Sessions Lays Out Financial Agenda For New GOP Majority In Address To Coolidge Foundation Budget Conference

WASHINGTON—U.S. Sen. Jeff Sessions (R-AL), Ranking Member of the Senate Budget Committee, delivered the following keynote address today at the Calvin Coolidge Presidential Foundation’s national budget conference. Sessions emphasized the need to balance the federal budget within 10 years, impose financial discipline on federal agencies, and improve economic conditions for American workers:

“I would like to thank all of our distinguished panelists. In particular, I would like to thank the Calvin Coolidge Presidential Foundation and the brilliant Amity Shlaes. Amity has performed an invaluable public service by helping return Calvin Coolidge to his rightful place among our great Presidents.

In my remarks today, I will rely on Amity’s exceptional work.

Amity’s research could not have come to us at a better time. We have strayed far from the sound and proven principles that make an economy—and a nation—strong.

This is the truth as I see it: the American and world economies are so huge that governments cannot possibly micromanage them, and no economic expert can predict the future.

The American concept, the Coolidge view, holds that real power in the economy comes from the drive of millions of energetic citizens doing their best to advance the interests that best suit them. Therefore, we believe that it is the primary duty of the government to create a framework in which individuals can pursue and most often achieve their dreams.

The idea that there is someone, somewhere, in the canyons of Wall Street, some special economist, who can email to Washington actions to take on a daily basis to move this economy forward to prosperity, defies reason. Just to state it is to reveal its absurdity. Thus, this government, like Coolidge, should simply dedicate itself to establishing sound policies—the same common-sense policies discussed around the kitchen table. And, maintained over time, such honorable policies, consistent with our national morality, will create stability and confidence and allow for the greatest prosperity. One such policy, basic but difficult today, is for the government to live within its means.

One reason this economy has been so slow to recover is that very bright people have promoted aggressive policies that they said would advance the economy. But, in truth, these actions have hurt the economy. We have lived for six years under an economic model of spend, tax, borrow, regulate. Our surging federal debt now exceeds our nation’s entire economic output.

Ominously, interest payments alone last year amounted to $231 billion—that’s six times more than our federal highway budget. In just eight years’ time, one single year’s interest payment on our debt will exceed our entire national defense budget.

CBO projects that by the end of the decade, interest payments will grow inexorably, and more than triple to $800 billion. Interest will be the fastest growing expenditure.

That’s out of a projected $5.8 trillion budget. This is a national calamity. One out every 7 dollars, taken from the American people and the economy, will be extracted for nothing. Spent on nothing. Interest is a burglar raiding the income of the next generation to pay for today’s reckless living. It drains the wealth of nations. It is a stealth tax on every working person. Every dollar added to our debt increases these interest payments, and hollows out the once-prosperous national treasury. What will we say to children of today when they go to work tomorrow, and are taxed, simply to pay the trillions in interest payments that we will owe to the world?

No nation can financially sustain such spending.

We were told this dangerous borrowing would spur economic growth. But growth over the last 4 years has averaged only 2.2%, or about half of what the White House projected. CBO, OMB, and the Federal Reserve—all dramatically overestimated growth.

Never has so great a sum been spent for so little in return.

Consider: Since 2009, the following has occurred:

  • Almost 10 million people have left the workforce entirely
  • Real median family incomes have dropped $3,200
  • Real median weekly earnings are lower today than they were in 2000

Our constituents believe very firmly we are on the wrong track. We have a jobs crisis. We have an income crisis. We have a confidence crisis.

And if we don’t return to sound budgeting principles, we will very soon have a debt crisis.

The first duty of lawmakers is to protect the nation from a clear and present danger. Our massive accumulation of debt has placed the country at great risk. Any kind of financial shock could trigger extreme fiscal repercussions. We have no margin for emergency.

Our CBO director, choosing his words very carefully, said that we are on an “unsustainable” path that threatens us with “fiscal crisis.”

The legacy of President Calvin Coolidge points the way forward.

Coolidge made it a practice to gather his department heads together twice a year for public interrogation on the federal budget. It was then that he and his budget director, General Lord, would rigorously and publicly question those whose departments spent more than their budgets. He would demand that their budgets be justified and chide anyone who failed to save sufficient dollars. This was broadcast live on national radio, to the delight of citizens grateful for a President who championed their interests and protected their dollars.

One of our top goals as a new Republican Majority must be to impose financial discipline on every agency in the federal government.

In a speech he delivered on October 26, 1924, Coolidge said:

“The budget idea… is a sort of obsession with me. I believe in budgets. I want other people to believe in them. I have had a small one to run my own home, and besides that, I am the head of the organization that makes the greatest of all budgets, that of the United States Government… I regard a good budget as among the noblest monuments of virtue.”

The Republican Congress must produce a budget. Failure is not an option.

By Coolidge’s first full year in office, 1924, debt was four times larger than in 1917.

The President acted immediately to demand a $300 million reduction in spending to which all of his departments were expected to contribute. Nothing was sacrosanct. General Lord, the budget director, even found savings by eliminating the red ribbon used to bind communications sent by the White House to Congress (providing us with the expression “cutting government red tape”).

Coolidge also instituted a substantial tax reduction from the revenue levels extracted during the Wilson Administration, helping to usher in a period of dramatic growth that most benefitted everyday working people.

Coolidge reduced federal spending from 3.5 percent of GDP to 3 percent during his six years in office. He also reduced tax rates, from a top rate of 77 percent to a top rate of 20. At the same time, total revenues grew by 60 percent over that period.

GDP also shot up by 20 percent over that period and averaged 4.7 percent growth per year. And unemployment fell from 6.7 to 3.2 percent.

We must apply Coolidge’s spirit to our current times. Here are some of the budget challenges we face:

  • We have no long-term budget plan. The outgoing Senate majority has only even bothered to introduce one plan since 2009.
  • We haven’t passed individual appropriations bills. Massive all-in-one spending bills, which no one has read and no one can amend, rule the day.
  • Senators have been denied the ability to offer amendments
  • Big spenders use accounting tricks to conceal the true cost of legislation
  • Medicare and Social Security are being raided by politicians to pay for other programs. Contributions to these programs are withheld from workers’ paychecks each week, but the trust funds are raided in violation of the moral obligation that we owe to them.
  • Budget rules are not enforced
  • We have no control over an unaccountable bureaucracy focused on itself, not the people. There are 80-plus different federal welfare programs, costing taxpayers $1 trillion when state contributions are included. We need to consolidate these and place new emphasis on job placement, protecting taxpayers, and better serving recipients.

Instead of defining compassion by how much we spend on poverty, we must define compassion by how many people we help to lift out of poverty.

One of the economic challenges we face now is the combination of high joblessness, low wages, and a shrinking middle class. This is a social, economic, and human disaster. We want all people to see their futures better.

The Harding-Coolidge Administrations faced similar economic conditions. There had been a great wave of immigration in the four decades leading up to their administration. This substantial increase in the labor pool had created a loose labor market that tilted the balance of power to large employers over everyday workers. Increases in the labor supply reduce the price of labor. Coolidge believed it was rational and sensible to swing the pendulum back towards the average wage-earning American. He explained in a speech to naturalized citizens: “We want to keep wages and living conditions good for everyone who is now here or who may come here. As a Nation, our first duty must be to those who are already our inhabitants, whether native or immigrants. To them we owe an especial and a weighty obligation.”

The labor market tightened, and as Coolidge had predicted correctly, it boosted wages for both the native-born and the millions of immigrants who had arrived previously—allowing them to rise together into the great middle class and allowing that middle class to grow substantially.

By 1970, a second great wave of immigration was underway, and has continued its rapid growth through the present. Immigration levels are at a record high, with 41.3 million U.S. residents born in another country.

A new challenge is the advance of robotics and computers reducing the demand for workers. Combined with increased globalization, these forces are further reducing wages and making it even more irrational to bring in very large numbers of lower-wage workers from abroad.

We need to help people get off of welfare, off of unemployment, and into good-paying jobs. But the immigration bill championed by the President doubles the rate at which foreign workers are brought into the U.S. What sense does it make to spend billions sustaining Americans on welfare while bringing in millions of lower-wage workers to fill jobs in their place? Doesn’t it make more sense to use the welfare office, instead of the immigration office, as a job placement center?

We need to transition millions of struggling Americans into good-paying jobs—strengthening families, uplifting communities, and honoring—as Coolidge did—the innate dignity of work.

Across-the-board, we need an economic strategy to get American back work—without adding to the debt. Here is how:

  • Produce more American energy, creating jobs here at home.
  • Make our tax code more competitive, so that America is the best place in the world to build, manufacture, invest, hire, and grow.
  • Eliminate all unnecessary regulations that drive up costs and send jobs overseas.
  • Resolutely make government leaner and more efficient.
  • Turn the welfare office into the employment office.
  • Stand up to countries that violate trade agreements and undermine U.S. workers and U.S. businesses.
  • Enforce an immigration policy that tightens the labor market and helps wages go up, not down.
  • Repeal Obamacare.
  • Balance the federal budget.

On this last point: we must produce a budget that achieves balance within 10 years. This must include a major effort to explain the dangers of a debt crisis and surging interest payments.

These steps that I have outlined will restore humility to Washington. For the last number of years, we have had a government that has lost sight of the sound principles and true needs of average Americans.

The elites have had their day. It is time for the middle class to have theirs.

Our new Senate Majority must represent middle America. It must be rooted in the values and wisdom of faithful, patriotic Americans.

The social and economic center of American life is not Washington, or Wall Street, or Martha’s Vineyard. The social and economic center of American life is, and must be, among the everyday working people.

The time has come for a humble and honest populism—not the cheap demagoguery of political operatives, but a sincere devotion to the legitimate needs and desires of the American people. A billionaire activist has just one vote—a vote no greater than that of the truck driver or the plumber.

It is time to place our emphasis squarely on the needs of the good and decent citizens who fight our wars, pay their taxes, follow the rules, put in an honest day’s work for an honest day’s wage, and give their love and loyalty to their country. We in elected office must return to them our loyalty, and pledge always to put their needs first. This is our moral pact with the American worker.

And at the center of that pact is the full and equal protection of our laws and our Constitution.

We will be worthy of this challenging moment in history. We will honor the legitimate and long-term interests of the more than 300 million Americans we serve. And, we will preserve and protect for our children their heritage of Republican government grounded in liberty, law, and prosperity.

Failure is not an option.”