERENT COUNTRIES. WE EXAMINED THE EXPERIENCE OF 44 COUNTRIES SPANNING UP TO TWO CENTURIES OF DATA ON CENTRAL GOVERNMENT DEBT, INFLATION AND GROWTH. OUR MAIN FINDING IS ACROSS BOTH ADVANCED COUNTRIES AND EMERGING MARKETS HIGH DEBT TO G.D.P. LEVELS, 90% AND ABOVE -- AGAIN, THIS IS GROSS DEBT. WHEN YOU GET TO A GROSS DEBT OF 90% OR MORE, ARE ASSOCIATED WITH NOTABLY LOWER GROWTH OUTCOMES. MADAM PRESIDENT, THIS ISN'T JUST ABOUT NUMBERS ON A PAGE. THIS IS ABOUT FUTURE ECONOMIC PROSPECTS, FUTURE ECONOMIC OPPORTUNITY, FUTURE JOB PROSPECTS, FUTURE WEALTH OF A NATION IS HURT WHEN YOU GET TO A GROSS DEBT OF MORE THAN 90% OF YOUR G.D.P. THE PREVIOUS CHART I SHOWED IS THAT WE WILL BE AT 104% OF G.D.P. AT THE END OF THIS YEAR. WE HAVE GOT TO FOCUS ON DEFICITS AND DEBT. BUT WE SHOULD NOT LOSE SIGHT OF THE FACT THAT YOU CAN'T PIVOT AND DO THAT WHEN THE ECONOMY IS WEAK OR YOU'LL MAKE THE ECONOMY EVEN WEAKER. SO THE INITIAL STEPS WE NEED TO TAKE ARE TO STRENGTHEN GROWTH. AT THE SAME TIME WE OUGHT TO PUT IN PLACE A PLAN THAT GETS US BACK ON TRACK FISCALLY. THE DEALS WITH THIS DEBT -- THAT DEALS WITH THIS DEBT PROBLEM FOR THE LONGER TERM. BECAUSE THIS IS NOT A MATTER OF YOU GOAT THIS POINT, YOU -- YOU GET TO THIS POINT, YOU FALL OFF THE CLIFF. IT DOESN'T WORK THAT WAY. WHAT IS CRITICALLY IMPORTANT IS WE ADOPT THE RIGHT ECONOMIC POLICIES NOW TO STRENGTHEN THE ECONOMY, TO LIFT GROWTH. BUT AT THE SAME TIME TO PUT IN PLACE A LONGER-TERM PLAN THAT DEALS WITH DEFICITS AND DEBT. MADAM PRESIDENT, HERE'S WHERE THIS IS ACCORDING TO THE WE FAIL TO ACT. CONGRESSIONAL BUDGET OFFICE. IT'S NONPARTISAN. WE'VE GOT A DEBT, GROSS DEBT THAT I WAS REFERENCING BEFORE, 104%. YOU'LL LOOK AT THIS AND YOU'LL CHART. SAY, GEE, IT'S NOT 104% ON THIS DEBT. THAT'S BECAUSE THIS IS NOT GROSS THIS IS DEBT HELD BY THE PUBLIC WHICH MOST ECONOMISTS LIKE TO TALK ABOUT. I TALK ABOUT THE GROSS DEBT BECAUSE GROSS DEBT INCLUDES WHAT WE OWE TO THE TRUST FUNDS. AND THE WORK OF REINHART AND ROGOFF FOCUSED ON GROSS DEBT. SO IF WE'RE GOING TO COMPARE OURSELVES TO THE RESEARCH THEY DEBT. DID, WE HAVE TO BE TALKING GROSS THIS IS DEBT HELD BY THE PUBLIC, AND THIS IS WHAT C.B.O. SAYS IS GOING TO HAPPEN TO DEBT HELD BY THE PUBLIC IF WE FAIL TO ACT. WE'RE GOING TO HAVE A DEBT MORE THAN 200% OF G.D.P. THAT'S THE TRACK WE'RE ON. TO SOBER UP. ON TRACK. WE NEED A PLAN THAT GETS US BACK AND WHEN WE ANALYZE HOW WE GOT IN THIS SITUATION, WHAT'S CRITICAL IS THAT WE LOOK AT SPENDING AND REVENUE BECAUSE IT'S THAT MISMATCH THAT LEADS TO DEFICITS. IT'S WHEN YOU'RE SPENDING MORE THAN YOU'RE TALKING IN, IT'S WHEN YOUR OUTLAYS ARE GREATER DEFICITS. THAN YOUR REVENUE THAT YOU HAVE AND IT'S THE CUMULATION OF DEFICITS THAT IS THE DEBT. RIGH THE DEBT IS ADDING UP ALL THE DEFICITS OVER ALL THESE YEARS. THE RED LINE SHOWS