I want to break down your email to me using logic.
We're 12 trillion in debt. We need to pay off our debt. Therefore, we must borrow more money to pay off our debt.
OK, I need the federal government to loan me 1.5 million dollars, so I can pay off my debt, and spend my way to financial freedom. I will be looking for a check in the mail next week.
From: senator@feinstein.senate.gov <senator@feinstein.senate.gov>
Subject: U.S. Senator Dianne Feinstein responding to your message
To: RAS
Date: Tuesday, February 23, 2010, 6:59 AM
Dear Mr. Smith:
Thank you for contacting me to express your concerns about raising the national debt limit. I appreciate the time you took to write about this important issue and welcome the opportunity to respond.
Like you, I am very concerned about our nation's increasing debt and the financial burden it will place on future generations. Our national debt is now over $12 trillion, which translates to roughly $40,000 owed by every American citizen. To ensure that the Federal Government does not default on its obligations, the debt limit must be periodically increased. On January 28, 2010, the Senate passed legislation that would increase the debt limit by approximately $1.9 trillion. You may be interested to know that this bill included an amendment, which I supported, to implement pay-as-you-go budgeting rules to help ensure that future tax and spending bills do not add to the deficit.
During consideration of this legislation I also supported an amendment offered by Senators Kent Conrad (D-ND) and Judd Gregg (R-NH) that would have established a commission to recommend policies for reducing deficits and ensuring the long-term solvency of entitlement programs. While this amendment ultimately did not pass, I am pleased that President Obama has signed an executive order to establish a commission, the National Commission on Fiscal Responsibility and Reform, to address this critical issue. I have attached the statement I gave on the Senate floor expressing my support for such a commission.
Please know that I do not take raising the debt limit lightly. Members of Congress must work together to improve our budgetary outlook by enacting more fiscally responsible policies. I will be sure to keep your concerns in mind as I work with my Senate colleagues to reduce Federal budget deficits.
Again, thank you for writing. I hope you will continue to keep in touch on issues of importance to you. If you have any further questions or comments, please do not hesitate to contact my Washington, D.C. office at (202) 224-3841. Best regards.
Statement of Senator Dianne Feinstein
In Support of the Conrad/Gregg Entitlement Commission
Mrs. FEINSTEIN. Mr. President, I wish to say a few words in favor of the Conrad-Gregg amendment which will shortly be before us and in opposition to the Baucus amendment.
I have worked for some time to try to produce legislation that would create a commission which could be like a BRAC commission and deal with what I consider to be the most formidable problem facing this government.
Every Wednesday during the summer and spring, I have a constituent breakfast. One of the things I do at that breakfast is show what debt and deficit really means. One of the best ways--you learn this when you do a budget, and I learned it when I was mayor of San Francisco and for 9 years put together a budget--is to look at what is actually spent, total numbers. That gives you the real clue. It is called outlays, Federal outlays.
What have Federal outlays been? In 2009, 50 percent of everything the Federal Government paid out went to entitlements. What are entitlements? Medicare, Social Security, veterans' benefits--things that cannot be controlled--if you are entitled to them, you get them.
Look at interest on the debt, which is 5 percent. If you look at discretionary defense, it is 18 percent. And if you look at everything else the Federal Government does that everybody talks about--education, agriculture, justice, the 22 agencies in Homeland Security--it is just 16 percent of what is spent. If you add together the 50 percent and the 5 percent of interest, we see 55 percent of everything the Federal Government spends this year cannot be controlled. We have to spend it. All the rest that is discretionary is rather small in comparison. If we project that out 10 years--and I must say that new numbers are coming out tomorrow, so this is the latest number I have--entitlements go up to 56 percent and interest on the debt to 14 percent; that is, 70 percent of everything that will be spent in the year 2019 if things are projected forward cannot be controlled. Discretionary defense is 16 percent, and nondiscretionary--again, everything else--is 14 percent. If you wanted to balance out, you could eliminate everything in discretionary spending and you could not solve the problem.
That is what is happening. Entitlements are expanding to an inordinate amount of what the Federal Government pays out every year. It does not matter whether something is in the budget or not in the budget; if you have to pay for it and spend it, it contributes to the deficit and that translates into debt. It is a very major problem.
That is why I rise today in support of the amendment offered by Senators Conrad and Gregg to establish a bipartisan commission to tackle this issue and look at these programs--namely, Social Security and Medicare--and make some recommendations as to how they can be changed, amended, melded to essentially be able to maintain themselves over time. We know both these programs are the third rail of American politics. Past Congresses and past Presidents have failed to take the steps necessary to ensure their long-term viability. Social Security will start running out of money in 2037, and Medicare will start to run out of money before the end of this decade. In 7 years, in 2017, Medicare will begin to run out of money.
This is an opportunity to take a concept which has worked before--namely, the Greenspan Commission, which in 1983 added years to Social Security solvency--and have a 1-year commission, which is the Conrad-Gregg commission, to deal with this debt. It would be an opportunity to get our Nation's finances back on track. If we could have done it, we would have done it. If we could have done it, why didn't we? Why year after year do we refuse to face the issues? The Greenspan recommendations, including a change to the trust fund revenue structure, actually won bipartisan support. Those recommendations were adopted, and they were credited with saving Social Security at the time.
More recently, the base realignment and closure process, known as BRAC, and the Homeland Security commission following 9/11 made recommendations. Many of those recommendations were accepted. The BRAC Commission had a process which all of us sort of derided and did not like, but it got the job done. They presented recommendations to the Congress; the Congress could vote them down. That decided the question. That is what the Conrad-Gregg amendment would do.
