default negotiations. so a rather legitimate reason for them to not be here as i said to them about midnight last night. do your duty and serve us well in the job you're trying to complete across the street. we will otherwise miss you, but a perfectly understandable excuse not to be here today. so in light of that we will try to give you a quick update on some other issues that are currently somewhere in play in this town. joining me today to my right immediately is bill kovacs who's the senior vice president for our environment, technology and regulatory affairs division. to his right is john murphy who's vice president of our international policy division, and to his right is mike eastman who is our executive director and our labor, immigration and

employee benefits division. i can't tell you much more, i don't think, than what you've already read, seen or heard in the papers about the ongoing debt negotiations. i think the one important thing to note is at least the principles that are in the room -- principals that are in the room negotiating all to a person have said the same thing, and the good news is what they are saying is default is an unacceptable outcome. so i continue to believe optimistically with everybody at least saying that that everybody realizes the repercussions of failing to achieve that. and while we'll have fits and starts, at some point we'll have resolution here one way or another and avoid default. having said that, let me start with john murphy because from a congressional perspective the other kind of hot issues or issue, if you will, that's surrounding the debt negotiations and occupying some

attention and time in congress are the pending free trade agreements from south korea to colombia and panama which have been stalled for several years. we're anxious to see them enacted, and the president recently announced that he would be sending them to congress. two weeks after that the president then said, first, however, he was putting congress on notice that they had to enact the expired provisions called trade adjustment assistance. and then two days later asked for an extension and expansion of unemployment comp. following that, the senate minority leader, mitch mcconnell, stated that procedurally he wanted to take the trade adjustment assistance issue back where it originated several decades ago, and that was in the context of trade promotion authority which expired here about a year and a half ago. the current president does not

have. and mitch mcconnell is very interested in reauthorizing trade promotion authority. so interestingly, we have agreement, i think, pretty much everywhere to move forward on the free trade agreements. we have some agreement on moving forward on reauthorizing trade adjustment assistance. we have a lot of disagreement on the process and procedures of just exactly how those trade agreements and trade adjustment assistance, let alone trade adjustment authority will be dealt with, addressed and voted on by both chambers in congress. last week we had mock mark-ups in the senate finance and the house ways and means committee, and i'll stop there and ask john murphy to elaborate at kind of the polar opposite outcome and give us some insight as to his read as to what that may mean

and where we might be end up going forward. john? >> thank you, bruce. you know, as you look at the situation today whether you're a entrepreneur or whether you're an elected official, um, in today's global economy when you stand still, you fall behind. and that's the panorama that our elected leaders are wrestling with today. ten days ago the european union entered into a free trade agreement with korea, and on august 15th canada will enter into one with colombia. in fact, there are a total of more than 297 of these bilateral free trade agreements around the world today, and the united states is a party to just is 1 of them -- to 11 of them covering just 17 countries. the american people, um, see this through, um, a lens that they see trade as often being unfair. and as a matter of fact, they're right. when the united states falls behind in trade and when we don't have these agreements, the result is that our market is wide open.

we're levying tariffs on imported goods that are often zero or 1%. by contrast, when we're selling goods to colombia, it's 15% for manufactured goods. when we sell farm goods to korea, we're paying upwards of 30%. that's a recipe for being shut out of these booming markets. now, as bruce points out, we've made a lot of progress here. there's considerable bipartisan support for moving forward with these trade agreements x if we held -- and if we held a vote on the merits of each one of them, they would pass handily. a lot hinges on what comes out of this trade adjustment assistance deal. dave camp, chairman of the house ways and means committee, and max baucus, chairman of senate finance committee working with the white house struck a deal on a new trade adjustment assistance program that is much more fiscally restrained. um, this is -- we believe it can

be part of a bargain moving forward here. basically, the perspective of the business community is we need to get going now, or we're going to be losing out of these foreign markets, and we believe that some kind of a deal to find a way out of this maze can be struck in the weeks ahead. >> you want to share with the audience the voteout comment, the two different committees on the party line basis? >> it was -- with regard to korea in both of those committees, um, in the senate finance committee, um, every democrat voted in favor of the combined korea and trade adjustment assistance bill. in the house ways and mean committee where it was just the korea agreement without trade adjustment assistance, every republican voted in favor, and every democrat voted against. that shows that there is, indeed, some polarization over this issue right now. nonetheless, we do, we do believe that if a procedural way can be found out of this and you

hear the expressions of support from so many people on both sides of the aisle for the agreement that can be found going forward. >> john, your division produced and released a study a few months ago about what happens if we don't proceed and enact these because of the e.u. and canada proceeding. could you give the audience a glimpse of what that outcome is? >> sure. >> it's a jobs summit. >> right, it is a jobs summit. the chamber conducted what was really a pretty straightforward analysis of what happens while the european union and canada and others move into free trade relationships with countries like korea and colombia while we do nothing. we stand to lose 380,000 jobs in this country. by contrast, there are other analyses including one by the u.s. international trade commission which estimates that the korea agreement alone could create 280,000 jobs here. so we're at a fork in the road here where there's a stark

choice, and a half a million american jobs or more are in the balance. we think that there's a strong case for moving down one of these roads and not the other. >> okay. let me ask mike eastman to start out, if he would, by touching a little bit on the national labor relations board's rather stunning decision where they've decided that the boeing corporation -- despite investing, i guess, a billion dollars -- should not be permitted to open up a new manufacturing facility in south carolina, a right-to-work state. interesting since nearly half the country are right-to-work states. this has shaken the business community, it's shaken some governors and, clearly, shaken corporate america. >> thanks, bruce. the national labor relations board is usually an esoteric government agency that few people have reason to know about. this complaint by the acting general counsel against the

boeing company is the highest profile thing that i can think of the board having done in its existence. here we have an allegation that boeing discriminated against its union workers in washington state by building a new facility in south carolina, um, in order to retaliate against workers for past strikes. the board -- what's truly breath taking is the remedy the board is seeking. the board is seeking to try to force boeing to move all of that production back to washington state, all dreamliners should be made in washington state, and that's thousands of jobs and more than a billion in construction costs so far. so it's really having chilling effects across the world. we've heard from folks in canada and elsewhere that are taking a pause before making decisions about where to invest in this country. and i think it's the best example of overreach by an aggressive agency. >> boeing throughout this has added several thousand jobs back in the state of washington.

>> exactly. this goes to the perverse nature of this discrimination complaint. somehow the government claiming boeing has scrip stated -- discriminated against workers in washington by adding 2,000 jobs there. >> so this esoteric agency as you refer to it appears to be going rogue because they appear to be simultaneously issuing another decision restricting the ability of employers to speak to their employees, otherwise known as the persuader rule. would you touch on this one and explain to the audience exactly what that means? >> sure. so boeing is the tip of the iceberg. persuader and some other things are the rest of the iceberg. and persuader is actually a piece from the labor department which is seeking to use disclosure regulations to bully employers to not exercise their free speech rights during organizing campaigns. in other words, today employers have free speech rights, they have the right to communicate

with their employees about a union and their opinion on what having a unionized work force would mean. the labor department's trying to use disclosure regulations to make it harder for employers to engage it and find competent lawyers and counsel during an organizing drive. also at the national labor relations board in a one-two punch, we have a new proposal for much quicker elections. currently, union elections take place in 38 days. the national labor relations has proposed changes that could make this time period as short as 10-15 days. this is, again, targeting that employer free speech provision. doesn't eliminate it, but it makes it much more difficult for employers to get their message out in response to a union campaign. >> mike, what does congress think about some of these proposals that are kind of bubbling up from nlrb? can we expect to see some congressional action that the employer community can get behind? >> we have already seen some congressional action. congress has begun exercising

its oversight authority, especially in the house of rerepresentatives. there was a hearing just last week in the house education and work force committee on this new nlrb proposal. we will soon, i think, see consideration of different legislative vehicles to try to get at this in the house, maybe through the appropriations process such as limiting funds for some of these initiatives, perhaps through direct legislation. so there is an opportunity here for people in the business community and others interested to weigh in with your legislators, stop the out of control nlrb and the department of labor be and exercise their constitutional oversight responsibilities. >> mike, while there reportedly are about 100 proposed rule makings, we understand, underneath this esoteric agency as you refer to it, the nlrb, that are underway, one that concerns all business but particularly as it relates to small business in the wage where

they are reportedly looking at changing titles as to who's a supervisor, who qualifies for overtime. why don't you speak to that one, at least as best you know it. >> sure. the labor department currently has a proposal -- it's not yet published as a proposed rule, but it's an idea that they have -- of trying to force employers to communicate and hand a written analysis to every employee that's not entitled to overtime. why are they not entitled to overtime? why are they an independent contractor? and this is going to be an extremely difficult thing for employers to comply with. the fair labor standards act and its regulations are almost incomprehensible to people not totally consumed by the flsa. this law was written in the '30s, the regulations have been amended but only marginally over the years, and even the best-intentioned employer is going to make mistakes. and handing these detailed

