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Harkin Statement In Opposition to the Debt-Ceiling Deal

August 1, 2011

Harkin Statement In Opposition to the Debt-Ceiling Deal

To say that this is the wrong policy at the wrong time is a gross understatement

***As Prepared for Delivery***

WASHINGTON, D.C. – Senator Tom Harkin (D-IA) today delivered the following speech on the floor of the U.S. Senate in response to the bipartisan debt agreement. 

Following is the text of his remarks, as prepared for delivery.

“Mr. President, the debt-ceiling agreement that will soon come before the Senate is a clear and present danger to the fragile, indeed faltering, economic recovery.  To say that this is the wrong policy at the wrong time is a gross understatement.

“Is anyone paying attention?  We just learned that economic growth fell to a 1.3 percent annual rate in the second quarter, and first quarter growth was revised downward sharply to just 0.4 percent – virtually flat.  The economy created a meager 16,000 jobs in the month of June – again, flat.  Last month, nearly 25 million Americans could not find full-time employment.  State and local governments continue to slash funding and jobs at a stunning pace; destroying an estimated 500,000 jobs in the last two years.  According to an article in today’s Wall Street Journal, in the first half of 2011, all government spending fell at a 3.5 percent annual rate – enough to knock three-quarters of a percentage point off GDP.  And now, on top of this wreckage, the Federal government is proposing to slash funding and investment by $2.4 trillion – an unprecedented step that will further destroy demand and directly kill millions of public and private sector jobs. 

“Mr. President, for months, now, Washington politicians have been distracted by the phony, manufactured crisis about raising the debt ceiling.  This city has been obsessed with the budget deficit.  But the rest of the country – with very good reason – is most concerned with a far more urgent deficit – the jobs deficit.  In a recent CBS News/New York Times poll, 53 percent of the public named the economy and jobs as the most important problem we face, while only 7 percent named the deficit.

“I oppose this misbegotten, misguided deal to raise the debt ceiling.  I oppose it for four reasons.

“Reason No. 1 is that this deal will destroy millions of jobs in both the public and private sectors.  And by shutting off Federal funding and investment – a critical engine sustaining our sputtering economy – it could easily plunge America back into recession. 

“Second, I have advocated a balanced approach to deficit reduction, including both spending cuts and revenue increases.  But this deal expressly rejects a balanced approach.  It rejects any sense of equity and fairness.  Indeed, this is the message that is coming across loudly and clearly in the phone calls and emails my office it getting from Iowa and across the country:  It offends people’s basic sense of fairness that Congress would slash funding for things like student loans and cancer research . . . essential funding for seniors, people with disabilities, and the most vulnerable people in our society . . . but ask not one dollar of shared sacrifice from millionaires and billionaires, who have received huge tax breaks over the last decade. 

“Third, I oppose this deal for the simple reason that I oppose paying ransom to hostage takers.  Since the 1930s, Congress has routinely raised the debt ceiling 89 times, including 7 times during the presidency of George W. Bush, and 18 times under President Reagan?  But not this time.  This time, Congressional Republicans are holding the economy hostage, threatening to default on our national debt and plunge America back into recession unless their demands are met.  Let’s be clear, this is not a negotiating tactic, it is blackmail.  Republicans have basically said:  We will inflict grievous harm on the economy if Democrats do not meet our demands.  Well, with this lopsided deal, the ransom will be paid and the hostage will be released.  But this sets a terrible precedent.  And, make no mistake, Republicans will use these same despicable tactics in the future.

“President Obama had an alternative to capitulating to the Republicans’ hostage taking and blackmail.  In remarks here in the Senate on Saturday, I urged the President to respond to this unprecedented threat by taking the unprecedented action, under the 14th Amendment to the Constitutions to, of raising the debt ceiling.  It is deeply regrettable that President Obama preemptively took this option off the table.  Throughout history, where meaning is unclear, where precedent is nonexistent, the American people, through their elected officials, have acted boldly to protect the interests of the United States.  For example, Jefferson initiated the Louisiana Purchase; Lincoln issued the Emancipation Proclamation; FDR made a lend-lease arrangement with Britain in order to help that nation fight Germany.  In each case, the Presidents had their initial doubts on the constitutionality of their actions, and critics challenged the legality of their acts, but at the end of the day each of these great Presidents realized their actions were not only well within the bounds of the Constitution, but were the right things to do.

“Finally, Mr. President, my fourth reason for opposing this deal is because, in truth, it is not about reducing the deficit; first and foremost, this deal is about preserving hundreds of billions of dollars in tax breaks for corporations and for the wealthiest people in our society. 

“Bear in mind that this is the singular purpose and goal of today’s Republican Party: not reducing the deficit, but preserving and expanding tax breaks for the wealthy.  We saw this back in December, when Republicans demanded a deal to preserve the Bush-era tax cuts for the wealthy.  That deal added a whopping $800 billion to deficits just in 2011 and 2012 – a very big reason why we need to raise the debt ceiling, today.  In December, Republicans’ No. 1 priority was preserving tax breaks for the wealthy, even if that meant adding hundreds of billions of dollars to future deficits.  Likewise, in recent weeks and months, Republicans have repeatedly rejected “grand bargains” to reduce future deficits by nearly $4 trillion.  Why have they rejected those historic deficit-reduction proposals?  Because each would have required at least some modest shared sacrifice from millionaires and billionaires – something that Republicans adamantly oppose.

“Mr. President, in his remarks announcing the debt-ceiling deal yesterday, President Obama said that the result “would be the lowest level of annual domestic spending since Dwight Eisenhower was President.” 

“Mr. President, for the record, the American people do not want to take down Federal funding and investment to the level of the Eisenhower years.  To do so would be to renounce the Great Society and the social contact that is at its core.  It is tantamount to repudiating Head Start, Medicaid, the Elementary and Secondary Education Act, the Higher Education Act, clean air and clean water programs, and on and on.  These programs, along with Social Security, undergird the middle class in this country.  They create a ladder of opportunity to allow disadvantaged Americans to work themselves into the middle class.  They define America as a decent, compassionate, and, yes, great society.  The President is sorely mistaken if he believes that the American people want to slash the budget to the level of the Eisenhower years, and turn back the clock on a half century of progress.

“Mr. President, let me close by reminding my colleagues that we have reached the point of maximum danger in the fragile economic recovery.  Employment growth is extremely weak, and threatens to stall out altogether.  Businesses remain reluctant to invest and hire for the simple reason that there is not sufficient demand for goods and services. 
“The American people “get it.”  They want to get this economy moving again.  They know that the best way to reduce the budget deficit is help 25 million unemployed Americans get good middle-class jobs and become taxpayers again. 

“I urge my colleagues to reject this misguided, counterproductive debt-ceiling deal.  Let us join together to pass a truly balanced approach to bringing deficits under control – an approach that balances spending cuts with revenue increases, while allowing us to continue to invest in education, infrastructure, research, and other things that will create jobs and boost our economy.”