Wednesday, June 15, 2011

U.S. Senator Johnny Isakson (R-GA)
Floor Statement Delivering Message from Georgia Constituents
that Washington is Making Our Economy Worse
Remarks as Delivered on the Senate Floor

Mr. President, last night, between 6 and 7 o'clock, I did a telephone townhall meeting in Georgia. We had a little over 3,000 people on the call, and I was able to handle 16 questions. As I listened to the answers I was giving to the questions, I was struck by what a real problem we have in Washington. Washington is making things worse. Georgians are frightened for their jobs, the value of their homes, and the education of their children. They are uncertain about everything. As you give answers about what is happening in Washington, you realize Washington is making it worse.

I wish to give a couple of examples based on my experience. First of all, let's talk about legislation for a second. We have high unemployment--9.1 percent. We have people without jobs or underemployed. We have a law called the Workforce Investment Act or WIA. I am on the subcommittee that overseas it and the Education Committee. We have basically had an agreement on expansion of the reauthorization for the Workforce Investment Act for months, but it still languishes in committee because there are arguments over labor provisions that some want to be added to it.

Here we are, a nation in trouble, and we cannot pass the Workforce Investment Act, which is intended to help the very problem we have.

Secondly, I am on the Health, Education, Labor, and Pension Committee, which does the reauthorization of the Elementary and Secondary Education Act--the fundamental foundation of training and improving our kids for the jobs of the 21st century. It has gone 4 years without reauthorization, and it languishes in committee because of a lack of willingness to bring it forward. Our children remain educated and taught and motivated under a law now expired for 5 years. That is not right, when we should be educating our children and training workers.

We in Washington are doing nothing. On the Commerce Committee, on which I serve, we are over the FAA committee and reauthorization of the Federal Aviation Administration, which is critical to economic development. That conference committee continues to languish. What are the arguments? They are about changes in labor law.

We need to get the job done in Washington and go to work. We need to understand that the American people are in trouble and are hurting. Our job is to provide answers, not to make it worse.

I wish to talk about a second feature--about regulation for a second--or strangulation, if you will. I have told this story before on the Senator floor, and I will tell it again. On January 3 of this year, I was in a cafe for breakfast and to meet with some businessmen. I walked in the front door and Steve Hennessy of Hennessy Cadillac and Land Rover in Atlanta called to me and came running across the floor. I thought he was going to give me a bear hug, but he said: Johnny, yesterday, I fired a salesman and hired two compliance officers. This financial regulation in the Dodd-Frank bill is strangling my productivity and raising my cost of doing business.

We have to recognize that regulation has consequences. It is not our job to eliminate risk in the marketplace. It is our job to mitigate risk so people will take risks, in terms of seeking rewards, which is what the capitalistic system is based on.

I will talk about a few other regulations that are causing significant problems in our recovery. The qualified residential mortgage rule that is being promulgated now by the six regulators will, if it goes into effect on August 1--and they have put the effective date off now--probably constrict the real estate market, which is already suppressed by 70 percent, by another 40 percent. It is going to take capital and risk capital and credit away from the Americans who are, in fact, buying homes today. In fact, in order to mitigate risk and try to eliminate it, it requires lenders to hold a 5-percent risk retention until the loan matures. It says you cannot loan anybody less than 80 percent--more than 80 percent, and if you have anything more than that, you cannot even have a private mortgage insurance policy to guarantee the money. So you are going to flood every buyer left to where? Through FHA, which is exempt from the Dodd-Frank bill, or Fannie Mae and Freddie Mac, which are going out of business, which means you will shift more of the burden of mortgage financing on people who are already overstressed.

Regulatory intent should not do that. My dairy farmers in Georgia are looking at a rule where milk is being categorized where it is going to have to be contained in tanks and reservoirs that now meet the standards of petroleum. That is higher investment and no additional profit for the country. That is protracted. Water--the EPA wants to take ``navigable'' from in front of the word ``water,'' in terms of the Clean Water Act, so the government doesn't regulate just navigable waters but every water.