compensation analyses over to employees will be a recipe for frivolous litigation where there need not be any. >> and, john, before we leave trade here entirely, would you take a couple minutes? because the rumor is that the generalized system of preferences both of which expire are going to be connected somehow going forward to these other three agreements. i think, a, it'd be interesting for people to know what they do, why they're important and what we think is going to happen in terms of these free trade agreements with them. >> the well, the gsp, the generalized system of preferences and andean trade preference act give duty-free access to the u.s. market for specific products. the gsp covers more than 100 cubs from around the world -- countries from around the world, and generally these are products that are not manufactured in the united states, or their raw

materials. and they've been uncontroversial, and they've been around for many years. the chamber did a study a number of years ago and found more than 70,000 jobs depend on gsp. these are manufacturing jobs where they need to have these low-cost inputs, for instance. gsp and atpa expired, in one case, december 31st, and in the indian case in february. -- andean case in february. so manufacturers are forced to pay these higher costs for their inputs, and this has been a problem for an array of industries. both of them have been added to the legislation for the colombia trade agreement, and that hasn't actually been controversial in the same way that the trade adjustment assistance has been. so if we do find a way forward for the trade agreements, and these things are all pretty much on the same agenda here in the mind of the congress, um, then we should see those renewed as well. >> okay. thank you, john.

bill, tom donohue, the chamber's president, spoke earlier today and made a number of comments about the need for regulatory reform and the challenges of building anything in this country today due to the restraints of regulatory agencies. he recommended permit streamlining and said that if we did so, we'd position the country and have a much better solution going forward in terms of job creation and insuring competitiveness for the country since you could put projects actually under construction. give everybody an example, if you will, of a stalled project due to permitting and what the impact is. and be then give us an example of where we've overcome stalled projects such as in the stimulus and the highway space a little bit so they have some context on either side. >> well, certainly, tom is hitting the nail right on the head. if you want to see where jobs can be created, the fact that

you can't build something if you don't get a permit to build. and one of the things that the chamber did last year is we wanted to find out how many stalled energy projects there were around the country, and what was the value of those projects. and in march of 2010 there were 351 energy projects that could not get permits. and you may say, well, so what? there are thousands of projects going. that may or may not be true. but out of these 351, the private sector was willing to invest $577 billion into those projects, and those projects during the construction period would have created about $1.1 trillion in new gdp. it would have created 1.9 million jobs per year for the seven years of construction. going beyond the construction period after the projects were finished, they were going to create about another 791,000 jobs. each one of those 351 projects was stalled, generally, because of environmental litigation.

and when you have within the environmental code about 40,000 pages of environmental regulations, the fact that you would miss one of those regulations means you couldn't get a permit be. the fact that somebody is looking at all 40,000 pages to lodge that complaint against you is what's really going on in this country. now, in terms of how we would look at solutions, there have been solutions, and they've worked. in 2006 in the highway construction bill, one of the things they did is they did a permit streamlining provision which required two very simple things. the first was to have the unique concept of a lead agency, someone who's responsible for the project. imagine, a federal government agency that's responsible to get a project built. just that simple provision along with requiring that litigation against the project be brought in six months instead of six years actually cut the time for when that project could be constructed and approved in half. it went from about 73 months to

36. another example which is really quite remarkable, in the stimulus law that was passed in 2008 we all heard the term, well, shovel-ready projects. and now some people want to laugh and say, well, there weren't so many shovel-ready projects as we thought. well, the chamber at that point in time argued that there were no shovel-ready projects. anything that was shovel ready has already been done, and we worked with senator barrasso and, eventually, actually senator boxer and got a provision in the stimulus which said that when you're looking at how you're going to implement the environmental impact statements, you have to implement them in the most ec we dishes manner possible -- expeditious manner possible be. meaning if it doesn't have a problem, you don't go through a full-blown environmental impact provision. no one had any idea how many times that provision was going to be used.

but in the end under the administration's own numbers, that was used for 180,000 projects. out of the 210,000 projects which gives you an idea how stuck it is. and then finally, to your last question what are some of the things you could do, the president could wake up tomorrow, do an executive order requiring one agency to be the lead agency and to coordinate the environmental impact statements and could start some form of an office where you begin to really track the permits and make sure that the agencies are moving them through the system in time rather than allowing them to linger for literally decades. >> bill, the fcc recently took some steps in this space with its shot clock. >> there's another example where the fcc, um, the nation's moving forward with broadband for everyone. and broadband's really important because it's the one thing that gives anyone anywhere the chance to market their goods anywhere in the world.

but one of the things that's needed for broadband is a cell tower, and at one point in time several years ago there were over 700 cell towers being litigated so that they couldn't get their permits. and what the fcc did is it set up a shot clock where if they can't get their permit in 150 days, the applicant for the permit is then authorized to go to court against the local municipality so that they can get the program. again, each one of these has moved, has moved the time from when you can get a permit from years, from decades at times down to a few years. so it's really important that you can do permit streamlining, but somebody has to be responsible and do it. >> bill, take a couple of minutes and explain to the audience what the energy savings performance contract authorization legislation is. there's a pot of money there. what it would do, why it's important and bring it home in terms of the jobs summit. >> that's a, that's really a

great question. thank you. the energy savings performance contract is, in this day and age, it's an $80 billion authorization that costs the federal government nothing. under the energy independence and security act of 2007, congress authorized, expanded to $80 billion a program which all the government has to do is accept bids from the private sector that won't cost the government anything. so the private sector finds a federal building that's in need of being energy efficient which is the policy of the government to make it energy efficient, and they can actually bid to make that building energy efficient. they put in the air-conditioning, the heating, the cooling, new windows, insulation, whatever it is. and the private sector actually finances the project. and they then, the private sector, gives a guarantee to the government that their energy use will be less and, therefore, the private sector companies are

then paid over time from the energy savings. in essence, they go in with no money to the federal government, and they actually promote the project. what happens what happened, the program was moving forward, it was becoming very aggressive, and then eventually when the stimulus came in, the federal agencies were allowed to use grants to do the same work. so the agency started using grants because they were used to doing grants as opposed to taking bids from the private sector. so if it's therein 80 billion -- $80 billion authorization, it can all be done immediately, it creates tens of thousands of jobs, and it's not being used. there's an example of where the president could issue an executive order tomorrow ordering that the statute, which is the law of the land, be utilized on a priority basis, and it doesn't require any appropriations. >> bill, canada is our country's number one source of imported oil. third largest reserves in the

world. speak a little bit about the keystone pipeline with respect to permitting and jobs, if you would, since we're going to, obviously, need their energy sources. >> here's another example of jobs just literally sitting there. the keystone pipeline would go from the oil fields up in be calgary to several points in the united states, one in the midwest and be then one down on the gulf. it would stretch several thousand miles, it's billions of dollars of construction work, would create tens of thousands of jobs, and the only thing it needs is approval from the state department for some reason, we can't seem to be able to work out these kinds of approvals. this is, but, i mean, if you go into the energy field and you go into what's not being approved, i mean, look, everybody's as familiar with the fact that we haven't been able to get the permits. but we have roughly in royalties, just the royalties from the oil that would be produced in the united states a little over a trillion dollars. and then if you start taking the

tens of thousands, billions of dollars it's going to take to construct the pipeline with the oil that we need, you've got jobs sitting there. so you take projects that can't get permits, energy-safing performance contracts where you have buildings that can't be rehabilitated even though it's the goal of the federal government, and then you take the fact that you have private sector companies wanting to build a several thousand mile pipeline that's going to give us more oil so that we don't have to depend as much on oil from the middle east, and you can't get any of these things started. and this seems to be what the problem is, but it's all regulatory. every one of these projects is being held up because they can't figure out how to get the regulatory system working. >> since the projections from the energy information administration are weaver going to need 30% more electricity here in the united states in the next quarter century, tell us everything congress and the administration's doing to insure we have the availability, the supply and the lines that transmit it and the energy

infrastructure projects capable of producing it and getting it to market. >> i think one of the things that the project showed, and that was all electricity, was that it's just as hard to do a transmission line as it is to do a coal-fired power plant. in fact, two things are really worth noting. one is that there are actually more projects whose permits are at risk than renewable energy projects that are coal-fired power plants. it's about 140 to 111, which is remarkable. second, there are projects that are also being held up, we're beginning to close our coal-fired power plant in some estimates we could lose in the next several years as much as 20% of that capacity. so we're doing relatively very little, but again, it comes back to the fact that these are things that are all within the control of the regulatory system, and it's got -- at some point in time you need someone

who's responsible for moving these projects forward. >> thank you, bill. i'm going to close this out by pointing out the obvious. bill miller unveiled the harris interactive survey of small and medium-sized businesses across the country where uncertainty seems to be the theme. and we have uncertainty in major areas of employers' concerns between opportunities to compete, opportunities to fuel or power their businesses and opportunities to manage with some degree of flexibility. and until that paralysis is resolved, things are going to stay as is. i would, finally, end by pointing out i think the biggest element and biggest wet blanket of uncertainty are these ongoing deficit default negotiations. i think until that gets resolved and all of us can move forward, the antiness of the -- antsiness of the financial markets here and abroad is going to continue.

