Sen Byrd Speech -- Budget Deficits / 07-31-03
Remarks by U.S. Senator Robert C. Byrd
July 31, 2003
"Threat of Bush Administration Budget Deficits"
An apocryphal tale is often told by professors of economics in classrooms across the country. It is a tale about a king who asks his advisors to teach him the laws of economics. The King's advisors return with a book on the subject. But the King tells his advisors that his time is precious, and he asks them to summarize the book. The King's advisors return with a single piece of paper. But the King again tells his advisors that his time is precious and he sends them away to summarize the lesson even further. The King's advisors finally return with a single line, summarizing all of the known laws of economics.
The King reads: "There is no such thing as a free lunch."
For most people, this is a universally accepted truism -- just plain common sense -- that nothing is free. There are tradeoffs and opportunity costs to every decision we make. Even a child can understand this most basic economic principle. But for the Bush Administration, you can beat them over the head with their own budget and still they will not acknowledge the tradeoffs and opportunity costs of the budgetary decisions they have made.
On July 15, the Administration released its mid-year budget and economic forecast, the so-called "Mid-Session Review." The Office of Management and Budget revealed to the American people that the government would run an incredible, record-breaking $455 billion deficit in the Fiscal Year 2003. Worse, the deficit will increase to $475 billion in the Fiscal Year 2004. The Administration estimates that if the Congress enacts the President's policies, we will increase the public debt by $2 trillion over the next six years.
The OMB Director assured the public that these deficits were "manageable...sustainable ...not a problem."
In other words, a free lunch.
When the Bush Administration promises almost $3 trillion in tax cuts; a prescription drug benefit, a record increase in defense spending, more money for education and health care, claims that it will protect Social Security and Medicare for future retirees, and asks for nothing in return -- that, Mr. President, is more than a free lunch, it is a cost-free invitation to a White House banquet.
The American people may recall the last free lunch this Administration tried to peddle.
Prior to the war in Iraq, the Bush Administration promoted a vision of Saddam's removal from power as a quick, easy, and bloodless exercise. Indeed, most of the support for this war was based on the rationale that America's tremendous military superiority over Iraq would confine the costs of this war to a relatively painless contest between the United States' awesome military might and the relatively weak, conventional military of Saddam Hussein.
But now the true costs of the war are becoming more apparent.
The number of U.S. casualties in Iraq has risen to 235 soldiers -- and rising by one soldier per day -- almost double the 123 deaths at the time the President declared victory in Iraq on May 1.
Families of reservists and national guardsmen, who thought that their sons and daughters, brothers and sisters, husbands and wives would return after major combat had ended, are now realizing that their family members will be in Iraq indefinitely.
Administration officials who were counting on U.S. allies to assist in peacekeeping efforts in Iraq are now realizing that our strong arm tactics have alienated many of our closest allies.
The United States is now committed to a long-term endeavor to rebuild Iraq, which is costing the American taxpayer $4 billion per month.
The Administration hid the potential costs in the buildup to the war. Now, the American people are realizing that free lunch will be paid for with our nation's treasure, prestige, and blood.
So I take little comfort when this Administration's promises another free lunch when it describes its budget deficits as "manageable" and "not a problem."
With $475 billion in budget deficits projected for the upcoming fiscal year, this nation is experiencing budget deficits never before seen. They amount to roughly one-fifth of the entire federal budget. This forces the federal government to borrow one out of every five dollars it spends. And much of that money will have to be borrowed from our allies overseas -- that is, those we have not yet alienated.
With a $475 billion budget deficit, next year, the federal government will have to borrow more than the entire defense budget. For every military operation underway right now -- in Iraq, Afghanistan, Liberia, the Balkans -- and to maintain our current military defenses, the Administration will have to borrow the money to pay the equivalent of those costs.
With a $475 billion budget deficit, the recently enacted tax cuts are not free. Ultimately, the American people will have to repay every dollar to balance the budget.
When the President is pinned down about the mounting deficits, he has two replies. First, they are small and not a threat. But the deficits assumed in his budget are the highest ever recorded, and, as long as we are running deficits, we are not saving to ensure the solvency of the Social Security and Medicare programs. There's no escaping that budgetary fact. Without more savings, we are endangering the Social Security and Medicare programs.
The President tells us that we can grow out of deficits. That sounds nice, but it won't happen. The Congressional Budget Office (CBO), which is now headed by a former White House economist, formulated nine different economic models to predict how the recently enacted tax cut would affect the economy, and the CBO concluded that the President's proposal would have only a negligible effect.
Even with strong economic growth, the White House budget office is still projecting that the nation will accumulate $2.0 trillion in new debt under this Administration's proposals, and that doesn't include the $5 billion per month the Administration is spending in Iraq and Afghanistan.
We're drowning in a sea of red ink -- gasping for air -- and all this Administration can do is promise more cost-free White House banquet dinners as they claim it's "not a problem."
But it is a problem!
We're already seeing these deficits eat into our budget. Just look at the amendments that were opposed by this Administration on the recently passed appropriations bill for the Homeland Security Department.
