Press Release of Senator Toomey

Senator Toomey Delivers Maiden Speech

Tuesday, March 1, 2011

WASHINGTON, D.C.– Today, Senator Pat Toomey (R-Pa.) delivered his maiden speech on the floor of the U.S. Senate. To view the speech, please click here.

Unofficial Transcript

“Thank you, Mr. President. Mr. President, it’s a great privilege and an honor for me to be able to represent the big, wonderful, diverse commonwealth of Pennsylvania in the United States Senate. Pennsylvania is a wonderful state. It’s got a terrific range of great attributes.

“It’s got big bustling cities like Philadelphia and Pittsburgh at opposite ends. It has all throughout the commonwealth beautiful historical boroughs like Emmaus and Gettysburg. We go from the banks of the Delaware all the way to the shores of Lake Erie, and in a state this big, of course we have a wide range of very vital industries.

“We’ve got old industries that we’ve had for a long time and are still very important employers – agriculture, coal, and steel and many others. We’re a big manufacturing state, manufacturing goods of all kinds. We have a huge service sector, especially in the fields of education and medicine, finance, and tourism and many others.

“We’ve got some relatively new and really very exciting industries in our commonwealth that I’m very hopeful will lead to an acceleration in job growth soon. I’m thinking in particular of the natural gas in the Marcellus shale. I’m thinking of the life sciences all across the commonwealth, especially in greater Philadelphia and greater Pittsburgh as well as points in between. The medical device sector and pharmaceutical industries are offering some of the most exciting opportunities for economic growth anywhere in the commonwealth.

“When I think about the diversity and the strengths of our commonwealth, I am convinced that Pennsylvania’s best days are ahead of us. That said, despite all of the underlying strengths and advantages that we have, we’ve got an economy that’s struggling. We’ve got job creation that’s far too slow. And as I said repeatedly throughout my campaign for the Senate seat, and as I’ve said since then, I think there are two vital priorities that we need to focus on first and foremost here in Washington.

“The first is economic growth and the job creation that comes with it. And the second is restoring fiscal discipline to a government that’s lost all sense of fiscal discipline. These two, of course, are closely related. We’ll never have the kind of job growth that we need and deserve until we get our fiscal house in order. But I look at them as separate issues, and I think they should be at the top of our priority list.

“Let me also say this, Mr. President, I am absolutely convinced that we can have terrific economic growth -- terrific job growth. We can have the prosperity that we’ve been looking for. In fact, it’s actually inevitable if the federal government just follows the right policies, remembering first and foremost, that prosperity comes from the private sector. It doesn’t come from government itself. But that government creates an environment that the government sector can thrive and create the jobs that we so badly need.

“I would argue, Mr. President, that the government does that really by doing four things well. The first is to make sure we have a legal system that respects property rights, because the clear title and ownership and ability to use private property is the cornerstone of a free enterprise system. It requires second that the government establish sensible regulations that are not excessive. We’ve seen a lot of excessive regulation. Too much regulation has unintended consequences that curve our ability to create the jobs that we need.

“A third thing a government always needs to do is provide a stable currency. Sound money because debasing one’s currency is the way to ruin, not the way to prosperity. Fourth, governments need to live within their means. They can’t be spending too much money, and they can’t have taxes at too high a level. It’s so important that government spending remain limited and, frankly, much less than we have today, for several reasons.

“One, of course, government spending is the political allocation of capital rather than the allocation of free people and a free economy, and the political allocation is always less efficient than that of men and women engaging in free enterprise. Secondly, the reason that too much spending is problematic is because it ultimately always has to be paid for with higher taxes. And higher taxes clearly impede economic growth and prevent job creation. They do that in many ways, but not the least of which is by diminishing the incentives to make investments, to take risks, to launch new enterprises, to hire new workers.

“I would argue, Mr. President, that of these four priorities, the government’s not doing such a great job. And the failure is most egregious when it comes to the level of spending that has recently developed in this town. The recent surge in spending amounts to about a 25 percent increase in the size of the government virtually overnight. The government is now spending the – the federal government alone is now spending fully 25 percent of our entire economic output.

“And, frankly, this huge surge in spending hasn’t worked. (The) unemployment rate has stayed near to 10 percent. Our deficits are now over $1.5 trillion in just a single year. That’s more than 10 percent of our entire economy. And, of course when you run annual deficits where you’re spending more than you bring in, that shortfall is made up for with new borrowing. And so we’ve been adding to our debt at what is really an alarming pace.

“I would argue this mounting debt is already, today, costing us job growth. It’s costing us jobs because it creates a tremendous uncertainty in our economic future when we’re not on a sustainable fiscal path. And that uncertainty itself discourages entrepreneurs and job creators from doing the kind of things that we need. The risks are very, very real. History is replete with examples of countries that have accumulated too much debt and, frankly, it never ends well. Very often it leads to very high rates of inflation, it can lead to much higher interest rates, which can have a crippling effect on job growth, and it can even lead to financial disruptions, which can be very damaging as we have recently seen.