with that, i understand you all have a 15-minute break -- no, we're going to go right into -- don't leave your seats. we will leave the stage for your final keynote speaker. thank you very much. [applause] >> consumer financial production bureau adviser elizabeth warren testified at an oversight hear anything the may. she'll be back on capitol hill thursday. members will ask her about the bureau's plans for next week when it begins supervising the nation's largest banks. you can watch the hearing live online at c-span.org. ms. warren testified before a house oversight subcommittee in may on home mortgage foreclosures. >> we have seen very little accountability among the largest financial services providers and among the largely-unregulated financial services providers. both before the crash of 2008 and after the crash of 2008. and i just want to point out

that has been really hard on american families. it's been hard on them directly when they've gotten their feet tangled in credit card agreements and payday loans that were deceptive. it's been hard on them when they thought they were doing sensible things on mortgage cans only to learn that they were going to lose their homes. but it's also been hard on others in the economy, people who did nothing to get involved with financial services but who lost their jobs. people who see the companies, the small businesses they're working for, their markets have dried up. and it has also been hard on community banks, on credit unions who work so hard day in and day out to work with their customers to be the relationship lenders, to be there over the long haul and who are getting crushed in a financial turn around that was not their fault. >> you can watch elizabeth warren today on capitol hill live online at c-span.org. >> the senate is coming back in

session with general speeches for an hour before resuming consideration of $142 billion in veterans affairs and military construction spending. the top republican on the budget committee, jeff sessions, has said that today he'll object to considering spending bills until there is an agreement on the budget. and there'll be events throughout the day about the ongoing debt talks including senate democrats meeting with treasury secretary tim geithner and congressional negotiators and the president sitting down at 4:15 p.m. eastern. we'll bring you information and events throughout the day from the c-span networks. now here's the senate on c-span2. the presiding officer: the senate will come to order. it is my honor and privilege to announce today's opening prayer will be offered by the

right reverend geralyn wolf from the episcopal diocese of rhode island. the chaplain: let us pray. almighty god, shepherd of our souls, the global community listens with eager expectation to the deliberations and decisions of the senate of these united states. with your holy wisdom, enter the hearts of those who serve in this august chamber, assure them of your constant love and presence as they address challenges that occasion creative solutions. let your holy spirit come and breathe upon their anxieties, diminishing their power and releasing a freshness of vision that secures the common good and honors the generations to follow.

may their pursuit of peace, security and happiness extend across nations and peoples, moving beyond political allegiances to a proclamation of hope for all humanity. bless us, dear lord, and make us a blessing to others. amen. the presiding officer: please join me in reciting the pledge of allegiance to the flag. i pledge allegiance to the flag of the united states of america, and to the republic for which it stands, one nation under god, indivisible, with liberty and justice for all. the presiding officer: the clerk will read a communication

to the senate. the clerk: washington, d.c., july 14, 2011. to the senate: under the provisions of rule 1, paragraph 3, of the standing rules of the senate, i hereby appoint the honorable sheldon whitehouse, a senator from the state of rhode island, to perform the duties of the chair. signed: daniel k. inouye, president pro tempore. mr. whitehouse: mr. president? the presiding officer: the senator from rhode island is recognized. mr. whitehouse: mr. president, i'm delighted to be here with my senior colleague, senator jack reed, to welcome geralyn wolf, the bishop of the episcopal archdiocese of rhode island who shared with us the prayer this morning. i want to share with my colleagues what a wonderful addition she is to our rhode island community.

she has served in kentucky and in pennsylvania, but she has been in rhode island for many years and has been devoted to our community and particularly to the needy in our community to the point where at one point she spent 30 days living as a homeless person in order to see firsthand what the resources were to support people when they faced the burden and the sorrow of homelessness and to inform her actions as the bishop of our diocese. she is keenly interested in the sudan and works with priests who are helping to bring christianity to those areas as the vehicle for peace amidst some of the worst and most horrific violence on the face of our planet. it gives senator reed and myself both great pride that she has come down to washington today to open the senate, and it is my hope and i'm sure senator reed's

as well that during the course of our deliberations today we will be informed by the hopes and the sentiments and the confidence and the blessings that she expressed. thank you. mr. reed: mr. president. the presiding officer: the senator from rhode island is recognized. mr. reed: mr. president, i join my colleague, senator whitehouse, in welcoming bishop wolf to the senate today, and i commend senator whitehouse for his invitation. bishop wolf is not only a pastoral leader in our community, she is also a great community leader. she not only preaches the gospel, she lives the gospel. as senator whitehouse indicated, she went on the streets of providence, the mean streets -- and there are mean streets in every town in this country -- to experience firsthand the travails and the troubles of people just trying to get by. that experience informed her ministry and informed her public positions, and we thank her for that. and she has a global vision as well as a vision in rhode island, and that global vision

is a world inspired by american actions that is peaceful and progressive and provides opportunity for all. so on behalf of the people of rhode island, we want to thank her for her service, and i want to thank her especially for the grace she has brought to us today and has brought to the state of rhode island in all of her service. thank you. the presiding officer: the majority leader is recognized. mr. reid: mr. president, following any leader remarks, the senate will be in a period of morning business for one hour. republicans will control the first half, the majority will control the final half. following morning business, the senate will resume the motion to proceed to h.r. 2055, the military construction, veterans affairs appropriations bill postcloture. we hope to yield back time and begin consideration of the bill some time today. i ask unanimous consent that michael lynch, united states army aviation officer who is currently serving as my defense legislative fellow this year be

granted floor privileges for the duration of h.r. 2055. the presiding officer: without objection. mr. reid: mr. president, there are some in the republican party who will not listen to the truth no matter who speaks it. this is my opinion. if we allow this nation for the first time in its history to default on our national obligations, it will not only be a black mark on our reputation but also a massive financial disaster will sweep the world in a global depression. it is not my opinion alone. i have come to that belief by listening to the most respected voices in the business community. default, they say, and i quote, is a risk our country must not take. they not only -- they are not the only ones who believe that's true. the most respected bankers have said -- j.p. morgan chase, says default would be catastrophic. investors have said it. bill gross, one of the world's

largest mutual fund managers sent us a warning yesterday. he said -- quote -- "there should be no question at all the debt ceiling should be raised and not be held hostage by budget negotiations. don't mess with the debt ceiling, washington." that's what bill gross said. economists have also said it. ben bernanke appointed by president bush as chairman of the federal reserve has said default would be a major crisis that would send shockwaves through the world financial markets. and yesterday, he said failure to avert default would mean huge financial calamity. even other republicans have said it. this is what speaker boehner said in april. "not raising the debt limit would be serious, very serious. implications for the worldwide economy and jobs here in america." end of quote. and perhaps most telling of all, all three rating agencies have already sent warning shots across our bow. last night, moody cautioned us that america's aaa rating, the

aaa rating, was already under review for downgrade. never in the history of the country has that happened. we're being reviewed to downgrade our debt rating. we have just three weeks left until we miss our first payment. they cited the -- quote -- "rising possibility that we will default." they said that we will lose this crucial rating which saves every american money every day even before we miss a payment. standard and poor's has told congress and business leaders that even if the united states keeps paying creditors but delays payments such as social security or veterans' benefits, it would cut our rating. and fitch has said default would -- quote -- "threaten the financial stability of the united states and the world as a whole." close quotes. so why are some republicans in congress still saying that a first-ever default on our nation's financial obligations would be no big deal?

