Dave Camp

Mr. CAMP

Mr. CAMP. I yield the gentleman an additional 30 seconds.

Mr. CAMP. Mr. Speaker, as a member of the National Commission on Fiscal Responsibility, or Debt Commission, we received testimony from experts in economic policy research; and they said that when debt loads of a country reach above or at 90 percent of their economy or GDP, that results in the reduction in economic growth in that country by about 1 percentage point. And using the administration's economic model, that 1 percentage point increase in our GDP or decrease in our GDP costs about a million jobs. That's why this debate is so important. It is so important to get us on a path to fiscal responsibility, to begin to bring down our national debt. The plan before us today does that. It does that with spending reductions. It does it with the sort of structural reforms in terms of spending caps that are there. But it also does it with an automatic reduction in spending if, for some reason, this select committee set up in this bill fails to come to some sort of agreement on how to reduce spending. That automatic reduction, I think, is an important backstop so the select committee will take its work seriously and do everything to come to a bipartisan solution. Also, there is a path forward on a balanced budget amendment in this legislation that is absolutely critical I think for not just today, because we know it is impossible to bind future Congresses, but to put in place a structure and a mechanism well into the future so that we don't find ourselves continuing to deal with the fundamentals of this problem. We begin to deal with the problem; we make progress on the problem; and that progress will mean job creation, and that's something we're all looking forward to. I thank the Speaker and urge a ``yes'' vote on the legislation. I yield back the balance of my time.

Mr. CAMP

Mr. CAMP. Mr. Speaker, I yield myself such time as I may consume. I have been listening to my friends on the other side over the course of this afternoon, and I would just say to them: Where is your plan? Where is your legislation to address the debt problems of the United States? Where are your ideas in legislation that is scored by the Congressional Budget Office so that you could bring your alternative to the floor? This isn't the direction that you want to go; where is your plan? I notice in the other body, the majority has not passed a budget in more than 800 days. Frankly, if they passed a budget on the other side, we might not be in this situation because we would have the avenue of reconciliation potentially available to us. This is the second Congress the other body hasn't passed a budget. We've got no ideas from my friends on the other side on how to address this issue. So this is the second proposal that we have put forward that has been in legislative form, that has been scored, where you can address the problems that are facing this country. We've had lots of rhetoric from the other side, but no concrete plans. We've had lots of press releases from the other side, but no proposals. Even the President has not articulated one spending cut after giving us 3 years of trillion-dollar deficits, after putting us on a path to more than double the debt of this country in less than half the time of the previous administration. So I would say this is the proposal that will get our country onto a fiscal path that will prevent default, that will address the long-term debt obligations that this Nation has run up, frankly, under both parties. But we need to address them now because the trajectory has become so much worse in recent years. This is the plan. I urge a ``yes'' vote. I ask unanimous consent that the balance of my time be yielded to the Budget Committee.

Mr. CAMP. At this time I yield 1 minute to the gentleman from Louisiana (Mr. Boustany), a distinguished member of the Ways and Means Committee.

Mr. CAMP. I continue to reserve the balance of my time.

Mr. CAMP. I continue to reserve the balance of my time.

Mr. CAMP. Mr. Speaker, I yield 2 minutes to a distinguished member of the Ways and Means Committee and the chairman of the Joint Economic Committee, the gentleman from Texas (Mr. Brady).

Mr. CAMP. At this time I yield 2 minutes to the gentleman from New York (Mr. Reed), a distinguished member of the Ways and Means Committee.

