balanced budget and that we shouldn't spend money that we don't have, and that when american families have to balance their budget, why in the world would we not require our government to balance its budget? what america needs is a balanced budget and an economy that grows and thrives and creates jobs, and yet, a malaise hangs in the air. america is a ship without a captain. instead of the president chastising job creators and preaching class envy, we need a president that will show us leadership. the president needs to accept responsibility for an economy that has worsened under his failed leadership. unemployment is up. gas prices have doubled. and this president will add more debt than all 43 presidents combined. america got a deal on august 2

but not a solution. what america wants is a solution, not a deal. i hope in the next six months the president will find it within himself to lead the nation. the courage to lead and embrace reform, the reform that is necessary to get this great country going again. thank you, madam president. i yield back my time. the presiding officer: the senator from utah. mr. hatch: madam president, i congratulate the senator from kentucky for his remarks on the floor and for allowing me this unanimous consent request. madam president, we're coming down to the wire here. we will soon be voting on a proposal that would couple some deficit reduction with an increase in the statutory debt limit. there are some positive features in this legislation, and the senate's minority leader, the speaker of the house, and the conservatives throughout the country should be commended for insisting on them.

first, the president asked for a clean debt limit increase and conservatives refused. they held the line and made clear that any interest in the debt limit required matching deficit reduction. second, having lost the fight over a clean debt limit increase, the president insisted on a balanced approach to deficit reduction by which he meant reducing the deficit by raising taxes. the conservatives again fought this back. they knew that the primary driver of our debt is spending, and regardless of the president's talking points, nondefense discretionary spending is at historic levels. we are set for our third straight trillion dollar deficit. we have a national debt of over over $14.5 trillion, and the president's budget will give us us $13 trillion more in debt. the answer to this is not giving the government more money to spend, and third, conservatives resisted the effort by the president's allies to push most of the deficit reduction in this package down the road. so there are some achievements

in this proposal that conservatives can hang their hat on, and i compliment speaker boehner and minority leader mcconnell for their work, but i regret to say thail not be able to support it because it does not sufficiently provide us with the solution to the debt crisis that the markets are commanding. last week, moody's made clear that the real threat to america's aaa rating is not default, which even the administration now acknowledges was never going to happen. the real threat after downgrade comes from a failure of will. it comes from the failure of presidential leadership in getting federal spending under control. there is a solution to this spending crisis. it is cut, cap and balance, which i was an early supporter of -- of which i was an early supporter. in addition to providing short-term relief by cutting and capping spending, it provides for a long-term solution for passage of a strong balanced

budget amendment. now, this proposal falls well short of cut, cap, balance, and therefore i -- i reluctantly cannot support it. i would like to address a technical point about this package that raises concerns for me. whether the president is looking to the deficit reduction committee as an opportunity to raise taxes. he says that he is, as have some of my colleagues in the senate. i do -- i do believe that it will be very difficult, given the committee's charge to reduce the deficit, to raise marginal tax rates. however, i worry that some democrats will be looking at tax expenditures in order to hit the committee's required deficit reduction targets. now, this would be a mistake for a number of reasons. the president has referred to tax expenditures as -- quote -- "spending through the tax code." unquote. but rhetoric aside, tax expenditures are an opportunity for individuals and businesses to keep more of the money that they earn, and getting rid of

tax expenditures without corresponding reductions in tax breaks will result in a net tax increase on the american people. the president would have you believe that getting rid of tax expenditures is acceptable because they only impact the rich. that is why it talks about bonus depreciation for jets and yachts used as second homes. yet, in a series of speeches, i have attempted to show that this rhetoric of class warfare might work politically, but as a description of tax reality, it is lacking. the fact is the largest tax expenditures though that the president and democrats would have to look to in order to raise revenue for deficit reduction benefit middle-class itemizers the most. consider the example of the home mortgage interest deduction. this is the most significant of the itemized deductions available to taxpayers. the mortgage interest deduction is the second largest tax expenditure identified by the joint committee on taxation.