when every financial expert, investor, business leader and banker in the country and even every reasonable member of your own political party is telling you the consequences of default would be catastrophic, it's time to start listening. why? because default won't just roil the financial markets, pushing interest rates higher and tank the stock markets, it will affect every american's wallet as well. there are a few things that will happen. social security checks and veterans' benefits and paychecks to our troops would stop. some of the most vulnerable americans would be placed at risk. our promise to the men and women who would protect this nation so bravely and those who protect it today would be broken. we would not be able to make payments to our military. payments on our national debt would stop. american investments in retirement accounts would be decimated. millions of americans could lose their jobs. interest rates would rise, not only for the government but for ordinary americans as well. those americans will pay more for their mortgages, they will pay more to use a credit card or

buy a car or finance a university education. they will even pay more for their electric bills, groceries and gas. a spike in interest rates and the damage to the united states dollar alone would cost the average american family more than $1,500 immediately. it would be the most serious financial crisis the country has ever faced. it would come at a time when our economy can least afford it. and in the long run, it would wind up costing the government not millions, not billions, trillions of dollars. a fact republicans shouting about the debt failed to mention. for every 1% increase in interest rates, it will cost our nation 1.3 -- again, not million, not billions, but trillions. for every 1% increase in interest rates, it will cost this nation $1.3 trillion. there is so much at stake. even speak boehner and minority leader mcconnell seem to understand the seriousness of this situation. they are willing to negotiate in good faith which i appreciate,

and the country appreciates. meanwhile, house majority leader eric cantor has shown he shouldn't be at the table and republicans agree he shouldn't be at the table. one republican told "politico" last night "he lost a lot of credibility when he walked away from the table. it was childish." end quote. that's what all about, mr. president? we had negotiations going here in a room, s. 219, a short jog from here, and he has walked out on the meetings with the vice president of the united states. it was childish. another republican said cantor is putting himself first. he said this -- quote -- "he is all about eric." end of quote. the time for personal gain and political posturing are over. it's time to put our economy and our country first. the risks we face are simply too great. we don't need to take my word for it.

more than 300 respected business leaders wret to congress night before last to make it clear how serious this crisis really is. quote again, "a great nation, like a great company, has to be relied upon to pay its debts when they become due." they further said this is main street, not wall street. this is a main street issue, not a wall street issue. we're listening. it's time for the irresponsible voices in the republican party that continue to deny the truth of this crisis to listen as well. i note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call: a senator: mr. president. i will wait a minute, mr. president.

mr. mcconnell: mr. president. the presiding officer: the leader is recognized. mr. mcconnell: i apologize to the senator from tennessee. i hope i haven't inconvenienced

him. my remarks are not lengthy. mr. president, over the past few days -- the presiding officer: the senate is currently in a quorum call. mr. mcconnell: i suggest the quorum be dispensed with. the presiding officer: without objection. mr. mcconnell: over the last few days, a lot of people have taken it upon themselves to offer republicans in congress and me in particular their advice on the debt limit, and i have listened to all of it very carefully. i appreciate how frustrating it is for people to know that despite all we know about the state of our economy, despite all the warnings about our deficit and debt, that we can't do something about it. i share that frustration. no one has spent more time cajoling and persuading this white house of the need to do something big. i was truly hopeful that the president could be persuaded to view the upcoming debt limit vote as an opportunity to cut washington spending and the debt

that has ballooned since he took office, and to preserve entitlements at the same time. but in the end, he just wasn't interested in doing something of that magnitude that would pass. really gave us three bad choices: higher taxes, smoke and mirrors, or default. and we refuse to accept any of them. republicans not be reduced to being the tax collectors for the obama economy. we won't be seduced into calling a bad deal a good deal. and we won't let the white house fool around with the full faith and credit of the united states. if the president wants to threaten seniors or veterans or rattle the world economy by pretending he can't pay our bills, he of course can do that. but he is not going to implicate republicans in these efforts. that's why i propose as a last resort a plan that would force the white house to really show its hand. if the president would rather default than cut back on the size and scope of government,

let him explain that. if he'd rather preserve his vision of washington that -- rather preserve his vision of washington than protect entitlements, let him explain that. if he and the democratic senate would rather borrow and spend us into oblivion, they can certainly do that. but don't expect anymore cover from republicans on it than you got on health care. none. the american people deserve to know what their elected representatives stand for in this debate. none of these proposals that have been presented up to now would do that. if democrats won't agree to the reforms we need, then we should at least show the public where we stand. what they wanted was a deal that purported to lower the debt from $26 trillion to $24 trillion over ten years, then have us give it thumbs up and call it a bipartisan victory for fiscal discipline. well, we weren't about to call this a good deal anymore than we

were about i to call the health care reform real reform. we refuse to let the dead thrien get us to cave. it's time to change this debate altogether. it's trim to make it clear at that to the american people where the two parties standed in this debate. either you're with the president and his vision of a government that continues to live beyond its means or you're with those of us who believe washington needs some strong medicine. either you want to simply borrow and spend our nation into oblivion or you want to get our fiscal house in order. the single-most effective way to do that is with a balanced budget amendment. if the president and democrats in congress won't agree to cut back, let's force them. let's pass a constitutional amendment that actually requires congress to live within its means. it's time for the american people to contact lawmakers on the democratic side and simply demand it. republicans are unanimous in their support for a balanced

budget amendment. we need 20 democrats to join us. it's an uphill climb, but if the american people speak out, we can get it done. if the president won't agree to it, it is time we go around him and directly to the american people. let's keep the pressure on. let's show the administration where the public is on this issue, and let's get our fiscal house in order. mr. president, i yield the floor. the presiding officer: under the previous order, the leadership time is reserved. under the previous order, the senate will be in a period of morning business for one hour with senators permitted to speak therein for up to ten minutes each, with the time equally divided and controlled between the two leaders or their designees, with the republicans controlling the first half and the majority controlling the final half. mr. corker: mr. president? the presiding officer: the senator from tennessee is recognized. mr. corker: mr. president, i realize that a scheme has been concocted on the debt ceiling that allows democrats to go into this next election continuing to

ensure that spending to many of their constituents is at levels that please them; therefore allow them to run successfully in 2012, and that scheme also allows republicans to run in 2012 with spending being the issue. so i think we all understand that, look, the debt ceiling is going to be increased, and it's going to be increased in such a way that both sides of the aisle have the ability to campaign against the other respective to their bases. but the fact of the matter is, mr. president, our great nation is in decline because of the elected leaders in washington. our great nation is in decline because of this body and the way it's acting. the house of representatives and the way it's acting, and the white house and the way that it

is acting. so this body today, as we meet and go into a spending bill, is helping our great nation go into decline. and let me explain why. maybe the debt ceiling was the wrong place to pick a fight, as it related to trying to get our country's house in order. maybe that was the wrong place to do it. the reason it was chosen is because this body hasn't passed a budget in 806-807 days. and i credit both sides for that. but the fact is that the united states senate hasn't passed a budget in over 806 days. i had a dinner this week, monday night -- i had dinner with six democrats and five republicans. i won't mention their names, to impugn them in any way. but all of them expressed tremendous frustration with the way this body is being run, basically most senators in this body are nothing but two-bit

pawns -- two-bit pawns -- as a political fight is under way, basically, to lay out the groundwork, if you will, for a 2012 election. i mean, that's what's really happening now in this body, and the i think we all know that. and yet yesterday we voted to move to a spending bill where we in essence are acting as accomplices, we're a come polices to this. the -- we're accomplices to this. the presiding officer and myself -- i mean, anybody who votes to go a spending bill without forcing the united states senate to come to terms with a budget is in essence an accomplice to allowing the shenanigans that are taking place right now to continue. we are allowing this great nation to go into decline by not forcing us to make those tough decisions. the reason the debt ceiling was chosen is because there hasn't

been any other mechanism to cause us to sit down and make those tough choices as it relates to spending here in our country. because we were unwilling to do that, many people lined up -- as a matter of fact, democrats and republicans -- there is a gang of six that had been working -- three republicans and three democrats. it is my sense that they, too, had planned to use the debt ceiling vote as a place to try to cause us to come together around something that might be sensible for our country. we haven't seen the details of that. i hope we'll see that soon. but my pin point is that both ss of the aisle actually had focused on this debt ceiling vote -- or many people on both sides of the aisle, to cause us to have the fiscal discipline we need to have in this country. obviously with this new scheme that's not going to havment i think we all know the debt

ceiling is going to be raised. blame will be assessed to either side. both sides will use that in the 2012 election, and then we'll move on to another cycle where probably we will continue to be irresponsible. but the fact is that this body today, by moving to a spending bill without a budget, everyone who agrees to do that -- everythineverysingle person whoe to a spending bill, no matter what level it's funding the things it's funding, everyone is an accomplice in causing this great nation to decline. every single one of us. so i would urge people in this body who would like to see us actually do our work, cause us to function the way the founding fathers had created this body, calls us to function in a way that no longer allows our

country to be in decline. i would urge everybody in this body to not agree to go to this spending bill and to say that we will not spend anymore of the united states resources, taxpayers' resources, without first agreeing to those tough decisions. i love seeing some of the masters of the universe on some of these financial programs in the morning. i heard one of them this morning on a particular program that sometimes i turn on to see what the markets are doing in reaction to the ridiculous, undisciplined nature of this body. i heard one of them say that you know, the debt ceil something no place -- most countries don't even vote hon a debt ceiling. what they do is they vote on budgets. you know, in this country, we don't even vote on budgets, and of course we figured out a way to really not make any tough decision on the debt ceiling vote either. and i understand what's getting ready to happen.