Mr. CAMP. I yield myself such time as I may consume. Mr. Speaker, I come today in strong support of the Budget Control Act, a legislative approach that cuts out-of-control Washington spending and is a responsible and necessary plan to avoid a default on our Nation's debt. As we all know, under President Obama we are experiencing our third straight year of deficits in excess of $1 trillion. In 4 years, President Obama's actions and projected budgets will add more than twice to our debt than was added during the previous 8 years. All told, the debt will double under President Obama's watch and reach a staggering $26 trillion by 2021. That's double the debt in half the time when compared with the previous administration. Congress must act to cut spending and get our debt under control, and that's what the legislation before us does. First, the bill cuts more than $900 billion in Federal spending and meets the expectations of the American people that we cut spending more than we increase the debt limit. Second, the bill guarantees the House and Senate will vote on a balanced budget amendment. More than half of the States have a balanced budget requirement, and it's time Washington's books are balanced as well. And third, the bill also demands reforms to the way Washington works by setting up a joint House and Senate committee to find at least $1.6 trillion in additional savings. Its work product would enjoy expedited consideration in the House and Senate and could not be filibustered. I'd also like to take a moment to point out that, despite what you've heard from the critics of this approach, that this is the most common way the debt limit is increased, for a short duration and tied to spending reforms. And history is pretty clear on this point. Over the last 25 years, Congress and the President have acted 31 times to increase the debt limit. Twenty-two of those 31 times were for less than a year. Only 3 of those 31 increases lasted longer than 2 years. These debt limit increases are often tied to spending reforms and are preceded by very short-term increases. Three examples of those include: In 1987, there were three short-term debt limit increases prior to a longer term increase that included deficit targets and automatic sequestration provisions. In 1990, there were six very short-term increases before a longer term increase that included PAYGO, discretionary caps, and other programmatic changes. And in 1996, there were two very short-term increases to ensure full funding of Social Security and other Federal funds before a longer-term increase included in the Contract with America Advancement Act. So what we're doing today is what has happened before. I would also point out that the increase in the debt limit and the binding process to achieve spending reform in Washington is exactly what the financial markets need and expect from us. Time is short, and this bill may be our last best chance to prevent a default. If we fail to act and the government defaults on its debt, the financial and economic shock waves that will ripple across this country are both unpredictable and unimaginable. Finally, I want to say a few words about something that's not in this bill, and that's tax increases. While the President continues to insist that tax increases be a part of any debt limit legislation, he has failed to convince even his own party that tax hikes are a good idea. In December of last year, when Democrats controlled both the House and the Senate, Congress refused to raise taxes. And now even Senator Reid's own plan to increase the debt limit, which the President has now thrown his support behind, does not include tax increases. Given the need to avoid default today and get our fiscal house in order for the future, we must pass the Budget Control Act. I urge a ``yes'' vote on this bill. I reserve the balance of my time.

Mr. CAMP. I yield 2 minutes to the gentleman from Florida (Mr. Buchanan), a distinguished member of the Ways and Means Committee.

Mr. CAMP. Mr. Speaker, I reserve the balance of my time.

Mr. CAMP. I yield 1\1/2\ minutes to a distinguished member of the Ways and Means Committee, the gentleman from California (Mr. Herger).

Mr. CAMP

Mr. CAMP. Mr. Chair, on rollcall No. 507 I was unavoidably detained. Had I been present, I would have voted ''no.'' Amendment Offered by Mr. Cicilline

Mr. CAMP

Mr. CAMP. I yield myself such time as I may consume. Last February, when the President submitted his budget for 2012, he did not provide any plan for reining in deficits and debt. The administration called for a clean increase in the debt limit, or an increase in the debt limit that was unconditional, one that had no spending reductions or structural reforms to try to address the problem that we face, and it assumed $2.4 trillion in borrowing authority, or an increase in the debt limit of about $2.4 trillion. One hundred fourteen Democrats have asked the leadership of their party for an unconditional vote on the debt limit. My colleagues on the other side have been very reminiscent about the Bush years, and I would just say that, in 4 years, the debt under the Obama administration will exceed that of the Bush administration's in 8 years; or another way of putting that is the debt under this President is going up at twice the rate it did under President Bush. So it is important that we send a clear signal that there is not going to be an unconditional increase in the debt limit and that we are serious about addressing our debt and deficit problems as a country. We've seen the signals that we've gotten from the financial markets, and we've heard what our constituents have said. It is very important that we bring the kinds of spending reductions and reforms to this debate that we need to, so I urge a ``no'' vote.

