Senate Proceeding on May 13th, 2009 :: 2:32:35 to 2:59:50
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2:32:32 to 2:32:53( Edit History Discussion )

Judd Gregg: colleagues to support this important would yield the floor. the presiding officer: the senator from new hampshire. mr. gregg: madam president, i wanted to rise to speak about the dire situation of our fiscal house as a which has been confirmed and

2:32:35 to 2:59:50( Edit History Discussion )
Speech By: Judd Gregg

2:32:54 to 2:33:15( Edit History Discussion )

Judd Gregg: reinforced by the recent reports of the trustees' report social security -- you know, we are in big trouble as a nation because of the amount of debt that we're running up. this president has proposed a budget which doubles the debt in five years, triples it in ten years. proposed a budget which runs, on

2:33:16 to 2:33:37( Edit History Discussion )

Judd Gregg: the average -- on the average -- $1 trillion of deficit every year for the next ten years. 4% to 5% of g.d.p. -- in deficit. in fact this year the debt -- deficit will be almost $2 trillion and it'll be almost 13% of g.d.p. staggering numbers, numbers we have never seen as a nation,

2:33:38 to 2:34:00( Edit History Discussion )

Judd Gregg: except during world war ii, when we were fighting for our survival. and these numbers add up to debt which is unsustainable and which cannot possibly be repaid by our children and, therefore, will create an atmosphere for our children and our children's children where our nation will notes as

2:34:01 to 2:34:22( Edit History Discussion )

Judd Gregg: as it was when our nation passed to our stewardship. and these problems are only massively compounded by a report which c yesterday from the social security trustees. because they pointed out that the social security trust fund is about to go into -- that the social security -- that the medicare trust fund is going

2:34:23 to 2:34:44( Edit History Discussion )

Judd Gregg: into a negative cash-flow situation and the social security trust fund will soon go into a negative cash-flow situation. what does that mean? well, for the last 15 or 20 years we basically have been financialing our government by borrowing from the piggy bank of social

2:34:45 to 2:35:06( Edit History Discussion )

Judd Gregg: money to operate the day-to-day costs of the federalovernment. what the trustees are telling us is, the piggy bank is broken. it's been smashed. it no longer has any money in it. it's not going to take money in that exceeds the money it has to pay out. and, in fact, we're going to have to borrow money now in order to pay social secity

2:35:07 to 2:35:27( Edit History Discussion )

Judd Gregg: benefits beginning in the year 2016 and medicare benefits right now, this year. this chart here reflects the seriousnes if you just take these basic mandatory programs -- social security, medicare, and medicaid

2:35:28 to 2:35:48( Edit History Discussion )

Judd Gregg: -- the cost of those programs is escalating on a steep, upward slope so that by 2025-2030, these three programs alone -- social security, medicare and medicaid -- will absorb all the money that the federal government has traditionally spent on all the programs of the federal government, all the money that

2:35:49 to 2:36:11( Edit History Discussion )

Judd Gregg: the federal government has traditionally spent on all the federal programs -- 20% of g.d.p. and then they go up, projected that towards the middle of this century, social security will literally -- medicare and medicaid will literally have bankrupt our

2:36:12 to 2:36:33( Edit History Discussion )

Judd Gregg: na by themselves. that says nothing about the basic underlying budget which is expanding so dramatically under this president sivment the debt of this country under president obama's proposal, under his budget, because of this spending in these three accounts -- social security, medicare and medicaid -- and new spending that the president has proposed in all the sorts of

2:36:34 to 2:36:54( Edit History Discussion )

Judd Gregg: other accounts, massive expansions in the size of government, the debt of the federal government just goes up and up and up to the point where it will represent at the end of president obama's will represent 80% -- the gross natio

2:36:55 to 2:37:15( Edit History Discussion )

Judd Gregg: what does that mean, 80% of the gross national product? well today the federal debt is about 40% of the gross product. it's down here. but after the spending spree of president obama and the democratic congress, it'll be 80% of the gross national product. and basically we will be putting ourselves in a position where we can't get out of the hole that we're digging.

