the economy in the midst of a severe economic downturn. here's what norman ornstein, a distinguished scholar at the american enterprise institute said about it, "few ideas are more is he ductive on the -- stkubgtive on the service than a balanced budget amendment to the constitution. nearly all of our states have budget requires. when the economy slows states are forced to slash spending at just the wrong time, providing a fiscal drag when what is needed it countercyclical policy to stimulate the economy. the fiscal drag from the states in 2009 and 2010 was barely countered by the federal stimulus plan. that meant the federal stimulus provided was nowhere near what was needed but far better than doing nothing. now imagine that scenario with a

federal drag instead. mr. president, "the washington post" editorialized, worse yet, the latest version of the balanced budget amendment would impose an absolute cap on spending as a share of the economy. it would prevent federal expenditures from exceeding 18% of the gross domestic product in any year. most unfortunately, the amendment lacks a clause letting the government exceed that limit to strengthen a struggling economy. mr. president, that has all of the potential to turn a recession into a depression. two of this country's most distinguished economists: alan blinder, former vice chairman of the federal reserve; and mark zandi former consultant advisor to this senator mccain evaluated the response to the last downturn. their conclusion: absent that federal response, we would have

had great depression 2.0. mr. president, the legislation before us would have prevented that federal response. they call this legislation cut, cap, and balance. they misnamed it. they should have called it cut, cap, and kill medicare. because that's precisely what it would do. mr. president, why do i say that? because when i referred earlier to the internal -- inconsistency of this legislation, this is what i was referring to: they have two different spending caps in the lilings befor in the us. in one part of the legislation, they say the spending cap would take spendin spending from 24.1f g.d.p. to 19.9%. that's in one part of the bill before us. in another part of the bill -- constitutional amendment -- they say, the spending cap would be

18% of g.d.p. so i don't know who cooked this up, but you'd think they'd have at least gotten on the same page as to what is the limitation on spending. what does it mean if you have a balanced budget amendment with a cap of 18% of g.d.p.? well, mr. president, here's what it means. and, by the way, the constitutional provision would certainly trump the conflicting provision that's in this legislation. so the cap would not be 19% of g.d.p. the cap would b would not be 19. what would it be? it would be 18% of g.d.p. if you fund just social security, defense, and other nonhealth spending and interest

on the debt, you're at 18% of g.d.p. there's not a dime left for medicare. there's not a dime left for medicaid. is that really what they intended? it must be, because that's what it says. so medicare is finished. medicaid is finished. anybody that votes for this better understand what they're voting to do. mr. president, here is a former top economic advisor to president reagan. here's what he said about the amendment that is before us: "in short, this is quite possibly the stupidest constitutional amendment i think i have ever seen. it looks like it was drafted by a couple of interns on the back of a napkin.

every senator cosponsoring this legislation should be ashamed of themselves." mr. president, that's a former top economic advisor to ronald reagan. i've been here 25 years. i don't think i have ever seen a piece of legislation more unprofessionally constructed than the legislation before us. but those aren't the only problems. when they said -- they titled this "cut, cap, and balance," they could have also called it preserve, protect, and defend tax havens and tax shelters, because that's the other consequence of this legislation. why do i say that? because it would take a two-thirds vote to increase revenue -- two-thirds vote. that means attempts to shut down

these offshore tax havens, these abusive tax shelters, because they'd rave revenue, would take a two-thirds vote. now, what does that mean? well, here's a little building down in the cayman islands i've talked about many times, a little five-story building, claims to be home to 18,857 companies. they all claim they're doing business out of this little building. i have sea aid this is the most efficient -- i've said this is the most efficient building in the world. quite remarkable. 18,857 companies are doing the business out of this little five-story building. and i'm told there are not many people coming and going from this building during the day. are 18,000 companies really doing their business -- they call this headquarters. that really their headquarters? we all know it's not their headquarters. we all know what's going on.

it's not business. it's monkey business. what they're doing down there is avoiding the taxes that all the rest of us pay. and this amendment would protect this scheme. you want to protect this scheme, vote for this amendment. mr. president, how big is this scheme? well, here's what our own permanent subcommittee on investigations has told us: "experts have estimated that the total loss to the treasury from offshore tax evasion alone approaches $100 billion per year, including $40 billion to $70 billion from individuals and another $30 billion from corporations engaging in offshore tax evasion. abusive tax shelters add tens of billions of dollars more." mr. president, you want to lock in these abuses? you prefer to pay more in taxes yourself so that people can engage in these scams? vote for this amendment. vote for the legislation that's

before us. vote for what is on the floor because you'll protect them forever more. mr. president, i end as i began. this is perhaps the most ill-conceived, ill-considered, internally inconsistent legislation that i have ever seen in my 25 years in the united states senate. i hope my colleagues have the wisdom to vote "no." i thank the chair and yield the floor. the presiding officer: the senator indiana. mr. coats: mr. president, i just would like t the chamber to know that today marks the 88th birthday of one of the great members of this senate body, a true american hero, former majority leader bob dole. and as i reflect on the extraordinary life he has led -- and i had the privilege of serving under him as a united states senator and working with him in the private sector getting to know he and his wife

well -- i cannot help but note that the leadership that he provided in comparison to the lack of leadership that is being provided in this body now stands in great contrast. there is an absence of leadership here and a seriousness of purpose that bob dole would never have allowed, had he been majority leader. i say that because i come to the floor today greatly troubled by the remarks that were made here in this senate yesterday and again this morning by the majority leader regarding the bill that is before us. the issue here takes two tracks. one of which is the content of the amendment in the bill that is before us that was voted on by the house of representatives, passed by the house of representatives, and sent over for us to debate and pass here.

we can disagree -- and i think there's been some misrepresentation of what this bill actually does. we can disagree about the contents of it, but we have an obligation and a responsibility to debate those contents and to put every member of this body on a position of saying "yea" or "nay" on amendments that might be offered to improve it or to dhaing ichange it or to modify d finally whether or not to support it or not support t that is vote on a motion to table. you know, thraw there are a couf definitions of "table. " more than a couple. but one of those is tabling -- getting to the table to negotiate something, just as the nfl players and owners are doing much more seriously and with much more consequences to the future of this country, what we ought to be doing.

putting it on the table, debating it, and addressing it, expressing your support or nonsupport, defending it, characterizing, mischaracterizations -- that's what this body is about. it is the world's greatest deliberative body is deciding not to deliberate this bill at all. the second definition of "table" is taking it off the table so the majority leader has said, i'm not going to allow you to debate it. i'm not going to allow amendments. i'm not going to allow up-or-down votes so the american people know where we are. this is a vote to table so we don't even have the opportunity to debate it. now, it was the majority leader himself who said we're going to be in session every day until we get this thing settlemen settle. now he comes down here and says, i am neat going to waste one more day on this. senators who were told we're going to be here every day, we'll be here on so saturday, ad

now says we can go home. what kind of leadership that? we don't know whether we're supposed to be here or not supposed to be here? what's happening with one of the most serious crises that we're facing, the country that is ever seen, particularly in the financial area, it is "the" most serious, except for maybe the great depression. and we're told, we don't even have time to debate this, this is a waste of time. i quote the unbelievable statements that have been made by the majority leader. this piece of legislation is about as weak and senseless as anything that is ever come on this senate floor? really? i could spend a half an hour talking about senseless legislation, egregious legislation, discriminatory legislation that is ham com haso this floor and debated and not just tabled. to characterize the serious efforts of the members of the house of representatives and the members of the senate, including

some democrat members, of trying to fix this problem, to characterize that as senseless and wasteless, i'm not going to send one more day of time on this senseless legislation. i thought, on reflection, the majority leader would come here this morning and say, perhaps i overstated the problem. let me better explain where i think we are and where we need to go. but, no, he comes down and he doubles down this morning, doubles down and says, it's very, very bad piece of legislation, without merit, it gets in the way, gets in the way. talking about dealing with cutting spending that we know we can't afford, talk about putting some caps on it so we don't keep doing this in the future, so we have a path to fiscal responsibility, talking about a balanced budget so we live within our means? that's getting in the way?

this body has failed its responsibility to be faithful to the constitution and faithful to the people of america. and, as a consequence of that, we're signature here saying, we're not even -- we're sitting here saying we're not even going to debate something that is brought forward with hundreds of thousands of hours of effort. maybe you don't like t maybe you don't agree with it. we will, stand up and say so -- well, stand up and say so and tell us what you want to do about it. the majority leader and his party has not brought one piece of legislation to this floor. the president has not offered one number, one proposal in writing that we can work with. we have not had the opportunity to debate for one minute anything that the other side has offered. and so we bring something forward and iter it's called a worthless piece of junk. is that what the american people sent us here to do? i came here to find a result, a result to the dire fiscal situation that our people are

in. and the majority leader comes down here and says, we are not responding to the will of the people. where hayes been? what planet is he on? responding to the will of the people? they're sick and tired of government spending more money than it has. they're sick and tired of being told they're handing over to their children debts that are never going to be aibl able to e repaid. and we're told that we want to take this off the table so we can't even debate it? i woke up in the middle of the night so frustrated and so angry, after spending last evening saying i'm hopeful that we can come together and work something out. and the well get gets poisoned t evening by the majority leader and gets poisoned this morning. those of us who work our tails off are told this is a piece of junk. that's not what we came here to do. i i didn't come here to get mad.

i came here to be senatorial and i've parntsly not done that. -- and i've apparently not done that. they're mooting in back rooms together -- they're meeting in back rooms together, signing letters to the president to ask him to step up. 32 democrats and 32 republicans. the president ignores that and does nothing until the very end and comes here to try to bail it out. look at me, i took care of everything while america is worried to death about the future. to say we haven't done anything but put forward a piece of worthless legislation is so worthless we're not going to allow us to talk about it or debate it, not allow amendments to take place, not give it the respect that it's due -- so you don't like it come down here and tell us why you don't like t and let us have a vote on why you don't like it. instead of saying take it off the table. i guess we're all getting

frustrated. it's 100-something degrees heat index outside and i can understand some of us getting worked up about this thing but the future of america is at stake and this majority leader is not allowing to us deal with it. with that, i yield the floor. mr. johanns: mr. president? the presiding officer: the senator from nebraska. mr. johanns: mr. president, i stand here today as a cosponsor of the cut, cap, and balance legislation and as a supporter of that legislation. here's the insanity that has gripped not only this body, but all of washington. we are literally in a year where we will have the third year in a row of deficit over $1 trillion. in fact, current projections are that this annual deficit will set a record, a very dubious

record, i might add, of $1.6 trillion-plus we were promised three years ago that if this enormous, gargantuan effort to force more spending into the economy with the stimulus plan were passed, that $1 trillion effort, it would put this country on a path to recovery. and it has done nothing except raise our debt and pass the problem on to our children and grandchildren. so after weeks and months of work, on an idea to rein in the spending and to come to grips with where we are at in the country, we are literally at a point where within minutes we will vote on a motion to table that effort, and we will be

right back to where we are today. we will be right back to a situation where we will face trillion-dollar deficits. we will be right back to a situation where every economist in the world is telling the united states of america, the largest economy, that your spending is not sustainable. we will be right back to rating agencies looking at our government debt and saying you have not come up with a plan to rein this in, and so you are being targeted to be downgraded. but what we are really right back to is this: we have a government too big, we have too many promises that have been made where no one had any idea how they would be paid for. by the end of the year we will

have a deficit of $15 trillion, which is significantly understated. in four more years, we will have a deficit, a debt of $20 trillion, which will still be significantly understated. and somehow there are members of this body that are arguing this is a better way, table cut, cap, and balance so we can return to where we are at today. is it any wonder that those of us who are concerned about this and concerned about the future of our children and grandchildren are coming to the floor and saying wait a minute, this is destroying our nation. mr. president, i rise today as i have many times over the last days to say support this effort.

