February 4, 2009
Mr. President, one of the things the American people have not heard about is everything that is in this bill. I want to spend some time tonight outlining the situation we are in as a nation, the fact that we have never had a bill this large at any time, in any way, shape, or form.
I want to first start out by noting my experience as a physician. The greatest mistake physicians make is when they don't listen to the patient. One of the things we know is, if we don't listen to patients when they are sick, we end up making a lot of mistakes. The other thing we know as physicians is that if we treat just the symptoms of a disease, what we oftentimes do is worsen the disease. I want to use an example of pneumonia. I will relate to this example throughout the time I talk.
If you come to me as a physician and you have a cough, a pain in your chest, a fever, and you are ill, I can make your symptoms go away, but I won't cure the underlying pneumonia you have as a patient. I can give you a cough medicine to suppress your cough. I can give you an antipyretic to control your temperature. I can give you, with that cough medicine, something to control the pain in your chest. I can do all those things. But if I fail to diagnose your real problem, which is pneumonia, all I am doing is covering up the symptoms of the real disease.
I would contend with my colleagues and the American public that the bill we have before us is a bill that covers up the symptoms of the real disease. The real disease we have is the fact that housing and mortgages are in trouble. Everything we do that does not address that disease first, that does not attempt to solve that problem, everything we do that does not address the real disease we have is going to be wasted effort. It is not going to accomplish its purpose. As a matter of fact, there is not an economist out there right now who says if we pass this bill without fixing the mortgage problem, without fixing the housing problem--none of them agree that what we are going to do is going to have a significant impact. There is not one. You can't get one to come and testify unless you fix the real problem.
We as American citizens are on the hook for 31 million mortgages.
We have 31 million we now own--Fannie Mae and Freddie Mac--so whatever happens to those mortgages, the American people are going to pay for them. If they are upside down and they get worse or if they go worse underwater, if they get foreclosed upon, the American taxpayers are going to have to pay for them. Now, who is that American taxpayer? It is not us. We are going to be dead and gone when it comes time to pay off the massive amounts of borrowing we are putting forward in this bill. That American taxpayer is our kids and our grandkids. So we dare not make the mistake of treating just symptoms.
My contention is we are way too early with a stimulus bill. We can spend this $1.12 trillion by the time you add in the interest plus the six point some billion dollars we just added on top of it without paying for it. We can pass this bill. But we run the risk of doing exactly what the Japanese did in the 1990s. They passed eight separate stimulus bills, none of which addressed the real underlying disease of the Japanese economy. That is why it is called the ``lost decade'' in Japan. They now have a debt to GDP ratio of 150 percent of their GDP.
So what are we to do? Are we to continue down this path with a bill that is going to spend over $1 trillion or should we be about fixing the real disease, which is the housing and the mortgage problems this country faces?
Now, it is not easy to fix that. I know that. And I am not putting forward a definitive plan tonight to do that, although I think my side of the aisle is going to be offering one in the next few days that will address the real disease: housing and mortgages in this country.
We got here--and it is important to remember how we got here, how we got the ``pneumonia''--we got the ``pneumonia'' because we said we were going to socialize the risk on mortgages so people in this country could buy a home who really could not afford a home, and we were going to put that risk on the rest of the American taxpayers.
Well, that bill has come home. That bill now--besides the cost of actually being responsible for the 31-some million failed mortgages, of which probably 30 or 40 percent we are going to end up owning as American taxpayers; besides that cost, the cost in terms of lost jobs, the cost in terms of true, real pain to American citizens who are having trouble feeding their families, paying their bills, the real cost of that is enormous on our society.
What I want the American people to know is we caused that. We did that. We created Fannie Mae and Freddie Mac, and then we did not do the regulatory work we should have done. We encouraged them to be irresponsible. We encouraged them to have bonuses, by making more and more and more of the loans and guaranteeing them and packaging them and selling them throughout the world. We did that. The Congress did that. No President did that--not President Clinton, not President Bush, and not President Obama. We did it. So we ought to be about fixing the real problem.
Until we fix this problem, we are going to stay in a recession. We can pass a bill that spends $1.12 trillion, and we are still going to be in a recession because what the economists tell us this year is that home prices are going to decline another 11 to 12 percent, which is going to put millions more Americans and their mortgages in trouble. So we can pass a bill that spends $1.12 trillion or we can say maybe we ought to address the real problem.