THE SPENDING OF THE UNITED STATES. THE GREEN LINE SHOWS THE REVENUE. AND WHAT JUMPS OUT AT YOU HERE AS SPENDING IS AT OR NEAR A 60-YEAR HIGH. THAT'S NOT SURPRISING BECAUSE WE JUST HAD THE BIGGEST ECONOMIC DOWNTURN SINCE THE GREAT DEPRESSION. AND WHAT HAPPENS WHEN YOU HAVE A STRONG ECONOMIC DOWNTURN? THE THINGS WE CALL THE AUTOMATIC STABILIZERS KICK IN TO PREVENT US FROM GOING INTO A DEPRESSION. STABILIZERS? WHAT ARE THE AUTOMATIC THINGS LIKE UNEMPLOYMENT INSURANCE. THINGS LIKE SPENDING PROGRAMS ON FOOD STAMPS. OTHER THINGS THAT ARE DONE TO PREVENT GOING FROM A RECESSION INTO A DEPRESSION. AND THOSE THINGS KICKED IN, AND THE RESULT IS -- AND OF COURSE WE HAD TARP AND BEAD STIMULUS, WHICH -- AND WE HAD STIMULUS WHICH I DEMONSTRATED WORKED I THINK QUITE EFFECTIVELY. WITHOUT THEM, THE BEST ECONOMISTS IN THE COUNTRY TELL US WE WOULD HAVE BEEN IN A DEPRESSION. MADAM PRESIDENT, SPENDING IS AT OR NEAR A 60-YEAR HIGH. BUT LOOK AT REVENUE. 60-YEAR LOW. LOW REVENUE, HIGH SPENDING, BIG DEFICITS, BIG ADDITIONS TO DEBT. THAT'S WHAT'S HAPPENING TO US. AND YOU CAN SEE THE SPENDING HAS COME BACK SOMEWHAT NOW. REVENUE HAS IMPROVED SOMEWHAT. SO THINGS ARE STARTING TO GET BETTER. BUT WE STILL HAVE A BIG GAP AND A DEFICIT OF $1.2 TRILLION FOR STAGGERING. THIS YEAR. AND THAT OVER TIME HAS GOT TO BE ADDRESSED. MADAM PRESIDENT, THE BUDGET CONTROL ACT THAT WE PASSED LAST YEAR, THE LAW -- AND OUR FRIENDS OVER HERE SAY YOU DIDN'T PASS A BUDGET RESOLUTION FOR 1,000 DAYS. WOW. DID THEY FORGET THEY VOTED ON A LAW CALLED THE BUDGET CONTROL ACT THAT CUT SPENDING BY THE BIGGEST AMOUNT IN THE HISTORY OF THE UNITED STATES? AND LOOK WHAT'S HAPPENED TO DISCRETIONARY SPENDING. UNDER THE BUDGET CONTROL ACT, DISCRETIONARY SPENDING IS GOING TO GO TO AN HISTORIC LOW. ALL THIS TALK ABOUT THE RUNAWAY SPENDING AROUND HERE, YES, SPENDING WENT UP WHEN YOU HAD A DEEP ECONOMIC DECLINE IN ORDER TO PREVENT THAT DECLINE FROM BECOMING EVEN WORSE AND BECOMING A DEPRESSION. BUT YOU KNOW WHAT? WE'VE ALREADY TAKEN STEPS TO REIN THAT SPENDING BACK IN IN THE FUTURE IN THE BUDGET CONTROL ACT. AND LOOK HOW IT'S GOING TO DO. WE SAW BACK IN 1968 DISCRETIONARY SPENDING. YOU KNOW, IN FEDERAL SPENDING THERE ARE TWO KINDS OF SPENDING. THERE'S MANDATORY SPENDING; THINGS LIKE SOCIAL SECURITY, MEDICARE, THAT'S MANDATORY SPENDING. THEN THERE'S DISCRETIONARY SPENDING. THAT'S THINGS LIKE EDUCATION, AND PARKS. AND BACK IN 1968, 13.6% OF BUDGET OUTLAYS WENT TO DISCRETIONARY SPENDING. IN 2012, EVEN AFTER THIS UPTICK, WE'RE STILL FAR BELOW WHERE WE HAVE IN 1968. ONLY 8.4% OF BUDGET OUTLACE ARE GOING TO STKREGSARY SPENDING. -- DISCRETIONARY SPENDING. LOOK WHAT HAPPENS UNDER THE BUDGET CONTROL ACT. DISCRETIONARY SPENDING AS A SHARE OF THE TOTAL BUDGET WILL DROP TO LESS THAN 5%. WE HAVEN'T BEEN THERE