support cut, cap, and balance. i am pleased to be a cosponsor of this legislation, this very important legislation that has the potential to change the direction of what we're doing, and i am going to be one of the people that supports this legislation today in my vote. mr. president, with that, i yield the floor. a senator: mr. president? the presiding officer: the senator from south dakota. mr. thune: mr. president, i want to echo the comments of my colleague from nebraska and my colleague from indiana, all of whom have come down here to express their support for the cut, cap, and balance approach to dealing with this debt crisis that we're facing today, and point out that it passed in the house of representatives a few nights ago. it had 234 votes, and it is the

only plan out there. as my colleague from indiana has said, the president, the democrat leadership here in the senate has yet to produce a plan that will meaningfully deal with the greatest crisis that our country has faced in my service here in the united states congress. and that is this massive out-of-control debt that as the senator from nebraska pointed out could lead to much higher interest rates along the lines of whether we're seeing in some of our european countries, which would absolutely crush this economy. if we are serious about growing the economy and creating jobs, we have got to get federal spending under control. we need a smaller federal economy and a larger private economy. and what's been happening here since this president took office is we continue to grow government. we've added 35% to the debt, spending in increase by 24% nonnational security discretionary spending in the last two years at a time when

inflation was 2% in the overall economy, federal spending has been growing at ten times the rate of inflation. the number of people who are receiving food stamps have gone up by 40%. the unemployment rate is up by 18%. there are 2.1 million more people unemployed today than there were when this president took office. the policies of this administration are not working when it comes to getting people back to work and getting spending and debt under control. i was listening with great interest to my colleague from north dakota who was down here on the floor earlier denouncing the whole idea of a balanced budget amendment like it was coming from some foreign planet, and talked about how ill-conceived and ill-considered and stupid this approach, this cut, cap, and balance approach, is. well, my observation about that, mr. president, is that the democrat failure to produce a budget in over 800 days is exhibit number one for why we need a balanced budget

amendment. we ought to be embarrassed here in washington, d.c. we are not doing the people's work. we haven't passed a budget in over 800 days. and yet, the other side comes down here and denounces the idea of a balanced budget amendment, which 49 states have some form of balanced budget amendment that requires them every single year to balance their budget. my colleague from north dakota knows that. his state has it. my state of south dakota has it. it's a very straightforward concept that the people of this country clearly understand. now, if it takes issue with the way this particular balanced budget amendment is written, fine. come up with your own proposal. but don't suggest that having a constitutional amendment that requires this place to do something that it hasn't been doing for literally the last 25 or 30 years is a bad idea. what we've got today is dysfunctional. it is broken. it does not work fork the american people. it's -- it does not work for the american people.

it's an embarrassment, mr. president. that's why we need something. we've got to put something on the books that will impose discipline on this congress to get spending and debt back under control and have us start doing something about the runaway debt that is putting a crushing burden on future generations of americans. if you don't like this balanced proposal, the cut, cap, and balance proposal is not prescriptive about this particular balanced budget amendment that many of us are cosponsors of, come up with another one. but let's put something in place that enshrines a responsibility and obligation and a requirement for us every single year to live within our means. we cannot continue to spend money that we don't have. and we have demonstrated year over year over year around here that we continue to add more and more and more to this debt. and under the president's proposal, budget proposal, that debt would have doubled in the next decade. that's why i think when his budget proposal was put on the floor of the united states senate it got zero votes. not a single democrat or a

single republican voted in favor of what this president put forward in his budget submission earlier this year. since that time there's been absolute lack of leadership out of the white house. the president has been completely missing in action. the democrat leadership, as i said, has put forward no idea, no plan of their own. we have in front of us something that achieved majority support in the house of representatives a few nights ago, 234 members of the house of representatives voted for this. it is a serious, meaningful effort to cut spending now, to cap it in future years and to put in place a balanced budget amendment that is long overdue and which, frankly, if it passed 15 years ago in the united states senate, we would not be in the position that we are today. it failed by one single vote in the united states senate back in 1997, and i can only help but think, mr. president, how much better off we would be today in terms of the spending and debt situation that is facing this country had we gotten the necessary two-thirds vote back in 1997. but it's never too late to do

the right thing, and we have an opportunity to do that today. and i think to hear our colleagues get up on the other side and belittle the effort that has been made by a lot of people around here who are trying to do something about a problem, a problem that is going to wreck this country if we don't fix it, is not befitting of this institution. and so i hope my colleagues today will allow us -- this is going to be a tabling motion now, i guess, instead of a debate about cut, cap, and balance because they've decided this isn't worthy of consideration on the floor of the united states senate. i think it's a terrible reflection on this institution that something is brought forward in good faith, a serious, meaningful effort to address spending and debt and to put this country back on a sustainable fiscal course, and we're not even going to have a debate on it. we're going to have a tabling motion in a few minutes. i hope my colleagues will defeat that tabling motion, allow us to continue to debate this and to get an up-or-down vote on

something that i think is a correct approach and something that will meaningfully address the serious problem this country faces. mr. president, i yield the floor. mr. leahy: mr. president? the presiding officer: the senator from vermont. mr. leahy: mr. president, unlike any republican in the house or the senate, i have voted for a balanced budget. we balanced the budget under president clinton. not only balanced the budget, started paying down the national debt. he was able to leave hundreds of billions of dollars in surplus to his successor who determined with republican votes to go to war in iraq and pay for the war with a tax cut. that's why we had to borrow the money from china and saudi arabia. not a single republican voted for a real balanced budget when they had a chance to. in fact, it passed in the senate only because vice president gore came and broke the tie. i was proud to vote for that balanced budget. not a gimmick, but a real

balanced budget. we had to actually make tough choices. we did. we balanced it. we had a surplus. but when you talk about amending our nation's fundamental charter, the constitution of the united states, it's not something congress and the american people should feel forced to do in the face of a financial crisis. i take seriously my senatorial oath to support and defend the constitution. now i know that there are a lot of pressure groups demanding elected representatives sign pledges about what they will and will not do. the pledge i follow, the one i was honored to make at the beginning of this congress, is to uphold the constitution. that's what i intend to do as i represent the people of vermont. the house-passed bill, h.r. 2560, which the senate is now considering, claims to oppose a balanced budget of future

congresses but it doesn't even contain the proposed constitutional amendment the supporters are seeking to adopt. nor did the bill pass with a two-thirds of the republican-controlled house voting in favor. that threshold is what is required, of course, to pass a constitutional amendment. the house vote was more than 50 votes short of that necessary number. the process by which this bill has been brought to the floor of the senate is an affront to the constitution that we're sworn to protect and defend. indeed, the house bill denies authority to meet the nation's obligations until congress passes a type of constitutional amendment that will actually make it more difficult to reduce our national debt. that kind of constitutional blackmail has no place in a democracy, no place in our laws. it's why the founders did not include a constitutional requirement for a balanced budget or prohibition against

incurring debt in our constitution. they knew full well that would have been foolish and dangerous and self-defeating the nation they were seeking to establish. and i respect the wisdom of the founders to uphold the constitution which has served this nation so well for the last 223 years. let us not be so vain to think we know better than the founders what the constitution should prescribe. i reject the notion that for political reasons we need to rush consideration of an ill-conceived and evolving proposal for a constitutional amendment. i'm going to stand with the founders. i'll defend their work and our constitution and oppose a proposed series of constitutional amendments which incidentally hasn't even had a hearing. amend the constitution and we haven't even had a hearing on it. amendments to the constitution of the united states are permanent. they're not bills or resolutions that can be abandoned or fixed.

they are not just a butcher sticker or a sound bite. each word matters to hundreds of millions of americans and future generations. i have never seen -- and i have been here 37 years -- i've never seen the solemn duty of protecting the constitution treated in such a cavalier manner. i wish that those who so o say they revere the constitution would show it the respect it deserves rather than treating it like a blog entry. i'm concerned how some in recent years have sought to impose their view by unilateral objection to compromise with minority obstruction. that has, at times, seemed to be the rule in the last few years. some have tried to undermine the legitimacy of president obama. filibusters and requirements for supermajorities have become

routine. they've stymied congressional action on the part of the american people. this year should be a cautionary tale that convinces all americans that the risk of default and ideological impasse risks us. i need only recall the game of chicken earlier this year. i cannot help but think, we don't take the steps we should, we see our interest rates go up, we'll spend hundreds of billions of dollars in extra interest to china, which they can spend on infrastructure, they can spend on medical research, they can spend on education; we won't have it here in the united states. that's what the other side seems to want. we've seen the danger that irresponsible brinkmanship can promote. we should guard against it, building into the constitution a

supermajority requirement for fiscal policy invites political blackmail and gridlock fl we've seen enough of that already. the source of our budgetary problems does not lie with the constitution. the constitution remains sound. the fault lies with those who will not work with the president to achieve results that will help the american people. it is lacking the political courage to do what is right. the last time we balanced a budget, not a single republican voted for that balanced budget. yet it created enormous surpluses. these proposed constitutional amendments would not cut a single dime from the debt or federal budget. rather than deal with our problems, some want to require that we deface the constitution with a measure that will by its own terms not be effective for five years, if it were to be adopted by two-thirds of both houses, the congress, and then ratified by three-fourths of the

states. put that another way, at least three election cycles from now. we get our bumper stickers today but we kick the can down the road three election cycles. congress has the power now to take steps to avoid a government's default, get us on the path to rebalancing the budget. just as we did at the end of the clinton administration. this debate is a distraction from the hard work and hard choices, thchoices that immediae made. -- that need to be made. proposed amendments to the constitution are not just unnecessary, they're unwise, dangerous. in my view, the house-passed bill, the proposed amendment, demeans our constitution. never in our history have we amended the constitution, the work of our founders, impose budgetary restreekses or required supermajorities for passing legislation and now

we're saying, let's do it, let's do it on a whim, let's do it without any hearings, let's do it because we can do it. well, all senators swear an oath to support and defend the constitution of the united states. that's our duty and responsibility. the constitution has allowed america to flourish, adapt to new challenges. we have amended it only 17 times since the bill of rights. our constitution deserves protection. i stand with the constitution today. i'm going to support the motion to table this ill-conceived legislation. mr. president, i yield the floor. the presiding officer: the senator from south carolina. mr. graham: how much time is left on our side? the presiding officer: five minutes. mr. graham: will you let me know when we have four minutes -- four minutes has expired? okay. someone else wants to talk. thank you, mr. president. in 2010 we had a major election

in the country. the people who were elected in the house made promises to their constituents that if you sent me to congress i would try to change the system and deal with the fact that our nation is being run into the ground. we've got more debt than any future generation can ever pay off. 40 cents of every dollar we spend is borrowed money that if you are born today, you inherit about $48,000 of debt that we're spending more on social security payments than we collect in taxes; medicare is underfunded by $30-something trillion over the next 75 years. when you add up all employment programs, we're about $50 trillion short of the promises we've made. simply put, the house republicans who were elected during their campaigns said that i believe congress is out of control. we're going to become greece and i'd like to do something about t

well, what did you expect what they got here? that they'd just say, okay, i've been taught the real way that the congress works and it's all okay? they did something about it. congratulations. anytime a person running for office fulfills the promises they made to their constituents, they've done, i think, a great service to democracy. cut, cap, and balance is a house effort to reduce spending, not ten years from now but this coming year. the problem with all these plans, is h very sincere probleo solve our budget problems in the past, gramm-rudman-hollings, between president clinton and the republicans, we achieved balance because we restricted the growth of entitlements, we restricted the growth of doctor and hospital payments, then we found out how much it was hurting doctors and hospitals. we began to nickle-and-dime doctors and hospitals and guess what? we stopped the program and we

spent all of the surpluses. how do you get $14-plus trillion in debt? both parties are working together. this has been a bipartisan effort for about 30 years to run the country in the ground. i like to have a bipartisan effort to save the country from becoming greece and the only way you can do that is put ideas on the table. please to my democratic colleagues, let this debate go forward. if this is not worth debating, what would be? how do you save the country from becoming a debtor nation to the point that the next generation can't inherit the american dream? if you've got a better plan than cut, cap, and balance, please show it to us. we're willing to raise the debt limit but we're not going to do it without change the reason we got in debt venal the cut part reduces spending in 12 20* 12 by $1 00 billion. that will cause some pain, but it is doable. it is about 3% or 4% of the federal budget. i think most people at home think they can cut their budget 3 oregon 4% to -- 3% or 4% to

save their feasm the cap an effort to wipe out the $1.4 trillion deficit. we're going become greece because we're going to have 100% of debt to g.d.p. in the next 20 years and $1-plus trillion deficit has to be changed and you can't do it overnight, but you should be able to do it over ten years. and the centerpiece of the house legislation is a balanced budget amendment to the constitution. what rational person really believes that republicans on this side and democrats on that side are ever going to find a way to fix our nation's problems without something new happening? the presiding officer: the senator has consumed four minutes. greenhouse gamr. graham: thank . after 40 years, the evidence is income tax the congress is broken. unless you change the system, fundamentally we're going to run our nation into the ground. so i support a balanced budget amendment. and here's the way it works. you got to get two-thirds in the senate and the house and three-fourths of the states have

to ratify the balanced budget amendment. give the people of america a chance to have their say. let pass a balanced budget amendment to the constitution before we take the country and put it in a situation beyond redemption. and the only thing that's ever going to change in body, i'm sad to say, is some discipline imposed by the constitution itself. so i promise my colleagues to work with you where i can. but for the rest of my time in the senate -- and i don't know how long it's going to be -- i'm going to push a balanced budget amendment to the constitution because i don't trust the congress to do the hard things on their own. and when i say that i mean republicans, too. i yield. mr. manchin: mr. president? the presiding officer: the senator from west virginia. mr. manchin: i rise today to speak of one of my greatest

concerns, which is our nation's fiscal future. all of us, democrats and republicans, liberals, mod pratts, conservatives, face a choice about whether we'll seats moment before us -- we'll seize the moment before us or whether we will let this moment pass us by. clearly we face tough and difficult decisions. the decision we make as members of congress must be the right and responsible ones or our beloved nation and our hardworking families will needlessly suffer. in my state when i became governor, we faced challenging times, growing debts, tough budget choices and when i was first elected in november of 2004, the first thing i did afterwards is going to new york and talk to the rating agencies to find out what our gravest challenges were. we took those challenges dish went back home and we started making changes much the first thing did i was not blame anybody, any past administration, republican or democrat, or any other body.