but, again, to all those folks that aren't head of this body, that aren't in leadership, who in the bathrooms or in the halls or at dinner or at lunch complain about the fact that this place is dysfunctional, complain about the fact that they really don't have the ability to be involved in causing us to function in the way that we should, every single one of you, in my opinion, that votes to go to a spending bill today or end debate on a spending bill -- in essence, alloallow us to pass a spendingl -- is an accomplice to allow this great nation to go into decline. we make a big deal out of some items around here, but we don't make a big deal when it comes to something that we can actually

effect and cause us, as a body, to do the things that we need to do. so, mr. president -- or, presiding officer, look, i'm very disappointed in the united states senate. i'm very disappointed in the white house. i'm very disappointed in all of us. i'm very disappointed in the childish behavior that this body has continued to exude over the course of this entire year. i'm very disappointed that we would even consider going on with spending taxpayer resources and not sitting down and making tough decisions. i'm very disappointed, candidly, that both sides of the aisle only want it their way. i don't think this great country was created the way that it was so that one side of the aisle got it exactly the way they

wanted it. i think this body was created to be -- quote -- "the greatest deliberative body in the country" and yet we don't do that. we don't act that way. we don't debate tough issues. we hide, all of us -- we hide and we let our leadership concoct ways to keep us from doing the tough things that we need to do. the fact that we can't even have a budget on this floor to come out of a committee when -- when obviously there is a majority. and i'm not even pointing fingers at the other sievmentd i think both sides are equally problematic in this because both sides, it's evident to me, are going to allow us to go to a spingdzing bill today without a budget -- to a spending bill today without a budget. but the fact that we can't even bring a budget to the floor when committees are stacked in such a matter that one side does have the majority, to me, is an incredible thing. so, you know, this united states

senate, if we move to a spending bill today without a budget, if we continue to do the things that we do here just without worrying about the fundamentals of what it takes for this country to be great, this body today will move one step closer, one step -- not closer, one step further down the path of causing this great nation to go in decline, to keep us from making tough decisions, to allow committee heads or subcommittee heads in appropriations to be able to bring forth their fruit, if you will, the things that they would like to spend money on -- by the way, i support mu much, probably support everything that's in this bill. i'm not sure. it supports veterans, it supports military construction. but the fact is that actually the very people that this benefit, the people who have been vernltsed in the past, the people -- the people who have

been veteranned in the past, the people who have give of themselves, some of them loved ones, they probably are impair embarrassed by the united states senate, too. even though they'd like it receive the benefits at some point down the road when these benefits come to fruition in this next fiscal year, they'd like to receive those, they probably would prefer first that all of us in this body do our jobs. that we quit acting like the children we've been acting like this entire year. that we quit calculating what we're going to do around the 2012 elections. that we quit hiding behind our leadership and allowing them to go down and negotiate grand bargains in private, that we quit -- quit again hiding from tough decisions. so, mr. president, i hope today that others will join with me and that we will not end debate on this bill. let me put it this way.

if we don't, if we don't do that, in other words, if we proceed with spending in this bill, i sure hope that all those who vote to do so will stop talking in private about how embarrassed they are about this united states senate, will stop talking in private about how they feel like little pawns in a political game, will stop talking in private about how they would like to see this body start acting in the fashion that it should act. we haven't done any real business this year. we all know it. we haven't done any real business this year because we haven't wanted to take on those tough issues. i'm embarrassed by that personally. i'm embarrassed about the way this united states senate has been conducting its business this year.

mr. president, i'm not going to vote for a spending bill until we pass a budget. if we had passed a budget and had the tough debates about revenues and expenditures, we wouldn't be in this no-win situation we're in right now as it relates to the debt ceiling. and we all know that, but we want to hide behind that. with that, mr. president, i see the lack of a quorum. the presiding officer: the clerk will call the roll. quorum call:

a senator: mr. president? the presiding officer: the senator from south dakota is recognized. mr. thune: is the senate in a quorum call? the presiding officer: the senate is. mr. thune: i would ask the quorum call be dispensed with. the presiding officer: without objection. mr. thune: mr. president, as we all know, in the next few weeks, we'll be faced with a decision about what to do with the debt limit. of course, there has been a lot of discussion around here as

well as between the white house and the congressional leadership about how best to resolve this issue, and i think what it really comes down to is a question about what's the best way to -- to resolve the debt crisis. i think it creates a great debate, philosophical debate about how do you -- do we need to grow government, do we need to shrink government, and really, mr. president, i would argue that's kind of the defining line in this debate is whether or not you believe that the best way out of the debt crisis is to expand and grow government or whether you think like i do that we ought to make government smaller, not larger, if we're trying to figure out how to get out of this particular circumstance that we find ourselves in right now. we have a $14 trillion debt. we have to increase the borrowing authority to get to the 2012 election by about about $2.4 trillion. that is the rate at which our debt is growing. and i have said on the floor

before that if you look at just the daily borrowing that our federal government does, it exceeds the entire budget of my state of south dakota for a whole year. so we will borrow more in the next 24 hours here in washington, d.c., about about $4 billion, than the state of south dakota spends in an entire year. that is the dimension of the problem that we are facing. now, many of us believe that the best thing that we could do in order to get ourselves on a better fiscal track is to pass a balanced budget amendment to the constitution, and frankly i hope that we will have an opportunity to vote on just that sometime in this next week or the following week. but most states around the country, including my state of south dakota, have a balanced budget amendment in their constitution, so it requires them year in and year out to get their books balanced. they can't continue to spend like there is no tomorrow. they can't spend money they don't have, they live within their means. that's what most americans have to do. that's what american businesses

and families have to do. it certainly makes sense, i think, that we ought to be doing that here at the federal level. so i would argue to my colleagues that if we look at the short-term issue, which is the debt limit both that we have to have, we have to figure out how are we best going to deal with that in the near term, but what are we going to do in the long term to put our country on a more sustainable fiscal footing? and i would argue that putting an imposed discipline on congress like an amendment to the constitution that would require us year in and year out to balance our budget just makes sense. it's practical, it makes economic sense, and it certainly is discipline that has been lacking here in washington, d.c., for some time. and if you look at the states that have made hard decisions -- mine is a good example of that. they had to cut spending this year significantly to balance their budget, but at least they are doing that. they are making those hard choices and hard decisions, and that's something that we have been putting off here for way too long. and i would point out, too, to my colleagues here that the --

as we talk about how to get the country back on the right fiscal track, you do have to start setting priorities, but we're not doing that. we haven't had a budget here in now 806 days. it has been 806 days since the democrat majority here in the senate has allowed us to have a vote on a budget. now, many of us believe that in order to determine how you're going to spend $3.7 trillion of america's hard-earned money, you ought to have some priorities. you ought to at least put a pathway out there about how you're going to go about spending those dollars, and in setting priorities for the country. well, we're not doing that because we haven't passed a budget in 806 days. that is a fundamental responsibility that we have as leaders, the people of this country elect us to do that and we're not doing it. i think that is creating uncertainty. i think it is creating instability out there around the country. i met with some business owners

this morning who say that in their particular industry, there are people who want to invest, they want to create jobs, they want to make capital investments, but they are long-term investments, and they don't know what's happening here. they don't know what the policies coming out of washington are going to be with regard to taxes, spending, regulations, all those sorts of things. there is an enormous amount of uncertainty. and there was a survey that was done just recently by the united states chamber of commerce in which they asked small businesses about their future hiring plans. 64% of the small businesses who responded to that survey said they were not going to add to their payrolls this year. they weren't going to hire this year. another 12% said that they were actually going to cut jobs. why? half of the people who responded to the survey said economic uncertainty. they just flat don't know what washington is going to do next. and you can't have that kind of uncertainty. what the markets want, what business wants, what investors want is they want to know what the rules are going to be, they

want some certainty about what's going to happen next. the kind of uncertainty we're creating, mr. president, reaches beyond our shores. i think if you look at what's happening in europe today, they are facing a debt crisis in many of those countries, and what are the economic impacts of that? well, if you look at the interest rates in the euro zone, the three-year government bond interest rates are 19.4% for portugal, 28.9% for greece and 12.9% for ireland. that is our future if we don't get our fiscal house in order. well, what does that mean? that means that not just does the federal government have to pay more to borrow money, pay more in higher interest costs, it also means that those interest costs -- because all interest rates in this country, whether it's for an auto loan or home loan or student, college loan, they all track with the treasury borrowing rates, those rates go up. that has profound implications