it is not -- it is not primarily a benefit for the wealthy. 30% of the benefit of the mortgage interest tax expenditure goes to taxpayers over $200,000. taxpayers with income below below $200,000 receive 70% of the benefit of the mortgage interest deduction. by a ratio of almost two to one, taxpayers under $200,000 benefit from the mortgage interest deduction. since $200,000 basically fits the definition of rich used by my friends on the other side of the aisle, we can see that the nonrich or ph*eulgz income group -- middle-income group disproportionately benefit from the mortgage interest deduction. the larger point is this, however, to the extent that the home interest deduction should be addressed by congress, it should be addressed through the context of a comprehensive revenue-neutral tax reform that lowers taxes and broadens the

base. these tax expenditures should not be cherry-picked by the president and his liberal allies to pay for the giant checks that his administration has written. mr. president, i would like to make a last procedural point about where we go from here. even if congress passes and the president science this deficit-reduction package -- and the president signs this deficit-reduction package, we are going to be back at this again before the year is out. the president will be asking congress to raise the debt ceiling again. and given that, i would like once again to address the failure by the treasury department to respond to repeated requests i've made over the past week about treasury short-term cash position and the failure of every member of the so-called fsoc to provide congress with information about their contingency plans in the event there is a ratings downgrade on the u.s. debt in the future. does treasury still think it will run out of cash by midnight tonight?

i've been given only limited information. treasury continues to say we will run out of cash today and will not be able to pay our bills the same date they estimated way back in may. treasury won't show me, the ranking member of the senate finance committee, how they are arrest raoeufrg at that estimate -- arriving at that estimate. i have not been informed, congress has not been informed and americans counting on timely social security payments have not been informed. almost every member of the fsoc including treasury and federal reserve refused to provide me with information. even if the debt limit is raised there is no assurance we won't face a downgrade. we need to know the government's plans. it should rise above politics. mr. president, as i've said repeatedly, this is unacceptable. i want to be clear about two things. first, congress will have to look into this matter very carefully and investigate

whether treasury and most of our major financial regulators have been deliberately withholding information from congress. and if so, for what purposes. second, assuming that down the road treasury will present congress with another default date, i want to put them on notice that this fall i will be demanding timely substantiation of treasury's assessment and the government's cash position. absent this cooperation, i will stand in the way of any debt limit increase demanded by an unsubstan -- unsubstan khaeutd treasury closing deadline. mr. president, i want to be clear i cannot support the outcome of these negotiations but my concern is not over the tpheurb kwraeurbs of the -- initiation of the leaders of the house and president. it is the failed presidency of president obama. he and his a liars i had -- he and his a liars commited to more -- he and his allies are commited to more spending.

mr. president, i ask that my full remarks be included in the record at this point. the presiding officer: without objection, so ordered. mr. hatch: thank you, mr. president. and i yield the floor. a senator: mr. president? the presiding officer: the senator from oregon is recognized. mr. merkley: mr. president, i ask unanimous consent that my intern rachel travis be permitted on the floor for the balance of this pending legislation. the presiding officer: without objection, so ordered. pherpl pherpl thank you. i rise -- america america i rise to -- mr. merkley: i rise to address the obama-boehner debt deal and it is an issue i have been immersed in, wrestling to understand the impact on unemployment, the impact on investments that will strengthen our nation down the road. certainly the impact on programs

that strengthen our families. and it is in that context, trying to understand how do we build the strongest possible nation for working families, how do we do that. and is this obama-boehner debt deal the right path? and i must conclude that it is not the right path. and i conclude that for four reasons. the first is the impact on jobs. we are facing a gathering storm on the job front. we have five million to eight million additional foreclosures that are suppressing success of our construction market, driving down the value of houses and having a devastating impact on the attempts at recovery. second, the unemployment benefits, extended unemployment benefits expire this year. and the rough estimate is that

that will result in the reduction of around 500,000 jobs. that's a tremendous blow in 2012. and then we have the termination of the payroll tax holiday and the estimates that may well produce losses of jobs of more than 900,000 across america. add them up together, and you're talking nearly 1.5 million jobs we will face. and that's in 2012. so on top of this gathering storm comes the obama-boehner debt deal that is estimated to produce another job loss and by varying estimates tpr-rbgs 100 -- from 100,000 to 300,000 additional jobs. mr. president, doesn't this deal take us in the wrong direction? shouldn't we be on this floor working to create jobs, not to destroy jobs? the success of our families depends on this.

my second major reservation about the obama-boehner debt deal is its impact on working families through the concentration of cuts on the 18% of the budget that is the non-defense discretionary portion of the budget. this is the portion of the budget that involves head start, pell grants. in other words, opportunity for our children, our smallest children, skeg, university -- success, university education for our college-bound students. it's the area of the budget that involves investments in clean energy, small business programs, to support the success of small business. involves job training that helps families adjust to a changing dynamic in the economy, and so much more. in this 18% of the budget, that is where the cuts will hit. and with the phase 1 required cuts, or title 1 cuts, in