2:37:16 to 2:37:36( Edit History Discussion )

Judd Gregg: you know, usually when you're digging a hole and you're fairly deep in the hole -- we are fairly deep in the hole already, by the way -- you i mean, that's the old adage. if you're in a h digging a hole underground level, you stop dig. we are he not doing stop digging as a government. -- we're not going to stop

2:37:37 to 2:37:59( Edit History Discussion )

Judd Gregg: digging as a government. what president obama is suggesting and the democratic congress is suggesting is that we bring it back into the hole and we dig twice as fast, so we go eve even further down into debt. it is not survival for our kids because they're going to end up withosts and deficits whi far exceed their ability to be

2:38:00 to 2:38:23( Edit History Discussion )

Judd Gregg: able to manage those costs and deficits. just the med has an unfunded liability of $37.8 trillion. and when you throw in security system o you a talking about un-- you're talking about unfunded

2:38:24 to 2:38:44( Edit History Discussion )

Judd Gregg: liability, over $42 trillion. what's the implications of that? paid in the united states since we were formed as a nation, since we began our government and since we started to collect taxes, we've paid less in in taxes than we have in obles on those two accounts -- obligations on those two accounts.

2:38:45 to 2:39:06( Edit History Discussion )

Judd Gregg: or if you took the net worth of every american, all our all our cars, all our stock, and you added it all up, we have a debt on the books for the purposes of paying for the programs which we know already exist under medicare and social security, we have a debt which exceeds the net worth of the entire country.

2:39:07 to 2:39:28( Edit History Discussion )

Judd Gregg: that is the definition of bankruptcy, by the way, your debt dramatically exceeds your assets. and, in fact, by the tenth year of this budget, as proposed president obama and passed here by the democratic senate -- without any republican votes, thank goodness, because it was such an irresponsible budget --

2:39:29 to 2:39:51( Edit History Discussion )

Judd Gregg: the interest on the federal debt alone will be $850 billion. try to put that in context. the interest on the actually exceed what we spend on national defense. it w

2:39:52 to 2:40:15( Edit History Discussion )

Judd Gregg: four or five what we spend on education, what we spend on transportation. so we will be putting more money into paying interest -- and, by the way, who interest to? the chinese. the japanese. the japanese government, the japanese people.

2:40:16 to 2:40:36( Edit History Discussion )

Judd Gregg: the southeast obviously, the arab oil-producing countries. we will be paying more interest to those nations, more american hard-earned dollars will go to those nations to pay interest on our debt than we will have available or we will be able to

2:40:37 to 2:40:58( Edit History Discussion )

Judd Gregg: spend on our own national defense. does that make sense? no, it doesn't make any sense at all. plus it's not supported. it's not supportable. there are only two things that can happen to our nation. when you run the debt manner in which this deficit is

2:40:59 to 2:41:20( Edit History Discussion )

Judd Gregg: proposed, the budget was proposed here, and you look at the debt and the serious financial situation that social security and in, there are basically only two things, unless we take action now on controlling spending, that can occur. one is you devalue the dollar and you inflate the currency.

2:41:21 to 2:41:43( Edit History Discussion )

Judd Gregg: that's a combined thing. you basically take the value of the american currency and you inflate its value. well, that's the cruelest tax of all. that says that people who have savings find that is worth less the nex because of inflation t says the people who want to buy things to have a better life can b because of

2:41:44 to 2:42:05( Edit History Discussion )

Judd Gregg: inflation is a massive tax on working americans. but th's one way you get o of this debt, you inflate it. of course, the of that is that people won't want to buy your debt. if they know inflation is coming, they're not going to buy your debt. why would they? why would they give you $1 billion to buy $1 billion of american debt knowing that

2:42:06 to 2:42:26( Edit History Discussion )