i was elected to fix things, not to put blame on people. and we started, as west virginians, not as democrats or republicans, about if if i fixe problems of our state. we didn't raise tax rates. people came to me and said, needed to do that. but i couldn't do that without trying to run our state more efficiently. the difference between what we did back home and what's happening here in washington is that we faced these choices together. we worked across party lines in a responsible way to address our fiscal challenges and in doing so we set our state on the right fiscal path, and without -- let me stress again, without sacrificing our moral responsibility or obligations to our seniors, our veterans, and the people most challenged in our society. and we did that without raising their tax rates. right now, because we made the right choices, our state is doing well. even in the most difficult,

challenging "financial times," we've had record surpluses every year, six years in a row. for the last three years we're one of the few states in the nation that's got an increase in our rating from the standard & poor's, moody's and fitch's, the rating agencies. we did all this by living within our means. it is the reason why i'm such a strong supporter of a balanced budget amendment. it makes #u put your priorities based on what our values are in place. i truly believe that most americans support a balanced budget. every family that i know in my state and in this nation works off of some sort of a budget. nearly all of our state governments operate on a balanced budget amendment. i have never seen another place except here at our nation's capital, at our government in washington, that puts a budget together based on what they want to spend and not on how much they have to spend. but how we balance our budget is critically important. we have a moral responsibility

and an obligation to our seniors, our families, and those who are the most fragile if our challenged society. that is why i cannot support the cut, cap, and balance plan passed in the harks which we will be voting on shortly. as a moderate democrat who is also a proud fiscal conservative, i agree with that bill's goal of a balanced budget. however, i cannot support the naught it takes. the cap cap plan does not reflect who we are or what we want to be os americans. i believe we need to cut but not so deeply without regard for our sarnsdz most vulnerable. i believe we need a cap on our spending but not at a level that could destroy the most important and vital programs that we have in society. i strongly believe that we need balanced -- a balanced budget amendment, but only one that takes a responsible and reasonable approach. clearly, we can all agree that it is time for us to make the difficult choice that will get our financial house in order,

but we must do with the right plan and in a responsible manner that keeps our promises to our seniors, our veterans, and most importantly our children. and like it or not, neither democrats nor republicans can take l this enormous challenge on their own. this is not a political problem. this is an american problem, one that we all face. we should put politics aside and truly put our country first. earlier this week i saw that spirit at its finest on tuesday of this past week, when you, mr. president, along with 49 other of our colleagues, came together to listen to the gang of six who worked so hard based off of the president's fiscal debt commission. democrats and republicans -- the presiding officer: the senate will be in order. mr. manchin: democrats and republicans rolled out the first bipartisan proposal to address the nation's fiscal nightmare. at that meeting senators from both parties evenly split came together to listen to the hard

work of the senators who spanned the ideological spectrum. at that moment the gang of six turned into what we affectionately call the mob of 50. and for the first time in these negotiations about our fiscal future, we had a bipartisan plan with momentum that was putting our country first. mr. president, we should not waste this moment. we must work together to cut spending and attack waste, fraud and abuse in every sector of our state and our country. every department, every program that needlessly costs our nation hundreds of billions of dollars every year, we must work together to reform our tax code not to raise tax rates but to make fairness a priority, and it's simply unfair that hardworking middle-class families in west virginia and all around this great country would pay more in taxes than a fortune 500 country like g.e. which didn't pay a cent or billionaires like warren buffet -- the presiding officer: the senator's time --

mr. manchin: democrats and republicans must work together to eliminate loopholes. and it's time to end the three wars that we have on which we're spending so much and the resources we can't afford and the lives we can't spare. mr. president, i say to all this is a time for us to come together as americans, to put our politics aside and do what is right for all of the future of this generation and for this country. thank you, i yield the floor. mr. reid: mr. president, i'm going to terminate my remarks very quickly. i want to say to my friend from west virginia, he's been a great addition to the united states senate. we, of course, know he replaced the great, legendary robert byrd. the people of west virginia should be happy with the peformance of joe manchin. his executive experience as governor of the state of west virginia which had an impeccable record of surpluses every year he was there. he's brought this talent to washington and has been very helpful to us all.

mr. mcconnell: mr. president? the presiding officer: the republican leader. mr. mcconnell: five months ago president obama unveiled the only concrete statement he's made to date on our nation's debt crisis. continue a budget plan so preposterous, so unequal to the moment that it was rejected in the senate by a vote of 97-0. the president's response to this crisis was to pretend it didn't exist. two months later the president doubled down on his vision for a future of debt by demanding that congress raise the debt limit without any cuts to spending or a plan to rein it in. it was a total abdication of leadership, and it wasn't sustainable. so over the past several weeks the president has been doing his best impersonation of a fiscal moderate. he's talked about balance and left it to others to fill in the blanks. and here's what democrats in congress have proposed as a solution: more spending and higher taxes as a solution to a

debt crisis. just yesterday with the clock ticking, we heard reports of a volcanic eruption among democrats that we should solve this crisis by focusing on reducing washington spending. well, mr. president, the solution to this crisis is not complicated. if you're spending more money than you're taking in, you need to spend less money. this isn't rocket science. we could solve this problem this morning if democrats would let us vote on cut, cap, and balance and join us in backing this legislation that republicans support. but the first step in solving a problem is to admit you have one, and too many democrats refuse to admit that washington has a spending problem. that's why republicans have insisted that we focus on spending in this debate. the reason we've got a $14 trillion debt is because no matter how much money washington has, it always spends more.

and the only twaoeu cure the problem -- and the only way to cure the problem is to stop enabling it. americans get it. i want to thank every american who has spoken out in favor of cut, cap, and balance. today the american people will know where we stand. a vote to table this bill is a vote to ignore this crisis even longer. a vote to get on this bill is a vote for getting our house in order. so i would urge my democratic colleagues one more time to reconsider their position, join us in support of a future we can afford. mr. president, i yield the floor. mr. reid: mr. president? the presiding officer: the majority leader. mr. reid: i say to my, all my friends, the new senators, welcome to the united states senate. this is a vote on the piece of legislation that was described by my friend, the chairman of the judiciary committee, about as well as anyone else. it is violative of our constitution. and this is a vote on this matter. and we're going to dispose of

this legislation as it needs to be so president obama and the speaker can move forward on a matter that will have some revenue in it and send it over ere and we can move >> now a discussion on the keff sit talks with oklahoma senator tom coburn, a member of the so-called gang of six. this is 30 minutes. table. he's joined the so-called gang of s in the senate which he le earlier, and alsonnounced a $9 trillion debt scheme atic. we'll be talking about this and more. senator, headlines suggest that if there is a deal being crafted between the speaker and the between the speaker and the senate that your democratic colleagues in the senate are angry about being excluded from

it. people are watching this mere yad of discussions. how do people understand where things are right now? guest: i don't really understand where they are. if they have negotiated something they agreed to, why would they complain? it is the whole washington silliness of complaining because you don't know what's going on. nobody knows what's going on except the principals in the room, and when they come to something they file feel they can bud a case for on both sides, they will put it out there. i was a part of the gang of six discussion. the idea is to get us moving. they should be listening. maybe they need to offer

something themselves. that's been the problem. we haven't had any offers. we have seen the republicans offering multiple things. we have a bill on the senate they are going to table that actually fixes the problem, raises the debt limit, and they don't want to vote on it, so we're going to table it. so i think it is all polital posturing. host: you know frequently this town wks to the brink. is there anything different about this time? do you think a deal will be done? guest: i certainly hope so. the root for us, as every american, is if we don't get a deal done, i think it will cost us a half of one percent. even if we got a deal done 10 days later, i think it costs us a half of one percent. that's $75 billion a year in terms of the damage to our credit. increased interest cost. i think another thing we need to

do -- you have to ask what the problem is. the problem isn't the negotiion between the republicans and democrats, it is not between the president and the speaker. the problem is for us to maintain our debt rating we have to have a program that cuts about $4 trillion at a minimum about $4 trillion at a minimum over the next 10 years. every interest interest grurengs i was listening to your calls beforehand. every interest group says they don't want to get touched. the fact is every interest group will be get touched. everybody that's comfortable with their benefit is going to be a little less comfortable if we're all as a country going to get out of this. hostwe had a number of callers saying congress should cut its own salary. i have a washington post article saying coburn should leave by

exple. what are you offering? >> cut our salary by 15%. actually, there wouldn't be anything wrong with cutting our salaries until we decrease the budget deficit. cut our expepses back 15%. we cut them back 5% this yeamet in other words make us have to do some of the hard -- i mean, our budgets are ludicrous. i trim back $600,000 every year. >> you are allocated money -- >> that i don't need. what you have to ask is, if i can do that, can't everybody? that's 20% of my budget. host: your 900 trillion plan, where is it going to go? >> it ising going to go anywhere

now. no one is looking at it. this is the first time they have researched what gao has sai what the congressional research has said, wh thendividual inspector generals have said, what o.m.b. has said, plus we what o.m.b. has said, plus we have done our own research and said, gosh, given all these facts, common sense would say you do this. so there are 3,000 references in there to studies on our recommendations that we' made. and so i hope it becomes a place where people go to find out information about what we can cut. we could have done more. england just recently said you could recently cut 14% out of the pentagon. his assessment is that you could cut 14% of the civilian payroll out of the peg -- pentagon. that's $150 million over 10 years. that's a lot of money. host: what do you say about this

being a naive cut? guest: washington doesn't cut because washington cares more about being re-elected than they do about the public. it comes from a lack of courage to stand up and do the best right thing for our country. when you are threw up -- through up here and you get out and the country is belly up r. you say, ll i believe careerism is killing us. term limits and a balanced budget amendment, term limits and a balanced budget amendment would fix everything that's wrong with washington. wrong with washington. host: you answer this twitter questioner, which says, "would you vote for the house balanced budget in a recession?"

guest: yes, because it will take a period of time for that to move through the states. we have to be careful how fast we cut, but we need to cut and we need to cut quickly. otherwise we're between two lanes. if we don't cut quickly enough, we're going to have the amount we cut in offset with increased interest costs. if we cut too fast, i mean, w can cut fast, but if we cut too fast, we'll have a negative impact on our ecomic growth. so we have to go down that line. that's why $4 trillion is a minimum. host: in the wall street journal this morning, his name is peter shelkin, he is a co-editor of understanding america, the anatomy of an exceponal nation. second year at law school. he one paragraph.

