Friday, December 6, 2013
Text of Sen. Susan Collins' speech:
Sen. Susan Collins refers to a chart during her speech Thursday in South Portland.
John Ewing / Staff Photographer
I want to talk this morning about our debt crisis, the prospect for tax reform, and then some of bipartisan proposals to get our economy moving again.
Our national debt is now a staggering 16.7 trillion dollars. The tab for every man, woman, and child exceeds $53,000 and is our legacy to future generations.
Debt, of course, is the result of years of borrowing and with borrowing comes interest. Each month, we spend about $18 billion on interest payments, more than the entire annual budget for Navy shipbuilding. That's more each day – in excess of $600 million – than the annual value of Maine's fishing industry. That's a lot of clams – and lobster, mussels, and haddock.
Excessive government borrowing crowds out the private sector, stifles business investment, depresses wages, and slows economic growth. In May, the nonpartisan Congressional Budget Office offered a chilling warning that when interest rates return to more typical levels, federal interest payments will increase substantially.
This chart titled "Major Components of the Budget," shows that the columns, tallying federal outlays from 1980 through 2020, increase at an alarming rate. I'll talk about the dominant orange section – which represents entitlement programs – a bit later. First, I'd like to draw your attention to the red section, which grows from a small portion of each column to, by 2020, the third-largest spending component. Those are interest payments, and their increasing size will become a roadblock to economic growth.
The chart of federal outlays demonstrates where federal revenues go. In 2012, nearly 64 percent of the $3.5 trillion in total federal outlays went to obligations for some very worthwhile programs: primarily Social Security, Medicare, Medicaid, civil service and military retirement benefits, as well as interest on the national debt. Now, consider that we can spend that $3.5 trillion only because we borrow $1 trillion on top of $2.5 trillion in revenue.
In fact, spending on mandatory programs eats up 83 cents of every dollar we collect in federal revenue. Add interest costs, and 92 cents of every revenue dollar is spoken for before we even consider "discretionary spending." And just because it's called discretionary doesn't mean it's not vital to our nation's security and our future. This category includes such important missions as defense, education, transportation, and biomedical research. Transportation funding, for example, helps rebuild our crumbling roads and deteriorating bridges. It allows products and raw materials to be transported efficiently, people to travel safely, and jobs to be created in the private sector.
We need to strengthen and preserve Social Security, Medicare, and Medicaid. If we do not reform these unsustainable programs in thoughtful ways that keep the promises we have made to those in need and our seniors, the programs will run out of money. A quick look at the chart tells the tale. The orange section – entitlements – grows so large you can almost feel its crushing weight on our nation's future.
An alarm has been sounded in the most recent Social Security and Medicare trustees report. The trustees project that the Medicare Part A trust fund, which covers hospital stays, skilled nursing care, post-acute home health care, and hospice benefits, will be unable to pay benefits in full or on time in just 13 years. Even more urgent is the fact that the disability component of the Social Security trust fund will be exhausted in 2016 – just three short years from now – and unable to pay full benefits. Yet, Social Security Disability Insurance is an essential component of our nation's social safety net.
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