GOING WAY, WAY BACK. THAT'S AN HISTORIC LOW. SO THOSE WHO SAY WE'VE GOT RUNAWAY SPENDING, NOTHING'S BEEN ABOUT IT, THEY HAVEN'T DONE THEIR HOMEWORK. AND THEY OBVIOUSLY HAVEN'T PAID ATTENTION TO THE LAWS THAT HAVE BEEN PASSED HERE. THE BUDGET CONTROL ACT THAT PASSED LAST YEAR IS TAKING US TO SPENDING FOR DISCRETIONARY PROGRAMS THAT ARE AN HISTORIC LOW. MADAM PRESIDENT, WHERE IS THE SPENDING GOING UP? ACCOUNTS. WELL, IT'S THOSE MANDATORY THAT'S WHERE THE SPENDING IS GOING UP. AND OF COURSE THIS IS THE PICTURE ON SOCIAL SECURITY. AGAIN, THIS GOES BACK TO 1972. G.D.P. SOCIAL SECURITY WAS 3.3% OF HERE WE ARE IN 2012, IT IS UP TO WELL OVER 5% OF G.D.P. AND HEADED TO OVER 6% OF G.D.P. AS THE BABY BOOMERS RETIRE. AND THAT'S NOT A PROJECTION. THE BABY BOOMERS HAVE BEEN BORN. THEY'RE ALIVE TODAY. THEY'RE GOING TO RETIRE. I'M A BABY BOOMER. I SEE A NUMBER OF OTHERS IN FRONT OF ME HERE. AND THAT'S NOT A PROJECTION. THAT'S BAKED IN THE CAKE. SO WE KNOW THAT WE HAVE GONE IN 1972 FROM SOCIAL SECURITY BEING 3.3% OF G.D.P. TO BEING 6% OF G.D.P. AND THAT'S NOT BECAUSE WE'VE HAD INCREASES IN THE PROGRAM. IT'S BECAUSE WE HAVE INCREASES IN THE NUMBER OF PEOPLE WHO ARE ELIGIBLE FOR THE PROGRAM. THE SAME IS TRUE IN OTHER MANDATORY PARTS OF THE THE BUDGET. HERE'S MEDICARE. MEDICARE BACK IN 1972 WAS 1.1% OF G.D.P. MEDICARE, MEDICAID, OTHER FEDERAL HEALTH SPENDING, IF YOU WAS 1.1% OF G.D.P. IN 2050, WE EXPECT THAT TO INCREASE TO 12.4% OF G.D.P. 12.4% OF G.D.P. SO IF WE'RE LOOKING FOR WHERE THE SPENDING IS REALLY INCREASING, IT'S CERTAINLY NOT IN THE DOMESTIC ACCOUNTS. G.D.P. THAT'S GOING DOWN AS A SHARE OF SOCIAL SECURITY, WE HAVE SEEN AN INCREASE BECAUSE OF INCREASED PEOPLE ELIGIBLE BECAUSE OF THE BABY-BOOM GENERATION. BUT THE BIG PLACE THAT WE HAVE SEEN AN EXPLOSION IS IN THE HEALTH CARE ACCOUNTS. THAT'S NOT BECAUSE OF THE LAW THAT WAS PASSED, WHAT SOME PEOPLE CALL OBAMACARE. THAT HAD NOTHING TO DO WITH THIS. THIS IS LONG-TERM TRENDS BECAUSE OF THE INCREASE IN THE COST OF BABY-BOOM GENERATION. MEDICINE AND BECAUSE OF THE REALLY SEE A LARGE INCREASE IN FEDERAL SPENDING. MADAM PRESIDENT, IT'S ALSO INTERESTING THAT WE'RE SEEING MEDICARE ENROLLMENT SOARING. BACK IN 1970, THERE WERE 20 MEDICARE. MILLION PEOPLE ELIGIBLE FOR IN 2085, IT IS GOING TO BE 115 MILLION. SO A KEY REASON WE'RE SEEING INCREASES IN COSTS IN THE SO-CALLED MANDATORY PROGRAMS IS A DRAMATIC INCREASE IN THE PEOPLE, THE NUMBER OF PEOPLE WHO ARE ELIGIBLE. THAT'S NO FAULT OF THE PROGRAM. THAT'S A DEMOGRAPHIC REALITY. AND WE'VE GOT TO COPE WITH THIS REALITY. IF WE'RE GOING TO HAVE A MEDICARE PROGRAM THAT GIVES AN ASSURANCE THAT PEOPLE IN THEIR SENIOR YEARS HAVE MEDICAL TREATMENT AVAILABLE TO THEM, WE'VE GOT TO DEAL WITH THIS REALITY OF A DRAMATIC INCREASE IN THE NUMBER OF PEOPLE WHO ARE ELIGIBLE