It is not going to be long until the Obama administration comes to this body and asks for $500 billion more to solve the problem with bank loans and mortgages. We ought to be doing that first. That is the real disease. There is not anybody in this body who will deny that the real disease is the housing and the mortgage failure in this country.
We are going to spend a week on this legislation. It is going to go to conference. It is going to come back. Most of the stuff we are able to take back is going to be added in conference because the power to do that is there, and it is incumbent on the other side of the aisle that they are going to take care of those who are on their team.
I want to make another point. In this bill we are talking about, we are making a fatal mistake. Let me tell you what that fatal mistake is. We are transferring the irresponsibility we have had over the last 6 years in this Congress--or last 8 years in this Congress--to the States because what we are telling them is: You do not have to be fiscally responsible. You do not have to live within your means because Uncle Sam is going to bail you out. That is what this bill says. We are going to bail them out.
So for the States, such as my State, that were smart enough and wise enough to create a rainy day fund and live within their means, we are going to ask all the taxpayers of all the States that have done that to pay for the exorbitant spending and growth in Government in all the rest of the States.
What is that going to do in the future? What is the signal that sends to the rest of the States? Here is what the signal says. Do not worry about it because if you get in trouble again, the Federal Government is going to bail you out.
Remember when New York City was going bankrupt? What did we do? Did we just pay for everything? Did we just send Federal money? No. We created an environment where they made the changes. We helped them. And I am not opposed to helping the States make the changes to put them back on a fiscal course to live within their means.
The other thing that is bad about this bill is every American family out there today--I do not care what their income is--they are reassessing every day what they need to do in terms of how to get by in the economic situation in which we find ourselves. They are making tough choices. There is not one tough choice in this bill. Let me explain what I mean by that.
President Obama campaigned on the fact that we ought to live within our means; that every program ought to be reviewed; that those that are not effective, those that have waste, those that have high fraud rates, those that are low priority ought to be eliminated. There is not one penny of effort placed in this bill that will get rid of less important Federal programs today.
We know there is at least $300 billion a year that is inefficiently, erroneously, and fraudulently spent by the Federal Government. We ask our children and our grandchildren to choke down $1.1 trillion more of debt when we have not done anything--not one thing--to lessen the waste, fraud, and abuse, the inefficiency, and to make choices on what is more important. What we are saying is everything we are doing now is important, everything we are doing is efficient, everything is working fine, and, by the way, we are going to add another $1.1 trillion.
I have this chart to show how we got in trouble--because we were spending money we did not have on things we do not need. That is how we got in trouble. This chart shows the deficits of the Federal Government from 2004, plus what CBO expects, without interest costs, by the way, as to what is going to happen to us.
We know, last year, under real accounting, accounting for the Social Security money we stole--and that is the only way you can say it; we stole about $160 billion out of the Social Security system--the real deficit, last year, set a record we have never seen. It was $609 billion. That is as of September 30. The estimate of CBO for this year is we are going to have--before we even talk about stimulus, before we do anything on stimulus, and before we account for the interest costs on stimulus--we are going to have a $1.2 trillion deficit.
Now, divide that out by 300 million Americans, and what you see is we are going to have a deficit of about $16,000 per family. For every family in this country, we are going to borrow $16,000 against their kids' future before we do this, before we even approach doing this. It does not get a lot better. Note these numbers: $1.4 trillion, if we add what the CBO expects to come out of this stimulus package, and only one-fourth of it is going to get spent this year.
Now, what do we know about stimulus packages in the past? Here is what we know. Only two times in our history--only two times in our history--have we ever had a stimulus package that was effective. Two times. John Fitzgerald Kennedy created a stimulus package that was effective, and Ronald Reagan, in the early 1980s, created a
stimulus package that was effective. All of the others have been ineffective to fix what was ailing us.
If we do not fix the mortgage problem in this country, and housing, this money will be to no avail other than to shackle our children and our grandchildren for years to come. What does that mean when I say ``shackle''? It means stealing their future. Right now the average American has a 30-percent higher standard of living than the average European and the average Japanese. What we are about to do--and we have been doing--is to guarantee that 30-percent advantage in standard of living is going to go away.
Other people say: Well, you have to fix the finance, you have to fix the credit markets, you have to fix the liquidity markets. You cannot fix the credit markets, you cannot fix the liquidity problems we have by spending money. We have already spent $400 billion of the TARP money, and other than pulling us back from the precipice of an absolute collapse of our financial markets, we still have the credit markets tied up and frozen in this country.