for our economy. that means that people across this country are going to pay much higher interest rates. small businesses are going to pay higher interest rates to borrow money. those are real-world impacts if we don't make the right kinds of decisions here to get this spending and this borrowing under control. so if you want to see our future, look at some of the european countries. look at the impact this is having on interest rates and on their economies. that is something that our economy could not withstand. we're already facing 9.2% unemployment. we have a need to get people back to work. what we need now is not more expanded government and more uncertainty about what washington, d.c., is going to do, but we need stability, we need certainty, we need the decisions here to have a favorable impact on the private marketplace and create an inducement to hire people as opposed to discouraging it, which is what we are -- what we are seeing today. now, mr. president, i have argued down here on many

occasions that this -- this debt is really strangling our economy because it's crowding out private investment. any time the government is out there borrowing money, it means there is less capital out there for private businesses to have access to. i think that the more fundamental issue in this whole debate, however -- and i mentioned this yesterday in some remarks on the floor -- is really the size and scope of government and whether or not we want to see an expanded, bigger, larger government or whether we ought to try and work our way out of this debt crisis by actually reducing the size of our government. and i pointed out that in the past couple of years alone, we have seen government expand dramatically. in fact, nondefense discretionary spending in the last two years has grown by 24%. the debt has grown by 35% in just the time that this president has been in office. and the amount that we spend on

our federal government as a percentage of our entire economy is growing dramatically as well. the 40-year historical average is 20.6%. that's what we historically for the past 40 years have spent on the federal government as a percentage of our entire economic output. you go back to the year 1800, hard to believe this, it was 2%. that's what we spent on the federal government as a percentage of our entire economy. of course, it's grown -- it's grown at -- since that time, but it's really taken off here in just the last few years. and i pointed out yesterday as well that of the five times that the budget has actually been balanced in this country since 1969, in every circumstance, it has been when government has spent less as a percentage of our entire economy than the average. so if the average is 20.6% for the past 40 years, the times when we have actually balanced the budget, we have averaged spending 18.7% of our g.d.p. the point simply is this: if you

want to solve this problem, it gets solved on the spending side of the equation. the problem that we have in this country is not that we tax too little or have too little revenue. it's that we spend too much, because this year we will spend as a percentage of our entire economy 24.3%. we're almost a quarter of the entire country of this country now being spent by the federal government. and that will only go up over time as we see these new entitlement programs, new health care program that was created last year continues to consume more and more of our resources in this country. that means that there is less and less out there for the private economy where the real jobs are created. if you look at what -- just what we pay in interest costs alone and how we would be influenced by a slight uptick in interest rates -- there was a great op-ed written in "the wall street journal" a couple of weeks ago by larry lindsey, who was a

former economic advisor to president bush, also a member of the federal reserve board of governors, and he pointed out that if interest rates return to their 20-year average, that it would add $4.9 trillion in additional borrowing costs over the next decade. so everything that we're talking about here in this debate about the debt limit in terms of reducing spending really pales in comparison to just a normalization of interest rates. if we saw interest rates go back to what is a 20-year average, we would see an additional $4.9 trillion that we would have to spend to finance our debt. and that is a staggering statistic, mr. president. i think, again, it speaks to the need for us to get our spending under control. because the amount that we borrow, as it continues to go up, ratchet up, we continue to get further, and further in debt fen the likelihood is that our -interest rates will continue to go up and we'll end up spending more and more on higher interest.

so i think that the real issue here is whether or not we as a nation are going to make a conscious decision that the way that we resolve this debt crisis is on the spending side or on the revenue side. and we've heard our colleagues on the other side, we've heard the president say, we need more revenue. in fact, i've not been in on the discussions that have been occurring at the white house, but my understanding is that one of the latest proposals on the table was $1.6 trillion increase in taxes. in other words, they want to spend -- they want to add $1.6 trillion in additional tax revenues in order to get some amount of spending reductions. wwell, we've seen this picture before. you go back to the 1990 president deadealthat president. the tax increases occurred, the spending cuts didn't. that is our history, mr. president. that is why making a deal that

involves massive increases in taxes on our economy, on our small businesses, at a time that we have 9.2% unemployment is a really bad idea when the problem you're trying to fix is fundamentally a spending problem. it would be one thing if we were spending at an historical rate, if we were spending at a rate that's 20.6% of our total economy, which is the 40-year average, it would be different. but we're spending more than 24% of our total economy. this is fundamentally a spending problem. it cannot be solved on the revenue side. the only thing increasing taxes would do is make it more harder, more -- harder, more expensive, and more difficult for our small businesses to create jobs. that is precisely what we want our small businesses to be thinking about doing. instead, they're saying -- 64% of them are saying this next year we're not going to add to the payroll, we're not going to create jobs. why? because of economic uncertainty. well, we need to create some certainty out there. we need them to know the tax

rates are going to stay at a low level, taxes on investment, fax on income. we need them to know that we are committed to cutting spending and to getting the federal debt under control. we need them to know that we're not going to add to the cost of doing business in this country by increasing the number of federal regulation regulations y have to comply w i hear that everywhere i go, whether it is a farmer, ranchers, or small business owner. i heard it this morning in meeting with some of these small business owners, that the regulations coming out of washington, d.c., are making it increasingly costly and more difficult for them to create jobs. and so, as we get into the final days of this debate and these decisions have to be made, i would say that -- to the president -- that the president needs to recognize that this is not a revenue issue. this is a spending issue. and step up and provide leadership and provide a pathway for how we get our fiscal house in order, not by increasing

taxes on the job creators in our economy, our small businesses, but, rather, by getting federal spend under control. i think he would have an incredibly warm and favorable reception from both the house and the senate, who are prepared to do business when it comes to reducing spending and making government smaller, not bigger, and dealing with this long-term structural problem that we have of a runaway debt that is growing literally at the tune of about $1 trillion annually. now, if we don't do this as i said before, we are looking at a future that resembles many of these countries in europe that i mentioned. we do want to go down that pasmght we don't -- we don't want to go down that path. we need to pay our debt. we need to adref this issue of the debt limit but we need do it in a responsible way that hold us accountable with the american people who spoke loudly and clearly in the last election that they believe government has

gotten too big, is growing too fast and they want that government reined n the way that we do that to rein in federal spending. that includes no the long-term structural challenges that we face in our entitlement programs, medicare and social security. republicans here in the congress are willing to lead on those issues, are willing to step forward and put forward a plan. in fact the only plan so that are phase been put forward to reform entitlements has come from the house republicans. it has been criticized by democrats in both the house and senate and by the white house but we've yet to see a plan from the other side. 806 days and we haven't had a budget presented by the democratic majority in the united states senate, nor has the president come forward with plan that actually does something to reduce spending and debt. the president did submit a budget proposal earlier this year by dramatically increased

spending and doubled the debt over the next decade and dramatically increased taxes. that is the message, the wrong message, to have received. the message the people of this country is send something we want washington to focus on the as spending side of the equatio. we want less spending, we want a smaller federal government, not a larger federal government. we want the federal government to do what we have to do, the american family has to do and small businesses have to do, and that's live within their means. so i would hope, mr. president, that this debt debate, it is a comes to a conclusion -- and i hope it will come to a good outcome, a good result for the people of this country -- it is not -- we do not want to have this country in a situation where we are not a making payments, where we are defaulting on our debt. but we cannot just continue this pattern of raising the borrowing authority of this country, of adding to the federal debt, without doing something to get that debt under control, without

doing something to reduce the amount that this federal government spending every single year. spending at 24% to 25% of our entire economy is a trend that cannot be continued, it cannot be sustained, and we need to get back to more of an historical average where the american people i think want us to be. the reason they reacted the way they did in the last election is because they saw this government growing at a frightening rate. that continues to this day because there is uncertainty about the country's future, there is an instability that exists today, and what i heard from these business owners this morning is, we want stability. we want to know -- we need some certainty about what the rules are going to be and, more importantly, it starts by having a federal government that lives within its means that doesn't spend money that it doesn't have, and that focuses intently on getting spending and debt under control and creating favorable conditions for

economic growth and job creation in this country. that does not happen by raising government revenues, by raising taxes. that happens by the federal government exercising fiscal responsibility, reducing spending, reducing debt, keeping taxes low on our job creators so that we can get people in this country back to work. that is the correct prescription for this country, mr. president. it is a prescription that i hope the president will embrace. i can tell -- i can say that republicans here in the senate and i would dare say republicans in the house of representatives as well are prepared to meet him in working together on that challenge of reducing spending, reducing debt and creating conditions that are favorable to economic growth and job creation and getting american people back to work. mr. president, i yield the floor. i suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

the presiding officer: the senator from florida is recognized. mr. rubio: thank you, mr. president. i ask unanimous consent that i be recognized for up to 15 minutes.