Mr. CAMP. Mr. Speaker, I have no further requests for time, and I reserve the balance of my time.

Mr. CAMP. Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days in which to revise and extend their remarks and to include extraneous material on H.R. 1954.

Mr. CAMP. I yield myself such time as I may consume. I am certainly concerned about the last 8 years, but I am more concerned about the last 2. I think we have got the third year in a row of trillion dollar deficits, a Presidential budget that doubled the debt in 5, tripled it in 10. I quote from the Standard and Poor's report on the United States debt: ``Because very large deficits and rising government indebtedness and the path to addressing these is not clear to us, we have revised our outlook on the long-term rating to negative from stable.'' The path to addressing these is not clear. We think it absolutely essential that we not have an unconditional increase in the debt limit, that we have the spending reductions, that we have the structural reforms that we so desperately need in this country. We have 110 Members of the other party who wrote a letter saying we want an unconditional increase in the debt; just keep spending. Don't bring in any spending reductions, don't bring any long-term reforms; just keep going the way we have been going. Well, Standard and Poor's says that if we don't address this issue-- and what does that mean that ``we have revised our outlook on the long- term rating to negative from stable''? It means buying a house is more expensive; buying a car is more expensive. Certainly our ability to sell our bonds around the world will be very difficult to do and make it that much more expensive. A downgrade in our debt limit would have the same impact as not increasing the debt limit at all. Financial markets would be disrupted, borrowing costs would skyrocket, the dollar would plunge, driving up the cost of imports like gasoline and causing higher inflation. It would wreak havoc on our economy. Research Update: United States of America ``AAA/A-1+'' Rating Affirmed; Outlook Revised To Negative Overview We have affirmed our ``AAA/A-1+'' sovereign credit rating on the United States of America. The economy of the U.S. is flexible and highly diversified, the country's effective monetary policies have supported output growth while containing inflationary pressures, and a consistent global preference for the U.S. dollar over all other currencies gives the country unique external liquidity. Because the U.S. has, relative to its ``AAA'' peers, what we consider to be very large budget deficits and rising government indebtedness and the path to addressing these is not clear to us, we have revised our outlook on the long-term rating to negative from stable. We believe there is a material risk that U.S. policymakers might not reach an agreement on how to address medium- and long-term budgetary challenges by 2013; if an agreement is not reached and meaningful implementation does not begin by then, this would in our view render the U.S. fiscal profile meaningfully weaker than that of peer ``AAA'' sovereigns. Rating Action On April 18, 2011, Standard & Poor's Ratings Services affirmed its ``AAA'' long-term and ``A-1+'' short-term sovereign credit ratings on the United States of America and revised its outlook on the long-term rating to negative from stable. Rationale Our ratings on the U.S. rest on its high-income, highly diversified, and flexible economy, backed by a strong track record of prudent and credible monetary policy. The ratings also reflect our view of the unique advantages stemming from the dollar's preeminent place among world currencies. Although we believe these strengths currently outweigh what we consider to be the U.S.'s meaningful economic and fiscal risks and large external debtor position, we now believe that they might not fully offset the credit risks over the next two years at the ``AAA'' level. The U.S. is among the most flexible high-income nations, with both adaptable labor markets and a long track record of openness to capital flows. In addition, its public sector uses a smaller share of national income than those of most ``AAA'' rated countries--including its closest peers, the U.K., France, Germany, and Canada (all AAA/Stable/A-1+)-- which implies greater revenue flexibility. Furthermore, the U.S. dollar is the world's most used currency, which provides the U.S. with unique external flexibility; the vast majority of U.S. trade flows and external liabilities are denominated in its own dollars. Recent depreciation of the currency has not materially affected this position, and we do not expect this to change in the medium term (see ``Apres Le Deluge, The U.S. Dollar Remains The Key International Currency,'' March 10, 2010, RatingsDirect). Despite these exceptional strengths, we note the U.S.'s fiscal profile has deteriorated steadily during the past decade and, in our view, has worsened further as a result of the recent financial crisis and ensuing recession. Moreover, more than two years after the beginning of the recent crisis, U.S. policymakers have still not agreed on a strategy to reverse recent fiscal deterioration or address longer-term fiscal pressures. In 2003-2008, the U.S.'s general (total) government deficit fluctuated between 2% and 5% of GDP. Already noticeably larger than that of most ``AAA'' rated sovereigns, it ballooned to more than 11% in 2009 and has yet to recover. On April 13, President Barack Obama laid out his Administration's medium-term fiscal consolidation plan, aimed at reducing the cumulative