I want to give you an example. I have a farmer friend who has been banking with a bank for 15 years. He has never missed a payment. He has been 100 percent on his payments every time. He has assets far in excess of what his loans are--far in excess--15, 20 times what his loans are. He was told this last week by his bank: We don't want your business anymore.
Now, this is a guy who is a premium credit risk. Why do they not want his business? Because they want the money in the bank rather than to have even a good loan outstanding.
Our credit problems are not getting better. They are getting worse. We have not solved the problem by putting money on the equity side of the balance sheets of the banks. The reason we have not solved the problem is because we have not approached and fixed the real disease, which is the mortgage markets and the mortgages that are underwater and the housing crisis in this country.
I want to spend a moment on another issue. A lot of the rhetoric we have heard in the last 3 or 4 months in this country goes after markets and capitalism. Market forces and capitalism in this country created the greatest country that has ever been or ever will be. When we hear market forces and capitalism criticized as the cause of all of our problems, we need to do a gut check.
Market forces and capitalism didn't cause this problem. Congress caused this problem, by our short-term thinking, by thinking, How do I look good politically, how do I do something that isn't based on markets? That is what Fannie Mae and Freddie Mac were all about. We were actually giving loans to people who couldn't afford them. It wasn't market capitalism that got us in trouble, it was short-term, politically expedient thinking that got us in trouble. So the next time you hear somebody attacking the very thing that generated liberty, that very thing that generated freedom, the very thing that generated the greatest standard of living in the world, you ought to ask the question: Is that true? Did market capitalism get us in this trouble?
What got us in this trouble was creating a socialized risk that abandoned the market principles and created a system of loans to people who could not afford the loans.
One of the questions I think we ought to ask--at least the American taxpayer ought to be asking every Member of Congress--is what guarantee do you have that passing this $1.12 trillion spending bill is going to solve the problem? You know what. There is not a guarantee out there. No Member of Congress can tell them that. We are going to treat the symptoms with this bill. We are going to solve some of the short-term problems. We are going to create dependency from the States. We are going to outline and do things we have no business doing. We are going to expand Federal bureaucracies. We are going to raise the baseline to $300 billion that will never go away. That is what we are going to do with this bill. We are going to emphasize and fund the most inefficient bureaucracies in the world, not on the basis of what is the best thing to do but because we will look good and we will help out somebody who needs our help right now.
I am not opposed to us helping people who are unemployed. I am not opposed to giving extra food stamps to people who find themselves, through no fault of their own, in a predicament they can't change, but that is not what this bill does. What this bill does is take a list of policy options that have been on the table for years and funds them in enormous, extravagant amounts, that will have no impact--zero impact--in terms of getting us out of a recession, and will have a 100-percent impact in guaranteeing we are going to lower the standard of living in this country and we are going to steal opportunity from our children.
Let's look at where we are right now as a nation. At the end of this year, we will have an $11.6 trillion debt, probably an $11.8 trillion debt, very close to our total GDP. We have $95 billion in unfunded liabilities we are going to place on the backs of our children and our grandchildren through Medicare, Social Security, Medicaid, and Medicare Part D--things we are going to give people that they have not paid for or we have stolen the money that was there to pay for them, and we are going to transfer that to our children.
Last year, we paid, as Americans, $230 billion in interest. Do you know what it is going to be 2 years from now? It is going to be $450 billion. How many people think the interest rates we are seeing today are going to be stable and the same 5 years from now? All of the economists tell us they are not. As the world looks toward us and we continue to borrow--we have increased our debt by $5 trillion by the time you take what the Federal Reserve has done and what the Treasury has done--how many people think we are going to be able to borrow money for 10 years for 2.6 percent? No economist thinks that. They know it is going to rise 2 or 3 percent. So we are going to go from about 16 percent of our budget for interest payments to about 40 percent of our budget for interest payments. What are we going to do then? The very real important things we need to do--not the superfluous stuff; the important things the Constitution says we should be doing--what are we going to do then? Are we going to borrow more?
What happens when we borrow more? What happens when we borrow more is interest rates go up, inflation goes up, and we have one of two choices: We can file bankruptcy as a nation or we can have hyperinflation and a marked devaluation of the value of the dollar. What does that mean? That means you won't be able to keep up with your payments, you won't be able to buy a home, the cost of any good that is imported in here will rise astronomically. This is Armageddon for us. While we are in this shape, how dare we think we can spend money we don't have now on things we don't need now and get out of a problem that was caused by the very same philosophy: It cannot happen and it will not happen.
