counting what we 02 trust funds like social security is about 70%. look where we are headed if we stay on our current course. congressional budget office tells us by 2037 our publicly held debt will be 200% of gross domestic product if we fail to act. how did we get in this circumstance? this is it clearly. the red line is spending line of the united states. the green line is the revenue line. going back 60 years. what we can see is the spending line is the highest it has ever been. 24% of gross domestic product federal spending. the revenue line is the lowest it has ever been in that period. the lowest it has been in 60 years. our friends on the other side say we have a spending problem. they have half right. we have a spending problem.

spending is almost the highest it has been in 60 years. but you know what? we also have a revenue problem. revenue is the lowest it has been in 60 years. that is a fact. mr president, we have to work both sides of this equation. if we go back and reconstruct how did we get in this ditch, historian may 1st, 2011, in the washington post is instructed. here's what they found. the biggest culprit by far has been an erosion of tax revenue triggered largely by two recessions and multiple rounds of tax cuts. the economy and tax bills that former president george w. bush

and lesser extent by president obama wiped out $6.3 trillion in anticipated revenue. that is nearly half of the $12.7 trillion swing from projected surpluses to real debt. federal tax collections now stand at their lowest level as a percentage of the economy in 60 years. confirming the point i just made. in addition if one examines our history going back to 1969 and look at the five times we balance the budget, each of those times revenue was almost 20% of gdp. right now remember what i just said? revenue is 14.5% of gdp. five times in 1969 we balance the budget, revenue was 19.7% of gdp in 69.

in 1998 it was 19.9. in 1999 it was 19.8. in 2000 it was 20.6. in 2001 it was 19.5. all of these budgets were the responsibility of bill clinton. bill clinton not only balance the budget but stopped using social security funds to finance other government operations and he did it with the longest period of uninterrupted growth in our nation's history and created twenty-three million jobs. the clinton administration record on deficits and economic growth and job creation is the best by far of all modern presidents. fact are stubborn things.

we have a tax code today that is riddled with tax expenditures. riddled with tax expenditures. we are losing to the treasury $1.1 trillion a year to tax expenditures, tax loopholes, tax exclusions and guess who gets most of the benefits. 26% of the benefit goes to the top 1% of those tax expenditures, those tax loopholes, those tax preferences. here is one of the most conservative economists and america. martin feldstein, professor of economics at harvard, chairman of the council of economic advisers under president reagan. this is what he said about tax expenditures on july 20th of last year. cutting tax expenditures, quote,

cutting tax expenditures is really the best way to reduce government spending. eliminating tax expenditures does not increase marginal tax rates or reduce the reward for savings investment or risk-taking. it will also increase overall economic efficiency by removing incentives that distort private spending decisions and eliminating or consolidating a large number of overlapping tax base subsidies would also greatly sympathize--simplified tax filing. in short cutting tax expenditures is not at all like other ways of raising revenue. that is precisely why the fiscal commission and the group of 6, both groups are was proud to participate in shows the reduction of tax expenditures as one way of reforming the tax system, improving the competitive position of the united states and raising revenue to help reduce this debt

threat. mr. president, anybody that wonders what is happening with respect to the loopholes, exclusions, deductions, preferences in the tax code you don't have to go any further than this picture i have shown many times. this little 5 story building down in the cayman islands claims to be the home of 18,857 companies. what an amazing building that is. this little building, the home of 18,000 companies. they all say they are doing business out of this building. really? anybody believe that? they are not doing business out of that building. they are doing monkey business and the monkey business they are doing is to avoid paying the taxes the rest of us pay because cayman islands is a tax haven.

they don't impose taxes on these companies so guess what these companies do. they file returns that show miraculously the progress of all their operations across the united states. their profits don't show up in the united states. they show up in this little 5 story building in the cayman islands. they say that is where the profits are being realized. and what a blessing that is. the cayman islands don't impose any taxes on profits that show up in the subsidiaries of the companies who are doing business all over the world. anybody that wonders that this is costing the rest of us huge amounts of money here is what are permanent subcommittee on investigations found in a report in 2007. experts have estimated the total loss to the treasury from offshore tax evasion alone approaches $100 billion a year.