FOR MEDICARE. MADAM PRESIDENT, AN AGING POPULATION IS THE PRIMARY DRIVER OF MEDICARE, MEDICAID, AND SOCIAL SECURITY COST GROWTH. AN AGING POPULATION. THE WORLD IS CHANGING. AS A POPULATION, WE'VE GOT A MUCH BIGGER GROUP THAN IS ELIGIBLE FOR THESE PROGRAMS. -- SOCIAL SECURITY, MEDICARE, MEDICAID. MY OWN BELIEF IS IT'S ABSOLUTELY ESSENTIAL THAT THOSE PROGRAMS BE MAINTAINED IN ORDER FOR OUR SENIORS TO HAVE A COMFORTABLE RETIREMENT. AND IN THEIR AGING YEARS, TO HAVE SECURITY. THAT IS THE GENIUS OF SOCIAL SECURITY AND MEDICARE AND MEDICAID. THEY HAVE TRANSFORMED LIFE FOR PEOPLE IN THEIR SENIOR YEARS. BUT WE ALSO HAVE THIS REALITY TO CONFRONT THAT BECAUSE WE HAVE A GROWING NUMBER, BECAUSE OF THE BABY-BOOM GENERATION, THE COSTS TO THE FEDERAL GOVERNMENT ARE SWELLING. AGAIN, IT IS NOT ON DISCRETIONARY SPENDING. THAT'S PART OF THE BUDGET, AS I'VE DEMONSTRATED -- THAT PART OF THE BUCKET, AS I'VEOF THE BUDGET, AS I'VE DEMONSTRATED, IS GOING DOWN. INTERESTINGLY ENOUGH, THE MEDICARE TRUSTEES SAY THAT THE HEALTH REFORM LAW PASSED HAS REDUCED LONG-TERM MEDICARE COSTS. I MEAN, I HEAR PEOPLE, ESPECIALLY OUR FRIENDS ON THE SAY THAT THE LAW THAT WE PASSED HAS INCREASED THESE COSTS. THAT'S NOT WHAT THE MEDICARE TRUSTEES HAVE FOUND. THE MEDICARE TRUSTEES HAVE SAID, "PROJECTED MEDICARE COSTS OVER 75 YEARS ARE SUBSTANTIALLY LOWER THAN THEY OTHERWISE WOULD BE BECAUSE OF PROVISIONS IN THE ... 'AFFORDABLE CARE ACT' OR A.C.A." SO, MADAM PRESIDENT, WHEN OUR COLLEAGUES SAY THEY WANT TO REPEAL THE AFFORDABLE CARE ACT, THEY'RE TALKING ABOUT MAKING THE SITUATION WORSE. NOT ACCORDING TO KENT CONRAD, BUT ACCORDING TO THE MEDICARE TRUSTEES. THE MEDICARE TRUSTEES SAID, "PROJECTED MEDICARE COSTS OVER 75 YEARS ARE SUBSTANTIALLY LOWER THAN THEY OTHERWISE WOULD BE BECAUSE OF PROVISIONS IN THE ... 'AFFORDABLE CARE ACT'." SO, OUR COLLEAGUES WHO ARE SAY THEY WANT TO REPEAL THE AFFORDABLE CARE ACT, WE WILL, THEY'REWELL, THEY'RE LINING UP TO INCREASE MEDICARE COSTS. AND, BY THE WAY, THEY'RE LINING UP TO INCREASE THE DEBT, BECAUSE THE CONGRESSIONAL BUDGET OFFICE HAS TOLD US THAT IN THE FIRST TEN YEARS OF THE AFFORDABLE CARE ACT, IT SAVES SEVERAL HUNDRED BILLION DOLLARS UNDER THE DEFICIT. BUT IN THE SECOND TEN YEARS, IT SAVES WELL OVER $1 TRILLION ON DEFICITS AND DEBT. LET ME REPEAT THAT. THE CONGRESSIONAL BUDGET OFFICE TELLS US THAT THE AFFORDABLE CARE ACT THAT SOME OF OUR COLLEAGUES ARE LINING UP TO REPEAL WILL REDUCE DEFICITS AND DEBT IN THE SECOND TEN YEARS BY WELL OVER A TRILLION DOLLARS. SO, MY FRIENDS WHO ARE LINING UP -- THEY WANT TO REPEAL THE AFFORDABLE CARE ACT -- THEY ARE LINING UP TO INCREASE MEDICARE LINING UP TO INCREASE THE DEBT OF THE UNITED STATES, ACCORDING TO THE CONGRESSIONAL BUDGET OFFICE -- THAT'S NONPARTISAN. MADAM PRESIDENT, THIS IS WHAT THE MEDICARE