Judd Gregg: you're going to pay them back in inflated dollars? if they're going to give you $1 billion or lend you $1 billion, they're going to require much higher interest rates than we presently have to p, because they're going to have to anticipate inflation and the fact that the value of dollar will be reduced and that that value of that debt that they

2:42:27 to 2:42:49( Edit History Discussion )

Judd Gregg: just bought will be worth less. so inflation has a lot of very bad ramifications. but how else do you get out from under neath a debt like? well, the other way massively increase taxes on all americans. now, this old -- this euphemism around here that we're just going to tax the rich, you can't

2:42:50 to 2:43:12( Edit History Discussion )

Judd Gregg: do it by just taxing theich. even if taxing the rich is suggest want to do. now, the other side of the aisle claims they're going to tax the rich. they're going to raise the tax rate on high-income americans from rate, as proposed by the president, of about 41%, 42%.

2:43:13 to 2:43:34( Edit History Discussion )

Judd Gregg: i would point out that these high-income americans large part the majority of job producers in america. most of the jobs in america are produced today by small businesses. almost all of those small businesses would be hit with so what happens to the small businesses? what happens to that mom and pop activity in new

2:43:35 to 2:43:55( Edit History Discussion )

Judd Gregg: is suddenly starting to grow in they've got ten employees. theyant to add 12 or 15 more. they can't do it? why? because they've got to take their money and put it towards paying taxes. they're not going to be able to put it towards adding more job which would be much more their money come to washington

2:43:56 to 2:44:16( Edit History Discussion )

Judd Gregg: and have a group in washington decide how to spend it much more officiately spent by small business men m. it is not like they're undertaxed? a 34% tax rate on a business means they're taxed more than any other people in the industrialized people for small business activity. most corporate taxes and

2:44:17 to 2:44:37( Edit History Discussion )

Judd Gregg: business taxes in the world average out around 20%, 19%, 15%. the united states, it's 35% if you're an individual or subchapter "s" corporation. now they're talking about taking it up to 41% under the proposal from the other side of the aisle. that's their

2:44:38 to 2:44:58( Edit History Discussion )

Judd Gregg: this is tax the rich, even though for the most part this is small business. let's accept the argument. how much money do they get from that? well, not very much compared to what they're talking about spending. they're proposing increasing spending, the other side of the aisle, byver a trillion

2:44:59 to 2:45:21( Edit History Discussion )

Judd Gregg: dollars on the discretionary side -- that's things like, oh, education and things like that -- an over a trillion dollars on the entitlement side. the increase are about one-fifth of that spending increase, maximum one-fifth.

2:45:22 to 2:45:42( Edit History Discussion )

Judd Gregg: maximum. people aren't going to be smart enough to go out and figure out ways to avoid taxes, which is what people usually do who have accountants when their tax rates they tend to go out and figure out a way to invest that they don't have to pay their taxes at quite such a high level legally by investing in things which are ta not a very efficient way to manage an economy.

2:45:43 to 2:46:04( Edit History Discussion )

Judd Gregg: you'd rather have people invest for the purposes of getting a maximum return because that creates the maximum productivity the society which creates the most jobs, but as rates, what happens is people go out to invest not to create jobs and create return, they go out to invest is a very inefficient way to use dollars. but let's accept the theory that

2:46:05 to 2:46:25( Edit History Discussion )

Judd Gregg: they're -- that this is all acceptable, that we should just tax the rich because it's a political statement and it makes for a nice tv ad and the v.a.t. will address the problem now. it doesn't. we still have goes up essentially on the same pathway, because this pathway of debt assumes

2:46:26 to 2:46:48( Edit History Discussion )

Judd Gregg: this tax increase on the wealthy. so what's the other option besides inflating the economy? it's to tax everyone at very dramatic rates. very, very dramatic rates. and what's the practical effect of that? well, if you tax all working this debt -- and rember what this debt's being used for. it's being used to expand the size of the government. the president's been forthright about this.