Let me outline what we have done so far in terms of this ``economic downturn.'' Last April, we borrowed $160 billion from our grandkids and we gave everybody a tax credit under $75,000 a year or $150,000 for families. We didn't pay for a penny of it. We didn't get rid of one wasteful program. We didn't make one hard choice. What do the economists tell us we did with that? What was the net effect? The net effect was that 12 percent of it had an effect. Twelve percent. Now, crank that up to $1.1 trillion at 12 percent, which is what the estimate is of this bill in terms of what kind of effect it is going to have. We are going to have about $120 billion that is going to have a positive effect, and then we are going to have another $850 billion or $860 billion that is going to have no effect whatsoever except to steal the future from our kids and our grandkids.
We are going in exactly the wrong direction. We ought to be standing on the principles that made this country great. There ought to be a review of every program in the Federal Government that is not effective, that is not efficient, that is wasteful or fraudulent, and we ought to get rid of it right now. We ought to say, Gone, to be able to pay for a real stimulus plan that might, in fact, have some impact.
I would be remiss if I didn't remind everybody that next week we are going to hear from the Obama administration wanting another $500 billion. Outside of this, they are going to want another $500 billion to handle the banking system. Still not fixing the real disease--the pneumonia--we are going to treat the fever or treat the cough, but we are not going to treat the real disease. Until we treat the real disease, this is pure waste. It is worse than pure waste. It is morally reprehensible, because it steals the future of the next two generations.
I am going to wind up here and finish, but I wanted to spend some time to make sure the American people know what is in this bill. I think once they know what is in this bill, they are going to reject it out of hand. Let me read for my colleagues some of the things that are in this bill. The biggest earmark in history is in this bill. There is $2 billion in this bill to build a coal plant with zero emissions. That would be great, maybe, if we had the technology, but the greatest brains in the world sitting at MIT say we don't have the technology yet to do that. Why would we build a $2 billion powerplant we don't have the technology for that we know will come back and ask for another $2 billion and another $2 billion and another $2 billion when we could build a demonstration project that might cost $150 million or $200 million? There is nothing wrong with having coal-fired plants that don't produce pollution; I am not against that. Even the Washington Post said the technology isn't there. It is a boondoggle. Why would we do that?
We eliminated tonight a $246 million payback for the large movie studios in Hollywood.
We are going to spend $88 million to study whether we ought to buy a new ice breaker for the Coast Guard. You know what. The Coast Guard needs a new ice breaker. Why do we need to spend $88 million? They have two ice breakers now that they could retrofit and fix and come up with equivalent to what they needed to and not spend the $1 billion they are going to come back and ask for, for another ice breaker, so why would we spend $88 million doing that?
We are going to spend $448 million to build the Department of Homeland Security a new building. We have $1.3 trillion worth of empty buildings right now, and because it has been blocked in Congress we can't sell them, we can't raze them, we can't do anything, but we are going to spend money on a new building here in Washington. We are going to spend another $248 million for new furniture for that building; a quarter of a billion dollars for new furniture. What about the furniture the Department of Homeland Security has now? These are tough times. Should we be buying new furniture? How about using what we have? That is what a family would do. They would use what they have. They wouldn't go out and spend $248 million on furniture.
How about buying $600 million worth of hybrid vehicles? Do you know what I would say? Right now times are tough; I would rather Americans have new cars than Federal employees have new cars. What is wrong with the cars we have? Dumping $600 million worth of used vehicles on the used vehicle market right now is one of the worst things we could do. Instead, we are going to spend $600 million buying new cars for Federal employees.
There is $400 million in here to prevent STDs. I have a lot of experience on that. I have delivered 4,000 babies. We don't need to spend $400 million on STDs. What we need to do is properly educate about the infection rates and the effectiveness of methods of prevention. That doesn't take a penny more. You can write that on one piece of paper and teach every kid in this country, but we don't need to spend $400 million on it. It is not a priority.
How about $1.4 billion for rural waste disposal programs? That might even be somewhat stimulative. New sewers. That might create jobs.
How about $150 million for a Smithsonian museum? Tell me how that helps get us out of a recession. Tell me how that is a priority. Would the average American think that is a priority that we ought to be mortgaging our kids' future to spend another $150 million at the Smithsonian?
How about $1 billion for the 2010 census? So everybody knows, the census is so poorly managed that the census this year is going to cost twice--in 2010 is going to cost twice what it cost 10 years ago, and we wasted $800 million on a contract because it was no-bid that didn't perform. Nobody got fired, no competitive bidding, and we blew $800 million.