TRUSTEES PROJECT IN TERMS OF REDUCTION IN MEDICARE COSTS. THIS IS THE PERCENT CHANGE IN AVERAGE PER-BENEFICIARY COST. FROM 2001 TO 2011 IT WAS UP 94%. FROM 2011 TO 2020, THEY PREDICT IT WILL GO UP 37%, A DRAMATIC SLOWING OF THE RISE IN COST BECAUSE OF THE AFFORDABLE CARE ACT. MADAM PRESIDENT, WE ALSO HEAR COLLEAGUES ON THE OTHER SIDE SAY THE ANSWER TO THIS DEFICIT AND DEBT SITUATION IS TO HAVE FURTHER TAX CUTS THAT PRIMARILY BENEFIT THE WEALTHIEST AMONG US. REALLY? I'VE JUST SHOWED A CHART THAT SHOWED OUR REVENUE IS AT OR NEAR A 60-YEAR LOW. SO DOES DIGGING THE HOLE DEEPER MAKE MUCH SENSE BEFORE WE START TO FILL IT IN? I DON'T THINK SO. AND WE HEAR OUR COLLEAGUES SAY, WELL, IF YOU LOOKED OVER THE LAST 40 YEARS, REVENUE HAS BEEN ABOUT 18% OF G.D.P. THAT'S TRUE. BUT, YOU KNOW WHAT? THE FIVE TIMES WE'VE BALANCED SINCE IS THE 69 THE REVENUE HAS -- WE'VE BALANCED SINCE 1969, THE REEF KNEW HAS NOT BEEN AT 18% OF G.D.P. THE REVENUE HAS BEEN AT 19.% OF G.D.P., 19.9% OF G.D.P., 19.%, 20.6%, 19.5%. SO THESE FRIENDS WHO SAY THEY BUDGET, LET'S STUDY THEIR NUMBERS. IT DOESN'T ADD UP. IT DOESN'T ADD UP. THEY WANT TO CUT THE REVENUE, WHICH ALREADY IS AT A 60-YEAR LOW, CUT IT SOME MORE. AND THEY SAY, WELL, SOMETIME IT'S GOING TO GET BACK TOWARDS TOWARDS IT'S HISTORIC AVERAGE. IT. WELL, THAT'S NOT GOING TO CUT THE TIMES WE HAVE BALANCED THE BUDGET, REVENUE HAS NOT BEEN AT 18% OF G.D.P. REVENUE HAS BEEN AT ABOUT 20% OF G.D.P. MADAM PRESIDENT, I DON'T KNOW WHAT COULD BE MORE CLEAR THAT WE NEED TAX REFORM IN THIS COUNTRY. THE TAX CODE IS OUT OF DATE, COMPETITIVENESS. INEFFICIENT, HURTING U.S. GLOBAL THE COMPLEXITY IMPOSES SIGNIFICANT BURDENS ON INDIVIDUALS AND BUSINESSES. THE EXPIRING PROVISIONS CREATE UNCERTAINTY AND CONFUSION. WE'RE HEMORRHAGING REVENUE TO THE TAX GAP, TO TAX HAVENS, TO ABUSIVE TAX SHELTERS. I'VE SHOWN ON THIS FLOOR MANY TIMES THE PICTURE OF A LITTLE FIVE-STORY BUILDING IN THE CAYMAN ISLANDS CALLED UGLAND HOUSE. UGLAND HOUSE, I'M GOING TO PUT IT IN UP UP IN JUST A MINUTE, CLAIMS COMPANIES. TO BE THE HOME TO 18,000 THEY ALL SAY THEY'RE DOING BUSINESS. REALLY? WE'LL TALK ABOUT THAT IN A MINUTE. BUT WE NEED TO RESTORE FAIRNESS. THE CURRENT SYSTEM IS CONTRIBUTING TO GROWING INCOME INEQUALITY. I DON'T KNOW HOW ANYBODY CAN DENY WE SEE A DRAMATIC GROWTH IN COUNTRY. INCOME INEQUALITY IN OUR ONE OF THE REASONS IS WE HAVE A TAX CODE THAT FAVORS THOSE AT THE VERY TOP -- AT LEAST SOME OF THEM. IT IS VERY INTERESTING, BECAUSE NOT ALL -- SOME PEOPLE AT THE TOP PAY A LOST TAXES. SOME PEOPLE AT THE TOP AND SOME COMPANIES PAY NOTHING, EVEN THOUGH THEY'RE HIGHLY PROFITABLE. THAT'S NOT FAIR. THAT'S NOT RIGHT. AND IT IS HURTING THE COUNTRY. AND OUR LONG-TERM FISCAL IMBALANCE MUST BE ADDRESSED. REVENUE MUST BE PART OF THE SOLUTION. MADAM