combination with the cuts under title 3, you have essentially a 15% cuts from the 2011 march c.b.o. baseline. now understand that baseline for 2011 is a very low baseline, much lower than 2010, much lower than 2009. it takes us back many years earlier. you already have a very low baseline and we're going to cut 15% more out of the core programs supporting the success of our working families, supporting the success of our smallest children, supporting the success of our college-bound children. this is not the path that builds a stronger america. the third factor is that while our children in head start and our children headed for college and our citizens seeking job training are going to take these blows, the wealthy and well-connected don't contribute one slim dime. some of my colleagues have

argued, well, you know what? there are some of those programs invented in the tax code that actually help the middle class. my colleague from utah was just making that argument. so don't touch any of those programs. well, if we take that same attitude towards our spending programs, we'd say some benefit the middle class, don't touch any of those programs. obviously it is an absurd argument. why is it made on the revenue side but not the programs on the appropriations bill? why is the tax bill protected in honor of that argument but the spending bills are not? one simple answer. the programs for the wealthy and well-connected are in the tax bill. and so this false argument is used to defend the cumulation of wealth, the expansion of prosperity for the few, for the powerful few at the expense of families across this nation.

my fourth concern about the obama-boehner debt deal is that simply it was forged out of a process of extortion. if you look through the editorials, you see words like hostage-taking and extortion and lunacy. we only have to turn back to ronald reagan to remember what he had to say on this. he said this brinksmanship threatens the holders of bonds and those who rely on veterans benefits. markets would skyrocket, instability would occur and the federal deficit would soar. the united states has a special responsibility to itself and to the world to meet its obligations. those who have threatened for the first time in the u.s. history for the u.s. not to meet its obligations would result in devastating impact to those across this nation, those who carried out that threat did so in the wrong spirit, not the

spirit of america pulling together, but in the spirit of creating a situation of hostage-taking and extortion designed to protect the most powerful and wealthy at the expense of families across this nation. so, mr. president, because this deal does damage to jobs and contributes to a gathering storm in 2012 that threatens to take us back into a double-dip recession, because the cuts are concentrated on the programs such as education and head start and pell grants that support the success of our children, success of our future economy, because it doesn't take one slim dime of contribution from those who are most able to contribute in our society, and because it was forged out of a fundamentally inappropriate use of extortion against the american family, for those four reasons i will oppose this deal. thank you, mr. president. a senator: mr. president? the presiding officer: the

senator from missouri is recognized. mr. blunt: mr. president, i rise in support of the bill. i would say that for the second time in about a week i've come to the floor to speak after one of my friends on the other side who was talking about what we ought to be talking about, and both times they were right. they said we should be talking about private-sector job creation. but, mr. president, i'll just say where are the bills to do that with? we've been here the week of the 4th of july we were here, and we had two votes that week. one was to compel the senators who didn't show up to show up. and the other one was on some motion to proceed to cloture on something that had nothing to do with job creation or any of the other things that we should be talking about. you know, we could talk about what we ought to be talking about, and that would be one thing. but of course what we are talking about today is the moment we have arrived at, the date that was set by the administration, and apparently

they were right in speculating when we'd need to look at the borrowing limit again. and that's today. and i rise, mr. president, in support of the bill. i said for months the only thing worse than not raising the debt limit would be raising the debt limit and not changing behavior. and in fact, i think that's what all the rating agencies that everybody's talking about now, whether they're going to, how they're going to rate our bond rating in the future, they've all said, and they said long before they talked about the debt limit, that we're spending more money than we can afford to spend as a federal government or as a society. we're spending $1 out of $4 that the society can produce, and that's about 25% more than we spent in 2008. it's 25% more than we spent on the average from the 40 years from 2008 going backwards four

decades. that's important. and i think this bill does begin the process of changing behavior. the way we approach the debt limit this time was anything but, was everything but business as usual. this is a totally different discussion than we've had before about the debt limit, and the country has almost always had debt. i think there have been only a couple of times in our history, andrew jackson paid off the debt. and there was one other time when we paid off the debt. only a couple of times in our history when we didn't have some kind of debt. and in the tradition of that debt, we've always just said, okay, let's borrow more money because we need more money. this time for the first time we said, why do we need more money? what is -- why is it that we're increasing debt? why is it we're increasing debt so rapidly? we had a $10 trillion debt in january of 2009.

