I would like to thank my good friend, Senator Ron Johnson, for taking the time to speak on the Senate floor in support of my Saving the American Dream budget proposal. He eloquently articulated the reasons why we must reduce the growth of government and stop going further into debt before it is too late. Below is a video of his remarks, as well as a transcript:

Before I start talking about my friend Senator Lee’s budget, I would like to respond to the senator from Iowa. Instead of talking about student rates, let me talk about America’s average borrowing cost.

What I’ve done is delved into the budget, taken a look at the history and from 1970 to 1999 over that 30-year period the average borrowing cost in the United States was 5.3%. And, by the way, that was when America was a far more creditworthy nation when our debt to G.D.P. ratio ranged from 40% to 67%. Now our debt-to-G.D.P. ratio is over 100%. Over the last three years our average borrowing cost has been kept artificially low at 1.5%.

So my concern is by not seriously addressing the problem, by not actually passing a real budget that starts reining in the growth in government, I’m concerned that we’re going to go from that 1.5% and revert back to that average mean borrowing cost of 5.3%. If we do, that 3.8% differential would add $600 billion to $700 billion per year to America’s interest expense, and that would crowd out 60% to 70% of all discretionary spending. That’s the day I’m concerned about. That’s the day of reckoning I’m concerned about, when global investors look at the United States and say, what you know? We’re not going to loan you any more money. Or what’s more likely to occur is they’ll say we’ll loan you money but at a far higher rate.

But having made that statement, I would like to talk a little bit about my friend Senator Lee’s budget and the things I like about it. One of the things I like to do is actually take a look at history here and point out that I know a lot of us say we don’t have a tax problem. We don’t. It’s not that we tax too little from the American public, it’s that we spend too much. And I think this is some pretty proof.

Here’s ten-year spending levels. From 1992-2001, the federal government spent a total of $16 trillion over that ten-year period. Over the last ten years, from 2002-2011, the federal government spent $28 trillion. Now the debate moving forward is, according to President Obama’s just-released budget, he would like to spend $47 trillion over the next ten years. The House budget would spend $40 trillion and I guess what I like about Senator Lee’s budget is he would come in and spend about $37 trillion and put ourselves on a more aggressive path toward fiscal sanity.

Now, we hear about draconian cuts all the time. You don’t have to be a math major
to realize that $37 trillion, $40 trillion or $47 trillion is not a cut from $28 trillion. All we’re trying to do is reduce the rate of growth.

Another thing I like about Senator Lee’s budget can be illustrated in terms of our chart that shows total federal debt. I start this chart in 1987, the tail end of Ronald Reagan’s administration when our total debt was $2.3 trillion. I’d like to point out that it took us 200 years to incur $2.3 trillion. And of course in last year’s debt ceiling agreement this Congress gave the president the authority to increase the debt limit by $2.1 trillion. We’ll go through that in less than two years. That’s a problem.

If you take a look at President Obama’s budget and you can see how quickly our national debt has increased, but according to President Obama’s budget, in the year 2022, our total federal debt would be $25.9 trillion, up $10 trillion from what it is today. Senator Lee’s budget would result in total debt of about $19.1 trillion. Even more importantly, he stabilizes and then reduces a very important metric, our overall debt to G.D.P. ratio. That is what investors take a look at in terms of our creditworthiness.

The other thing I like about Senator Lee’s budget is that by 2022, it will reduce federal spending to 17.8% of the size of our economy. Now, if you’re like me and you think the root cause of our problem, our economic problem is the size, the scope, all the rules, all the regulation, all of government’s intrusion into our lives and the resulting cost to government, this is the key metric. How large the federal government is in relationship to the size of our economy.

Currently, the federal government takes 24 cents of every dollar that is generated by our economy. If you add in state and local governments, total government of the United States consumes 39.2%. 39 cents of every dollar filters through some level of government and I don’t know about you, but I don’t find government particularly effective or efficient.

To put that in perspective, for example, of European-style socialist nations, Norway last year was 40%, and Greece, 47%. Anybody hear of Greece recently? That economic model is collapsing. And this is why Senator Lee’s proposal’s important.

If you take a look at spending and revenue generation over the last 50 years, you can see spending from 1959-2008 averaged 20.2%. Over the last three years, we’ve increased that to 24%. Revenue generation has been 18.1% over that same time period.

By the way, regardless of what our marginal tax rate is, and as much as our friends on the other side of the aisle want to punish success and increase marginal tax rates, the problem with that is that it simply doesn’t work. In my lifetime, the top marginal rate has been 90%, 70%, 50%, 28%, 35%, 39.6%, and now we’re back down to 35%. And in all that time period, the average tax receipts, the maximum amount the federal government could extract from our economy, is averaged very tightly around that mean of 18.1%. If we ever have any chance of living within our means, we’d better get federal spending down to about that level. That’s what Senator Lee’s budget does.

And so again, I just want to thank my friend, Senator Lee, as well as Senator Toomey and Senator Paul for putting forward serious proposals. And I want to thank all Republicans in Congress that are actually voting for something, because, Mr. President, Republicans are proving that we are willing to be held accountable to the American people by putting a plan on the table and showing the American people what we would do to try and get our fiscal house in order. With that, Mr. President, I yield the floor.