PRESIDENT, MARTIN FELDSTEIN, A DISTINGUISHED CONSERVATIVE ECONOMIST -- NOBODY EVER ACCUSED MARTIN FELDSTEIN OF BEING A LIBERAL -- SAID THIS: "CUTTING TAX EXPENDITURES IS REALLY THE BEST WAY TO REDUCE GOVERNMENT SPENDING. ELIMINATING TAX EXPENDITURES DOES NOT INCREASE MARGINAL TAX RATES OR REDUCE THE REWARD FOR SAVING, INVESTMENT, OR RISK-TAKING. IT WOULD ALSO INCREASE OVERALL ECONOMIC EFFICIENCY BY REMOVING INCENTIVES THAT DISTORT PRIVATE SPENDING DECISIONS. AND ELIMINATING OR CONSOLIDATING THE LARGE NUMBER OF OVERLAPPING TAX-BASED SUBSIDIES WOULD ALSO GREATLY SIMPLIFY TAX FILING. IN SHORT, CUTTING TAX EXPENDITURES IS NOT AT ALL LIKE OTHER WAYS OF RAISING REVENUE." MADAM PRESIDENT, IN THIS CASE, I THINK MARTIN FELDSTEIN HAS GOT IT ABOUT RIGHT. ONE WAY WE COULD RAISE ADDITIONAL REVENUE IS TO REFORM THE CURRENT TAX SYSTEM, MAKING OUR SYSTEM MORE COMPETITIVE AND AT THE SAME TIME RAISING ADDITIONAL REVENUE THAT COULD BE USED TO HELP REDUCE THE DEFICIT, ALONG WITH REFORM OF ENTITLEMENT PROGRAMS, ALONG WITH ADDITIONAL SPENDING RESTRAINT. MADAM PRESIDENT, THESE TAX EXPENDITURES GO OVERWHELMINGLY TO THE TOP 1%. HERE IS THE INCREASE IN AFTERTAX AFTER-TAX INCOME FROM TAX EXPENSED EXPENDITURES. THE MIDDLE QUINTILE GETS $2, $3,200 A YEAR OF VALUE. THE TOP 1% GET OVER A QUARTER OF A MILLION DOLLARS A YEAR. OVERWHELMINGLY, THESE TAX EXPENDITURES WHICH ARE NOW COSTING US $1.2 TRILLION A YEAR ARE GOING TO THE WEALTHIEST AMONG US. AGAIN, NOTHING AGAINST WEALTH OR PEOPLE SUCCEEDING. I'M ALL FOR IT. I AM FOR THERE BEING A FAIR DISTRIBUTION OF THE BURDEN OF RAISING THE REVENUE NECESSARY TO SUPPORT THE COUNTRY. AND THIS IS NOT FAIR. IT IS NOT FAIR WHEN THE TOP 1% GET A QUARTER OF A MILLION DOLLARS IN VALUE EVERY YEAR FROM THESE TAX EXPENDITURES THAT GET ALMOST NO ATTENTION. MADAM PRESIDENT, THIS IS THE PICTURE I WAS TALKING ABOUT. THIS IS A LITTLE BUILDING IN THE ISLANDS, FIVE-STORY BUILDING CALLED UGLAND HOUSE. 18,857 COMPANIES CALL THIS BUILDING "HOME." REALLY? WELL, I SAY, THAT'S THE MOST EFFICIENT BUILDING IN THE WORLD. CAN YOU IMAGINE ALL THESE COMPANIES DOING BUSINESS OUT OF THAT LITTLE BUILDING? 18,857 COMPANIES? ARE THEY REALLLOY DOING BUSINESS OUT OF THAT LITTLE BUILDING? THE ONLY BUSINESS THEY'RE DOING OUT OF THERE IS MONKEY BUSINESS, AND THE MONKEY BUSINESS THEY'RE DOING IS TO AVOID THE TAXES THEY LEGITIMATELY OWE IN THIS COUNTRY. THAT'S WHAT'S GOING ON IN THIS BUILDING IN THE CAYMAN ISLANDS. THE AVOIDANCE OF TAXES, COUNTRY. LEGITIMATE TAXES, IN THIS AND IT IS THE REASON THERE ARE SOME VERY LARGE COMPANIES THAT EVEN THOUGH THEY'RE HUGELY PROFITABLE PAY ABSOLUTELY NOTHING IN TAXES. RIGHT. THAT'S NOT FAIR. AND IT SHOULD BE STOPPED. AND OUR COLLEAGUES ON THE OTHER SIDE, THEY DON'T WANT TO STOP IT IT. THEY'RE AGAINST IT. IN FACT, THEY'VE TAKEN A