$100 billion a year. if you have any doubt about this go home and google tax haven and see what you find. you will be quite startled by what you see. those losses of $100 billion a year include $70 billion from individuals. another $30 billion for corporations engaging in offshore tax evasion, abusive tax shelters that at $10 billion more. my family and dark hair we know. the majority of people in this country pay what they owe. a few people tend to be people with much greater resources are not paying what they owe. they shouldn't permit it. that should come to a screeching

halt. mr president, the bipartisan groups proposing comprehensive balance plans with spending cuts and revenues include the fiscal commission, bipartisan policy center and the group of 6. the the the only plants that have come from anywhere and all of the recommend a balance between spending cuts and revenue. almost all of them focused on reducing tax expenditures, the loopholes and preferences, tax havens in order to raise revenue to reduce rates to make america more competitive but also to raise additional revenue to dump this debt. mr. president, the other day there was a spirited debate between senior senator from arizona and the senior senator from illinois. i arrived here at the end of that debate to, didn't have a

chance to participate. there were a number of assertions main. by my friend senator mccain. i want to set the record straight. if we look at the records of reagan, bush 41, bullish 43 and clinton with respect to deficits the record is very clear. here it is. during the reagan administration deficits exploded. deficits averaged $200 billion a year. during the first bush administration the deficits got worse and ended up in the range of $200 billion a year. president clinton inherited deficits of $200 billion a year but you can see by the last four years of his administration he was in the black.

the budgets were balanced and for two or three of those years he actually stopped using social security money to fund government operations. then we see what happened in the second bush administration. deficits absolutely exploded. absolutely exploded. the second bush administration was by far the worst in the record of deficits and debt of any of these administrations. by far the best was the clinton administration. we can look at it a different way. this chart shows in dollar terms what happened to the deck. you see the reagan administration. the debt more than doubled. the bush administration to get much further. the clinton administration actually started bringing down the debt, paying off the debt during the clinton administration. then we saw what happened in the

second. administration. the debt absolutely skyrocketed going up over 2-1/2 times. when we look at the record of economic growth is very interesting. reagan who more than doubled the debt had a pretty good record of economic growth. 3.5%. . i who ran the debt up even further, 2.1% economic growth. clinton who actually paid down the debt had the best record of economic growth, 3.8% on average. bullish ii in place the massive tax cuts that. and deficits into debt had the worst record of economic growth averaging 1.6%. let's connect the dots. let's connect the dots.

big increase in debt during the reagan administration but pretty good economic growth. . 1 --bush i economic debt faltered. clinton administration has the best record on deficits and debt and the best record on economic growth and bush ii who had huge tax cuts never offset by an adjustment as reagan did had the worst record of economic growth and finally on job creation of the reagan administration, sixteen million jobs were created. quite a strong record of job creation during his eight years. the first bush should ministrations three million jobs created. the clinton administration by

far the winner on the job is 30. twenty three million jobs created and he had the best record of deficit and debt reduction and the best record on economic growth. he raised taxes and cut spending. wow. our friends on the other side said when president clinton raised taxes and cut spending that it would crater the economy. i heard the majority leader on that side say that that proposal would crater the economy. republicans all repeated that line across america. the clinton plan to get the deficits and debt down by raising revenue and cutting spending they all said would crater the economy. they were wrong. they were wrong. then it came time for the bush

administration and he had massive tax cuts and they said that would be a huge job creator and fire up the engines of economic growth. they were wrong again. they were wrong again. the record is clear. look at the difference here. sixteen million jobs created under reagan. three million under bush i. three million of the clinton, three million under bush ii. and clinton had the biggest reduction in deficit and debt by far than any of them. the best economic growth, the best job creation and second bush administration comes and say big tax cuts will fire up economic growth and fire up job creation. they were wrong. when clinton had a proposal to raise revenue and cut spending they said it would crater the economy and yet clinton had the

best record on economic growth, best record on job creation. they were wrong again. during the second bush administration we were on the brink of financial collapse. i was called to a special meeting in this building with the bush administration's secretary of treasury and our along with other leaders of the house and senate was told we were days away from a financial collapse. this idea that you can't raise revenue or it will kill jobs, cat cut spending or were killed jobs has not proven to be right. in the real world the clinton administration raise revenue, cut spending to get our debt under control and had the

strongest record of job creation and economic growth of any of the four presidents during that period by far. i wish i could have participated in that debate last night. i missed it but i wanted to set the record straight. i thank the chair and yield the floor. >> we have a financial crisis in our country. the debt limit we will be considering tomorrow is the thermometer of the canary in the coal mine that tells us we are at a dangerous level. for example we reached it faster and higher levels than we ever have. the results of which is our debt

rise is telling us that we have to raise our debt limit. those things happen periodically but this would be the largest debt limit increase in our history and it is a fact that we never had such a surge in. the deficit fiscal year just for one year would be $1,500,000,000,000, largest deficit that bush ever had was large was $450 billion. the last two years have been $1.2 trillion, this year it is expected to be $1.5 trillion. we will go from interest on our debt this year of $140 billion to the tenth year on the budget that was sent by the president. i will acknowledge a budget voted down 97-0.

