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July 26, 2011

TRANSCRIPT: Johanns Calls on President to Lead on Debt Negotiations

Mr. Johanns: We are seven days away from literally a crisis in our country. We are down to a point where it's getting even difficult to try to figure out what the time lines naturally built into the process, how you get from here to there in seven days. And yet that's what faces us. Last night, like many Americans, I watched and listened to the President and listened to speaker Boehner. I must admit when it comes to the comments made by the President, I don't understand where he is coming from. He talks about higher taxes and more revenue when the reality is that at this late date, he is the only one talking about that. Now, I have been one of those people that has said for a long time, we absolutely need to engage in a process of reforming our tax code. It's too complicated. It's almost an antigrowth piece of work. I'm anxious to work with my colleagues, but with seven days left to try to suggest that there will be a massive amount of new taxes just doesn't make any sense. That's not in the Reid plan. It's not in the Boehner plan. And yet there it is.

Well, here we are. We are literally seven days away, and as I said, as watched those comments last night it looked to me like campaign rhetoric. It looked like positioning for the next election. It looked like class warfare. What it did not look like to me was presidential leadership. And yet our creditors around the world are watching this debt limit debate unfold, and they are as shocked as all of us are by the lack of leadership coming out of the White House. Well, just this weekend, the President was presented with a bipartisan approach. I found it reassuring over the weekend to know that our leaders in the senate were trying to work their way through this. It is a very difficult issue. I thought that with that kind of effort, when an approach was presented to the president, he would naturally embrace the approach. With only one week left, that made the most sense to me.

Yet, surprisingly, the President rejected the approach. The reason, as he has said so many times, the President does not want to deal with increasing the debt limit next year during his campaign for a second term. Now, I find that shocking. Since last night when he addressed the nation, he expressed great concern about our debt limit negotiations being in a stalemate. Yet he could have used that opportunity by accepting the bipartisan proposal that had been presented to him just a day or so earlier. He had opportunity to show the type of leadership our country needs and is crying out for, but he decided to reject the plan and retreat to political talking points. The President also said that he would veto Speaker Boehner’s approach claiming that it kicks the can down the road, claiming that that's what it would be.

Well, let's look at that. Let's examine what the president is trying to convince this nation of. Over the last 25 years, congress has increased the debt limit 31 times. 22 of those 31 times were for less than a year. Yet the president claims that he'll veto anything not extending into 2013. It defies logic to decry our debt and then veto anything unless it allows more record-setting debt. And that is exactly what he is pledging that he will do. Veto anything less than the largest debt limit increase in the history of the United States of America. The largest. His last debt limit increase in January was the largest in history at that point, $1.9 trillion.

Yet instead of hitting the brakes and saying, whoa, time out, this is getting us in trouble, the president is doubling down, demanding yet another record-setting budget buster. Now, who does the President think is going to pay off all this debt? It will be our children and our grandchildren. Passing multiple trillion dollar debt limit increases without addressing our addiction to spending does far more to kick the problems down the road. It sends the problems over the cliff, in fact. Yet despite this reality, the President continues to accelerate as we get closer and closer to the cliff.

The President just recently said this, and I'm quoting: "the only bottom line I have is that we have to extend the debt ceiling through the next election into 2013." unquote. While numerous issues accompanied this line of thinking, let's hit some high points. Our national debt is more than $14 trillion, and the President is requesting to increase it to $16 trillion. The largest in our nation's history. So why is the bottom line only about the length of the extension, not about spending reductions that put our country back on track?

Unfortunately, the President's only fundamental concern is how do we kick this past the next election? Above all else, not good policy, not what is best for our citizens, but the number-one goal is how to get past the next election. And this is unfortunately his bottom line. It is simply astounding that the campaign of hope and change has become such business as usual. Simply raising the debt ceiling, absent any meaningful spending reforms, just won't work. So now we find ourselves in one heck of a mess. With about a week to go, the latest in the debt limit saga is a proposal that was introduced last night by Senator Reid, but here's why this latest plan has so many problems. Policy-wise, it just doesn't hold together. The plan claims $1 trillion in savings from reduction in troop forces. These savings assume that troop surge extends into perpetuity which never was the plan, so it assumes savings from stopping spending that was never scheduled nor even requested. This plan counts savings that were scheduled to happen. Second, the plan counts $400 billion in interest savings on that savings relative to the troop money that wasn't going to be spent, wasn't asked for. In other words, not only does the plan count nonexistent savings, it then compounds the policy problem by counting nonexistent interest savings on that savings. You simply cannot count savings that were never intended to happen. 

Now, we're dealing with a ticking time bomb here. We've got rating agencies saying, my goodness, your debt is so out of control that unless we see a plan, we won't be fooled by the gimmicks. And yet this policy approach doesn't hold together. You see, the rating agencies justifiably so want to see real budget savings that actually help to improve our balance sheet. Well, Mr. President, we are at a critical time in our nation's history with one week left. The American people are yearning for bold leadership, not another shell game. Heated rhetoric and charged accusations, they're not going to fix the fiscal situation. I stand ready to work with my colleagues and I urge the President -- on a solution, and I urge the President to do the same. Let's quit defending what is really indefensible, and that is worrying about getting the can kicked down the road past the next election. And let's figure out how to best address this.

 

There was a plan that came out recently dubbed from the gang of six and the presiding officer and i have had some interest in that plan. But we all acknowledge that it is going it take time to put that plan in place, to debate that plan to bring it to the floor, to do the things that are necessary. And we've got to take action now. I'm a part of a group that says, look, let's take a long, hard look at that plan. Let's see if that's the plan that we can move down the field to success. Well, we have just seven days left. We need to face the reality that seven days from now we will be within hours of hitting our debt ceiling. And incidentally, to those who are arguing, it is not August 2. Well, if it is not August 2, it is close to August 2.

We are facing a real problem where there won't be money to pay the bills. Many say, just pay the interest on the debt. Make sure you get that done. I don’t want to default on our debt. But that means we have about 50 cents on the dollar in August according to a cash-flow statement done by the bipartisan policy group, and that means that 50% of those out there who would otherwise receive some type of payment from the federal government won't get it because there just simply isn't enough money to pay the bills. So what does Speaker Boehner’s plan do? It is a plan that is realistic. It says, look, seven days. We've got to come to grips with where we are at in the next seven days. Or we can simply suspend rational thought, believe that the record-breaking debt increases to accommodate record-setting debt is somehow a possible course. It is not. I'm more apt to believe the president's own words. When the debt limit increase was $781 billion to raise our borrowing authority to $9 trillion, then-Senator Obama was in the place where we're in today deciding on whether he would vote for a debt ceiling increase. And he called the situation then -- quote -- "a failure of leadership." unquote.

He went on to say, quote, "increasing America's debt weakens us domestically and internationally," unquote. Well, we were at $9 trillion then, and really unforgivable amount of money. Today we are at $14.5 trillion, and the steam engine is just firing away, building up more and more debt. Senator Obama's words were as truthful then as they are today. Yet now he's done a 180. His presidency has hit the turbo booster when this comes to record debt.

I yield the floor…

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