PLEDGE THAT THEY WON'T INCREASE TAX REVENUES BY CLOSING DOWN THIS KIND OF TAX DODGE. THEY'VE TAKEN A PLEDGE NOT TO DO ANYTHING ABOUT IT. VIRTUALLY EVERY REPUBLICAN HAS TAKEN A PLEDGE THAT THIS WOULD BE A TAX INCREASE TO SHUT DOWN THIS KIND OF TAX DODGE. MADAM PRESIDENT, THAT'S NOT RIGHT. NOW, WHEN WE LOOK AT THIS LONGER LONGER-TERM DEFICIT AND DEBT PROBLEM -- AND I TRIED TO BE CLEAR HERE TODAY -- WHAT WE NEED TO DO IS A TWO-STEP APPROACH. THE FIRST STEP -- WE NEED MORE ECONOMIC GROWTH. NEED THINGS TO SUPPORT THIS ECONOMIC RECOVERY. WE NEED MORE INVESTMENT, CERTAINLY IN INFRASTRUCTURE WHERE WE ARE FALLING BADLY BEHIND, BUT REALSO NEED A COMPREHENSIVE -- BUT WE ALSO NEED A COMPREHENSIVE LONG-TERM PLAN TO GET US BACK ON TRACK, TO DEBT. FACE UP TO THESE DEFICITS AND AND WHAT'S THE BEST WAY TO DO THAT? WELL, HERE'S WHAT THE AMERICAN PEOPLE SAY: THEY SAY, YOU NEED A BALANCED APPROACH. CUT SPENDING. ER YOU KNOW,YOU KNOW, SOME PEOPLE SAY, JUST PEOPLE ARE. THAT'S WHERE 17% OF THE AMERICAN SOME SAY, JUST INCREASE TAXES. THAT'S WHERE 8% OF THE AMERICAN PEOPLE ARE. BUT 62% OF THE AMERICAN PEOPLE SAY, YOU GOT TO DO SOME OF BOTH, GOT TO CUT SPENDING, YOU GOT TO A BALANCED PLAN. RAISE REVENUE, YOU OUGHT TO HAVE SO, THAT'S WHAT THE AMERICAN PEOPLE ARE TELLING YOU AND INTERESTINGLY ENOUGH, THAT'S WHAT -- ARE TELLING US, AND INTERESTINGLY ENOUGH, THAT'S WHAT THE PRESIDENT'S COMMISSION -- FISCAL COMMISSION CONCLUDED. THAT'S THE SIMPSON-BOWLES COMMISSION. 11 OF US SUPPORTED THE RECOMMENDATIONS OF THAT COMMISSION. WE TOOK THAT BALANCED APPROACH AND YES, WE REFORMED THE REVENUE SYSTEM TO HAVE A MORE FAIR TAX SYSTEM, TO SHUT DOWN ABUSIVE TAX HAVENS AND LOOPHOLES, BUT ALSO TO HAVE FURTHER SAVINGS ON THE SPENDING SIDE OF THE EQUATION. THIS IS AN OVERVIEW OF THE FISCAL COMMISSION PLAN. $5.4 TRILLION IN DEFICIT REDUCTION OVER TEN YEARS. LOWERED THE DEFICIT TO 1.4% OF G.D.P. IN 2022 FROM THE PEAK WHICH IS AROUND 10% OF G.D.P. STABILIZED THE GROSS DEBT BY 2015, REDUCED DISCRETIONARY SPENDING TO 4.8% OF G.D.P. BY 2022 WHICH HAS ALREADY BEEN DONE AS I'VE INDICATED IN THE BUDGET CONTROL ACT. BUILD ON HEALTH CARE REFORM SAVINGS, CALLED FOR SOCIAL SECURITY REFORM WITH THE SAVINGS TO BE USED ONLY TO EXTEND THE LIFE OF SOCIAL SECURITY ITSELF. SOCIAL SECURITY WAS NOT PART OF A DEFICIT REDUCTION PLAN BECAUSE SOCIAL SECURITY HAS NOT BEEN A CONTRIBUTOR TO BUILDING THESE DEFICITS AND DEBT. BUT WE ALSO KNOW SOCIAL SECURITY IS IN TROUBLE. ITS SOLVENCY IS IN QUESTION. AND WE RECOMMENDED ANY CHANGES TO SOCIAL SECURITY BE PURELY FOR THE PURPOSE OF EXTENDING THE LIFE OF SOCIAL SECURITY ITSELF GIVEN THE INCREDIBLY IMPORTANT ROLE IT PLAYS IN OUR COUNTRY. AND WE ALSO INCLUDED FUNDAMENTAL TAX REFORM TO RAISE REVENUE AND TO GO AFTER THESE TAX HAVENS, TO GO AFTER THESE ABUSIVE TAX