unified federal deficit by US$4 trillion in 12 years or less. A key component of the Administration's strategy is to work with Congressional leaders over the next two months to develop a commonly agreed upon program to reach this target. The President's proposals envision reducing the deficit via both spending cuts and revenue increases, and the adoption of a ``debt failsafe'' legislative mechanism that would trigger an across-the-board spending reduction if, by 2014, budget projections show that federal debt to GDP has not yet stabilized and is not expected to decline in the second half of the current decade. The Obama Administration's proposed spending cuts include reducing non-security discretionary spending to levels similar to those proposed by the Fiscal Commission in December 2010, holding growth in base security (excluding war expenditure) spending below inflation, and further cost- control measures related to health care programs. Revenue would be increased via both tax reform and allowing the 2001 and 2003 income and estate tax cuts to expire in 2012 as currently scheduled--though only for high-income households. We note that the President advocated the latter proposal last year before agreeing with Republicans to extend the cuts beyond their previously scheduled 2011 expiration. The compromise agreed upon in December likely provides short-term support for the economic recovery, but we believe it also weakens the U.S.'s fiscal outlook and, in our view, reduces the likelihood that Congress will allow these tax cuts to expire in the near future. We also note that previously enacted legislative mechanisms meant to enforce budgetary discipline on future Congresses have not always succeeded. Key members in the U.S. House of Representatives have also advocated fiscal tightening of a similar magnitude, US$4.4 trillion, during the coming 10 years, but via different methods. House Budget Committee Chairman Paul Ryan's plan seeks to balance the federal budget by 2040, in part by cutting non-defense spending. The plan also includes significantly reducing the scope of Medicare and Medicaid, while bringing top individual and corporate tax rates lower than those under the 2001 and 2003 tax cuts. We view President Obama's and Congressman Ryan's proposals as the starting point of a process aimed at broader engagement, which could result in substantial and lasting U.S. government fiscal consolidation. That said, we see the path to agreement as challenging because the gap between the parties remains wide. We believe there is a significant risk that Congressional negotiations could result in no agreement on a medium-term fiscal strategy until after the fall 2012 Congressional and Presidential elections. If so, the first budget proposal that could include related measures would be Budget 2014 (for the fiscal year beginning Oct. 1, 2013), and we believe a delay beyond that time is possible. Standard & Poor's takes no position on the mix of spending and revenue measures the Congress and the Administration might conclude are appropriate. But for any plan to be credible, we believe that it would need to secure support from a cross-section of leaders in both political parties. If U.S. policymakers do agree on a fiscal consolidation strategy, we believe the experience of other countries highlights that implementation could take time. It could also generate significant political controversy, not just within Congress or between Congress and the Administration, but throughout the country. We therefore think that, assuming an agreement between Congress and the President, there is a reasonable chance that it would still take a number of years before the government reaches a fiscal position that stabilizes its debt burden. In addition, even if such measures are eventually put in place, the initiating policymakers or subsequently elected ones could decide to at least partially reverse fiscal consolidation. In our baseline macroeconomic scenario of near 3% annual real growth, we expect the general government deficit to decline gradually but remain slightly higher than 6% of GDP in 2013. As a result, net general government debt would reach 84% of GDP by 2013. In our macroeconomic forecast's optimistic scenario (assuming near 4% annual real growth), the fiscal deficit would fall to 4.6% of GDP by 2013, but the U.S.'s net general government debt would still rise to almost 80% of GDP by 2013. In our pessimistic scenario (a mild, one- year double-dip recession in 2012), the deficit would be 9.1%, while net debt would surpass 90% by 2013. Even in our optimistic scenario, we believe the U.S.'s fiscal profile would be less robust than those of other ``AAA'' rated sovereigns by 2013. (For all of the assumptions underpinning our three forecast scenarios, see ``U.S. Risks To The Forecast: Oil We Have to Fear Is . . .,'' March 15, 2011, RatingsDirect. Additional fiscal risks we see for the U.S. include the potential for further extraordinary official assistance to large players in the U.S. financial or other sectors, along with outlays related to various federal credit programs. We estimate that it could cost the U.S. government as much as 3.5% of GDP to, appropriately capitalize and relaunch Fannie Mae and Freddie Mac, two financial institutions now under federal control, in addition to the 1% of GDP already invested (see ``U.S. Government Cost To Resolve And Relaunch Fannie Mae And Freddie Mac Could Approach $700 Billion,'' Nov. 4, 2010, RatingsDirect). The potential for losses on federal direct and guaranteed loans (such as student loans) is