2:46:49 to 2:47:09( Edit History Discussion )

Judd Gregg: he says, i believe 6 that by dramatically growing the -- believe that by dramaticall growing the size of the government -- i third tod npr wch appropriate since they happen to be a government-funded agency -- by dramatically expanding the size of the government, you can create prosperity. that's the argument of the president. it's the argument of npr's commentator today.

2:47:10 to 2:47:31( Edit History Discussion )

Judd Gregg: and i'm thinking to myself, wow, explain this one to me. you take the debt of the united states up to 80% of g.d.p., you run deficits of a trillion dollars a year for the next ten years and you're going to creat prosperity? you're not going to create prosperity. you're going to create a momentary blip in the size of the -- in the activity of the

2:47:32 to 2:47:54( Edit History Discussion )

Judd Gregg: government in -- in sector -- not permanent flip -- and you're going to permanently increase the size of government and maybe you'll create some jobs, but in the end what you'll get is a massive expansion in debt, a massive expansion in

2:47:55 to 2:48:15( Edit History Discussion )

Judd Gregg: a commiserate increase in inflation or in taxes which have a huge dampening effect on prosperity. you don't create prosperity creating inflation. you don't create prosperity by creating a n workplace where capital is being invested not for the purposes of efficiency but for the burps of avoiding taxes -- but for the purposes of avoiding taxes. so basically what you're absolutely guaranteeing when

2:48:16 to 2:48:37( Edit History Discussion )

Judd Gregg: you're running up this type of debt is you're not going to prosperity, you're going to get a weaker government -- weaker economy, a loss prosperous county and a country that isn't as strong. and these numbers that came out yesterday from the social security and medicare trustees, the social security

2:48:38 to 2:48:58( Edit History Discussion )

Judd Gregg: only highligh highlighted in a most devastating way our signifint our proem is. and if we fail to take it on, we fail to start to address this issue, if we continue on this path of just spending money as if there's no tomorrow there, will be no tomorrow for our children. because the burdens will be so high and so extreme from all the

2:48:59 to 2:49:19( Edit History Discussion )

Judd Gregg: costs of government and especially from the burdens of these entitlement programs. so what's the answer? well, to begin with, yes, we're in a tough fiscal time right now and we have to spend money that we don't want to spend in order to try to get things going, but this recession's not going to go on forever. in parts, hopeful there's -- in fact, hopefully there's some lights at the end of the tunnel

2:49:20 to 2:49:40( Edit History Discussion )

Judd Gregg: here and there's some glimmers of things turning around and we all hope that that's going to occur, and it taps may. the federal reserve chairman thinks it l. well, as we move out of this shouldn't continue to spend as if we're in a recession. rather, we should start to draw back on the spending that we put

2:49:41 to 2:50:01( Edit History Discussion )

Judd Gregg: into the system, we should start back. all of these spending programs that came in the stimulus ould have been these programs d after the recession is over, a year and a half from now or maybe a year from now. but that's not the plan. the plan is to build all this spending into the baseline and have this spending go on for as far as the eye can see. and that's why the president's

2:50:02 to 2:50:22( Edit History Discussion )

Judd Gregg: budget calls -- expects to have a trillion-dollar deficit for as far as the eye can see, or at least as far as the budget window allow -- ten years. and then spending that's being -- retrenching on the spending that's being proposed just in the short term and saying, let's stop this spending when we get

2:50:23 to 2:50:45( Edit History Discussion )

Judd Gregg: out of the recession, let's start curtailing the spending, let's go back to the former spending patterns of the government -- which weren't very good to begin with but at least were a lot better than what was being being proposed now -- let's put in some strict fiscal discipline. let's f discretionary spending for one or two years after we move pas this recession.

