No Time to Delay Fiscal Restraint

I voted against the plan to increase the federal debt ceiling by $2.4 trillion this week because it delays meaningful spending reductions, fails to address entitlement spending in a way that will save the programs for future generations of retirees, and leaves open the possibility of tax increases.

Tax increases are the wrong answer for a struggling economy, and recent history proves that higher taxes don’t go to the bottom line.  Congress has spent $1.17 for every dollar in new taxes since World War II.

I appreciate that the debt deal that passed on Tuesday is at least a move in the right direction in that the discussion in Congress today is about reducing government spending, but it’s not a plan that’s proportional to the fiscal problems facing the nation. 


Floor Statement of U.S. Senator Chuck Grassley
Vote on the Debt-Limit Increase
Tuesday, August 2, 2011

Mr. President,

During the past few weeks and months, Congress and the President have been involved in discussions to raise the debt ceiling, and reduce spending, deficits and debt.  This discussion is a result of the elections last year.  The voters sent a strong message that it was time for Washington to stop the spending spree.  And it’s because of that message that we’re even having this debate.  Even the President now agrees that to address our fiscal situation we need to reduce spending.

That hasn’t always been the case, though.  Just last year President Obama refused to endorse or advance the findings of his own National Commission on Fiscal Responsibility and Reform.  On February 14, President Obama submitted his budget proposal to Congress that refused to address our looming deficits and debt.  Over the next ten years, his budget would have added another $13 trillion to our national debt.  President Obama’s budget was so out of touch that it was rejected in the Senate by a vote of 97-0.  Then he delivered a speech in April that magically found $4 trillion in spending cuts.  In just a matter of weeks, President Obama found $4 trillion in spending that no longer needed to be spent.

The American people have to wonder how Washington can be serious about budgets and spending if the President, in a matter of weeks, can find $4 trillion of spending that was of national importance on February 14 but is no longer necessary on April 13.  It’s this type of behavior that leads people to be cynical of Washington and the federal government.  It’s little wonder that lofty commitments from Washington are received in Middle America as just more empty promises and political rhetoric.

And up until a few months ago, President Obama and members of his administration were calling for a clean debt limit increase with no spending cuts.  He simply wanted Congress to provide him a blank check.

The debate has shifted.  We’re no longer discussing spending increases.  The entire debate today is about cutting spending, how much and from where.  The fact that we’re here today in agreement on the need to cut spending is an enormously important development.  I commend all of those who worked and insisted that spending cuts be included in this agreement, and I thank those who were involved in working out this hard-fought agreement. 

Unfortunately, this bill does too little to address our overspending, deficits and debt.  Virtually none of these cuts in this bill come in the next few years.  It’s all back-loaded with no guarantee that Congress won’t reverse course and undo these spending reductions.  And, there’s no guarantee that entitlement programs that are driving the long-term fiscal problems will be reformed.  These programs need reform so they remain viable, affordable and available for generations to come.  But this bill has too little to ensure those reforms take place.

The American people sent us to Washington to confront these problems.  They want us to stop overspending.  They want us to chart a path to fiscal responsibility, where Washington spends only what we take in, like the American people themselves must do.  And, while this bill is a small step in the right direction, I believe the American people expect and deserve a giant leap in the right direction. 

In addition to its timidity on spending reductions, this bill will set up a process to increase taxes on the American people in the belief that more tax revenue would lower deficits.  This bill creates a bicameral, bipartisan committee that will be tasked with producing the second tranche of deficit savings.  Despite the fact that our government has a spending problem and not a revenue problem, President Obama continues to insist that higher taxes must be a part of a major deficit reduction plan.  It is his desire for bigger government and higher levels of taxation that will likely prevent any serious follow-up on deficit reduction or an entitlement reform package.

I want to be clear.  I do not wish for the government to be launched toward a threat of default.  My vote against this bill is not a signal that I would prefer default.  I would not.  But, I’m compelled to vote against this package because I see this as a missed opportunity.  We’re providing President Obama with the largest increase in the national debt ceiling in history.  But, instead of using this opportunity to address our near-term and long-term spending and fiscal problems, we’re cutting a little now and kicking the can farther down the road.

This bill grants a $2.4 trillion increase in our nation’s debt limit, the largest increase in our history.  The challenge for Congress and President Obama was to sketch a deficit reduction plan to address deficits and debt in a significant way.  The uncertainty about Washington’s fiscal management gets in the way of private-sector job creation and economic recovery.  But this bill is insufficient in putting us on a path to live within our means.

To me, this is also a moral issue.  It’s wrong for this generation to over-spend and leave the bills for the next generation to pay.  The trajectory of our debt is alarming.  It will soon undermine our economy and our economic growth.  If we do nothing, our children and grandchildren will have fewer economic opportunities than we have had.  Without a plan to put our fiscal situation on a better path, the next generations will have a lower quality of life than the one we’ve experienced.  We can’t let that happen.  But, I’m afraid this bill will accomplish too little in this regard.

Again, I recognize that this hard-fought compromise is a step in the right direction, and I’m pleased that Congress and the American people have recognized the terrible fiscal path our nation is on.  I only wish that this plan was proportional to the size of the problems we face.


Friday, August 5, 2011