"i can think of no other law that would alo judges to exercise more budget-making decision than a balanceed budget amendment. even if the courts simply did their job and did not grasp for that power." guest: we have a judge sitting on the bench today that should be impeached. the fact is you will never control washington with today's politicians until you put a bridle and a bit in their mouth that says you can't spend money you don't have. it won't hatch l happen. -- it won't happen. host: one more column. grover nor quift has a piece where he is explaining his

position on taxes. "read my lips, no new taxes. why republicans should not relent." he was on o program and talking about you specifically. we want to replay that quote. >> the difference of opinions between coburn and americans for tax reform, between coburn and the 225 members that signed the pledge is we are for tax reform but not for tax increases, and coburn vote forward a $2 trillion tax increase when he endorsed obama's deficit plan. all three members of the republicans in the gang of six not only took the pledge not to raise taxes but then wrote me a letter saying, look, we are not going to raise taxes. we just want economic growth. i'm for that. coburn has publicly said in the past that he likes tax increases. that passed him by. the republican leadership in the house made it clear that if

coburn continues to be for tax increases, he's on his lonesome on that and no one else has joined him. host: senator coburn? guest: i think he representshe silliness of ourolitical system today. i don't want to raise taxes. i think it is terrible that we would have to raise more taxes. but if we're going to get in agreement in washington to fix our problems when those of us don't want to raise taxes control the house of representatives, don't control the senate, don't control the white house, it is pretty stupid and naive to think you are going to win that battle. i would rather fix our country and lose a battle with grover norquist then send our country norquist then send our country down the tubes and raise a point of view that is suicide. the fact is, in is a lot of way

to enhance the federal government. reforming the tax code is a great way to do it. we have to get $4 trillion. that doesn't go away no matter what anybody says. the present didn't have a deficit plan. the president's commission had a deficit plan. he never enbraced it. you see the games played wit the numbers, which aren't accurate. realistic things. plus, revenues are at the lowest point. we're at 15.8%. revenues are as a percentage of g.d.p. i think there are tons of tax credits and things ithe tax credits and things ithe tax codes that are unfair that we ought to eliminate. anybody that gets something out of the tax code today in terms of the tax credit and the tax spend tour, you are paying for it if you didn't get one. it is a matter of shifting costs around. if you don't hava special deal on the tax code that you can

take advantage of, you can actually pay more taxes. host: here is part of the plan, reduce the deficit $9 trillion over 10 years. reduce medicaid and medicare spending by $2.6 billion eliminate $1 trillion itax breaks. that is part of senator coburn's plan. the "gang of six "budget's plan is to reduce the deficit $4 trillion over 10 years, overhaul the tax code $1 trillion, immediate spending cuts of $500 billion. caller: i appreciate what you are saying, but i think the

whole problem of everything that we're going through in this country right now has to come down to one simple thing. and that is separate ralte racial of powers. now, a lot of people get this miscon trude with oh, you mean separation of church and state. no. well, yes and no. in their derrick the church was the big power. kis and queens could not move without the permission of the church. nowadays it is big business. when you have big business influence washington, d.c., people like yourself, this is what you are going to get. you cannot have foxes guarding the hen house. host: all right. your response. guest: if you talk about specific tax credits, i think he's right. i don't think it is just big business. i think it is the aarp, i think it is the big labor unions.

i think it is everybody. the whole fact is the federal the whole fact is the federal government is too big and it is in areas it shouldn't be. if you read the constitution, you also read the enumerated powers which gives limited powers to the federal government and specifically states everything not listed here is reserved for the people in the states. the reason we have a $3.6 trillion, $3.7 trillion budget, is a trillion and a half of that or more is stuff that's not our responsibility in the first place. sho look, i'm one of the few republicans that stands up and says i think we need to eliminate some of these tax loopholes, but i think we need to do it in a way that doesn't grow the government. host: here's a comment from kevin mccarthy. he writes "projected entitle ments are between 25 and 50

billion. why are we not more focused on cutting this spending instead by fixing the current epidemic of illegal immigrants in the u.s.?" guest: that's a good question. we are at the point where there ought to be nothing that we are not doing. we ought to be looking at everything. this spring i spent three days all across arizona where the vast majority of our problems are. that is not an unfixable problem. the problem is, we're not getting straight answers from the department of homeland security. we're not completing what we know will work. we're not training new border patrol agents to be as effective as they can because they don't have the language skills. we put them out there without the language skills. they are right.

the senate hasn't done anything this year because the leader of the senate doesn't want to take his votes. his votes. there's an election coming up in 18 months. that's crazy. we haven't had a budget in 2 1/2 years. the reason we haven't had a budget is they don't want their member to cast a vote that might be cast in a way that might hurt them in election. host: another caller. caller: i wish you would add eye -- i wish you would add "investors' business daily" to

your list of newspapers. host: ok. caller: i promise if they drafted you, you woo get at least one vote from connecticut. we would have to have a balanced budget amendment. you mail in a balance each year.

as the government came out wit this number, people would be aware if the government was going toost them more money or less money each year. i thought that was a reasonable way to approach this. i would be interested in your answer off the air. thank you. guest: you're welcome. it is a novel idea. i'm not sure i want the government to tell us what the tax rate would be every year, but it certainly would get us even gauged. you are talking about a modified flat tax for everybody. i think we ought to go on and do the national sales tax where -- host: in lieu of income tax? guest: yes. it is embedded into our income

tax system and the products we export in this country and make us super competitive around the world, it would re-enhance manufacturing in this country, because it would offset, the taxes would be taken out of the products that we produce. it would be a great way for us to actually grow our economy. it is simple. people say they baer. we have $0 billion a year. people don't report income taxes. everybody would know what it costs. if you delegate to the states, it will be done more efficiently it will be done more efficiently and economically.

host: an example? guest: education. we have spent $2.6 trillion since the department of education has been open. we have bureaucrats in washington telling teachers and administrators in oklahoma how to take care of kids, what to do for kids who have no concern whatsoever on them, and when you look at the metrics, susan, of the success of our educational system, there is not one parameter that's better. so why not take that money and just send it to the states and just send it to the states and let the states do what they do better than what we do. what we have done, we have lost our educational advantage, and it nee to be returned to the

states. we can do that in the $9 april april. host: there is a questn, if it host: there is a questn, if it is that promising, senator co burn, why isn't there a bill? guest: there is a bill. they won't let it get to the floor. caller: i watch you on the senate floor all the time. senate floor all the time. i wish you wld consider running for president. we need you. you are probably one of the most honest men in our government. i wish you could consider one suggestion. i would like to see a bill past that there wouldn't be any

campaigning until -- you couldn't possibly raise the money with us, and that would make it a lot betr for our election system. thank you so much and please consider, please consider running. we would all vote for you. thank you. guest: the presidential race is 16, 18 months away.

it is causing us not to focus on the problems at hand, and we are seeing people make decisions based on a re-election 16, 17 months from now. that's why i believe in term limits. i believe if we had term limits for the members of coness, you wouldn't see as much foolishness. people wouldn't be trying to gain advantage partisan wise. they are -- we have seen a difference in how things work. the angst would be less. people would be coming here to get something done before they come home. host: the next caller is from san antonio. this is mike. you are on for the senator. .

i suggest that you go to the irs website and found steps for taxes in 2008. they can pace those tables right into excel and to do the math themselves. they will find a 39% rate only brings in 8.7 billion in additional dollars in the year. this is peanuts. the only way we're going to get to where we needed to be was to cut spending. >> in 2008, the top 20% in this country paid 84% of all the taxes.

they paid 84% of all the taxes. if you raise taxes, what you see tax avoidance start happening. the government can get 18.8%, maybe 19.5%. close to 20 with the tech bubble. what people do is to change their behavior. the government would be 63% bigger. you cut nine trillion dollars and it is still 63% bigger than it was in 2001. this implies a 3% annualized growth in government. we cannot afford this. we cannot afford the inefficiencies that come from

the size of the government. that is hurting us. >> the next call is from new york. caller: i would like to thank you for taking on grover norquist. there is something treasonous about one gentleman holding an entire party hostage above and beyond the pledge that they take into the oath of office. my concern is that i do believe we have a spending problem. we also have a revenue problem. that comes from an understanding of who owes whom white. the other -- the operating budget those trust funds. for example, the social security trust fund. some people say that is an illusion.

it was only an illusion when it was used to pay for the operating budget expenses. the tax forms of pollution, congress is a magician. we need to repay the money. -- tax forms are a the illusion. i am fine with all the spending cuts but i think that an honest budget would require all of you to destroy the unified budget and then require individual balanced budgets and the operating budget, for the trust funds, but also after the operating budget has returned to social security and to medicare and i believe there are 110 other trust funds, smaller ones which are paid for by fees. that is the only way to solve this problem. please destroy the unified budget. what you are

doing. i think you are honorable. i just disagree with the way you are doing it. guest: i think she's dead on. there are 120 trust funds we've stol the money from and spent somewhere else. you hear social security doesn't need to be reformed. the reason it needs to be reformed is because it isn't sustainable. we can't ever borrow the money in the markets becse congress has stolen that money and spent it. we have to borrow against it. what we have to do is reform it so we have to borrow from those and make it sustainable. i think she is right.

they use it to run that money. so she didn't have a tax increase for it. ever since, we have been dionest about the american people about the true cost of things and implied that we can afford to do things that we really can't. host: what are the main areas that contributed to the government. guest: every year the federal government has grown, the defense department, it is out of control. in terms of its purchasing of weapons systems. no one is spending money and how. there is a gray area of generalized government in all sorts of government.

just wait. it is going to be about 45% of anybody that has real health insurance through their employer. we can find each agency and how it has grown. nasa, even though we don't have a manned space flight going on now after the shuttle without going through the russians, yet their -- not on getting anyone into space. i would make this point, susan. we --

host: there is an extreme spending gap between the wealthy earnings and the stale wages of everyone else. guest: what are you going to do? right now, do you want the country to grow? we would tax those people that have the capital that are going to create the jobs in this country angive it to the government rather than decrease government spending and allow that money that they were going to tax to go into productive jobs? the reason you have $3 trillion sitting on the sidelines in bunesses not being -- if you

take all this money, we would still have about a $700 billion. let's take everybody's money, all of it that makes $250,0. that doesn't solve our problem. it doesn't come close to solving our problem. it is a pipe dream. we have to be careful. the thing that built this country is the he that people can get ahead, that can make it to a plateau. if you start saying, we're going to punish you for going there, there is not going to be jobs created, and we will continue to export all o jobs. host: next caller is tiffany, republican in rancho, coucamunga, california. caller: i just wanted to say that i support some of your ideals, however as a middle class person, it is difficult for me to support you as far as your tax increases not being the

35 or 39% that they are supposed to because everydy else is hurting. i look at my budget, and i say, i really can't afford to give anymore. my salary is not in -- increasing. if your plan keeps your belly fat and i'm starving over here. i think we need to do a little something a little more balanced. thank you for taking my call. guest:: we need to lower rates ultimately to we get more money invested in the economy, and that will be $150 billionn

revenue to the federal government and economic growth. when i say to you that the government is twice the size it was 10 years ago, you have to ask a question, is the problem renue or is the problem been able to get out of control? the government has no business being in the business it is in. we have 180 programs for economic development that comes to the economic development of the states. there is area upon area where our hearts are big, great intentions, but the fact is, the right hand doesn't know what the

left hand is doing. the very mistake would be, if we don't cut the $7 trillion or $8 trillion in my plan and you don't raise taxes, we are toast. we won't ever reverse it. we have more of a means testing on the upper hand. as you increase the taxes on social security, social security nefits. they have to pay them back out. we totally revamp the disability

program. we're inhe midst -- the senate we're inhe midst -- the senate committee is totally investigating the i.r.s. on their disability program. whether it is a judge that had a 99% approval rating but did 72% of cases for two lawyers in virginia. that's going on across the country. social security administration is part of disability. 1-18 people in this country is collecting a disability check. i can tell you that 1-18 people in this country are not disabled. i can give you personal experiences. people have to look around. what happened to them? the law says if there is any job you can do in the economy, you are not disabled. yete have had a system, the sts social security -- the

social security system implies you are disabled and we have to prove you are not. it needs to be the oth way. we have undermined self-reliance in this country. in this country. now we hear people who can't do it. we can't because i'm not -- we have families with 14 members that are collecting social security checks on each? i mean, it is out of control. if someone is truly disabled, i want to make sure we're here to help them. but i am planning on coming at you if you are stealing from the system. .

caller: here is the tax the tea party people would get behind. it is called the put your money where your mouth is tax. where your mouth is tax. everyone who had voted for increased government, people who had voted to give our tax dollars to foreign countries so they could use it to kill our soldiers, people who are behind saddling us with all of these e legal aliens the cost of billions of dollars each year, people like george -- host: could you get your point? caller: so we can balance the budget. guest: the implementation and impracticality up it would not

work. we need to go back and say, what was the genius of america it? it is limited government with a limited range the federal government is supposed to do. created the most progressive, the greatest nation the world has ever seen. the genius was liberty and freedom and liberty in government. we no longer have limited government and a government we can afford. we have so many programs that we can get rid of that to not do anything that cost a ton of money. nobody would ever miss them except the people employed in the programs. we need to have a renovation of ideas and a renewal that says we are going to go back in a brace of made us great. you will see job growth. you will see an economy that booms. it will bloom. we still have the same american spirit. is there.

