Hoeven: We Need to Move Forward With Boehner Approach

Reid Plan Savings Downgraded by CBO

WASHINGTON – Senator John Hoeven today spoke on the floor of the U.S. Senate to underscore the differences between the debt ceiling plan proposed by Speaker of the House John Boehner and that proposed by U.S. Senate Majority Leader Harry Reid. 

Just prior to the Senator’s speech the independent Congressional Budget Office (CBO) announced that, excluding the effects of the caps on funding for Iraq and Afghanistan and similar activities – and therefore the interest on the war debt – the total reductions in the Reid plan are $909 billion, rather than the $2.7 trillion he had originally assumed in his proposal. In other words, excluding the effects of the caps on funding for operations in Afghanistan and Iraq, the CBO now says Senator Reid’s bill will yield 10-year savings of $909 billion, $8 billion less than the estimated $917 billion it has certified for Speaker Boehner's bill. The difference is that the Boehner bill requires another $1.8 trillion in savings for a total of $2.7 trillion in two stages, whereas the Reid bill requires only $900 billion in total savings and  increases the debt limit by $2.7 trillion. 

Following is an excerpt from Senator Hoeven’s speech: 

Now we are faced with really two different pieces of legislation at this point, one is the Boehner plan, or the Budget Control Act of 2011, that the House will be voting on very soon, I believe. Then there’s another plan, the Reid plan here in the Senate. Though they have some similarities, as configured now, they’re different. They’re different approaches. One very importantly gets us on the road to recovery. The other one doesn’t. 

Let’s take just a minute to talk about each of those respective plans and make sure we understand that so as they’re voted on in the House, and as we face these important votes. We need to understand the difference between these approaches so that we can find ways to come together on an approach that we can pass in this chamber but also in the House, an approach that truly moves our country forward. 

Under the Boehner proposal there are savings of more than $900 billion. $917 billion in savings must be provided in order to raise the debt ceiling. That allows the first increase in the debt ceiling in the amount of $900 billion. Those savings have to be identified first. These savings are as much as —in fact, more than – the amount of the debt ceiling increase. 

Then, the second tranche to increase the debt ceiling beyond that $900 billion, an additional $1.8 trillion in savings has to be identified and provided. That’s $2.7 trillion in savings to get this country back on the road to financial health in order to raise the debt ceiling. That’s fundamentally important because that’s the fundamental issue. It doesn’t fully solve the problem, but it gets us on the right path, and we’ve got to get going on the right path. 

That second tranche of savings is found by a committee—six members of the Senate, three Democrats, three Republicans and six members of the House three Republicans, three Democrats—a bipartisan committee. I think that committee offers us real opportunity. 

Here’s why: the committee has to come up with recommendations for real savings by November. It’s bipartisan, and it’s a straight up-or-down vote in the House or the Senate to put those savings in place and those savings must be identified before we raise the debt ceiling further.  It’s something that we have to do. 

Let’s think about that committee for a minute, Mr. President. That’s a committee that could bring in the ideas of the Gang of Six. That’s a committee that can bring in the Simpson Bowles Commission concepts. That’s a committee that can bring in tax reform. That’s a committee that can bring in entitlement reform. These are the things that we’re going to need to address to get this economy going and get control of our spending. 

I know, Mr. President, you’ve put together many pieces of legislation that have been bipartisan and very important for this country, and I think that this committee truly offers us that opportunity. I hope it’s something that we in the Senate can find a way to come together on, and that we can get our colleagues in the House to join us. 

In my view, I think we need to engage in tax reform. I think the right kind of pro-growth tax reform—some of the concepts brought forth by the Gang of Six—can truly help us to stimulate economic activity. I think the real way to get revenue for this country is through economic growth, not higher taxes. Economic growth expands the pie, it’s the rising tide that lifts all boats.  

If we can engage in tax reform in a way that stimulates economic growth, we can get this economy growing. You get people back to work, you reduce that unemployment rate of more than 9 percent. That’s good for every American, but it also is the way you really create revenue to help us get out of this deficit and debt at the same time that we control spending.

 I absolutely believe it can work, and I think that we need to convince our members that we need to come together and make it happen. 

The Boehner proposal also includes a Balanced Budget Amendment. I know that’s been an issue of great debate in the Senate. I believe we need a Balanced Budget Amendment. 

I’ve said it many times before: I come from the background of a governor. In my state, we balance our budget every year. Forty-nine states have either a constitutional or statutory requirement to balance their budget. I think we need that fiscal discipline in Washington, D.C. I think we need it to make sure that we don’t get ourselves into this situation in future years for ourselves or for these young people we see here today with us. 

Now, when you compare that approach—the approach of the Boehner plan—it is different than the Reid plan. It’s important that we understand that. The Reid plan does provide that we identify $900 billion in savings, but it then provides that once we’ve identified that $900 billion in savings we raise the debt ceiling by $2.7 trillion. 

So, unlike the Boehner proposal, where we’re finding more savings—significantly more savings than we’re increasing the debt ceiling—this is just the opposite. We’re increasing the debt ceiling $2.7 trillion, but only requiring $900 billion in savings. That doesn’t get at the root problem. That continues the underlying problem of too much spending and too much debt. 

Like the Boehner proposal, the Reid proposal does provide for a committee. That’s important. That’s good. But, unlike the Boehner proposal, it doesn’t require that the committee bring back the savings, and that we put those savings in place before the debt ceiling is increased. It doesn’t have the teeth we need to make sure that we get this job done for the American people. That’s a problem. They are different approaches. The Reid plan doesn’t include a Balanced Budget Amendment. 

Now, there has been talk that we must work together and find a way to bridge the gap and the differences. I think that’s true. We have got to find ways to come together. Time is growing short. We need to get it done now. I think it’s the approach identified in the Boehner plan that we need to take. We need to get our colleagues in this chamber to join with us to do it. It’s the only piece of legislation that can pass the House, but more importantly, it’s a big step forward. It’s a big step in the right direction for our country.