Press Release of Senator Toomey

Senator Toomey's Floor Statement On The Budget

Wednesday, May 25, 2011

WASHINGTON, D.C.— U.S. Senator Pat Toomey (R-Pa.) spoke on the Senate floor today on his fiscal year 2012 budget proposal and the importance of putting our country on a fiscally responsible path.

You can watch Sen. Toomey’s floor statement here.

An unofficial transcript is below:

Thank you, Madam President. And I thank you, the senator from South Carolina, for giving me opportunity to speak on this issue. Let me point out -- follow up on the central point that the senator has been making. When I go back to Pennsylvania and I talk to my constituents about the fact that the government of the United States, the world's biggest enterprise, an enterprise that's going to spend $3.6 trillion this year and we're doing it without a budget, they look at me in shocked disbelief that this could even be possible.

But it's possible because my colleagues here in the Senate, my Democratic colleagues, refuse to produce a budget. It’s just an unbelievable abdication of responsibility. But my colleagues have asked the American people to elect them to the United States Senate, to ask the American people to be the majority party of the United States Senate, which they are, and their attitude is they have no responsibility to lay out a plan for how they want to spend the $3.6 trillion that they want to spend.

They have no intention of laying out the plan of where the revenue is going to come from, how much it's going to come from and which -- in which areas. How should this money be spent? No overall blueprint, no guidelines, no architecture for spending this staggering sum of money. This is an extraordinary abandonment of a very fundamental responsibility. And I have to say, I have a hard time listening to the criticism of the House budget by people who have offered no budget as an alternative.

Now, let me speak about the house budget for just a minute, because it's taken a great deal of criticism from my friends on the other side in particular because 10 years hence in this budget, they recommend reforms to Medicare that save Medicare. And i want to stress this point. The current policies being advocated -- not in a budget but being advocated elsewhere by my Democratic friends, they are currently in the process of crushing Medicare because that's what's happening.

Talk to your doctors back home. Talk to your hospitals. We have small hospitals across Pennsylvania that are increasingly finding it so difficult to operate. Reimbursements are being gradually crushed down. We have this threat that doctors' reimbursements are going to be dramatically cut. And we've created in the president's health care overhaul, we've created this independent payment advisory board, as it's called, the purpose of which is to find ways to ratchet down reimbursements for health care providers. you know, one of the things that breaks my heart is how often I have had the conversation with a doctor who tells me, often choking up in the process, that he's encouraging his kids to pursue some other line of work, some other profession other than health care, the profession that -- that he or she has dedicated their life to. But this is the state of affairs that we have today because of where Medicare is and where it's heading.

So the House comes along and offers a plan that saves Medicare, puts it on a viable, sustainable footing for future generations and they get attacked for it. You know, is it the perfect plan, is it the only plan? I’m sure it's not but it would work. And you know one of the things that makes so much sense about what they're doing is they're altering the -- the payments as a function of people's wealth and health. Makes a lot of sense. So when younger people reach retirement age, they get more financial help from the government if their income is lower and their health is worse, and they get less if they're wealthy and relatively healthy. And this mechanism would put individuals in control of their own health care and put the government on a sustainable path.

Frankly, i think we ought to congratulate them for doing some very thoughtful work, and I’m going to vote for the House plan. Now, what the House plan does is it addresses a very long-term structural problem that we have for our budget and does it in a very thoughtful and sensible way. But I’m introducing an alternative budget because I want to focus the nearer term. My focus is just these next 10 years, because I think we've got a crisis staring us right in the face and we've got to deal with it now.

And so i think we've got to deal with it in next year's spending and in the immediate future. And a big part of my goal and what we've demonstrated in the budget that I’ve introduced and that we'll have a vote on in a little while is that we can balance this budget within 10 years. And I think that's just a very important goal.