2:50:46 to 2:51:07( Edit History Discussion )

Judd Gregg: in other words, in the year 2010 -- let's also at the same time look at these entitlement accounts and see how we can put them on a more sustainable path. and that means making some courageous decisions around here here. and we've proposed, myself and senator conrad have proposed a way to accomplish that because we know the

2:51:08 to 2:51:28( Edit History Discussion )

Judd Gregg: doesn't inherently allow people, members of the government who have to run for make the tough decisions on these programs that affect everyone we know that. we know it's very hard for snob stand up in -- somebody to stand up in a town meeting and say oh, we're going to raise the minimum retirement age on social

2:51:29 to 2:51:49( Edit History Discussion )

Judd Gregg: security, we're going to minimize the cola on social security. that's not possible in a political climate. so we accept that. so why not set up a procedure which drives a good policy which we can vote on and everybody can sort of issue together? and that's what senator conrad

2:51:50 to 2:52:10( Edit History Discussion )

Judd Gregg: and i have suggested, called the conrad-gregg in new hampshire where we call it the gregg-conrad commission. and essentially what it does is set up a process where a group of people who are very knowledgeable with a by the way, fro party, sit down and figure out

2:52:11 to 2:52:32( Edit History Discussion )

Judd Gregg: the best ways to try to bend this curve a little bit -- and hopefully more than -- see, this is the curve base lierng the blue one. hopefully ge baseline. and get und of growth of these entitlements so they do become at least if not iediately affordable over a and we do this on a fast-track

2:52:33 to 2:52:53( Edit History Discussion )

Judd Gregg: and we do it without amendments and we require an up-or-down vote and we require a supermajority so that everybody's protected, everybody knows it's fair and it gets to the underlying issue, which is how you control the rate of growth of spending. you know, i recognize that i've been sort of asive yous at

2:52:54 to 2:53:15( Edit History Discussion )

Judd Gregg: pucking a rock up a hill on this issue and the top of the hill yet. concern. the chairman of the budget committee in both the house and the senate have both said that these out-year debt patterns of their budget is unsustainable. not -- those weren't my words. the director of o.m.b., the

2:53:16 to 2:53:36( Edit History Discussion )

Judd Gregg: president's and budget, has said these out-year numbers are unsustainable. th said these unsustainable. you cannot have a debt to g.d.p. ratio of 80%. you cannot have deficits of 4% to 5% annually. you just can't do it and have a sustainable government.

2:53:37 to 2:53:58( Edit History Discussion )

Judd Gregg: you end republic if you continue on this path, where you basically self-implode through inflation or the international community is starting to comment this. the chinese -- head of the chinese federal reserve -- different title but the same position -- has raised his

2:53:59 to 2:54:20( Edit History Discussion )

Judd Gregg: concerns about it, premier of china. and after all, they're our biggest lender. that's like if you're the guy that -- the person who lent you the money for your comes to you and says, hey, i'm a little concerned about you're amount of credit you've run up here; i'm a little concerned about it. you've got to listen to that person because that's the person who's going to lend you the next

2:54:21 to 2:54:42( Edit History Discussion )

Judd Gregg: doll. and regrettably, we're in that situation, whether we like it or not. so this is not a scusmghts this is a real discussion about the real problems we confront as a country, and the report should be listened to. now, there was one specific suggestion in the trustees' report that we as a congress are supposed to do.

2:54:43 to 2:55:05( Edit History Discussion )

Judd Gregg: the trustees' report says that when iis proje medicare trust fund will have to be supported with more than 45% of the general funds of the country -- of the government -- in other fund is supposed to be self-insured. never has beenut it's supposed to be.it's not supposed to use general funds, which is general taxation, to pay for it.