the presiding officer: the senate is currently in a quorum call. mr. rubio: i ask that the quorum call be suspended. the presiding officer: without objection. mr. rubio: and that i be recognized to speak for up to 15 minutes. the presiding officer: without objection. mr. rubio: i stand here today, i have spent some time over the last few days really thinking about this dispute on the debt limit as we hear from our constituents around the country that are looking at washington and asking themselves what's going on up there, what are you guys doing? it's a difficult process for people to understand. they elect us and they send us here to serve our country and to solve problems. yet they read in the newspapers all these startling statements now, the president saying a few days ago that he can't guarantee social security payments. others saying that our bond rating might be at risk. and of course the reality of daily life that more than ever, americans are finding it hard to find a job. the ones that do have a job are working twice as hard, making half as much. things are tough all across this country. they have gotten tougher over the last couple of years, unfortunately, and people have a right to be upset with the direction that we're headed.

it was one of the reasons that compelled me to run for the united states senate was to hope to come up here and be part of making a difference, be part of putting this country on a track that helps us to embrace all the things that made us exceptional and unique and continue to make us exceptional and unique. i look at this dispute about the debt limit and i say what's the dispute about? two things are very clear. one, we can't continue to do what we're doing now. anyone who argues that we can is not being realistic and doing a great disservice to the future of our country. you cannot have a government -- it's just simple. you cannot have a government that spends $1.5 trillion more than it takes in every single year. you cannot have a government that spends 40 cents out of every dollar that it spends is money that it's borrowing. you can't do that. that's not sustainable. look at europe. look at what happened yesterday. greece was downgraded. they are on the verge of being in default. not greece. i apologize. it was ireland. why is that happening in europe? why are these countries in trouble? it's not because they refuse to raise their debt limit. it's because people don't think they can pay back the money

anymore. the people that lend you money, sell you your debt, they are saying we're looking at these countries. we don't know how you will pay us back. your economy doesn't produce enough money. you have no plan to bring spending under control. we have lost confidence in you. that's the message that is being sent to europe today. if we keep doing what we're doing now, that's the message that is going to be sent here to america very soon. and the impact that that will have, not just on our country but the world is, quite frankly, devastating. that's what we're facing. the fundamental problem here is twofold. we have a government that spends too much money, more money than it takes in, and we have a government, we have a government that doesn't take in enough money to pay its debts because its economy is not growing. and that's why i have argued from the days on the campaign trail when i got elected that the way out of this problem is a two-pronged approach and you have got to do them both. you have got to cut spending. we have to have spending cuts and spending discipline. it doesn't all have to happen overnight, but we have to stop

spending $1.5 trillion a year of money we do not have. you cannot continue to do that. that's why i support the cut, cap and balance plan because it says we're going to begin to cut spending this year in a real way, we're going to cap the ability of government to grow in spending in future years and we're going to give the states a right to ratify a balanced budget amendment for our country that basically says you can't spend more money than you take in. states balance their budget, businesses have to balance their budgets, families have to balance their budget. if this federal government does not begin to balance its budget at some point in the near future, we may cross a line that's irreversible and put us in a place similar to what you're seeing in europe today. so on the spending side, it has to happen. again, people that pretend that we can do it overnight, of course not. it took us a long time to get into this predicament. it's going to take a while to get out. but we have to start trending in the right direction. it's critically important that some sort of spending discipline plan be put in place. i don't want to get overly -- this is a political place.

the debate is always framed by politics. i like everyone else here fully participates in the political banter, but today for a moment i want to step back and just say this. ultimately, i want to see a solution to the spending plan, and i will welcome that solution if it comes from the white house, if it comes from our minority leader, if it comes from our majority leader. i just want someone to step up and offer a plan that begins to bring spending discipline under control. i know i have endorsed one. it's called cut, cap and balance. it's out there now. if there is a better way to do it, offer it now. what are you waiting for? now is the time to offer it. if someone in this building has a better way to bring spending under control, then now is the time to offer it. don't negotiate in the shadows. all these negotiations that are going on, we're hearing about in the press, where's the plan, where is the document that tells us and shows us how you bring spending under control? because now is the time to show it. now is the time to do it. what are you waiting for? that's on the spending side. but spending cuts are important, they are essential, we can't do it without it. we can't do it without fiscal

spending discipline. but it's not enough. we also have to grow. we have to grow. and that's where the crux of this debate has really gotten. you hear in the press this fight is because certain people don't want to raise taxes on certain people, and that's really not what this issue is about. i think everyone agrees that we need growth. government needs growth in its revenue so it has a way to pay down this debt. the debate is about where does this revenue come from? some argue the way you get more money for government is you raise taxes on people. you raise taxes on really rich people. and i have two problems with that. neither one is ideological. my first problem is it doesn't work. you can't possibly raise taxes high enough to collect enough money to make a difference on the debt. i looked at some of the tax increases that the president and others have proposed. it adds up to less than ten days of deficit spending. even if you raise the taxes of what they define as rich to 100% next year, it's still not enough money just for one year's deficit. and so tax increases don't work

because they don't work. they don't generate enough money to do anything about it. and the second reason why i can't support tax increases is because it will kill jobs. and this debt thing is a huge issue. it's really important, but the jobs issue is even more important. the number-one issue in washington is the debt, and rightfully so. it's a huge, enormous generational issue, but unemployment is the number-one issue in america. we're talking about people that have worked hard their entire lives, that went to school, that did everything that was asked of them, and now they go out into the job market and they can't find a job. it's especially astonishing among young people. 25, 30 years of age. they went to college, they got their degree. now they are out there trying to find a job and they can't find one. certainly not for what they studied to be. we have to get that turned around. every other problem we face in our country, the housing crisis, all these other problems become easier to deal with if you have more people working, people making money, people paying their taxes, people spending money into the economy. unemployment is what we have to

get at. and you're not going to create jobs by tax increases. and if someone in this building, if someone in washington has a tax increase that creates jobs, i invite you to offer it. we're all ears. right now. if someone in washington has a tax increase that helps create jobs, then now is the time to offer it. i would submit to you you're not going to find one. because there are no tax increases that will create jobs. and if you don't create jobs and you don't grow this economy, there is no way out of this debt. you cannot cut your way out of it and you certainly can't tax your way out of it. does that mean we don't do anything about taxes, as i hear some commentators saying in the press? of course not. our tax code is broken. there are a bunch of thing in the tax code that do not belong there, and i think there is bipartisan support, whether the media tries to ignore it or not, i think there is bipartisan support in the senate, in the house, in washington for tax reform. tax reform, we can get done. tax reform means we're going to

look at the tax code, and if there are things in the tax code that are there because somebody hired a lobbyist and got it put in the tax code but it's not really good policy, it shouldn't be in there. and if we find enough of those unfair things in the tax code, then we can lower everybody's rates. we can make the rates flat. we can make the tax code simpler and easier to comply with. and that's what we should aim at. because that's what job creators tell us. i mean, i swear to you, i have never met a job creator that told me that they are looking for a state with high taxes and burdensome regulations. i have never met one. there may be one. and again, i invite anyone here in washington, d.c., to produce for us a job creator, a company or an individual who says that what they are looking for is they are looking to open a business someplace where the taxes are high and difficult to understand and the regulations are expensive to comply with. because that's what we have in america. you want to know why jobs aren't being created? because that's what we have in america. so if someone knows of a job

creator anywhere in the world that's looking for a high, complex tax environment or looking for a high regulatory environment, i would like to meet them. because i have yet to meet a job creator that's looking for that, and that's what we have. i would submit to you that there is support, there is bipartisan support for the idea of tax reform, of simplifying our tax code, of making it easier to comply with. if we do it the right way, of lowering everybody's tax rates, so that people have more money in their pocket to spend into the economy, to grow their business, to start a new business, because that's how jobs are created. i i know that all of us would like to think that senators and presidents create jobs. not outside this building they don't. jobs are created when everyday people from all walks of life say, you know what i'm going to do today? i'm going to open up a business in the spare bedroom of my home or out of the garage or when someone has an existing business an decides, i want to grow this birks i want to hire a couple

more people because i have a belief that this business can do better. we need to get people excited about doing that again. you are neat going to do that if our taxes and regulations are out of control. so let's begin to focus on some of the thanks there has to be agreement on. and there are two things: we must -- we must control our spending, and we must put a plan in place that shows the world how america would bring its spending under control, and we have to do something to grow our economy, and you ask any job creator in the real world, you ask any job creator in the real world, what are you looking for to grow your economy -- to create jobs and they'll tell you, we're looking for confidence. and we get confidence from knowing that regulations are predictable and easy to comply with, and the tax code is predictable, affordable, and easy to comply w i submit, if we focus on those things and not all the other shois noise that goes on in the back and forth of this place, we can actually start moferg towards a solution.