“Now, with the recent acceleration in the size of our deficits and increase in our debts, we are now rapidly closing in on the statutory limit to the amount of money that the federal government is permitted to borrow under law. That’s an amount of over $14 trillion, but the truth is we’re rapidly closing in on that limit. And we’ll get there fairly soon. The administration has suggested that we ought to here in Congress vote to raise that limit with no conditions attached.

“I have to tell you this I think is a very bad idea. This brings to mind the case of a family that is routinely living beyond their means. They’re routinely spending more than their income and making up for the difference by running up the limit on their credit cards. When this family reaches the limit on all of the credit cards they’ve got, who really thinks it’s a good idea to give them another credit card? I think most folks in Pennsylvania think it’s probably time to reexamine the spending and look at the real problem that has gotten the family in this situation. I think that’s where we are as a government. I think we need to really fundamentally reexamine the spending that we’ve been engaged in.

“Now, I will say, clearly, I think failure to raise the debt limit promptly upon reaching it is not optimal, and it would be very disruptive. I hope that doesn’t come to pass. I happen to think the most irresponsible thing we could do is simply raise this debt limit and just run up even more debt without making any of the changes to the problems that got us in this fix. Specifically, what I think we need to do is have real cuts in spending now. Not later, not at some distant hypothetical point of time in the future, but now. That’s one.

“Second, I think we need real reforms in the spending process – reforms in the way that Congress goes about its business, because the process is part of what’s gotten us here. My own view, I’d like to see a balanced budget amendment. One with real teeth. One that requires our books to be balanced. One that limits the total spending to a reasonable percentage of our economy. And one that makes it harder to raise taxes. I think that would be a very good development. But that will take several years, at best, if we can get that implemented. Of course all the states have to agree.

“And in the meantime, I would hope we could have statutory spending caps in law, limits to how much the federal government can spend and a mechanism that would redress the problem if for some reason we exceeded those limits. Now, as we’ve had this debate over whether or not we should attach these conditions to raising the debt limit, some have suggested that this is a very dangerous discussion to have because failure to immediately raise the debt limit, some have suggested that that amounts to a default on our Treasury securities, on the borrowing that we’ve already incurred. The fact is that’s just not true, and I think it’s irresponsible to suggest that.

“The fact is, Mr. President, that the ongoing revenue from taxes that will be collected, whether or not we immediately raise the debt limit, well, the ongoing revenue is more than 10 times all the money needed to stay current on our debt service. In fact in the last 20 years, there have been four occasions where we reached the debt limit without immediately raising it, and we never defaulted on our debt. And this country never will. So I don’t think we should have a discussion on something that will never happen.

“Since some in the administration have raised the specter of a default, I’ve introduced legislation that would clearly take that risk off the table entirely. My bill is called the Full Faith and Credit Act. It simply says that in the event that we reach the debt limit without having raised it, it instructs the Treasury to make sure that debt service is the top priority. This guarantees that we wouldn’t default on our Treasuries. We wouldn’t create a financial crisis of any kind.

“And, maybe more importantly, I think it would be a great reassurance to the millions of Americans who have lent this government their money. The millions of Americans who hold Treasury bonds in their IRAs, their 401(k)s, their pension plans. The retiree who lives in Allentown, Pa., who’s lived modestly, saved money, with their retirement savings invested in the U.S. Treasury, I think those folks deserve the peace of mind of knowing that first priority is going to be to make sure that we honor the obligation to stay current on our debt.

“I want to take a moment to just thank Senator Vitter, because yesterday he came down to the floor and introduced my legislation as an amendment to the current patent reform bill. And I hope we’ll be able to pass my amendment. I hope we’ll soon get to a vote here on the Senate floor on this. The real reason is I just want it take off the table; I want to remove this false specter of a default on our debt so we can have an honest debate on how we’re going to get spending under control. What kind of spending cuts we can have now and what kind of reforms we’re going to make to the progress going forward.

“I just don’t think we can kick this can down the road anymore. We’ve been doing that a long time. And as I said earlier, it never ends well when government continues to take on too much debt. Nobody here I know wants to see the government shut down. No one wants to see the disruption that would come from failing to raise the debt limit at one point. But nor can we proceed with business as usual. And all across Pennsylvania I hear every day back home how important it is that this government learn to live within its means as Pennsylvania businesses and families have done.

“Let me close by just saying, I still remain absolutely convinced we can have a terrific economic recovery. We can have a booming economic growth and the tremendous job creation that goes with it. It’s overdue, but it can still arrive if we just pass the kind of policies that create the right environment. I’m convinced the 21st century will be another great American century and Pennsylvania will be at the forefront. Thank you, Mr. President, and I yield the floor.”