another material fiscal risk, in our view. Most importantly, we believe the risks from the U.S. financial sector are higher than we considered them to be before 2008, as our downward revisions of our Banking Industry Country Risk Assessment (BICRA) on the U.S. to Group 3 from Group 2 in December 2009 and to Group 2 from Group 1 in December 2008 reflect (see ``Banking Industry Country Risk Assessments,'' March 8, 2011, and ``Banking Industry Country Risk Assessment: United States of America,'' Feb. 1, 2010, both on RatingsDirect). In line with these views, we now estimate the maximum aggregate, up-front fiscal cost to the U.S. government of resolving potential financial sector asset impairment in a stress scenario at 34% of GDP compared with our estimate of 26% in 2007. Beyond the short- and medium-term fiscal challenges, we view the U.S.'s unfunded entitlement programs (such as Social Security, Medicare, and Medicaid) to be the main source of long-term fiscal pressure. These, entitlements already account for almost half of federal spending (an estimated 42% in fiscal-year 2011), and we project that percentage to continue increasing as long as these entitlement programs remain as they currently exist (see ``Global Aging 2010: In The U.S., Going Gray Will Cost A Lot More Green,'' Oct. 25, 2010, RatingsDirect). In addition, the U.S.'s net external debt level (as we narrowly define it), approaching 300% of current account receipts in 2011, demonstrates a high reliance on foreign financing. The U.S.'s external indebtedness by this measure is one of the highest of all the sovereigns we rate. While thus far U.S. policymakers have been unable to agree on a fiscal consolidation strategy, the U.S.'s closest ``AAA'' rated peers have already begun implementing theirs. The U.K., for example, suffered a recession almost twice as severe as that in the U.S. (U.K. GDP declined 4.9% in real terms in 2009, while the U.S.'s dropped 2.6%). In addition, the U.K.'s net general government indebtedness has risen in tandem with that of the U.S. since 2007. In June 2010, the U.K. began to implement a fiscal consolidation plan that we believe credibly sets the country's general government deficit on a medium-term downward path, retreating below 5% of GDP by 2013. We also expect that by 2013, France's austerity program, which it is already implementing, will reduce that country's deficit, which never rose to the levels of the U.S. or U.K. during the recent recession, to slightly below the U.K. deficit. Germany, which suffered a recession of similar magnitude to that in the U.K. (but has enjoyed a much stronger recovery), enacted a constitutional limit on fiscal deficits in 2009 and we believe its general government deficit was already at 3% of GDP last year and will likely decrease further. Meanwhile, Canada, the only sovereign of the peer group to suffer no major financial institution failures requiring direct government assistance during the crisis, enjoys by far the lowest net general government debt of the five peers (we estimate it at 34% of GDP this year), largely because of an unbroken string of balanced-or-better general government budgetary outturns from 1997 through 2008. Canada's general government deficit never exceeded 4% of GDP during the recent recession, and we believe it will likely return to less than 0.5% of GDP by 2013. Outlook The negative outlook on our rating on the U.S. sovereign signals that we believe there is at least a one-in-three likelihood that we could lower our long-term rating on the U.S. within two years. The outlook reflects our view of the increased risk that the political negotiations over when and how to address both the medium- and long-term fiscal challenges will persist until at least after national elections in 2012. Some compromise that achieves agreement on a comprehensive budgetary consolidation program--containing deficit reduction measures in amounts near those recently proposed, and combined with meaningful steps toward implementation by 2013--is our baseline assumption and could lead us to revise the outlook back to stable. Alternatively, the lack of such an agreement or a significant further fiscal deterioration for any reason could lead us to lower the rating. Standard & Poor's will hold a global teleconference call and Web cast today--April 18, 2011--at 11:30 a.m. New York time (4:30 p.m. London time). For dial-in and streaming audio details, please go to www.standardandpoors.com/cmlive. Related Criteria And Research Sovereign Credit Ratings: A Primer, May 29, 2008. Ratings List Ratings Affirmed; Outlook Action United States of America (Unsolicited Ratings) (To--From) Sovereign Credit Rating (AAA/Negative/A-1+) (AAA/Stable/A- 1+) Ratings Affirmed United States of America (Unsolicited Ratings) Senior Unsecured (AAA) United States of America (Unsolicited Ratings) Transfer & Convertibility Assessment (AAA) This unsolicited rating(s) was initiated by Standard & Poor's. It may be based solely on publicly available information and may or may not involve the participation of the issuer. Standard & Poor's has used information from sources believed to be reliable based on standards established in our Credit Ratings Information and Data Policy but does not guarantee the accuracy, adequacy, or completeness of any information used. Complete ratings information is available to subscribers of RatingsDirect on the Global Credit Portal at www.globalcreditportal.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com. Use the Ratings search box located in the left column. I reserve the balance of my time.