We all see the gravity of what is happening. As we vote to increase the debt limit for the ninth time in 8 years, we are not able to do anything about the biggest consumers of debt--entitlements--because they are such valuable programs to people and no one wants them touched.
This commission would be bipartisan. It would be composed of 18 members--10 Democrats, 8 Republicans; specifically, 16 Members of Congress split evenly between each party and 2 administration officials. Their charge would be to come to grips with this situation and make a series of recommendations on an expedited procedure that would come to the Congress, and we would either vote it up or vote it down. Everything would be on the table. The scope of the commission is broad enough to include all possibilities for improving our budgetary outlook. The commission would issue this report before the end of the year. Mr. President, 14 of the 18 Members must approve the report before it could be presented to us, and Congress would be required to vote on the report, as I said, with expedited consideration before the end of this year. So for the first time, in a matter of months, we would have before us some recommendations. How do we tweak Social Security to enable it to go past its doomsday? How do we handle Medicare to see that it is viable throughout the next three, four, five decades? It does not circumvent congressional procedures, nor does it exclude elected officials from shaping the final report.
The Social Security trust fund runs out of money in 2037. If we do not do anything, it is going to happen sooner. Today, 50 million people depend on Social Security. By 2050, 82 million people--another 32 million people--will receive Social Security.
Most people do not realize that one-half of American workers today have no retirement or pension benefit from their company. I did not know this. One-half of all retiring workers have no retirement or pension benefit from their company. Social Security is what they will have. With the problems in the workplace today, with the increase in bankruptcies, we can be sure that Social Security is only going to become more important as the decades go on.
In 2007, Social Security alone kept 35 percent of older Americans out of poverty. That is how important it is. Thirty-five percent of our seniors would be living in poverty if it were not for Social Security. And for almost two-thirds of people, Social Security makes up more than half their income. So Social Security is really the breadbasket, it is the opportunity for many seniors and pensioners and retirees to continue to live and stay out of poverty.
Medicare is in even worse shape. By 2017, the hospital insurance trust fund will be depleted. In last year's Trustees report, insolvency was projected in 2019.
Medicare is unsustainable over time.
That is something that none of us wants to admit, none of us wants to face. The record is clear: None of us has faced it. None of us has done anything about it, and yet the time is ratcheted sooner and sooner.
So once the hospital trust fund is exhausted, it will be necessary to reduce the amount of benefits payable. What does that mean? That means after 2017, only 81 percent of benefits will actually be paid. Think of that. Is it all right to let that happen? Is it all right to do nothing? Is it all right to say: OK, we know that come 2017 only 81 percent of the benefit an individual should get will be paid, and it is because we are not willing to do anything about it? That is what we are saying if we vote no on the Conrad-Gregg resolution.
Medicare Part B and Part D prescription drug coverage will increasingly outpace beneficiary income over time. So funds won't be there to pay for prescription drug benefits. That is the simple result. Without finding an adequate way to fund these obligations, those funds will have to be borrowed or will be nonexistent, and this further adds to the debt we see coming down the pike. All of it adds together to the financial insolvency of both Social Security and Medicare.
That is why a commission is needed--because we haven't done what we should have done. We haven't made the tweaks, the changes, the adjustments. We haven't looked at means testing. These programs were founded on the belief that no matter how wealthy you are, you should get these benefits. My own view is that should change. They should be looked at more as insurance programs. If you don't need them, if you are a millionaire, why should you have these benefits? If you need them, if you are part of the half of America that has no pension or retirement benefit, if you earn under, let's say, $250,000 a year as a retiree, maybe you should still get them. But if you earn more than $250,000, with this picture facing us, maybe you should pay your own way.
These are some of the decisions that have got to be made, and we can't keep putting them off because they are unpleasant, because the more we put them off, the bigger the troubles get. That has been the case in the 17 years I have been here. I have watched this, and it keeps going up and up and up. So the problem is apparent, but it has been ignored. It has been shoveled under the rug. It has never been addressed, and that is why we need a commission.
I cosponsored a bill two Congresses ago with Senator Domenici and I cosponsored a bill this Congress with Senator Cornyn to create a Social Security-Medicare commission. Mine was not composed of Members of Congress, but there was opposition. People felt, well, if this body is going to have the ability to make a recommendation that may result in having to put more money into the system, either by increasing the payroll tax or any other way, then it ought to be the Members of the Congress or the Senate who make that recommendation. Senator Conrad and Senator Gregg took that as a kind of mandate and said: All right, we will do that, and here is what we propose.
I am very glad the Senator from Florida is on the floor. We have worked as part of this group together, come to several meetings. I guess it would be fair to say there are about 16 or 17 of us who have worked together with Senator Conrad on the Democratic side on this, and we do so because we recognize doing nothing doesn't save Medicare and doing nothing doesn't save Social Security. But doing something may, so that is why we need a commission. This will never get done if we follow regular order in the Congress. For 17 years, I have watched that regular order year in and year out, and nothing has happened. I remember Fritz Hollings standing right there on the floor talking about keeping money from going out of the trust funds. As you know, now it is an accounting judgment. Everything goes into one fund, but there is just an accounting judgment. He advocated separating it out so it couldn't be used to balance the budget. Right now the trust funds are used to balance the budget. They are not set aside for a special fund to see that Social Security remains secure. It is the good faith and credit of the government that does that. Well, I say that isn't enough. We have to face the consequences, bite the bullet. We have to find a way to see that our national credit card is fiscally responsible.
I know my time is up, but I want to indicate my very sincere support and my thanks to both Senator Conrad and Senator Gregg for their work, for their leadership, and for their strong advocacy. They have friends. We will support them. And I very much hope this body will as well.
Mr. President, I yield the floor.
Sincerely yours,
Dianne Feinstein
United States Senator