My budget accomplishes that really with two elements: policies that generate strong economic growth, which have all kinds of benefits, not the least of which is it generates more revenue for the federal government; and the other part of this is we've got to tighten our belt. This government's been spending way too much money. My budget ratchets that back. And the combination brings us to balance within nine years and generates a modest surplus within 10 years. In the process, we dramatically reduce the amount of debt as a percentage of GDP. We just saw the senator from South Carolina present a comparison of what a dangerous position we are already in compared to that of other countries who have racked up too much debt as a percentage of their economies. Well, we are following on this very dangerous path.

What my budget does is starts to reverse that curve, starts to lower the debt as percentage of GDP, and by bringing the budget into balance, it will actually stop growing the debt altogether, which is a very important goal. Part of that is through pro-growth tax policy. So, No. 1, we would -- in this budget we would ask the committees in the two bodies to enact reforms that would simplify the tax code dramatically and allow us to lower marginal rates. A combination of a simplified code and lower rights would generate growth. I would do that on the corporate side as well as on the individual side. On the corporate side, notify a territorial tax system so we wouldn't continue to have the tremendous competitive disadvantage that we have. (Inaudible) … different approaches to Medicare. We’re just focused on these next ten years. We end the fiction that we're going to cut doctors by 30 percent or end the threat, depending on how you choose to look at so the sustainable growth rates as it's called around here, this notion that we have to massively cut reimbursements to doctors all of a sudden, that's done away with, and we recognize that that would be very imprudent policy.

Another thing that we do is we adopt one of recommendations from the Simpson-Bowles Commission on medical practice liability reform. That saves some significant money across the board on health care. That includes (inaudible) on Medicaid, we adopt a very similar approach that that is done in the House budget, which is to say this is completely unsustainable in its current form. Medicaid has been doubling every eight years, and it is a big driver of the deficit that we have in Washington. It has big driver of huge deficits across the 50 states. It’s a big problem because the states have little or no flexibility in how they administer this program. They’ve got a big financial burden that comes with it. And what I think we ought to do is take these resources, block-grant them to the states and give the states the flexibility to figure out a better way to deliver health care services to low-income people. And among our 50 states, I am very confident that there will be many who will come up with better models. And as they do they believe adopted generally and we can put this program on a sustainable path, which it is certainly not on trade.

On some other areas of spending -- on non-defense discretionary spending, we (move) immediately to cut them. In recent years the big surge in the recent years has come from the discretionary side. So what we call for is lowering non-defense discretionary spending to the level it was at in 2006, and then freezing that. Freezing that for six years after which it would be indexed to the consumer price index. Other mandatory spending aside from the big entitlement programs would gradually be reduced to just over the 2007 level, I say "gradually," we do this so that people have a chance to adjust.

(Inaudible) the economic growth we would get from the lower taxes, the lower marginal tax rates, should I say, would help facilitate this. It gets lowered to 2007 levels by 2014, after which it grows at CPI. Our budget calls for no changes whatsoever to Social Security, and it calls for none of the structural changes to Medicare because those occur after the 10-year window and we are a focused on just the next 10 years.

Madam President, I would strongly stress that we are staring at a full-blown crisis. We don't know whether it's a year from now or two years from now or 18 months or even nearer. That is impossible to know. But it's impossible to deny that we cannot continue on this course. We cannot continue running multitrillion-dollar deficits, deficits that are 10 percent of our entire economic output, that rack up this huge amount of debt that we have done in recent years. That is not sustainable.

My first career out of college was in finance. When i was working in finance, the idea of the federal government of the United States of America even having a credit rating was not -- it was not something that was understood to be that way. The United States of America was above the credit rating system. It didn't apply to us. A triple-A rating system wasn't even relevant because you didn't even talk about the creditworthiness of the United States except to refer to it as the “risk-free” interest rate, requests the risk-free security, the security for which there was no risk of a failure because this was after all the government of the United States of America. Well, now, we're in a position that is absolutely shocking to me. We very much are subject to a credit rating, but it is worse than that. We have S&P telling us that they are actively contemplating the day on which they will lower our credit rating and we won't even be a triple-A. This is shocking to me and has tremendously dire consequences.

I will close by just saying, we cannot kick this can down the road anymore. We need to do something now. I have got a budget that balances within 10 years, and I would urge my colleagues to support it. Thank you.