Floor Statement: The Impact of the Proposed Budget on Future Generations

Wednesday, March 25, 2009

The Impact of the Proposed Budget on Future Generations
The Impact of the Proposed Budget on Future Generations - Wednesday, March 25, 2009
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Mr. President, I’m a member of the Budget Committee with Sen. Conrad as our Chairman, Sen. Gregg as our ranking member.  As the Senate knows, this week we’ll be taking up the President’s proposed budget, and I want to speak just a few minutes about that subject.

 

Yesterday I had the opportunity to speak to a number of students, who were here because they want to make sure Congress continues to provide them an opportunity to study at our nation’s community colleges.  I’m a strong believer in the role of community colleges as a less expensive yet outstanding opportunity to earn a good education, but also as part of our workforce development and training, where industry can come in and match up a curriculum to train people to perform jobs for which they can receive well-paying jobs.  But yesterday these community college students of course were here to talk about the issues that were on their mind.   They heard from Dr. Jill Biden and Secretary Duncan among others, and I really appreciated how eager they were to learn what’s going on here in Washington. Indeed I bet there are a lot of people who would like to know what’s going on here in Washington.

 

And I encouraged them to learn about the issues and express their views. And I told them that as far as I can tell, their generation will bear the consequences of the reckless spending that this Congress has engaged in, in a budget that simply spends too much, taxes too much and borrows too much.

 

Students will ultimately end up after they finish their education and go on and enter the workforce, they’ll end up paying those higher taxes under this proposed budget. This proposed budget calls for $1.4 trillion in additional net taxes over the next 10 years.  Students are trying to figure out how these higher taxes will actually impact the opportunities they will have as they enter the workforce.  And some of them will hit these students at the toughest time, and that is right as they enter their first job.

 

Because we know the engine of job creation in America is our small businesses and in fact, those small businesses that employ between 10 and 500 employees, which are the principle job creators in our country, 50 percent of them will experience higher tax rates because many of them are not incorporated, they are single sole proprietorships, they are partnerships, they are sub-chapter S corporations, where the income actually flows through and is reported on an individual tax return. So it is just not true to say these will only affect the rich. indeed, it these will affect the very job engine that creates the jobs that we ought to be worried about retaining and, indeed, creating more of.

 

 I also talked to these students about how they will feel the impact of higher energy costs on their electric bill. And you may wonder what I'm talking about. Well, we all care about the environment. As a matter of fact, I reject the notion that there are people who actually say, well, we really care about the environment, and you don't care. I think we all care about the quality of the air we breathe, the quality of the water we drink. I can't imagine someone who doesn't. These students, though, I think are understandably skeptical at the complex and unproven cap-and-trade scheme that the President's budget wants to import from Europe that will actually ultimately increase the cost of energy including electricity and that's why some people have called it a national sales tax on energy, if indeed, this complex and unproven cap-and-trade plan is passed as part of the President's budget.

 

And then there's the issue of the caps placed on charitable deductions for taxpayers who take advantage of that tax break when they contribute money to good and worthy purposes. Many community colleges student receive scholarships from foundations that are funded by charitable contributions. As a matter of fact charitable giving is one of the things that is part of our nation's great tradition of volunteerism, something that Alexis De Tocquevile called it public associations, things you don't get paid for, but things that people do because they think it is the right thing to do and they have the opportunity to do in our great country.

 

But this budget would actually cap charitable contributions which will actually reduce the tax incentive for individuals to contribute money to good causes like this Tyler Community College Foundation in Tyler, Texas.  The foundation is understandably concerned that raising taxes without increasing the charitable tax deduction will limit their ability to offer as many scholarships in the future years. So these tax increases will, in effect, limit the opportunities for these community college students including folks in my state in East Texas and Tyler, Texas.

 

And then there's the issue of raising taxes generally it's spending. These students know that Congress is already spending a whole lot of their money because it's all -- it's all borrowed money, and, in fact, we've spent more money since this Congress convened this year than has been spent for the Iraq war, the war in Afghanistan, and in Hurricane Katrina recovery. We've done that already. And this budget calls for doubling the debt in five years and tripling the debt in 10 years. These students, because they're going to be the ones that we're going to look to pay that money back or bear that tax burden should be concerned and, indeed, they are concerned that so much money is being spent so recklessly, and, in fact, it's impossible for me to imagine that it will be spent without huge sums of money actually have been wasted. We have already seen evidence of that.

 

In the stimulus bill that the President said that he wanted on his desk in short order, was rushed through the Senate and through the Congress, $1.1 trillion, including the debt and interest on the debt. We found out that once we passed the next bill, which is a $410 billion omnibus appropriation bill that lo and behold that Congress had actually doubly funded 122 different programs in the bill. We acted with such haste, with such little care, with such little deliberation, that we found out we doubly funded 122 programs. And indeed, we found out in recent days that in the conference report on the stimulus bill there was a provision stuck in the conference report that protected the bailout bonuses for the executives of AIG and then, of course, there was the understandable uproar over that. That's what happens when a bill is printed and circulated at 11:00 at night on a Thursday night and we're required to vote on it less than 24 hours the next day. That's not the kind of transparency, that's not the kind of accountability, that's not the kind of thing that will actually give people more confidence in their government and elected officials, just to the contrary.

 

And then there's another provision in this omnibus bill that has essentially started a trade war with Mexico.  Something that causes me grave concern. So as we consider the President's $3.6 trillion budget proposal, we should remember the lessons of the past two weeks. Spending so much money so quickly can lead to unintended consequences to say the very least. But the biggest consequence of this budget is the amount of debt we're accumulating.

I already talked about it a minute ago. But, of course, we were shocked and I think that even the President and the Administration were shocked by the Congressional Budget Office, the nonpartisan office which evaluates financial matters for congress say that's the President's budget will actually create deficits averaging nearly $1 trillion a year for the next decade. I mentioned the fact that it would double the debt in five years, triple it in 10. And the Congressional Budget Office said the size of the national debt as a percentage of the economy will become the highest since the years after World War II. So these students who start college this year will see their share of the national debt grow from $19,000 per student to more than $36,000 per student after graduation from a four-year program. By 2019 their share of the debt will grow to more than $55,000 per person. Can you imagine with the money they have to borrow to fund their education with their credit card debt? And I don't know any student who doesn't have sizable credit card debt, we're going to heap $55,000 in additional debt on these students, a tough way to start out your life after school as you start your first job.

So, Mr. President, today's college students will ultimately have to pay back the debt as well as the generations that succeed them. All bailouts, one way or another, will come out of their pocket. I urge my colleagues to understand the impact on this younger generation of a budget that taxes too much, spends too much, and borrows too much. Because of our actions the next generation will either have to raise more taxes or cut programs that are necessary or lower their standard of living.

Mr. President, I know from my parents, who are members of the greatest generation, the one thing they aspired to more than anything else is that my brother and my sister and I would have a better life, more opportunities, more freedom and a better standard of living than they did they were willing to sacrifice for that and sacrifice they did it seems to me that the sacrifices we're calling for today are all on our children and grandchildren and none upon the present generation. The President says that he wants to make hard decisions, but I don't see any hard decisions in this budget. All I see is more borrowing, more taxing and more spending and that's exactly the wrong way we ought to be headed.

 

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