it has been stifled because the government is smuggling yes. -- smothering us. host: we have heard the senate may be in session. we are not sure. we will see. the debates continue about the debt. thank you, senator. >> tomorrow, a reporter has the latest on the ongoing debt talks. douglas talks about his recent study would suggest that requiring drug companies to issue rebates for drugs would cause increases for premiums. and meredith mcgehee looks a campaign financing. who is eligible, and how much people pay. "washington journal" on c-span. the john boehner has announced he is pulling out of the debt

and deficit reduction talks with president obama. instead he will negotiate with senate leadership to work out a compromise. washington ellis less than two weeks away from a deadline to raise the borrowing limit. after that, the president met with reporters to discuss the situation. this is just over 30 minutes. >> good evening, everybody. i wanted to give you an update on the current situation around the debt ceiling. i just got a call about a half hour ago from speaker boehner

who indicated that he was going to be walking away from the negotiations that we've been engaged in here at the white house for a big deficit reduction and debt reduction package. and i thought it would be useful for me to just give you some insight into where we were and why i think that we should have moved forward with a big deal. essentially what we had offered speaker boehner was over a trillion dollars in cuts to discretionary spending, both domestic and defense. we then offered an additional $650 billion in cuts to entitlement programs -- medicare, medicaid, social security. we believed that it was possible to shape those in a way that preserved the integrity of the system, made them available for the next generation, and did not affect current beneficiaries in an adverse way.

in addition, what we sought was revenues that were actually less than what the gang of six signed off on. so you had a bipartisan group of senators, including republicans who are in leadership in the senate, calling for what effectively was about $2 trillion above the republican baseline that they've been working off of. what we said was give us $1.2 trillion in additional revenues, which could be accomplished without hiking taxes -- tax rates, but could simply be accomplished by eliminating loopholes, eliminating some deductions and engaging in a tax reform process that could have lowered rates generally while broadening the base. so let me reiterate what we were offering. in other words, this was an

we were calling for taxes that were less than what the gang of six had proposed. we were calling for modifications to entitlement programs that would have saved just as much over the tenure window. in other words, this was an extraordinarily fair deal. if it was unbalanced, it was unbalanced in the direction of not enough revenue. but in the interest of being serious about deficit reduction, i was willing to take a lot of heat from my party -- and i spoke to democratic leaders yesterday, and although they didn't sign off on a plan, they were willing to engage in

serious negotiations, despite a lot of heat from a lot of interest groups around the country, in order to make sure that we actually dealt with this problem. it is hard to understand why speaker boehner would walk away from this kind of deal. and, frankly, if you look at commentary out there, there are a lot of republicans that are puzzled as to why it couldn't get done. in fact, there are a lot of republican voters out there who are puzzled as to why it couldn't get done. because the fact of the matter is the vast majority of the american people believe we should have a balanced approach. now, if you do not have any revenues, as the most recent republican plan that's been put forward both in the house and the senate proposed, if you have no revenues at all, what that means is more of a burden on seniors, more drastic cuts

to education, more drastic cuts to research, a bigger burden on services that are going to middle-class families all across the country. and it essentially asks nothing of corporate jet owners, it asks nothing of oil and gas companies, it asks nothing from folks like me who've done extremely well and can afford to do a little bit more. in other words, if you don't have revenues, the entire thing ends up being tilted on the backs of the poor and middle- class families. and the majority of americans don't agree on that approach. so here's what we're going to do. we have now run out of time. i told speaker boehner, i've told democratic leader nancy pelosi, i've told harry reid, and i've told mitch mcconnell i

want them here at 11:00 a.m. tomorrow. we have run out of time. and they are going to have to explain to me how it is that we are going to avoid default. and they can come up with any plans that they want and bring them up here and we will work on them. the only bottom line that i have is that we have to extend this debt ceiling through the next election, into 2013. and the reason for it is we've now seen how difficult it is to get any kind of deal done. the economy is already weakened. and the notion that five or six or eight months from now we'll be in a better position to try to solve this problem makes no sense. in addition, if we can't come up with a serious plan for actual deficit and debt reduction, and all we're doing

is extending the debt ceiling for another six, seven, eight months, then the probabilities of downgrading u.s. credit are increased, and that will be an additional cloud over the economy and make it more difficult for us and more difficult for businesses to create jobs that the american people so desperately need. so they will come down here at 11:00 a.m. tomorrow. i expect them to have an answer in terms of how they intend to get this thing done over the course of the next week. the american people expect action. i continue to believe that a package that is balanced and actually has serious debt and deficit reduction is the right way to go. and the american people i think are fed up with political posturing and an inability for politicians to take responsible action as opposed to dodge

their responsibilities. with that, i'm going to take some questions. ben. >> thank you, mr. president. you said you want the leaders back here at 11:00 a.m. to give you an answer about the path forward. what is your answer about the path forward? what path do you prefer, given what's just happened? and also, sir, quickly, what does this say about your relationship with speaker boehner? >> well, with respect to my relationship with speaker boehner, we've always had a cordial relationship. we had very intense negotiations -- i'm going to have my team brief you exactly on how these negotiations proceeded. up until sometime early today when i couldn't get a phone call returned, my expectation was that speaker boehner was going to be willing to go to his caucus and ask them to do the tough thing but the right thing. i think it has proven difficult for speaker boehner to do that. i've been left at the altar now

a couple of times. and i think that one of the questions that the republican party is going to have to ask itself is can they say yes to anything? can they say yes to anything? i mean, keep in mind it's the republican party that has said that the single most important thing facing our country is deficits and debts. we've now put forward a package that would significantly cut deficits and debt. it would be the biggest debt reduction package that we've seen in a very long time. and it's accomplished without raising individual tax rates. it's accomplished in a way that's compatible with the "no tax" pledge that a whole bunch of these folks signed on to -- because we were mindful that they had boxed themselves in and we tried to find a way for them to generate revenues in a way that did not put them in a

bad spot. and so the question is, what can you say yes to? now, if their only answer is what they've presented, which is a package that would effectively require massive cuts to social security, to medicare, to domestic spending, with no revenues whatsoever, not asking anything from the wealthiest in this country or corporations that have been making record profits -- if that's their only answer, then it's going to be pretty difficult for us to figure out where to go. because the fact of the matter is that's what the american people are looking for, is some compromise, some willingness to put partisanship aside, some willingness to ignore talk radio or ignore activists in our respective bases, and do

the right thing. and to their credit, nancy pelosi, harry reid, the democratic leadership, they sure did not like the plan that we are proposing to boehner, but they were at least willing to engage in a conversation because they understood how important it is for us to actually solve this problem. and so far i have not seen the capacity of the house republicans in particular to make those tough decisions. and so then the question becomes, where's the leadership? or, alternatively, how serious are you actually about debt and deficit reduction? or do you simply want it as a campaign ploy going into the next election? now, in terms of where we go next, here's the one thing that we've got to do. at minimum, we've got to increase the debt ceiling. at minimum. i think we need to do more than that.

but as i've said before, republican leader mcconnell in the senate put forward a plan that said he's going to go ahead and give me the responsibility to raise the debt ceiling. that way folks in congress can vote against it, but at least it gets done. i'm willing to take the responsibility. that's my job. so if they want to give me the responsibility to do it, i'm happy to do it. but what we're not going to do is to continue to play games and string this along for another eight, nine months, and then have to go through this whole exercise all over again. that we're not going to do. jessica yellin. >> standing here tonight, mr. president, can you assure the american people that they will get their social security checks on august 3rd? and if not, who's to blame? >> well, when it comes to all the checks, not just social security -- veterans, people

with disabilities -- about 70 million checks are sent out each month -- if we default then we're going to have to make adjustments. and i'm already consulting with secretary geithner in terms of what the consequences would be. we should not even be in that kind of scenario. and if congress -- and in particular, the house republicans -- are not willing to make sure that we avoid default, then i think it's fair to say that they would have to take responsibility for whatever problems arise in those payments. because, let me repeat, i'm not interested in finger-pointing and i'm not interested in blame, but i just want the facts to speak for themselves. we have put forward a plan that is more generous to republican

concerns than a bipartisan plan that was supported by a number of republican senators, including at least one that is in republican leadership in the senate. now, i'll leave it up to the american people to make a determination as to how fair that is. and if the leadership cannot come to an agreement in terms of how we move forward, then i think they will hold all of us accountable. but that shouldn't even be an option. that should not be an option. i'm getting letters from people who write me and say, at the end of every month i have to skip meals. senior citizens on social security who are just hanging on by a thread. folks who have severe disabilities who are desperate every single month to try to figure out how they're

going to make ends meet. but it's not just those folks. you've got business contractors who are providing services to the federal government, who have to wonder are they going to be able to get paid and what does that do in terms of their payrolls. you've got just a huge number of people who, in one way or another, interact with the federal government. and even if you don't, even if you're not a recipient of social security, even if you don't get veterans' benefits or disabilities, imagine what that does to the economy when suddenly 70 million checks are put at risk. i mean, if you're a business out there, that is not going to be good for economic growth. and that's the number one concern of the american people. so we've got to get it done. it is not an option not to do it. >> and your degree of confidence?

>> i am confident simply because i cannot believe that congress would end up being that irresponsible that they would not send a package that avoids a self-inflicted wound to the economy at a time when things are so difficult. scott horsley. >> mr. president, can you explain why you were offering a deal that was more generous than the gang of six, which you seemed to be embracing on tuesday when you were here? >> because what had become apparent was that speaker boehner had some difficulty in his caucus. there are a group of his caucus that actually think default would be okay and have said that they would not vote for increasing the debt ceiling under any circumstances. and so i understand how they get themselves stirred up and the sharp ideological lines that they've drawn. and ultimately, my responsibility is to make sure that we avoid

extraordinary difficulties to american people and american businesses. and so, unfortunately, when you're in these negotiations you don't get 100% of what you want. you may not even get 60% or 70% of what you want. but i was willing to try to persuade democratic leadership as well as democratic members of congress that even a deal that is not as balanced as i think it should be is better than no deal at all. and i was willing to persuade democrats that getting a handle on debt and deficit reduction is important to democrats just as much as it's important to republicans -- and, frankly, a lot of democrats are persuaded by that. as i said in the last press conference, if you're a

progressive you should want to get our fiscal house in order, because once we do, it allows us to then have a serious conversation about the investments that we need to make -- like infrastructure, like rebuilding our roads and our bridges and airports, like investing more in college education, like making sure that we're focused on the kinds of research and technology that's going to help us win the future. it's a lot easier to do that when we've got our fiscal house in order. and that was an argument that i was willing to go out and make to a lot of skeptical democrats, as you saw yesterday. but ultimately, that's what we should expect from our leaders. if this was easy it would have already been done. and i think what a lot of the american people are so disappointed by is this sense that all the talk about responsibility, all the talk about the next generation, all the talk about making

sacrifices, that when it comes to actually doing something difficult folks walk away. last point i'll make here. i mean, i've gone out of my way to say that both parties have to make compromises. i think this whole episode has indicated the degree to which at least a democratic president has been willing to make some tough compromises. so when you guys go out there and write your stories, this is not a situation where somehow this was the usual food fight between democrats and republicans. a lot of democrats stepped up in ways that were not advantageous politically. so we've shown ourselves willing to do the tough stuff on an issue that republicans ran on. norah.