in the tenth year that one year interest would be $940 billion. for example the education budget is around 100 and the highway budget is around 40. nine hundred forty billion dollars will crowd out tremendous portions of the good things we would like to do with taxpayers' money. instead of being able to improve our infrastructure or do other things that we think could be good we will be sending that money to debt holders abroad to pay them back for the money they loaned us that we have been spending now. $0.40 of every dollar we spend this year will be borrowed. that is a situation that is very real to us but it always felt we have a responsibility to be honest with our constituents and we are going to need to raise

the debt limit to. it places too much risk on our economy to not raise it. we might as well be honest about that. we have got ourselves in a fix and will have to be raised. i want to share some thoughts why i am uneasy about legislation that is before us and what will not be able to support it. i have been warning for months that we are heading into a situation where we have a last-minute, 11th-hour bill and the senate will be asked to pass it without adequate time to review it. that other bad things could be included in this debt limit increase and it is not the kind of process we need to pursue.

our democratic leadership decided they did not want to bring up a budget. instructed the budget committee chairman of which i am the ranking member not to bring up a budget. the majority leader said it would be foolish to have a budget. we have gone 824 days without a budget under the democratic majority in the senate. at a time we have a large deficit in american history. the largest. non clothes to it and we don't have a budget. it would be foolish to have a budget and the question is why would it be foolish? because if you pass a budget and one can be passed with 15 votes and expedited procedure that can be filibustered, guaranteed a vote in 50 hours but you have

the right to file amendments. people would have a right to file amendments. when you file amendments and get a vote on those amendments then people are held accountable. and they have to vote whether they think this is a good step or not. we have a lot of people say we would like to do more but we are sorry we can't do more. maybe if we had a budget up here we would have a chance to vote for more or maybe people who are suggesting that really wouldn't be fought back. the problem was the decision was made that would be too difficult to execute the normal regular order in the senate to bring forth a budget and have amendments filed. senators do what they are paid to do.

that is particularly problematic in light of what happened in the last election. the american people are not happy with us. they rightly believe that congress cannot justify a situation in which $0.42 of every dollar we spend is borrow. congress cannot justify $1.5 trillion deficit this year. they are not happy about that. i have been to meetings where people say you work for me. i am not happy. you have seen that on television. it was a shellacking for those who thought business as usual ought to continue in the united states of america. that money can just be borrowed and spent and when the problems get hit we will just raise taxes

on the american people and they have to pay for our spending binge. that is what it was all about frankly. we had an election that was that shellacking for the big spenders. they just lost and they were demanding among other things accountability. they were demanding that we in congress be responsible for what we do and do it out in the open and stand up and be willing to answer in our town hall meetings for what we have done. a fair request in a great republic like ours, i think. i have been a critic of this idea that we won't have a budget we won't vote and we haven't voted. very few votes. we had the harry reid proposal when the john boehner proposal and this compromise proposal.

our colleagues brought up the house budget so they could vote it down and it was a historic budget. they did it publicly and voted on the floor. there were amendments, new spending by $6 trillion. they changed the death course of america. i would like to have seen them go further because even that plan to alter the debt trajectory of america, bringing down our deficit didn't balance in the tenth year. the house was radical and did strange things, not so. read the budget. it was an honest budget based on good numbers and changed the debt course of america. even that didn't go as far as we need to go. so the house did its bit and we did nothing in return and now we get to the point where the debt limit is upon us and we are

supposed to vote. this morning at 3:00 a.m. apparently legislation was finally put together and brought forth to the floor of the senate and we will vote tomorrow morning. after a couple hours debate tomorrow. i am really uneasy about that and uneasy about what is contained in it. the good part is it reduces our spending by $2.1 trillion. may be 2.4. more solid believe that we reduce spending if congress adheres to the guidelines and it can appear to you as we figure ways around the limits and constraints that are put on

spending but the plan is to reduce spending by $2.1 trillion. it is better than more spending like we have been doing. in the last two years under president obama when the democratic majority had 60 senators in the senate, non defense discretionary spending went up 24%. the budget the president submitted this year called for 13.5% increase in education for next year beginning oct. first, fiscal year twelve when we are in the worst financial shape ever. 13.5% increase in spending. is that common sense? is that a reasonable judgment for america when we are in a

situation like this? he proposed 9.5% increase in the energy department and 10.5% increase in the state department. it proposes that 6% increase in the highway department and they say there will be a tax. mr. secretary, what tax? it won't be a gas tax. we agree it is not a gas tax. what is it? we will talk about that. congressional budget office said that is no income. you can't say you got in come to offset a big increase in high-speed rail and things like that if you don't have a source of revenue. that is the kind of situation we find ourselves in. a deep philosophical

disagreement. the majority in this senate and the president believe in spending and when they have been caught after raising spending and when i said 24% increase that did not include $1 trillion in stimulus package. did not include that, all of which every penny was borrow because we are in debt and spend extra money you borrow the money. we don't have it to spend. we have disagreement about where we are heading in our country. we should have had a full glorious debate in the united states senate. the finance committee should be looking at how to deal with taxes. the appropriation committees