Jun 16 2011
United States Senator Orrin G. Hatch
The Gathering Economic Storm
United States Senate
June 16, 2011
Mr. / Mdme. President, our nation’s challenges grow by the day. The citizens of Utah get this. The citizens of this country get this.
A recent NBC News / Wall Street Journal poll found that 62 percent of Americans think the country is on the wrong track.
Only thirty-seven percent of Americans approve of the President’s job of handling the economy.
I would like to meet those people. Because when I talk to Utahns, the numbers are much lower than that.
And I understand why.
Applications for unemployment have been above 400,000 for seven straight weeks.
Economic growth is stagnant.
Job growth is pathetic.
The real estate market remains in free fall. Since 2007, housing values have dropped by more than during the Great Depression.
Medicare is going bankrupt, and when it does it will take down this country and tens of millions of seniors with it. Yet, President Obama and his Democratic allies steadfastly refuse to acknowledge that there is a problem with Medicare. Former Speaker, Nancy Pelosi, when asked where the Democrats’ reform plan was, responded, “We have a plan. It’s called Medicare.” Meanwhile, the President’s hand-picked chairwoman of the Democratic National Committee gleefully demagogues Republicans’ efforts to fix this dying program.
There are legitimate fears that the Federal Reserve’s loose money policy is creating yet another stock market bubble that could pop and destroy the retirement savings of millions of Americans.
And most ominously, Pimco, the world’s largest bond fund manager, is looking to countries like Australia, Canada, Brazil, and Mexico — countries without our massive fiscal problems — to invest in. As I have said before, there is a genuine risk that the United States is in a debt bubble. Because of historically low interest rates, we may be totally underestimating how dangerously leveraged this country is. But the minute that rates start going up, citizens are going to realize how much they are really on the hook for. And when the word on the street is that U.S. Treasuries are not worth investing in, higher interest rates are just around the corner.
So we have a lot of work to do.
But I want to touch on three things that we should be doing now.
And I mean RIGHT NOW.
The people are demanding action, and there are a few things that Congress can do TODAY that would bring relief to struggling American families.
First, the President needs to submit the Colombia, Panama, and South Korea free trade agreements to Congress. They are long overdue. The failure to submit these agreements has stalled U.S. job growth at a time when it is desperately needed. There is only upside to these agreements. Consider that from Utah alone, South Korea imported more than $294 million of goods in 2009.
The former director of the Congressional Budget Office, Doug Holtz-Eakin, has it right. This is what he said earlier this week in a letter to the President. “Opening Colombia, South Korea, and Panama to U.S. businesses is anticipated to increase total exports by $12 billion and will add at least $14 billion to the United States gross domestic product, promoting increased investment and job creation at home.”
While the President is down in Florida yukking it up with rich liberals about how he wasted nearly $1 trillion on his stimulus boondoggle, he seems oblivious to the fact that he could just hit send, deliver these agreements to Congress, and have a trade-driven economic stimulus.
If given a clean up-or-down vote, I am confident that these agreements would pass.
I have no doubt who would prevail if that debate were allowed to happen.
But old habits die hard.
The President’s spend-first mentality is cluttering up what should be a clean debate on the benefits of these trade agreements for the American economy. Rumors persist that the President may include a reauthorization of an expanded Trade Adjustment Assistance bill into one or perhaps all of the bills implementing our trade agreements with Colombia, Panama, and South Korea. This would be a grave mistake. That tactic raises serious procedural concerns which could jeopardize approval of these job-creating agreements. It also raises serious concerns about the President’s commitment to gaining approval of our long-stalled trade agreements with these important allies. It would send a signal that further placating unions is more important than growing our economy — a position that I simply cannot understand or support. If the President choses this course of action, he needs to know that I will vigorously oppose him, and reserve the right to use all procedural options available to do so. If, as the President says, there is such strong bipartisan support for Trade Adjustment Assistance, it should be considered on its own merits, and not thrust upon an unwilling Congress through procedural shenanigans.
These trade agreements are something that Washington can do, and should do, to get our economy back on track.
But we must also be vigilant in fighting AGAINST proposals that would undermine our economy and our sovereignty.
Standard & Poor’s recently downgraded Greece’s debt rating to Triple C, from a B. This is the world’s lowest rating. And S&P concluded that a default on Greek debt was increasingly likely.
And so what was the President’s response.
Like the Siren’s call, a bailout beckoned.
He seemed to go all-in for an IMF bailout of Greece.
Greece has already been bailed out once by the IMF, to the tune of $145 billion.
We cannot let this happen again.
That is why today, I am co-sponsoring the Anti-IMF Bailout Amendment with my good friends, Senators DeMint, Vitter, and Cornyn. This amendment, which we filed to the Economic Development Revitalization Act, would rescind bailout funds provided in 2009 to the International Monetary Fund. Under the urging of the Obama administration, additional funding of up to $108 billion was given to the IMF which it can use to bail out heavily indebted European countries like Greece.