>> mr. president, there seems to be an extraordinary breakdown of trust involved here. and i wonder if you could address what we're hearing from republicans, which is that there was a framework and a deal that was agreed with your chief of staff, with the treasury secretary, about a certain number of revenues, that the republicans had agreed to that. and then after you brought that to your party and the discussion of that, the goal line was moved. is this an example of where the goal line has moved and that that's what has led to this breakdown in trust? >> norah, what i'll do is we'll do a tick-tock, we'll go through all the paper. we'll walk you through this process. what this came down to was that there doesn't seem to be a capacity for them to say yes. now, what is absolutely true is we wanted more revenue than they had initially offered.

but as you'll see, the spending cuts that we were prepared to engage in were at least as significant as the spending cuts that you've seen in a whole range of bipartisan proposals, and we had basically agreed within $10 billion, $20 billion -- we were within that range. so that wasn't the reason this thing broke down. we were consistent in saying that it was going to be important for us to have at least enough revenue that we could protect current beneficiaries of social security, for example, or current beneficiaries of medicare -- that we weren't slashing medicaid so sharply that states suddenly were going to have to throw people off the health care rolls. and we were consistent in that. so i want to be clear. i'm not suggesting that we had

an agreement that was signed, sealed and delivered. the parties were still apart as recently as yesterday. but when you look at the overall package, there's no changing of the goalposts here. there has been a consistency on our part in saying we're willing to make the tough cuts and we're willing to take on the heat for those difficult cuts, but that there's got to be some balance in the process. what i've said publicly is the same thing that i've said privately. and i've done that consistently throughout this process. now, with respect to this breakdown in trust, i think that we have operated aboveboard consistently. there haven't been any surprises. i think the challenge really has to do with the seeming inability, particularly in the house of representatives, to arrive at any kind of position that compromises any of their

ideological preferences. none. and you've heard it. i mean, i'm not making this up. i think a number of members of that caucus have been very clear about that. >> but they were willing to move on some revenues, apparently. >> absolutely. but what you saw -- and, again, you'll see this from the description of the deal -- essentially what they had agreed to give on is to get back to a baseline -- this starts getting technical, but there were about $800 billion in revenue that were going to be available. and what we said was when you've got a ratio of $4 in cuts for every $1 of revenue, that's pretty hard to stomach. and we think it's important to make sure that whatever

additional revenue is in there covers the amount of money that's being taken out of entitlement programs. that's only fair. if i'm saying to future recipients of social security or medicare that you're going to have to make some adjustments, it's important that we're also willing to make some adjustments when it comes to corporate jet owners, or oil and gas producers, or people who are making millions or billions of dollars. wendell. where's wendell? wendell is not here. lesley. is lesley here? >> yes, mr. president. >> there you are. >> thank you. you've said that your bottom line has been the big deal -- that's not going to happen. are you going to be willing to go back to just raising the debt ceiling still?

>> well, i think i've been consistently saying here in this press room and everywhere that it is very important for us to raise the debt ceiling. we don't have an option on that. so if that's the best that congress can do, then i will sign a extension of the debt ceiling that takes us through 2013. i don't think that's enough. i think we should do more. that's the bare minimum; that's the floor of what the american people expect us to do. so i'd like to see us do more. and when i meet with the leadership tomorrow i'm going to say let's do more. but if they tell me that's the best they can do, then i will sign an extension that goes to 2013, and i will make the case to the american people that we've got to continue going out there and solving this problem. it's the right thing to do, and it's time to do it.

we can't keep on putting it off. >> you suggested that speaker boehner didn't return phone calls this afternoon. could you elaborate a little bit on that? >> you know, i'm less concerned about me having to wait for my phone call returned than i am the message that i received when i actually got the phone call. i'm going to make this the last question. go ahead. >> yes, the markets are closed right now, obviously. what assurances can you give people on wall street? are you going to be reaching out to some people on wall street so that when monday comes we don't see a reaction to the news that's developing right now? >> i think it's very important that the leadership understands that wall street will be opening on monday, and we better have some answers during the course of the next several days. >> what can you say to people who are watching who work on wall street who might find this news a bit alarming, perhaps? >> well, i think what you should say -- well, here's what i'd say -- i remain confident that say -- here is what i would say.

i remain confident that we would get an extension of the debt limit and we will not the fault. i am confident of that. i am less confident that people are willing to step up to the plate and actually deal with the underlying problem of debt and deficits. that requires tough choices. that is what we were sent here to do. that is a formality. historically, it hasn't even been an issue. it has been a routine vote of congress does periodically. it was done when ronald reagan was president. he said that the fault is not an option. it would be hugely damaging to the prestige of the united states. and we should not even consider it. that is the easy part. we should have done that six months ago.

the hard part is dealing with the underlying data and the deficit. and doing it in a way that is fair. that is all the american people are looking for. some fairness. i can't tell you how many letters and e-mail, including from republican voters that say, look, we know that neither party is blameless when it comes to how this develops. there has been a lot of blame to spread around. that you don't just balance the budget on the backs of seniors. we hope that we are not flashing our commitment to make sure that kids are going to college. we hope that we are not throwing a bunch of four kids off of medicaid so that they can't get a basic preventive services that keep them out of the emergency room. that is all they're looking for. some fairness.

what you're going to hear, i suspect, if the senate is prepared to pass the balanced bill, the republican plan, then somehow, we can solve this problem with serious debt reduction. it turns out that the plan that we were talking about was comparable in terms of deficit reduction. the difference was that we did not put all the burden on the people that are least able to protect themselves that don't have lobbyists, they don't have lawyers working on the tax code for them, ordinary folks that are struggling every day. and they know they are getting a raw deal. and they are mad at everybody about it. amass that democrats and republicans because they know that no matter how hard they work, they don't seem to be able

to keep up. what they are looking for is somebody that is willing to look out for them. that is all they are looking for. for us, not to keep those folks in mind every single day, when we are appear, for us to be more worried about what some talk radio show host says or what some columnist says, for what pledge we saw in back when we were trying to run and worry about having a primary fight. for us to be thinking in those terms instead of about those folks is inexcusable. and the american people are just desperate for folks who are willing to set aside politics just for a minute to try to get some stuff done.

when i asked or someone else asks, why was i willing to go along with the deal that was not an optimal from my perspective? it is because even if i didn't think the deal was perfect, it least it would show that this place is serious. that we are willing to take on a responsibility, even when is tough. we are willing to step up even when the folks that helped get us elected may disagree. and at some point, if you want to be a leader, then you have got to lead. thank you very much. >> following the president's remarks, house speaker john

boehner met to explain why he ended the talks with president obama and focused on working out a compromise with the senate leadership. >> and good evening. i want to be entirely clear. no one wants to default on the full faith and credit of the united states government. i am convinced that we will not. starting tonight, i will be working with colleagues in the capital. to find irresponsible power forward. i have confidence in the bipartisan leaders of congress that can come together and insure that we have an agreement that will allow the american people to avoid default. spending cuts must be greater than the increase in the debt limit and the tax increases.

discussions we have had with the white house have broken down for two reasons. first, they insist on raising taxes. we had an agreement on a revenue number. a revenue number that we thought we could reach based on a flatter tax code with lower rates and a broader base that would produce more economic growth, more employees, and more tax cuts with a tax system that was more efficient in collecting the taxes that were due to the federal government. let me just say that the white house move the goalposts. there was an agreement on additional revenues. until yesterday when the president demanded $400 billion more which was going to be nothing more than a tax increase on the american people. the leader and i were very

disappointed in this call for higher revenue. secondly, they refused to get serious about cutting spending and making the tough choices that are facing our country on entitlement reform. that is the bottom line. i take the same oath of office as the president of the united states. i have the same responsibilities of the president of the united states. and that is for both of us to do what is in the best interest of our country. it is not in the best interests of our country to raise taxes during this difficult economy and it is not in the best interests of the country to ignore the serious spending challenges that we face. this is a serious debate. it is a debate about jobs and a debate about our economy. it is also a big debate about

the future of our country. until recently, the president was demanding that congress increased the debt limit with no strings attached. the treasury secretary sent me a letter after we were sworn in in january demanding that we give him a clean increase in the debt limit. i immediately responded and told the treasury secretary that the american people would not tolerate a clean increase in the debt ceiling unless there were serious spending cuts attached and real reforms to the way that we spend the american people's money. i went to new york city in may and outlined the challenges we were facing. i made it clear that we would not increase the debt limit or without cuts that exceeded that increased in the debt limit and that there would be no new taxes, and that there would be a serious spending reforms put in place.

it is time to get serious. it is time that the bipartisan leaders act. >> year of aids said that the package of cuts on the table was worth about $3 trillion. how can he say the white house was not serious about spending cuts. that is even more than you were asking for initially. >> we put plan after plan on the table. we had our plan out there. the house passed the cap and balance. never once did the president ever come to the table with a plan. we were always pushing. and when you get into these negotiations, sometimes it is good to back away from the tree at take a look at the forest. yesterday afternoon after the president demanded more revenue in this package, i came back

away from the tree to take a look at the forest. i spent most of the morning and afternoon consulting with my fellow leaders and others. about the way to go forward. i must want to tell you what i said several weeks ago. dealing with the white house is like dealing with a bowl of jello. what i can say is that the world, the cuts we need to make in order to preserve the fiscal integrity of our country. the need to be made to preserve our entitlement programs which are important programs to tens of millions of americans. >> how can you concede that you can forge an agreement with people in the house and the set

without having some by n? >> i think that we can work together here on capitol hill to forge an agreement and i am hopeful that the president will work with us on the agreement. >> president obama says he did not return his phone calls. does this damage your relationship with the president? >> we have gotten to know each other pretty well and i can tell you that in all of our conversations, they were respectful, they were firm, there were frustrations on both sides. but i don't believe that our relationship is permanently damaged. >> to the president has invited you to the white house tomorrow morning. are you going to go? >> yes, ma'am. >> do you trust the president? you say he backed away from an offer he made. do you trust him? >> i trust him as a negotiator.

the understand that every step of this process was difficult. there is a reason why we have to political parties. there is a reason why the president and i come from different political parties. the president believes in the size of government and more taxes for the american people. every week and what i am not stuck here in washington, d.c.. i am out in my district and i run into people. small business people that don't understand why they pay the taxes they pay. i don't understand all the regulations coming out in washington is impeding their ability to grow their business and hire more people. when you boil all of this down, we have to save for the fiscal future in our country and we have to get our economy going again. the way to do that is to have real spending cuts now. >> and the difference in

revenue, it sounds like you and the right house -- white house, considering the context of a $3.70 trillion cut, it is not that much. if the stakes are so high, how the talks have broken down over this relatively insignificant amount? >> it would be increasing taxes on the very people we expect to invest in our economy and create jobs. >> the president suggested that you walked away because you could not control your own caucus. republicans say that the fault is not something they are concerned about. is there any truth that you were pressured to walk away from something that you might have otherwise have expected? >> absolutely not. i gave the president's proposal serious consideration. there was an agreement with the white house at $800 billion in

revenue. it is the president who walked away from his agreement and demanded more money at the last minute. the only way to get that extra revenue was to raise taxes. >> what is the likelihood of doing a short term debt limit increase? >> president and i have never discussed a short-term increase in the debt limit. i am not really interested in a short-term increase in the debt limit. i believe there will be to challenges. we have to increase the debt limit and we have to deal with the deficit and the debt. the sooner we do that, the better off the country will be. >> we begin with three possible options. it failed in the senate. the deal has collapsed. what else is there to do? >> i will be working with

bipartisan congressional leaders on a path forward and i am confident that congress -- confident that congress can act next week and not jeopardize the full faith and credit of the united states government. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> the senate voted on legislation the republicans passed with an increase in borrowing authority to a substantial spending cuts, including restraints on social security and medicare. he said it would defeat the measure along strict party

lines. here is the final hour of the floor debate in the senate. the presiding officer: without objection. mr. reid: in about an hour we'll vote on the so-called cut, cap, and balance legislation. as i said before, in fact just a few minutes ago, this is one of the worst pieces of legislation to ever be placed on the floor of the united states senate. it violates the spirit of our constituti and certainly what we're trying to accomplish here in washington. and we as a senate refuse to waste even one more day on this piece of legislation. we have 11 days lt until the united states simply stops paying its bills. and, frankly, we've wasted too much time already on this. the united states house of representatives needs to know this legislation has expired. it's gone. republicans wanted to vote on their radical plan to kill medicare and social security before they would consider

helping democrats avert this crisis n. an hour they'll get this chance. at least one republican senator went toefr a large gathering in the house of representatives, i'm told, and said we're going get at least 60 votes on this. please, mr. president, their extreme plan would within 25 years cut in half every federal benefit on the books including social security, medicare, medicaid, military pay, veterans benefits and much more. meanwhile it would erect constitutional amendments for special interests, the millnaires and billionais who are able to buy those yachts and corporate jets for which they get tax benefits. republicans demand we pass this radical proposal before they even consider cperating with democrats to avert a cris that would rock the globe. they are demanding the death of

medicare and social security as its ransom. we all knowheir failed prescription will fail here in the united states senate. they do not have the votes to pass a plan that would pwalt budget on the -- balance the budget on the backs of seniors and middle-class families. and so we must move on, mr. president. i want to be very, very clear. there is simply no more time to waste debating and voting on measures that have no hopes of becoming law. we have no more time to waste playing partisan games. as the saying goes, indecision becomes decisiowith time. our time is running out before this gridlock, this refusal by the other side to move an inch toward compromise becomes a decision to default on our debt. the markets are already reacting to our inaction. ever responsible voice, including those of my republican colleagues, many of them at

least, warned much worse is to come if we don't take action and take it soon. that's a risk we can't afford to take. i ask my republican colleagues again to join democrats in seeking common ground. the american people have demanded it of us. overwhelmingly they have said the national default is a serious problem and that is an understatement and both parties of congress must meet in the middle. we all know, mr. president, there are talks going on between president obama and speaker boehner. i wish them well. we await their efforts. i'm told there will be revenue measures in that. if that's the case, we know constitutionally the matter must start in the house of representatives. i say to both the president and to the speaker here on the senate floor, representing my democrats, and i'm confident many republicans, be very careful. show a lot of caution as this

negotiation goes forward because any arrangement must be fair to all america, not just the wealthy. would the chair announce proceedings for this morning. the presiding officer: under the previous order, the leadership time is reserved. under the previous order, the senate will resume consideration of the motion to proceed to h.r. 2560, which the clerk will report. the clerk: motion to proceed to the consideration of h.r. 2560, an act to cut, cap, and balance the federal budget. the presiding officer: under the previous order, the time until 10:00 a.m. shall be equally divided between the two leaders or their designees. the senator from north dakota. mr. conrad: mr. president, in about an hour we are going to vote on a package that was sent this body by the house of representatives.