SHELTERS. AND YES, TO ASK THE WEALTHIEST AMONG US, SOME OF WHOM -- SOME OF WHOM, NOT ALL -- SOME OF WHOM HAVE GOTTEN AWAY WITH PAYING VERY LITTLE, TO ASK THEM TO PAY THAT ARE FAIR SHARE. MADAM PRESIDENT, THIS IS WHAT WOULD HAPPEN TO THE DEFICIT AS A PERCENTAGE OF G.D.P. UNDER THAT PLAN. YOU CAN SEE IT WOULD BE REDUCED DRAMATICALLY FROM 7.6% OF G.D.P. IN THIS YEAR TO 1.4% OF G.D.P. BY 2021. AND REALLY DRAMATIC REDUCTIONS AS A PERCENTAGE OF G.D.P. BY 2016. AND THIS IS WHAT WOULD HAPPEN TO THE DEBT. INSTEAD OF THE DEBT CONTINUING TO GROW TO MORE THAN 119% OF 2022, THAT DEBT WOULD BE AT 93% OF G.D.P. BY 2022. SO WE WOULD GET -- IN THE NEAR TERM DEBT WOULD GO UP SOME MORE, ABSOLUTELY, BECAUSE WE GOT TO DEAL WITH THIS ECONOMIC WEAKNESS BUT OVER THE FULL TEN YEARS OF THE PLAN, THE DEBT WOULD BE BROUGHT UNDER CONTROL AND BE BROUGHT DOWN SOMEWHAT. MADAM PRESIDENT, THAT'S THE ELEMENTS OF THE PLAN. I'D JUST SAY TO MY COLLEAGUES WE'RE GOING TO HAVE TO FIND A WAY TO COME TOGETHER. IT'S IMPORTANT TO THE COUNTRY THAT WE DO. I'M RETIRING AT THE END OF THIS YEAR, BUT I WOULD HOPE THAT WEEKD FIND A -- WE COULD FIND A WAY TO REFORM THE TAX SYSTEM TO MAKE IT MORE FAIR, TO REFORM OUR ENTITLEMENTS IN RECOGNITION THAT THE BABY BOOM GENERATION IS UPON US, THEY'RE GOING TO RETIRE, THEY'RE PUTTING STRESS THESE PROGRAMS. THESE PROGRAMS ARE CRITICALLY IMPORTANT TO LIFE IN AMERICA, CERTAINLY THE LIFE OF OUR SENIOR CITIZENS. AND THAT WE'RE GOING TO HAVE TO DO MORE ABOUT THE DISCRETIONARY ACCOUNTS. BUT AS I'VE INDICATED, THE DISCRETIONARY ACCOUNTS HAVE ALREADY BEEN HIT REPEATEDLY AND WE ARE HEADED FOR A SHARE OF OUR BUDGET GOING TO THE DISCRETIONARY ACCOUNTS THAT ARE A RECORD LOW. SO I PERSONALLY DON'T BELIEVE GOING BACK AND CUTTING THEM MORE BEYOND WHAT'S ALREADY BEEN DONE IN THE BUDGET CONTROL ACT PASSED LAST YEAR IS A WINNING STRATEGY. MADAM PRESIDENT, YOU KNOW, THIS IS AN IMPORTANT AND DEFINING MOMENT, I THINK, IN THE COUNTRY'S HISTORY. THESE ARE PROBLEMS THAT ARE REAL CERTAINLY TO THE MILLIONS OF PEOPLE WHO ARE WITHOUT A JOB, WE HAVE AN ABSOLUTE OBLIGATION TO DO EVERYTHING WE CAN TO STRENGTHEN THIS ECONOMY. WE ALSO HAVE AN ABSOLUTE OBLIGATION TO TAKE ON THIS DEBT THREAT BECAUSE THAT HANGS OVER THE COUNTRY AS WELL. AND YOU KNOW WHAT? WE CAN DO THIS. WE'VE DONE IT BEFORE. IN THE CLINTON ADMINISTRATION WE GOT BACK TO BALANCED BUDGETS, AND A STRONG ECONOMIC GROWTH, THE CREATION OF MORE THAN 20 MILLION JOBS AND A COUNTRY THAT WAS PROSPERING AND DOING BETTER THAN ANY COMPETITOR ON THE FACE OF THE GLOBE. WE CAN DO IT, AND I BELIEVE WE WILL. I THANK THE CHAIR AND YIELD THE FLOOR. MADAM PRESIDENT? THE SENATOR FROM VERMONT. MADAM PRESIDENT, THE AMERICAN PEOPLE ARE ANGRY. THEY ARE ANGRY BECAUSE THEY ARE LIVING THROUGH THE WORST RECESSION SINCE THE GREAT DEPRESSION.