Under pressure from the Administration, Senators voted down amendment after amendment designed to enhance the security and safety of the American people. Spending for vital homeland security functions is being denied -- each time with the same excuse -- that our budget doesn't allow for it. We are spending nearly $4 billion per month in Iraq, but we could not afford a $1.75 billion amendment that I offered to secure our ports, equip and train our first responders and secure our borders. It's incredible! The budget that calls for astronomical tax cuts does not allow for the safety and security of the American people within their own borders.
Al-Qaeda has not yet been destroyed. It is still alive and well, and planning attacks against U.S. citizens. They're patient, persistent killers.
Yet, this Administration continues to oppose essential homeland security funding. Just this week, the Department of Homeland Security issued a new advisory about the potential hijacking of planes, yet they opposed my amendment to secure cargo on passenger aircraft. Our ports, our borders, our airlines, our chemical facilities, our nuclear power plants are still perilously vulnerable. Have we not learned anything, Mr. President?
The war on terrorism can only be won with both a strong defense and a strong offense. And, yet, the ratio of defense to homeland security spending is 12 to 1. That's $1 of spending to build up our homeland defenses for every $12 dollars spent on our military.
We're seeing only a half-hearted effort by this Administration to address the vulnerabilities in our infrastructure -- just enough to say that they're doing something, but not enough to thwart terrorist attacks. It should frighten us all.
The President has established a track record for being strong on rhetoric and short on resources. In his State of the Union, he said, "We will not deny, we will not ignore, we will not pass along our problems to other Congresses, to other Presidents and other generations". Yet, according to the White House's latest deficit estimates, the President's policy is to have a deficit of $455 billion this year, $475 billion in FY 2004, and an increase in the public debt of $2.0 billion over six years. That is rhetoric without resources.
In May of this year, the President signed the United States Leadership Against HIV/AIDS Act, which authorized $15 billion over five years to attack global AIDS and authorized $3 billion for FY 2004. He traveled to Africa and pressed for the Congress to support the $15 billion commitment. Yet, the President requested only $1.9 billion for global AIDS programs for FY 2004. That is rhetoric without resources.
In January of 2002, the President signed the No Child Left Behind Act with great fanfare. He said, "Today, begins a new era, a new time in public education in our country. As of this hour, America's schools will be on a new path of reform, and a new path of results…And our schools will have greater resources to meet these goals". Yet, his budget for FY 2004 proposes to cut funding for No Child Left Behind Act programs by $1.2 billion below the levels that Congress approved for the current fiscal year, to a level that is $6.1 billion below the level authorized in the law that he signed eighteen months ago. More rhetoric, without resources.
The President has called for the National Service Americorps program to have 75,000 volunteers to tutor, mentor and teach our children, provide services for our elderly and clean up our communities. This month, the Senate approved a $100 million supplemental that would have prevented the elimination of 20,000 volunteers, reducing the program to 30,000 volunteers. The President did not lift a finger in support of the program when the House stripped those funds from a supplemental bill last week.
The President and Members of his party have passed three tax cuts, taking $2.25 trillion out of the phoney surpluses that the President projected in 2001. Each time the President proposed these tax cuts, he promised that the tax cuts would create jobs. But the facts are different. Instead we have seen 3.1 million jobs disappear in the private sector since the beginning of this Administration, including more than 300,000 jobs lost within the past five months. Once again, we see rhetoric, but no results. More false promises.
We're seeing the same half-hearted effort when it comes to preserving the Social Security and Medicare programs. The Administration often refers to the long-term problems facing these programs, but it hasn't set aside any money to make them financially solvent. In the coming decade, as the baby boomers begin to retire, the American people are going to realize yet another cost from these budget deficits -- namely that there will not be enough money saved to pay the benefits promised to our nation's seniors.
The Administration's budget deficits are a problem for state governments, as well. Federal budget deficits have contributed to a $30 billion gap in state budgets because of a lack of federal payments to states. Without federal support, states are forced to cut Medicaid and health care-related programs. For the first time ever, K through 12 education programs are being cut by states to make up for a lack of federal funds. This year, Oregon school districts were forced to close some schools a month early because of these budget deficits.
The Administration vehemently opposes any increase in federal taxes to cover its budget deficits. But what the White House doesn't admit is that state governments across the country are already raising taxes to fill this budget gap. Governors in 29 states have proposed tax or fee increases in their latest budgets.
The President likes to justify his tax cuts for the rich by asserting that it's the people's money. Well, thanks to his tax cuts, we are facing a public debt of $5.5 trillion by 2008. That is $18,890 of debt for every man, woman and child in this country. By 2008, we will be spending $260 billion on interest on that debt. In 2017 when the Social Security Trust Fund is in the red, the 65 million Americans who expect to receive their social security benefits, will ask, where is our money?
Everything costs something, Mr. President. There is no free lunch. And, yet, the Administration continues to play the role of the savvy salesman, handing out tax cuts and telling the American people that it will cost them nothing in return.
The Administration will be forced to reconcile the budgetary quagmire they have created. Nothing is free. There is no such thing as a free lunch. That much, even an apocryphal king could learn.
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