We have $75 million for smoking cessation activities, which probably is a great idea, but we just passed a bill--the SCHIP bill--that we need to get 21 million more Americans smoking to be able to pay for that bill. That doesn't make sense.
How about $200 million for public computer centers at community colleges? Since when is a community college in my State a recipient of Federal largesse? Is that our responsibility? I mean, did we talk with Dell and Hewlett-Packard and say, How do we make you all do better? Is there not a market force that could make that better? Will we actually buy on a true competitive bid? No, because there is nothing that requires competitive bidding in anything in this bill. There is nothing that requires it. It is one of the things President Obama said he was going to mandate at the Federal Government, but there is no competitive bidding in this bill at all.
We have $10 million to inspect canals in urban areas. Well, that will put 10 or 15 people to work. Is that a priority for us right now?
There is $6 billion to turn Federal buildings into green buildings. That is a priority, versus somebody getting a job outside of Washington, a job that actually produces something, that actually increases wealth?
How about $500 million for State and local fire stations? Where do you find in the Constitution us paying for local fire stations within our realm of prerogatives? None of it is competitively bid--not a grant program.
Next is $1.2 billion for youth activities. Who does that employ? What does that mean?
How about $88 million for renovating the public health service building? You know, if we could sell half of the $1.3 trillion worth of properties we have, we could take care of every Federal building requirement and backlog we have.
Then there's $412 million for CDC buildings and property. We spent billions on a new center and headquarters for CDC. Is that a priority? Building another Government building instead of--if we are going to spend $412 million on building buildings, let's build one that will produce something, one that will give us something.
How about $850 million for that most ``efficient'' Amtrak that hasn't made any money since 1976 and continues to have $2 billion or $3 billion a year in subsidies?
Here is one of my favorites: $75 million to construct a new ``security training'' facility for State Department security officers, and we have four other facilities already available to train them. But it is not theirs. They want theirs. By the way, it is going to be in West Virginia. I wonder how that got there. So we are going to build a new training facility that duplicates four others that we already have that could easily do what we need to do. But because we have a stimulus package, we are going to add in oink pork.
How about $200 million in funding for a lease--not buying, but a lease of alternative energy vehicles on military installations? We are going to bail out the States on Medicaid. Total all of the health programs in this, and we are going to transfer $150 billion out of the private sector and we are going to move it to the Federal Government. You talk about backdooring national health care. Henry Waxman has to be smiling big today. He wants a single-payer Government-run health care system. We are going to move another $150 billion to the Federal Government from the private sector.
We are going to eliminate fees on loans from the Small Business Administration. You know what that does? That pushes productive capital to unproductive projects. It is exactly the wrong thing to do.
Then there is $160 million to the Job Corps Program--but not for jobs and not to put more people in the Job Corps but to construct or repair buildings.
We are going to spend $524 million for information technology upgrades that the Appropriations Committee claims will create 388 jobs. If you do the math on that, that is $1.5 million a job. Don't you love the efficiency of Washington thinking?
We are going to create $79 billion in additional money for the States, a ``slush fund,'' to bail out States and provide millions of dollars for education costs. How many of you think that will ever go away? Once the State education programs get $79 billion over 2 years, do you think that will ever go away? The cry and hue of taking our money away--even though it was a stimulus and supposed to be limited, it will never go away. So we will continue putting that forward until our kids have grandkids of their own.
There is about $47 billion for a variety of energy programs that are primarily focused on renewable energy. I am fine with spending that. But we ought to get something for it. There ought to be metrics. There are no metrics. It is pie in the sky, saying we will throw some money at it. Let me conclude by saying we are at a seminal moment in our country. We will either start living within the confines of realism and responsibility or we will blow it and we will create the downfall of the greatest Nation that ever lived. This bill is the start of that downfall. To abandon a market-oriented society and transfer it to a Soviet-style, government-centered, bureaucratic-run and mandated program, that is the thing that will put the stake in the heart of freedom in this country.
I hope the American people know what is in this bill. I am doing everything I can to make sure they know. But more important, I hope somebody is listening who will treat the ``pneumonia'' we are faced with today, which is the housing and mortgage markets. It doesn't matter how much money we spend in this bill. It is doomed to failure unless we fix that problem first. Failing that, we will go down in history as the Congress that undermined the future and vitality of this country. Let it not be so.
Mr. President, I appreciate the indulgence of you and the staff. With that, I yield the floor.