Mr. CAMP. I yield 2 minutes to the gentleman from Louisiana (Mr. Scalise).

Mr. CAMP. At this time, I yield 2 minutes to a distinguished member of the Ways and Means Committee, the gentleman from North Dakota (Mr. Berg).

Mr. CAMP. No, I will not yield. So I would say that by supporting an unconditional increase in the debt limit, as more than 100 wrote in a letter to their leaders, again, it would do nothing about preserving that program for the future. At this time I yield 1 minute to the gentleman from New Mexico (Mr. Pearce).

Mr. CAMP. I yield myself such time as I may consume. One hundred fourteen members of the other party signed a letter to the leader who just spoke and asked for an unconditional increase in the debt limit. I know that's not maybe a fact they want to acknowledge now, but it is so important that we have a clear path forward on this given what the rating agencies are saying about our debt. They're saying it's not clear how we are going to deal with our indebtedness. It is so important that we set forward that when we address this issue, there are going to be the kind of spending reductions and structural reforms we need. That is going to have to be part of this discussion. We can't continue to have it clouded with this idea that we might have a debt limit increase without any of those. That's why it is so important to send this very strong signal today. I hope all of the members of your party join me in voting ``no'' on this bill. At this time, I yield 1 minute to the distinguished gentleman from Michigan (Mr. Huizenga).

Mr. CAMP. I yield the gentlewoman an additional 30 seconds.

Mr. CAMP. Mr. Speaker, I reserve the balance of my time.

Mr. CAMP. I yield myself such time as I may consume. I would say that the Medicare trustees have said that Medicare goes broke in 2024. So if you support an unconditional debt limit increase, as 100 Democrats wrote to their leaders and asked to be made a position of the Democrat Caucus, that does nothing about preserving and protecting Medicare for the future.

Mr. CAMP. I continue to reserve the balance of my time.