let me first comment on the context within which we consider this legislation. i think it's very important to remind our colleagues and remind citizens across the country who are perhaps watching and listening that our country is borrowing more than 40 cents of evy dollar that we spend. that is unsustainable. it cannot be continued for long. mr. president, i think all of us know thathe circumstance that we are in is extraordinarily serious. here's what the chairman of the joint chiefs of staff told us just a year ago. our national debt is our biggest national security threat. mr. president, i believe that that's the case. our gross debt now is approaching 100% of the gross domestic product of the united states. we've not seen a debt that high nce after world war ii.

mr. president, it is extraordinarily important that we take on this debt threat. it is extraordinarily important for our country's future economic well-being that we change course. mr. president, the legislation that has been sent to us by the house is one of the most ill considered, ill-conceived, internally inconsistent pieces of legislation that i have seen in my 25 years here in the united states senate. it has all the earmarks of something that was hastily thrown together, really pieced it together. and this legislation includes an amendment to the constitution of the united states. mr. president, were better than this. the congress is better than this. certainly the country is better

than this. let me just be brief. the fundamental problems with the balanced budget amendment are as follows: one, it restricts the ability to respond to economic downturns, having all the potential to make an economic downturn even more serious. it uses social security funds to calculate balance and subjects that important program to the same cuts as other federal spending, even know it is funded separately. mr. president, it shifts the ultimate decisions on budgeting in this country to unelected judges and unaccountable judges. finally, it provides for state ratification process that could take years to complete. we need long-term debt resolution now, not in the sweet by-and-by.

mr. president, the proposal before us has all of the potential to turn a recession into a depression. why do i say that? because, mr. president, it would prevent congress from taking urgent action to provide lift to the economy in the midst of a severe economic downturn. here's what norman ornstein, a stinguished scholar at the american enterprise institute said about it, "few ideas are more is he ductive on the -- stkubgtive on the service than a balanced budget amendment to the constitution. nearly all of our states have budget requires. when the economy slows states are forced to slash spending at just the wrong time, providing a fiscal drag when what is needed it countercyclical policy to stimulate the economy. the fiscal drag from the states in 2009 and 2010 was barely

countered by the federal stimulus plan. that meant the federal stimulus provided was nowhere near what was needed but far better than doing nothing. now imagine that scenario with a federal drag instead. mr. president, "the washington post" editorialized, worse yet, the latest version of the balanced budget amendment would impose an absolute cap on spending as a share of the economy. it would prevent federal expenditures from exceeding 18% of the gross domestic product in any year. most unfortunately, the amendment lacks a clause letting the government exceed that limit to strengthen a struggling economy. mr. president, that has all of the potential to turn a recession into a depression. two of this country's most distinguished economists: alan blinder, former vice chairman of the federal reserve;nd mark

zandi former consultantdvisor to this senator mccain evaluated the response to the last downturn. their conclusion: absent that federal response, we would have had great depression 2.0. mr. president, the legislation before us would have prevented that federal response. they call this legislation cut, cap, and balance. they misnamed it. they should have called it cut, cap, and kill medicare. because that's presely what it would do. mr. president, why do i say that? because when i referred earlier to the internal -- inconsistency of this legislation, this is what i w referring to: they have two different spending caps in the lilings befor in the us. in one part of the legislation, ey say the spending cap would take spendin spending from 24.1f

g.d.p. to 19.9%. that's in one part of the bill before us. in another part of the bill -- constitutional amendment -- they say, the spending cap would be 18% of g.d.p. so i don't know who cooked this up, but you'd think they'd have at least gotten on the same page as to what is the limitation on spending. what does it mean if you have a balanced budget amendment with a cap of 18% of g.d.p.? well, mr. president, here's what it means. and, by the way, the constitutional provision would certainly trump the conflicting provision that's in this legislation. so the cap would not be 19% of g.d.p. the cap would b would not be 19.

what would it be? it would be 18% of g.d.p. if you fund just social security, defense, and other nonhealth spending and interest on the debt, you're at 18% of g.d.p. there's not a dime left for medicare. there's not a dime left for medicaid. is that really what they intended? it must be, because that's what it says. so medicare is finished. medicaid is finished. anybody that votes for this better understand what they're voting to do. mr. president, here is a former top economic advisor to president reagan. here's what he said about the amendment that is before us:

"in short, this is quite possibly the stupidest constitutional amendment i think i have ever seen. it looks like it was drafted by a couple of interns on the back of a napkin. every senator cosponsoring this legislation should be ashamed of themselves." mr. president, that's a former top economic advisor to ronald reagan. i've been here 25 years. i don't think i have ever seen a piece of legislation more unprofessionally constructed than the legislation before us. but those aren't the only problems. when they said -- they titled this "cut, cap, and balance," they could have also called it preserve, protect, and defend tax havens and tax shelters, because that's the other

consequence of this legislation. why do i say that? because it would take a two-thirds vote to increase revenue -- two-thirds vote. that means attempts to shut down these offshore tax havens, these abusive tax shelters, because they'd rave revenue, would take a two-thirds vote. now, what does that mean? well, here's a little building down in the cayman islands i've talked about many times, a little five-story building, claims to be home to 18,857 companies. they all claim they're doi business out of this little building. i have sea aid this is the most efficient -- i've said this is the most efficient building in the world. quite remarkable. 18,857 companies are doing the business out of this little five-story building. and i'm told there are not many people coming and going from this building during the day. are 18,000 companies really

doing their business -- they call this headquarters. that really their headquarters? we all know it's n their headquarters. we all know what's going on. it's n business. it's monkey business. what they're doing down there is avoiding the taxes that all the rest of us pay. and this amendment would protect this scheme. you want to protect this scheme, vote for this amendment. mr. president, how big is this scheme? well, here's what our own permanent subcommittee on investigations has told us: "experts have estimated that the total loss to the treasury from offshore tax evasion alone approaches $100 billion per year, including $40 billion to $70 billion from individuals and another $30 billion from corporations engaging in offshore tax evasion. abusive tax shelters add tens of billions of dollars more."

mr. president, you want to lock in these abuses? you prefer to pay more in taxes yourself so that people can engage in these scams? vote for this amendment. vote for the legislation that's before us. vote for what is on the floor because you'll protect them forever more. mr. president, i end as i began. this is perhaps the most ill-conceived, ill-considered, internally inconsistent legislation that i have ever seen in my 25 years in the unit states senate. i hope my colleagues have the wisdom to vote "no." i thank the chair and yield the floor. the presiding officer: the senator indiana. mr. coats: mr. president, i just would like t the chamber to know that tod marks the 88th birthday of one o the great members of this sena body, a true american hero, former majority leader bob dole.

and as i reflect on the extraordinary life he has led -- and i had the privilege of serving under him as a united states senator and working with him in the private sector getting to know he and his wife well -- i cannot hel but note that the leadership that he provided in comparison to the lack of leadership that is ing provided in this body n stands in great contrast. there is an absence of leadership here and a seriousness of purpose that bob dole would never have allowed, had he been majority leader. i say that because i come to the floor today greatly troubled by the remarks that were made here in this senate yesterday and again this morning by the majority leader regarding the bill that before us. the issue here takes two tracks. one of which is the content of

the amendment in the bill that is bore us that was voted on the house of representatives, passed by the house of representatives, and sent over for us to debate and pass here. we can disagree -- and i think there's been some misrepresentation of what this bill actually does. we can dagree about the contents of it, but we have an obligation and a responsibility to debate those contents and to put every member of this body on a position of saying "yea" or "nay" on amendments that might be offered to improve it or to dhaing ichange it or to modify d finally whether or not to support it or not support t that is vote on a motion to table. you know, thraw there are a couf definitions of "table. " more than a couple. but one of those is tabling --

getting to the table to netiate something, just as the nfl players and owners are doing much more seriously and with much more consequences to the future of this country, what we ought to be doing. putting it on the table, debating it, and addressing it, expressing your support or nonsupport, defending it, characterizing, mischaracterizations -- that's what this body is about. it is the world's greatest deliberative body is deciding not to deliberate this bill at all. the second definition of "table" is taking it off the table so the majority leader has said, i'm not going to allow you to debate it. i'm not going to allow amendments. i'm not going to allow up-or-down votes so the american people know where we are. this is a vote to table so we don't even have the opportunity to debate it. now, it was the majority leader himself who said we're going to be in session every day until we get this thing settlem settled.

now he comes down here and says, i am neat going to waste one more day on this. senators who were told we're gointo be here every day, we'll be here on so saturday, ad now says we can go home. what kind of leadership that? we d't know whether we're supposed to be here or not supposed to be here? what's happening with one of the most serious crises that we're facing, the country that is ever en, particularly in the financial area, it is "the" most serious, except for maybe the great depression. and we're told, we don't even have time to debate this, this is a waste of time. i quote the unbelievable statements that have been made by the majority lder. this piece of legislation is about as weak and senseless as anything that is ever come on this senate floor? really? i could spend a half an hour talking about senseless legislation, egregious

legislation, discriminatory legislation that is ham com haso this floor and debated and not just tabled. to characterize the serious efforts of the members of the house of representatives and the members of the senate, including some democrat members, of trying to fix this problem, to characterize that as senseless and wasteless, i'm not going to se one more day of time on this senseless legislation. i thought, on reflection, the majority leader would come here this morning and say, perhaps i overstated the problem. let me better explain where i think we are and where we need to go. but, no, he comes down and he doubles down this morning, double down and says, it's very, very bad piece of legislation, without merit, it gets in the way, gets in the way. talking about dealing with cutting spending that we know we can't afford, talk aut putti

some caps on it so we don't keep doing this in the future, so we have a path to fiscal responsibility, talking about a balanced budget so we live within our means? that's getting in the way? this body has failed its responsibility to be faithful to the constitution and faithful to the people of arica. and, as a consuence of that, we're signature here saying, we're not even -- we're sitting here saying we're not even going to debate something that is brought forward with hundreds of thousands of hours of effort. maybe you don't like t maybe you don't agree with it. we will, stand up and say so -- well, stand up and say so and tell us what you want to do about it. the majority leader and his party has not brought one piece of legislation to this floor. the president has not offered one number, one proposal in writing that we can work with. we have not had the opportunity to debate for one minute anything that the other side has

offered. and so we bring something forward and iter it's called a worthless piece of junk. is that what the american people sent us here to do? i came here to find a result, a result to the dire fiscal situation that our people are in. and the majority leader comes down here and says, we are not responding to the will of the people. where hayes been? what planet is he on? responding to the will of the people? they're sick and tired of government spending more money than it has. they're sick and tired o being told they're handing over to their children debts that are never going to be aibl able to e repaid. and we're told that we want to take this off the table so we can't even debate it? i woke up in the middle of the night so frustrated and so angry, after spending last evening saying i'm hopeful that we can come together and work something out. and the well get gets poisoned t evening by the majority leader and gets poisoned this morning.