the last point i would make is the word "compromise" is a very popular word around here. and there's nothing wrong with compromise, so long as the compromise also happens to be a solution, because if your compromise doesn't solve the problem, you've just created a new problem. nothing wrong with compromise. maybe your ideas of tax reform are different from my ideas of tax refortunately. but ultimately we have to solve the broken tasm tax code. so compromise is not a dirty word unless the compromise makes it worse, not better. too oftentimes in politics compromise leads to things that make things worse, not better. and if you raise taxes in this economy with 9% unemployment, you're going to make things worse, not better. so i hope that we will rally in a bipartisan fashion around the concept of tax reform, of creating a tax code in america that encourages people to create jobs here once again. because if we can solve the jobs issue, the ununemployment issue,

all has to other issues that we face as a nation become easier to deal w with that, i thank you for your attention, mr. president. i note the absence of a quorum. the presiding officer: the clerk will call the roll.

recognized. mr. cardin: i ask that the quorum call be dispensed with. officer without objection. mr. cardin: i have 10 unanimous consent requests for committees to meet during today's session of the senate. they have been approved by the majority and minority leaders. i ask unanimous consent that these requests be agreed to and these requests be printed in the record. the presiding officer: without

objection, so ordered. mr. cardin: mr. president, i ask unanimous consent to speak up to ten minutes as if in morning business. the presiding officer: without objection. mr. cardin: we're getting dangerously close to the august 2 deadline. the august 2 deadline is the deadline for america to increase its debt limit or to face default on our obligations. we are -- we need to come together. we need to increase the debt lipt and this is an opportunity for us also to manage our debt. we've been talking about this for a while. and i understand -- i think my colleagues understand that the responsible thing for us to do is to use this opportunity to increase the debt limit, to also give us a game plan to manage our national debt and spending. we need to have a credible plan. our debt is not sustainable. we can't continue along this path. we understand that. and we have to

have a credible plan to manage our deficit. quite frankly, mr. president, the democrats have come up with these plans. the proposal offered by senator conrad, the chairman of the budget committee, and supported by all the democrats on the budget committee -- and i'm proud to be a member of that committee -- brings forward a credible proposal that has all the elements of our budget on the table. it reduces government spending. it deals with protecting the priorities that are important for america's growth: invest in education, invest in innovation and infrastructure so we can create the jobs necessary for america's prosperity. that's what that budget does. and it brings about more deficit reduction than the republican budget, bringing our debt under control. well, we understand that we need a bipartisan budget. it's not going to be just what the democrats want. that's what the political process is all about. midterm elections, the house is controlled by republicans. the senate has a -- has a

democratic majority. we've got to come together. so what many of us have said in this body, well, okay, let's use the bipartisan bowles-simpson proposal as a starting point. that has all the elements on the table, including mandatory spending and including doing a better job on revenues. well, okay, that's a bipartisan proposal. democrats have said, we're willing to work and come out with what we call the grand deal, the deal that will really manage our debt and all elements of the federal budget will be on the table as we talk about that. but, mr. president, there's one option that should not be on the table and that option is to allow august 2 to pass without increasing the debt limit. in other words, to permit america to default on its obligations. that's one option that cannot be on the table. and, quite frankly, what concerns me, there seems to be a growing number of republicans

who say that is an option, that's okay. it would be all right for us to pass august 2 without increasing the debt limit. let me quote, if i might, from david brooks, the conservative columnist who said -- and i quote -- "the republican party may no longer be a normal party. over the past few years, it has been affected by a faction that is more a psychological protest than a practical governing alternative. the members of this movement do not accept the logic of compromise. no matter how sweet the terms. if you ask them to raise taxes by an inch in order to cut government by a foot, they'll say no. if you ask them to raise taxes by an inch to cut government by a yard, they'll say no. the members of this movement do not accept the legitimacy of scholars or intellectual authorities. a thousand impartial experts may tell them that a default on the debt would have calamitous

effects far worse than raising revenues a bit, but the members of this movement refuse to believe it." i know that the majority leader in the house of representatives, mr. kantor, tells us that there's no compromise that can pass at the present time in the house of representatives. i don't accept that, mr. president. i think democrats and republicans working together in the house can pass a grand deal. under the parameters that have been talked about at the white house. but what mr. kantor needs to do is to work with the democrats as well as the republicans in the house of representatives. we've got to come together, democrats and republicans. but the one part of the option that should not be on the table is allow us to pass august the 2nd without raising the debt limit. let me talk about the consequences. i've said i believe there are catastrophic consequences and i believe that.

we know that it is likely, almost certain that the rating houses will downgrade america's currency from the most secure currency in the world. we would be downgraded. it runs the real risk as to whether the dollar will continue to be the global currency. right now, many international transactions are related in dollars. we know that as far as energy, et cetera. all of a sudden on august the 3rd, we run the risk that the american dollar would no longer be the global currency, having major impact on the u.s. economy. j.p. morgan tells us that we can expect an immediate increase in interest costs of 75 to 100 basis points. now, what does that mean? well, for the taxpayers of this country, it means that it's going to cost more money for us to pay for our borrowing. that will raise the cost of

interest payments, which i would suggest are not very productive use of taxpayer dollars. causing taxpayers to have to pay more for our borrowing. but it goes well beyond the federal taxpayers. it affects every family in america. the estimates that the effect of the increase in u.s. obligations on interest rates will have an effect on all borrowing. so if you're buying a home, you can expect that the interest costs will increase by about $1,000 a year in your cost of trying to buy a home. you're a credit cardholder, you can expect your interest rates to go up about $250 a year. that's the effect it's going to have to every american family if we pass august 2 without increasing our debt limit. if you have money in the stock

market, you can expect that there will be a reduction in the value of your wealth. we saw that happen once before when retirement accounts' values slipped dramatically. we run the risk of having that happen again if we pass august 2 without increasing the debt limit. the impact it will have on our economy, on jobs, we expect that it will clearly have a negative impact on our job market. we will lose jobs and we very much -- very well may go back into recession. that's why this is catastrophic if we don't deal with the debt limit in a mature way. let me just give you the numbers, mr. president, in the month of august, we expect that we're going to have about $172 billion of revenue coming into our treasury but we're going to have $360 billion of bills coming in, spending that we've already incurred that we have to pay for.

so there are those who say, well, we could just pick which bills we want to pay and let the others just go. well, they say, we'll have some winners and losers. well, i think we're going to have all losers. because you just can't pick the winners and losers. there are some who say, well, obviously we'll pay the interest on the national debt. well, okay, we pay that. how about social security? and how long can we pay social security? and if we don't pay social security, what happens to those on fixed income? or if we reduce the social security payments, how does someone who has planned their -- their monthly benefits -- their monthly budget, how do they manage with getting, say, 40% less in their social security check in august? how do they handle their obligations? and then what do we do about medicare? do we continue to pay medicare at 100%? well, we assume we're going to run out of money. what do we do about our military, our soldiers, who we all say we want to support? do we continue their salaries or

do we reduce their amounts by, say,40%? if he with pay all of those, then there's -- if we pay all of those, then there's no money to pay veterans benefits, and what happens to our veterans who are depending on their checks in order to meet their obligations. what do we tell our students who are planning to go to school in the fall about their pell grants, that their pell grants aren't going to be available and maybe they can't go to school in the fall? they have to make plans right now. and what do we do about small business owners who are depending upon their contracts with the federal government in order to make their payroll? are their -- are their -- is their money going to be coming in on august 3? well, mr. president, we can't pay those bills unless we raise the debt limit. it has nothing to do about increased obligations of this country. we're talking about spending that we've already incurred, that has already been obligated and now the people who are entitled to the money are asking

for their checks. what do we do on august the 3rd? well, mr. president, i don't believe we have a choice. i think we must increase the debt limit. i don't think that's an option. no responsible legislator would consider that to be an option. now, yes, let's use that opportunity to manage our deficit. i still hold out hope that we can get this grand deal. it's got to be fair. it's got to be balanced. it's got to allow america to grow. it's got to allow us to create more jobs. it's got to invest in education and innovation and infrastructure so america can compete. we know we can get that done if we use a balanced approach. reduce government spending at all levels, including the military, as we bring our troops home from afghanistan. and, yes, it needs to look at the money that we spend through our tax code -- and we've talked about this over and over again. we need to have a balanced approach, a credible approach to

manage our debt. and that should be our first option. but under no circumstances should we allow america to default on its obligations, causing harm to every american family. i urge-colleagues to put the national -- i urge my colleagues to put the national interests first, to take off the table the default on our debt, take that off the table, let's put the national interest first, work together to bring about a credible plan to manage our national debt. and with that, mr. president, i would yield the floor and suggest the an -- before i do that, i would suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call: