MR. REED: Mr. President, the bills from a decade of ineffective tax cuts and unpaid wars and a recession fueled by lax regulation have come due. I did not support the policies that generated these bills, but pretending these bills do not have to be paid is not an option. Indeed, playing chicken, literally, with the full faith and credit of the U.S. Government is a recipe for disaster. If the U.S. defaults on its debt, every single expert tells us, it will have a huge and immediate impact on the lives of every American all across this country, from the poorest to the most well off. And particularly for those who are struggling, it will be devastating at a time when they can least afford it. Not only could it cause a stoppage of Social Security and veterans' benefits checks, but, more systemically, it would undermine our Nation's opportunity to build a more lasting and more prosperous recovery.
We have seen some progress, but it is not enough. This step, if we default, would seriously undermine our ability to function as an economy and would seriously, perhaps decisively affect our ability to mount and continue to mount a reasonably recovery. We are still recovering from the worst depression since the 1930s. Much of it is based on the policies I mentioned previously: two unfunded wars, the expansion of an entitlement program that was unpaid for, deep tax cuts that were unpaid for -- all of it put on the tab, and the tab is coming due. But now to suggest that we walk away from our obligation to provide at least the legal means to pay our debt is irresponsible.
My colleagues on the other side of the aisle like to talk about taking a scalpel to wasteful spending and about the primacy of severely curtailing investments in our society. They continue to talk about an economic philosophy that I think has been disproven by the last several years, particularly from 2000, when President Bush and the Republican Congress inherited a projected multitrillion-dollar surplus and turned it into a huge deficit under the premise that these types of cuts in taxes, these types of policies would stimulate jobs.
In fact, there has been talk that we are now focusing on cutting spending on Medicare and Medicaid, which is so central to all Americans. It is difficult also to imagine that they are asking for these cuts at a time when so many families throughout this country are struggling -- struggling to stay in their homes, struggling simply to pay their bills each week, struggling to ensure their children can continue on with their education. All of this needs a government that supports these Americans, not reneging on commitments we have made, particularly commitments we have made financially to essentially pay for the obligations that have been run up, particularly beginning in 2000 and continuing through the Bush administration.
We all understand we have to reach a principled compromise, but in that compromise, as so many of my colleagues have suggested, an exclusive focus on cutting expenditures will not get us there, I think, simply based on the arithmetic, but more than that, it will impose huge burdens on families who are struggling, and it will continue to reward the most prosperous in this Nation. I do not think that is the right way to do it or the fair way to do it.
The priorities I have heard expressed on the other side are to continue to talk about very deep tax cuts, at a time when we have the lowest revenues we have had in decades, and then talk about cutting expenditures -- education, health care, and, indeed, under their proposed budget, Medicare and Medicaid, which is so central to so many people.
We know we have to focus on not just expenditures but also revenue, and we also have to begin the very difficult and arduous task of entitlement reform. We began that in the last Congress. In fact, I think it is ironic, as I recall the debate on the affordable care act, that most of the amendments my colleagues on the other side were offering were to send back to committee proposed changes in Medicare that would have reduced costs and, I would argue, would actually have improved quality. That was their focus. Now their focus has suddenly shifted to how we must cut Medicare and Medicaid.
What we have to do is provide the same kind of reasonable, balanced approach that took place in the 1990s.
Again, without any Republican support in 1993 and 1994 but with a Democratic President and Democratic votes, we were able to begin to balance the budget. It was a multiyear process. It required difficult choices. But we have to continue to pursue that path of a balanced, reasonable response to this problem.
As I said before, one of the issues that is so central to this country is not directly related just to the issue of the deficit, it is also related to jobs. They are obviously closely interrelated. The more jobs we have, the more people who are participating in the economy, the better our fiscal position is in Washington.
Sadly, what we saw, particularly at the tail end of the Bush administration, was a collapse in our jobs market. The U.S. economy lost 8.7 million private sector jobs in 2008 and 2009. We experienced -- under the Bush administration principally -- 25 consecutive months of job losses. That, again, has contributed to these huge deficits. If people do not work, they do not contribute to the taxes. If people do not work, they are likely to get unemployment benefits. People who lose part of their wages may qualify for other programs.
Since the President has come to office, we have seen a rebound. We have not seen the full, robust recovery we need, but we have seen a rebound. We gained 2.081 million jobs, a little over 2 million jobs in 2010 and 2011. We have experienced 15 consecutive months of private sector job creation -- not enough, but we have reversed the collapse and 25 months of job decline by creating jobs and continuing on a sustained basis as a result of difficult decisions that were made by President Obama and the Democratic Congress in the Recovery Act.
My home State of Rhode Island has been particularly hard hit by the policies we saw in the first part of this decade. We have the third highest unemployment rate at 10.9 percent. We have seen a significant foreclosure problem. We have seen very crippling impacts on the working families of Rhode Island.
Now we hear that the only solution we have and the best way to correct jobs is to continue to do what was done under the Bush administration: Let's just cut taxes, particularly for the wealthiest Americans. The evidence suggests that does not produce the kinds of jobs -- not even the kinds of jobs we have seen in the last 15 months. The economy did not add a single new job during the 3 years under the Bush tax cuts. The economy had 132 million jobs in June 2001 when we passed -- against my opposition -- the Bush tax cuts. That was the month it was first signed into law. Three years later, in June 2004, there were just 131.4 million jobs. We actually lost some jobs.
If you take a step back and look at the course of the entire Bush Presidency, from January 2001 through January 2009, there was a decline in the number of private sector jobs of approximately 650,000. That is over the course of the whole administration. In fact, the only net job creation that occurred was in the public sector. Nearly 1.75 million government jobs were created over the course of the Bush Presidency.
Revenue as a percentage of our economy, as a percentage of GDP, was 14.9 percent in 2010. It is the lowest level since 1950 when it dropped to 14.4 percent. By comparison, government revenue was averaging about 18 percent over the previous 30 years. So you see, under the Bush policies, which essentially my colleagues want to emulate, reconstitute, no job growth and a significant decline in revenue.
At a time when revenue as a percentage of GDP is the lowest it has been in 60 years, now we are talking about further tax cuts in the Republican budget, but we are certainly talking -- my colleagues are talking about maintaining the current taxes. Frankly, there are so many tax expenditures that my colleagues talked about that are not worthy of retention, that are loopholes that we can, in fact, eliminate, and we should. Some examples: tax break for people who breed alpacas; deductions for film and TV production; favorable tax depreciation for racehorse owners, horse breeders tax credit; an exemption for wooden practice arrows used by children; NASCAR motorsport racing facility tax credit; withholding tax breaks on horse and dog track winnings. The list can go on and on.
The PRESIDING OFFICER. The Senator has used his 10 minutes.
Mr. REED. Mr. President, I ask unanimous consent for 1 additional minute.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. REED. I thank the Senator from Illinois for his deference.
We understand we have to make tough choices. They have to include expenditure cuts. We have already started with the continuing resolution of the last year where we reduced spending significantly. But we have to have revenue on the table. As Federal Reserve Chairman Bernanke said:
[...]a sharp fiscal consolidation focused on the very near term could be self-defeating if it were to undercut the still-fragile economy.
We need to create jobs. We need to balance deficit reduction with job creation. We need to put everything on the table, and we need to recognize that the consequences of default on our debt will be staggering, felt by every American. One figure that continues to be impressed upon me is the fact that for every 1 percent increase in the interest rate over the 10-year period, we increase our deficit by over $1 trillion. I think the first response to a default would be a rise in the interest rates we have to pay for our debt.
I would urge progress on the efforts to have a comprehensive solution. I yield the floor.