The amendment I am co-sponsoring would roll that funding back. Now IS NOT the time, when Americans are struggling to find work and have budget problems of their own, to tap innocent American taxpayers in order to bail out profligate European governments. Rather, it IS time to stop our own runaway spending and our continued movement toward European levels of government. If we go down that route, the destination is an America very different than the one our Founders intended, and it is critical that we hit the brakes now and save our limited constitutional government.
The American people are tired of bailouts. When ordinary Americans are struggling to get by, and when our country faces its own debt crisis, the last thing we need is a bailout of irresponsible socialist governments and the irresponsible investors who bet on them.
Which brings me to my final point.
Earlier this week, my colleague and friend from Florida, Senator Marco Rubio, gave his maiden speech in the Senate. He is to be commended. It was a tour de force, and I recommend that all of my colleagues, and for that matter, all of the citizens of this nation, read it.
He made it clear that he is confident in this nation, and our ability to weather the current storm and emerge in rich and steady seas.
America’s best days are ahead of it. America has been and will be A Shining City on a Hill.
But for there to be another American century — a century of liberty and prosperity both here and abroad — we have our work cut out for us.
America is over $14 trillion in debt.
We face our third straight year of trillion dollar deficits.
We have entitlement programs that are going bankrupt.
Our total obligations, according to one account, are over $62 trillion.
This is a debt burden that is simply unsustainable. We need to get our spending under control immediately. Otherwise, American families and businesses will be crushed under the weight of all this debt.
The other side keeps telling us the problem is a lack of revenue.
They say that all we need to do is raise taxes and eliminate tax loopholes.
Never mind the fact that raising taxes threatens to kill the small businesses that will be the engine of our economic recovery.
And never mind the fact that these so-called loopholes include the IRAs, 401(k)s, and charitable deductions of American taxpayers. Let’s not make any bones about it. The left’s proposal to gut tax expenditures would put a bulls eye on the backs of working families that have mortgages and save for the future.
And in the spirit of bipartisanship, as an aside to some of my friends on my side of the aisle who seem to think all tax expenditures are wasteful spending, consider the following. The third largest tax expenditure is the current lower rates for capital gains and dividends. Be careful, my friends. Otherwise, you might inadvertently find yourself sharing the stage with my friend, the Junior Senator from Vermont, in effect advocating for a sharp hike in the rates on capital gains and dividends.
Even if liberal Democrats did all of these things, raising taxes on middle Americans and further hindering economic growth, we still would come nowhere close to balancing the budget.
This is the dirty secret about the failure of President Obama and Democratic leadership to engage in meaningful efforts to balance the budget. As my colleague from Alabama, the Ranking Member of the Senate Budget Committee, notes, it has been more than 770 days since Democrats passed a budget. For over two years, congressional Democrats have simply abdicated their most basic constitutional responsibility.
And here is why.
They refuse to cut spending, and they know that balancing the budget through new taxes alone would be received as a full-blown assault on personal liberty and limited government.
So instead of offering up a bogus budget, as the President did, and get laughed out of town, or offering up a proposal for balance that satisfies their liberal base, raises the tax burden to historic levels, and inspires the vitriol of their constituents, Democrats decide to keep their mouths shut.
So where does that leave us?
The answer to me is clear.
We need to pass a Balanced Budget Amendment.
This is where the entire Republican caucus stands in the Senate. The amendment that I introduced, S.J. Res. 10, is supported by every single Senate Republican.
It is a good amendment that benefitted from the input of many senators.
And it is a necessary amendment.
Some people — the sophisticated set — argue that it is not a serious proposal.
Well, the American people beg to differ.
They know that Congress will not balance the budget and shrink the size of government without meaningful constitutional restraints.
The actions of Democrats and President Obama over the last few months are all the evidence we need to support this hypothesis.
Facing a full-blown debt crisis, they still prefer to kick the spending can down the road.
I want to be clear that I am deadly serious about this proposal, and so are the people of Utah.
I have been proud to work side-by-side with my colleague from Utah, Senator Mike Lee, on the BBA.
Some people might say that we are the odd couple.
I have a few years on him.
And I don’t tend to be as animated as he is.
But we share at least one thing — an absolute commitment to passing a Balanced Budget Amendment and sending it to the people in the states for ratification.
The people are demanding that we act, and it is well past time that we recognize their constitutional sovereignty and allow them to exercise it through state ratifying conventions.
I would like to commend Senator Lee for his tireless work on this amendment. He is not the only one who deserves thanks. My colleagues Senators Cornyn, Kyl, Toomey, DeMint, Rubio, Paul and many others were all essential in the development of this amendment.
But it really is special for me to be working with my friend, Senator Lee, on this critical constitutional amendment. He is a legitimate constitutional scholar, a steadfast advocate of our constitutionally limited government, and a hero to many, and I could not be prouder to stand with him and lead this fight for the people of Utah and the taxpayers of this country.
If the American people said anything last fall, it is that they want their representatives in Washington to listen to them. They know that we won’t get it right every time, but they know that we should always do our best to represent their values and interests.
This Congress needs to listen to the people.
It needs to get these trade agreements done — without holding them hostage to unrelated spending.
It needs to say no to any more bailouts.
And it needs to pass a Balanced Budget Amendment.
In this country the people are sovereign.
It is well past time that Congress and the President listened to them.