30 months later we have a $15 trillion debt. obviously that trajectory can't continue, and the framework for the decision that's made in this bill says it won't continue. now we do continue to add debt over the next decade, but, mr. president, we wouldn't have to. there's a study out that says if every time the debt ceiling comes up over the next ten years, we'd make the same kind of determination that for every dollar we increase the debt ceiling, we're going to find a dollar in savings over the next decade. that study would indicate that in ten years we'd balance the budget. and of course, that's what we should be doing, balancing the budget. this body before i served here, before i served in the house, before i was in the congress at all, in 1995 came within one

vote of the balanced budget amendment, one vote of passing the amendment that had passed the house. in 1996, it came within two votes of passing that same amendment that had passed the house again, and if that one vote would have changed in 1995 or the two votes would have changed in 1996, we wouldn't be having this discussion today. because we would have a balanced budget today and would be moving in the way that every state but one has to function and every family in america eventually has to come to grips with the fact that they can't spend more than they have. the truth is, mr. president, that this agreement, while it's a ten-year agreement, is only enforceable for a couple of years. i believe we will do what this agreement says this year and next year. i'm hopeful and optimistic that the select committee will do its job and come back with another

trillion and a half or more of cuts to spending, and that's going to happen -- that select committee is going to report this year. the budget cap is set for this year and next year, but elections matter, and who is elected in 2012 to the house and the senate and the presidency will finally and ultimately make a decision about whether this -- this track that we're on now gets better than it is now or frankly heads back in the other direction. the campaign pledges, mr. president, i think are important, and while i support the bill, i'm also fully appreciative of everyone who feels like they can't. and frankly, if some campaign pledges hadn't been made in 2010, we probably wouldn't be at this moment today. if that's -- if that's somehow

an extraordinary thing that people run for office and they say that's what they're going to do and then they come here and do that, that is -- that is what the process is all about and how it's supposed to work. is this the -- my sense of what would have been the best way to deal with these spending cuts? we would have more spending cuts if i was writing this bill. but you know, the fact is in washington today no one party controls anything. my party, the republican party, controls one-third of what it takes to get a bill to become law. and the other party controls two-thirds, and at the end of the day by definition, nobody is going to be totally happy with this bill, but as senator pat roberts said yesterday in a meeting i was in, using an old legislative saying, this is not the best possible bill but it's the best bill possible.

it is the best we can do right now. i think we take this victory, use it as a way to move forward to the future, and, mr. president, i rise again in support of this bill. mr. lieberman: mr. president. the presiding officer: the senator from connecticut is recognized. mr. lieberman: i thank the chair. mr. president, i come to the floor to express my support for the measure before us like my colleague from missouri has just spoken, and like everyone else i have heard express their support for this proposal. no one seems perfectly satisfied with it, but that's inevitable, and i think we come to one of those classic moments on a very big challenge our nation faces, this enormous debt we have, of whether in this agreement we see the glass half full or the glass half empty. whether what encourages us in the agreement outweighs what disappoints us. and for me, the positive outweighs the negative. i'm going to vote for my hopes

about what this agreement means as opposed to my fears that we're not doing enough in this agreement. what makes me most happy about it? this is a bipartisan compromise that really does turn the corner, turn the ship of america's state away from greater and greater deficits and a greater national debt and in the direction of balancing our budget once more, and the direction of re-establishing classic american values, of discipline and thrift and concern about our future and investment in our future which we have lost in our federal government through the work of both parties, executive and legislative branch of our government.

it's a bipartisan agreement at a time when this chamber and this city have become reflexively and destructively partisan, and that's encourageing to me that it is bipartisan. it is a compromise at a time when this city has become ideologically rigid, and it's clear if you look at our history that we only make progress when we compromise. that's because we're such a big, diverse country with so many different opinions and points of view. so this is a bipartisan compromise, and it is a beginning of a long, hard march back to fiscal responsibility in our country, back to a balanced budget. so what troubles me about it? what troubles me about it is that the bipartisan compromise also represents a kind of

bipartisan agreement by each party to yield to the other party's most politically and ideologically sensitive priority. in the case of democrats, it's to protect entitlement spending in the case -- entitlement spending. in the case of republicans, it's to not raise taxes. the reality is we have got to do some of both if we're going to get our country back into balance. and because this agreement doesn't really touch the entitlement programs, particularly medicare which is growing faster, bigger than any other government program, it -- it puts all the burden of getting back to a balance in our budget on the so-called discretionary spending part of the budget. that's about a third of federal spending. about 60% is the entitlement or mandatory program. so we have got here the beginning of a system that --

that forces cuts in a discretionary third of the budget, defense and nondefense, which they have to do. they have got to cut. but it doesn't really ask much of anything of the 60% that's growing so rapidly that's entitlement spending. and as a result, if the special committee created in this agreement, which is the great hope of the agreement, i think, doesn't work its will and involve itself in entitlement reform and tax reform and congress doesn't accept it, then the trigger, the automatic spending cuts are also all from discretionary spending, asking that third of the budget to pay the way, even though it's a small part of the responsibility for the increase in government spending, and that would have a devastating effect on our national security because it would dramatically undercut our defense, and also on s