Thursday, June 30, 2011
Floor Speech: Colloquy warning of inaction on our nation's debt
As Delivered on June 30, 2011
Mr. President, the two senators from Colorado have, I think, inspired me to come to the floor and join them in a colloquy about the challenges facing our country. And to the senators from Colorado, I am pleased and impressed with their leadership and have greatly enjoyed serving with them to date.
I agree that the vote on one of our tax expenditures, on the ethanol subsidy, was an encouraging and inspiring moment because we saw both Democrats and Republicans from all over the country casting a vote to end a tax expenditure — a subsidy – that many would argue has outlived its usefulness in the current marketplace.
In my home state, we recently saw the bankruptcy of our second-largest poultry company and they have communicated to me their grave concern about the ethanol subsidy. There are lots of folks on both sides of that particular debate. I think the larger point that is important to get to is certainty in the markets. I spent a number of years in the private sector, in business, before running for and being elected to office, and I know the mantra that Senator Bennet is well-familiar with, Senator Udall is well-familiar with, many of our colleagues from that both parties are well-familiar with — is that certainty is what the markets look for. Certainty is also what the people look for, and I think we have alarmed them — concerned them — by not being able to reach a broad, bipartisan, responsible plan that lays out a framework for how it is we're going to address both the nation's record deficits and record debt.
Our debt today, as you know, is roughly $14 trillion. Our deficit has hit an all-time record and we're working on borrowed time.
I've heard some suggest that we need to better understand the situation we're in. The situation we're in, I believe, is that we are about to risk defaulting on America's mortgage. We've made commitments as a nation. We've expended ourselves at home and abroad in a lot of different ways, and I'm worried that we are on the verge of failing to meet our commitments. Just as America's households really hesitate before ever defaulting on their mortgage, I think we as a nation — as a people — have to hesitate — have to think deeply about the consequences of it.
I asked the folks who work with me on economic policy to quantify it. They looked at a number of different studies around the country and gave me some just chilling numbers. Should we fail to meet the August 2nd deadline that Secretary Geithner has repeatedly — since January — in writing and in testimony, suggested to us is the absolute last date by which we can reach a bipartisan compromise and a path forward — we'll lose hundreds of thousands of jobs. One study said 640,000 jobs. The markets may lose as much as 10 percent of their value, which would mean loss of almost $1 trillion of market equity value. That means that pension funds, 401(k)'s, and personal savings would take an enormous hit.
The average homeowner would see an increase in the costs of, whether it’s their credit cards, or mortgages, or car loans. It’s easy to think this is an abstract problem, but in reality, I think the problem that we're causing — the lack of confidence in the markets — could have a sudden, sharp, grinding effect on our economic world. And that's because investors act more like animals than they do like machines and when spooked, they act the way herds do and they run off in a certain direction. And my concern is that we are so used as a country to have a Triple A bond rating, to being the world's reserve currency, to being the gold standard for the most safe and most secure investment.
I am gravely concerned that intransigence — an unwillingness to come to a reasonable compromise — is putting us at real risk of spooking the markets, of harming the average American homeowner, of putting our rating at risk as a country. At the end of the day, I've observed some things about how Washington works so far that really worry me.
If I could offer a metaphor, it seems to me there are a lot of sacred cows here. It seems to me that the trillions of dollars that we spend in our tax code through tax loopholes and special tax provisions, and the trillions that we spend through direct spending are broken up into these sacred cows, and I feel as if I've gone into dairy. I feel as if I'm surrounded by a whole herd of sacred cows and that what we need is a deliberate and clear-eyed, bipartisan effort to thin the herd here, to make some tough choices.
As I know Senator Bennet said previously, I want to commend the hard work of the gang of six — the so-called “gang of six” — the bipartisan group that came up with both processes and a path forward. The Bowles-Simpson Commission that presented to those of us on the budget committee and to this body, a proposal.
There are paths forward. There are ways to make these tough choices. I hope that before the time runs out that this body will embrace these proposals, make the tough choices and the sacrifices we need to, come to the center, and lay out a path.
I frankly don't think we've got until August 2nd. I think if we're going to put at risk the markets by injecting uncertainty, I think frankly the timeline may be more like the middle of July. It is my hope, Mr. President, that the senators from Colorado will be joined by senators from both sides of this body and both sides of this Capitol in crafting a responsible bipartisan solution.