Sessions Delivers Opening Statement At Budget Hearing With Treasury Secretary Geithner

“Secretary Geithner… you are a capable and loyal member of the administration. But, more fundamentally, you are a servant of the American people. You have an opportunity today to help us understand both the dangerous unsustainability of our fiscal path, and the depth of change needed to right our course…

History will judge our conversation today. Do you believe that the president’s budget provides the solution to our fiscal problems? Do you believe that $11.2 trillion in new federal debt, annual interest payments approaching $1 trillion a year, and a budget where health care spending grows twice as fast as our economy, is a sustainable future?…

This nation needs a more optimistic future. One with less debt, leaner government, and a thriving private sector that provides good, high-paying jobs for everyday Americans. I know we can get there, but there is a definite lack of confidence out in the marketplace today. It cannot be altered by fine speeches. That day is past if it ever existed. A definite course change, founded on sound, mature action is required. Sadly, this budget says we will not get it.”

WASHINGTON—U.S. Sen. Jeff Sessions (R-AL), Ranking Member of the Senate Budget Committee, delivered an opening statement today at a Committee hearing with Treasury Secretary Timothy Geithner to examine the president’s FY 2013 budget request.

Sessions’ remarks, as prepared, follow:

“Secretary Geithner, I appreciate your appearing before the committee today and I hope we can reach some measure of agreement on the plain facts regarding the president’s budget proposal.

You are a capable and loyal member of the administration. But, more fundamentally, you are a servant of the American people. You have an opportunity today to help us understand both the dangerous unsustainability of our fiscal path, and the depth of change needed to right our course. It will be hard—but quite doable—if we begin to take action today that can ripen over time.

On Tuesday, the Acting Budget Director offered some of the most misleading testimony I have heard during my time in the Senate. Should America suffer a debt crisis as a result of our recklessness, Mr. Zients’ testimony will provide future generations with a useful illustration of how America failed to prevent ‘the most predictable economic crisis in its history.’ In the words of Michael Tanner from the Cato Institute: ‘President Obama’s latest budget proposal should be hailed as the Da Vinci of fiscal obfuscation.’

Federal Reserve Chairman Ben Bernanke testified before this committee last week. He was explicit about the danger ahead:

‘Having a large and increasing level of government debt relative to national income runs the risk of serious economic consequences. Over the longer term, the current trajectory of federal debt threatens to crowd out private capital formation and thus reduce productivity growth. To the extent that increasing debt is financed by borrowing from abroad, a growing share of our future income would be devoted to interest payments on foreign-held federal debt. High levels of debt also impair the ability of policy makers to respond effectively to future economic shocks and other adverse events.’

In your own testimony before the Senate Finance committee yesterday, you seemed to suggest that the president’s budget achieved fiscal sustainability. At the time Chairman Bernanke issued these warnings last week, our nation’s gross debt was projected to reach $26 trillion dollars. This week, the president’s budget did not change that number or our course. The gross federal debt had already risen above 100 percent of GDP during this president’s term, the highest since World War II, and will remain above 100 percent every year under this budget. Chairman Conrad, I know, believes as I do, that debt-to-GDP is an important metric.

Thus, it’s clear the president’s budget proposal has made no improvement to this long-term fiscal outlook. It did not reduce deficits by $4 trillion over current law. Debt, spending, and taxes all increase dramatically. So you’ll forgive me if I don’t see sustainability here.

During Chairman Bernanke’s recent appearance, I recalled comments that he and you, and other officials, made at Federal Reserve meetings in the run-up to our last financial crisis. At that time, you were president of the New York Federal Reserve. It is clear from those remarks that you and your colleagues failed to see the growing and nearing financial danger. People like Mr. Roubini were mocked as prophets of doom for warning of danger. In fact, Federal Reserve policy was a central component in helping to form the housing bubble in the first place. It is difficult to predict the future. I am not blaming you; indeed most people missed the warning signs. But we must be mindful of the clear dangers we’re facing today.

We don’t know the day, the time, or the hour when a debt crisis might erupt. We have been wrong before. We can’t predict what event might set it in motion. But we do know we are on a dangerous course. The longer we wait to change our course, the graver the danger becomes. This debt cloud over our economy is depressing growth right now.

I hope we are on a recovery today, and that the millions of Americans out of work will soon find jobs. I hope we are about to see a rebound that will continue. But, experts have told us that the largest threat to our economic and national security is our debt. This Administration had, in its last year of its term, an opportunity to put forward a budget plan that would have changed the debt course of this country. Yes, it would require some belt tightening, some pain, but nothing this nation could not handle. The American people are ready to stand together, to make the tough choices. Instead of leading, the president has even attacked those who have had the integrity and courage to make proposals that would actually work.”

NOTE: To view a video of Sessions’ opening remarks, please click here.

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