2:55:06 to 2:55:27( Edit History Discussion )

Judd Gregg: and so put in this if it goes over 45% of the support for the trust fund comes from the general fund -- so it's no longer an insurance event, so people who are paying into their health insurance, h.i. insuranc no longer are supporting anything more than 55% of the costs of the fund --

2:55:28 to 2:55:51( Edit History Discussion )

Judd Gregg: at that point, the trustees notify the congress and president that this is going to occur within the next seven years and we are our own statute, receive from the president directions as to how to bring the spending or the cost of the trust fund down so that the general fund will not

2:55:52 to 2:56:12( Edit History Discussion )

Judd Gregg: be invaded by more than 45% now, the president bush took this to heart and proposals to accomplish that, both of which were fairly reasonable. the first one was that people who benefit from their -- who take part in the program should haveo pay a percentage of their premium for that program if they're rich. if they're well-off.

2:56:13 to 2:56:33( Edit History Discussion )

Judd Gregg: in other words, people working in a restaurant in hampshire, today are fully subsidizing the part-d premium of, for example, warren buffett. that makes no sense does, it? so if you have a fair amount of income, you should larger -- me percentage, at least, of your part-d premium.

2:56:34 to 2:56:54( Edit History Discussion )

Judd Gregg: president bush suggested that. of as his issue -- as one his -- another approach he said was there's a lot of savings occurring in the health care industry today based mostly on technology advances and we would like to share the rewards of those savings with the people who are getting them. today 100% of the savings goes to the health care industry. president bush suggested that we

2:56:55 to 2:57:17( Edit History Discussion )

Judd Gregg: take half of those savings and put it back into medicare trust fund. very reasonable proposals, both of those. they were both rejected by the democratic congres. congress controlled by the democrats. both rejected by the democrat congress. now it's president obama's turn to send us some ideas for how we

2:57:18 to 2:57:38( Edit History Discussion )

Judd Gregg: keep the cost of the trust of medicare to the general fund below 45%. but what has happened? total silence. total silence. nothing's been st up. no proposal's been sent up. no endorsement of any proposal's been sent up. interestingly enough and to his

2:57:39 to 2:57:59( Edit History Discussion )

Judd Gregg: credit, president obama did snug his budget the same proposal on part-d that president bush proposed, which was that wealthy people should payome percentage of the cost of their premium. and so you might think that they would send that proposal up as a ee-standing initiative, at least that one, as a way to

2:58:00 to 2:58:22( Edit History Discussion )

Judd Gregg: address some of the costs which are being generated and being borne by the general fund. but we haven't heard that. it is ironic, of course, that president obama sent that -- has what that proposal in his budget and is not willing to send it up. it may be that because the congress under democratic leadership rejected this idea

2:58:23 to 2:58:43( Edit History Discussion )

Judd Gregg: two years ago that they feel it will be rejected again, but let's at least take a run at it because it's a good idea and it's very appropriate, should be done. now, along withome other yrksdz because we have this opportunity -- ideas, because we have this responsibility under our own rules -- they're our rules, we set them up. we said if the general fund is going to be 45%, we have to come up with some way to correct that.

2:58:44 to 2:59:04( Edit History Discussion )

Judd Gregg: so we ought to at least live by that. so there's some ideas as to where we should go from here. rather than allowing this debt to become so excessive that, for example, it got so high that we become so irresponsible as a nation in the area of debt that we couldn't even get in the european union. that's an irony, isn't it?

2:59:05 to 2:59:25( Edit History Discussion )

Judd Gregg: when this debt gets up to over 60% of g.d.p. -- which it will fairly early here, probably within the next two years -- at that point, the united states would no longer qualify for entrance into the european union. because those industrialized states have said that level of debt is irresponsible. a government that has that level of debt is so irresponsible that

2:59:26 to 2:59:46( Edit History Discussion )

Judd Gregg: we do not want you in the european union. in other words, latvia or lithuania could get in the euroan union but the united states couldn't. not that we're going to apply but that's a pretty good place to look for a standard, isn't it? i mean, they are nations. so we need to take some action and we need to listen closely and read closely the trustees'

2:59:47 to 2:59:53( Edit History Discussion )

Judd Gregg: report because it is telling us we are in deep trouble.