those of u who work our tails off are told this is a piece of junk. that's not what we came here to do. i i didn't come here to get mad. i came here to be senatorial and i've parntsly not done that. -- and i've apparently not done that. they're mooting in back rooms together -- they're meeti in back rooms together, signing letters to the president to ask him to step up. 32 democrats and 32 republicans. the president ignores that and does nothing until the very end and comes here to try to bail it out. look at me, i took care of everything while america is worried to death about the future. to say we haven't done anything but put forward a piece of worthless legislation is so worthless we're not going to allow us to talk about it or debate it, not allow amendments to take place, not give it the respect that it's due -- so you

don't like it come down here and tell us why you don't likt and let us have a vote on why you don't like it. instead of saying take it off the table. i guess we're all getting frustrated. it's 100-something degrees heat index outside and i can understand some of us getting worked up about this thing but the future of america is at stake and this majority leader is not allowing to us deal with it. with that, i yield the floor. mr. johanns: mr. president? the presiding officer: the senator from nebraska. mr. johanns: mr. president, i stand here today as a cosponsor of the cut, cap, and balan legislation and as a supporter of that legislation. here's the insanity that has gripped not only this body, but all of washington. we are literally in a year where we will have the third year in a row of deficit over $1 trillion.

in fac current projections are that this annual deficit will set a record, a very dubious record, i might add, of $1.6 trillion-plus we were promised three years ago that if this enormous, gargantuan effort to force more spending into the economy with the stimulus plan were passed, that $1 trillion effort, it would put this country on a path to recery. and it has done nothing except raise our debt and pass the problem on to our children and grandchildren. so after weeks and months of work, on an idea to rein in the

spending and to come to grips with where we are at in the country, we are literally at a point where withininutes we will vote on a motion to table that effort, and we will be right back to where we are today. we will be right back to a situation where we will face trillion-dollar deficits. we will be right back to a situation where every enomist in the world is telling the united states of america, the largest economy, that your spending is not sustainable. we will be right back to rating agencies looking at our government debt and saying you have not come up with a plan to rein this in, and so you are being targeted to be downgraded. but what we are really right back to is this: we have a

government too big, we have too many promises that have been made where no one had any idea how they would be paid for. by the end of the year we will have a deficit of $15 trillion, which is significantly understated. in four more years, we will have a deficit, a debt of $20 trillion, which will still be significantly understated. and somehow there are members of thisody that are arguing this is a better way, table cut, cap, and balance so we can return to where we are at today. is it any wonder that those of us who are concerned about this and concerned about the future of our children and grandchildren are coming to the floor and saying wait a minute, this is destroying our nation.

mr. president, i rise today as i have many times over the last days to say support this effort. support cut, cap, and balance. i am pleased to be a cosponsor of this legislation, this very important legislation that has the potential to change the direction of what we're doing, and i am going to be one of the people that supports this legislation today in my vote. mr. president, with that, i yield the floor. a senator: mr. president? the presiding officer: the senator from south dakota. mr. thune: mr. president, i want to echo the comments of my colleague from nebraska and my colleague from indiana, a of whom have come down here to

express their support for the cut, cap, and balance approach to dealing with this debt crisis that we're facing today, and point out that it passed in the house of representatives a few nights ago. it had 234 votes, and it is the only plan out there. as my colleague from indiana has said, the president, the democr leadership here in the senate has yet to produce a plan that will meaningfully deal with the greatest crisis that our country has faced in my service here in the united states congress. and that is this massive out-of-control debt that as the senator from nebraska pointed out could lead to much higher interest rates along the lines of whether we're seeing in some of our european countries, which would absolutely crush this economy. if we are serious about growing the ecomy and creating jobs, we have got to get federal spending under control. we need a smaller federal economy and a larger private economy. and what's been happening here since this president took office

is we continue to grow government. we've added 35% to the debt, spendi in increase by 24% nonnational security discretionary spending in the last two years at a time when inflation was 2% in the overall economy, federal spending has been growing at ten times the rate of inflation. the number of people who are receiving food stamps have gone up by 40%. the unemployment rate is up by 18%. there are 2.1 million more people unemployed today than there were when this president took office. the policies of this administration are not working when it comes to getting people back to work and getting spending and debt under ctrol. i was listening with great interest to my colleague from north dakota who was down here on the floor earlier denouncing the whole idea of a balanced budget amendment like it was coming from some foreign planet, and talked about how ill-conceived and ill-considered and stupid this approach, this cut, cap, and balance approach, is. well, m observation about that,

mr. president, is that the democrat failure to produce a budget in over 800 days is exhibit number one for why we need a balanced budget amendment. we ought to be embarrassed here in washington, d.c. we are not doing the people's work. we haven't passed a budget in over 800 days. and yet, the other side comes down here and denounces the idea of a balanced budget amendment, which 49 states have some form of balanced budget amendment that requires them every single year to balance their budget. my colleague from north dakota knows that. his state has it. my state of south dakota has it. it's a very straightforward concept that the people of this country clearly understand. now, if it takes issue with the way this particular balanced budget amendment is written, fine. come up with your own proposal. but don't suggest that having a constitutional amendnt that requires this place to do something that it hasn't been

doing for literally the last 25 or 30 years is a bad idea. what we've got today is dysfunctional. it is broken. it does not work fork the american people. it's -- it does not work for the american people. it's an embarrassment, mr. president. that's why we need something. we've got to put something on the books that will impose discipline on this congress to get spending and debt back under control and have us start doing something about the runaway debt that is putting a crushing burden on future generations of americans. if you don't like this balanced proposal, the cut, cap, and balance proposal is not prescriptive about this particular balanced budget amendment that many of us are cosponsors of, come up with another one. but let's put something in place that enshres a responsibility and obligation and a requirement for us every single year to live within our means. we cannot continue to spend money that we don't have. and we have demonstrated year over year over year around here that we continue to add more and more and more to this debt.

and under the president's proposal, budget proposal, that debt would have doubled in the next decade. that's why i think when his budget proposal was put on the floor of the united states senate it got zero votes. not a single democrat or a single republican voted in favor of what this president put forward in his budget submission earlier this year. since that time there's been absolute lack of leadership out of the white house. the president has been completely missing in action. the democrat leadership, as i said, has put forward no idea, no plan of their own. we have in front of us something that achieved majority support in the house of representatives aew nights ago, 234 members of the house of representatives voted for this. it is a serious, meaningful effort t cut spending now, to cap it in future years and to put in place a balanced budget amendment that is long overdue and which, frankly, if it passed 15 years ago in the united states senate, we would not be in the position that we are today. it failed by one single vote in the united states senate back in

1997, and i can only help but think, mr. president, how much better off we would be today in terms of the spending and debt situation that is facing this country had we gotten the necessary two-thirds vote back in 1997. but it's never too lat to do the right thing, and we have an opportunity to do that today. and i think to hear our colleagues get up on the other side and belittle the effort that has been made by a lot of people around here who are trying to do something about a problem, a problem that is gng to wreck this country if we don't fix it, is not befitting of this institution. and so i hope my colleagues today will allow us -- this is going to be a tabling motion now, i guess, instead of a debate abo cut, cap, and balance because they've decided this isn't worthy of consideration on the floor of the united states senate. i think it's a terrible reflection on this institution that something is brought forward in good faith a serious, meaningful effort to address spending and debt and to put this country back on a

sustainable fiscal course, and we're not even going to have a debate on it. we're going to have a tabling motion in a few minutes. i hope my colleagues will defeat that tabling motion, allow us to continue to debate this and to get an up-or-down vote on something that i think is a correct approach and something that will meaningfully address the serious problem this country faces. mr. president, i yield the floor. mr. leahy: mr. president? the presiding officer: the senator from vermont. mr. leahy: mr. president, unlike any republican in the house or the senate, i have voted for a balanced budget. we balanced the budget under president clinton. not only balanced the budget, started paying down the national debt. he was able to leave hundreds of billions of dollars in surplus to his successor who determined with republican votes to go to war in iraq and pay for the war with a tax cut. that's why we had to borrow the money from china and saudi arabia. not a single republica voted for a real balanced budget when they had a chance to.

in fact, it passed in the senate only because vice president gore came a broke the tie. i was proud to vote for that balanced budget. not a gimmick, but a real balanced budget. we had to actually make tough choices. we did. we balanced it. we had a surplus. but when you talk about amending our nation's fundamental charter, the constitution of the united states, it's not something congress and the american people should feel forced to do in the face of a financial crisis. i take seriously my senatorial oath to support and defend the constitution. now i know that there are a lot of pressureroups demanding elected representatives sign pledges about what they will and will not do. the pledge i follow, the one i was honored to make at the beginning of this congress, is to uphold the constitution.

that's what i intend to do as i represent the people of vermont. the house-passed bill, h.r. 2560, which the senate is now considering, claims to oppose a balanced budget of future congresses but it doesn't even contain the proposed constitutional amendment the supporters are seeking to adopt. nor did the bill pass with a two-thirds of the republican-controlled house voting in favor. that threshold is what is required, of course, to pass a constitutional amendment. the house vote was more than 50 votes short of that necessary number. the process by which this bill has been brought to the floor of the senate is an affront to the constitution that we're sworn to protect and defend. indeed, the house bill denies authority to meet the nation's obligations until congress passes a type of constitional amendment that will actually make it more difficu to reduce

our national debt. that kind of constitutional blackmail has no place in a democracy, no place in our laws. it's why the founders did not include a constitutional requirement for a balanced budget or prohibition against incurring debt in our constitution. they knew full well that would have been foolish and dangerous and self-defeating the nation they were seeking to establish. and i respect the wisdom of the founders to uphold the constitution which has served this nation so well for the last 223 years. let us not be so vain to think we know better than the founders what the constitution should prescribe. i reject the notion that for political reasons we need to rush consideration of an ill-conceived and evolving proposal for a constitutional amendment. i'm going to stand with the founders. i'll defend their work and our constitution and oppose a proposed series of constitutional amendments which

incidentally hasn't even had a hearing. amend the constitution and we haven't even had a hearing on it. amendments to the constitution of the united states are permanent. they're not bills or resolutions that can be abandoned or fixed. they are not just a butcher sticker or a soundite. each word matters to hundreds of millions of americans and future generations. i have never seen -- and i have been here 37 years -- i've never seen the solemn duty of protecting the constitution treated in such a cavalier manner. i wish that those who so o say they revere the constitution would show it the respect it deserves rather than treating it like a blog entry. i'm concerned how some in recent years have sought to impose their view by unilateral objection to compromise with minority obstruction. that has, at times, seemed to be the rule the last few years.

some have tried to undermine the legitimacy of president obama. filibusters and requirements for supermajorities have become routine. they've stymied congressional action on the part of the american people. this year should be a cautionary tale that convinces all americans that the risk of default and ideological impasse risks us. i need only recall the game of chicken earlier this year. i cannot help but think, we don't take the steps we should, we see our interest rates go up, we'll spend hundreds of bilons of dollars in extra interest to china, which they can spend on infrastructure, they can spend on mical research, they can spend on education; we won't

have it here in the united states. that's what the other side seems to want. we've seen the danger that irresponsible brinkmanship can promote. we should guard against it, buildingnto the constitution a supermajority requirement for fiscal poly invites political blackmail and gridlock fl we've seen enough of that already. the source of our budgetary problems does not lie with the constitution. the constitution remains sound. the fault lies with those who will not work with the president to achieve rests that will help the america people. it is lacking the political courage to do what is right. the last time we balanced a budget, not a single republican voted for that balanced budget. yet it created enormous surpluses. these proposed constitutional amendments would not cut a single dime from the debt or federal budget. rather than deal with our problems, some want to require that we deface the constitution

with a measure that will by its own terms not be effective for five years, if it were to be adopted by two-thirds of both houses, the congress, and then ratified by three-fourths of the states. put that another way, at least three election cycles from now. we get our bumper stickers today but we kick the can down the road three election cycles. congress has the power n to take steps to avoid a government's default, get us on the path to rebalancing the budget. just as we did at the end of the clinton admistration. this debate is a distraction from the hard work and hard choices, thchoices that immediae made. -- that need to be made. proposed amendments to the constution are not just unnecessary, they're unwise, dangerous. in my view, the house-passed bill, the proposed and