Credit. Credit is becoming nonexistent for Main Street. I am a small business guy. I was in a small business in Georgia for 33 years. A lot of small businesspeople use their credit cards to manage their cash flow over time. Because of the credit bill passed a couple years ago, they don't have the flexibility to do that anymore. Bank credit is suspended primarily because banks are being run by the FDIC under cease and desist orders or, if they are extending credit alone, they are extending it to the extent that a borrower can put that much money in the bank.

When you constrict credit, you suppress small business. When you suppress small business, you suppress 72 percent of the employment in the United States.

I commend Senator Corker for his remarks about an hour ago on the floor of the Senate because he focused on the big problem we have; that is, debt and deficits. It is kind of disappointing to me we have spent more time on the SBA act, which has been pulled now--it was on the floor the beginning of last month--than we have spent on all the appropriations bills in the last 3 years of this Congress. We debated amendments, we protracted the debate but still nothing happened. We ought to be talking about debt reduction, about deficit reduction, and a long-term plan, over time, to amortize the debt of this country to a reasonable level.

We have a debt ceiling vote that is confronting us, and I have heard the political statements made by people in both parties that there is a game of chicken being played right now, with some saying we are going to push it right up to August 2 and force a vote. If we don't get it, we will run the risk of America's credit going up in cost and uncertainty happening. Others are saying we are not going to do anything on a debt ceiling increase period until we have to at the last minute.

That is not the way to run a business. That is not the way to expand credit. That is not the way to run a country. We ought to be sitting down at the kitchen table of Washington, DC, in the Senate reprioritizing the way we spend money to begin to rein in our expenditures, lower our deficit and lower our debt.

I bet in the last couple of years every family in America, as every family in Georgia, has had to sit around their kitchen table and reprioritize their expenditures. Things have changed. Their nest egg may have shrunk. Their equity may be suppressed. Their job may be in trouble. We have all had to do it. I have had to do it. Almost everybody in America has had to do that. Why doesn't the government do it? At a crisis moment of $14 trillion in debt, with no ceiling above it; with a deficit of $1.5 trillion, $300 billion more than discretionary spending, why aren't we sitting around that kitchen table?

The questions I heard last night during my tele-townhall meeting made it clear to me Washington is making things worse. The American people want to be confident that we will address the debt and the deficit problem; that we are working on it and not that we are putting it off to a drop-dead date and then play chicken politics in the Senate.

People don't mind regulation that is fair, but they do mind regulation that is suppressive and that suppresses jobs. They don't mind having legislation debated in Washington on the floor of the Senate, one way or another depending on your position, but to leave it languishing in committees and not even bringing it up is not right. So my challenge--for me and for every Member of the Senate, and for this administration and for the President--is for us to lead.

We have a clock winding down on a debt ceiling increase that will be important for this country. But without substantial reform of the way we do our business and a game plan for a downpayment on our debt and deficit, and without an indication we are going to work together and have shared sacrifice, there is nothing at all we can do in this government except cause things to be worse. I don't want to be a part of that.

My last comment is this: I was 39 years old in 1983. A report was put out by the board of the Social Security Administration saying it was going broke in 2004. President Reagan and Tip O'Neill got together and said: We can't let that happen.

President Reagan said: I don't want it to go broke, but I am not going to raise the tax.

Tip O'Neill said: I don't want it to go broke, but I am not going to cut the benefit.

They went to the actuaries and said: What do we do?

The actuaries said: Put out the eligibility.

So they changed the law and said if you are an American born after 1943 you can't get Social Security at 65; you have to wait until you are 66. I am 66. They put my Social Security off a year. I didn't miss it. They also made Social Security actuarially sound until 2050. Only in the last 2 years has that date come down, and it has come down because of unemployed Americans at age 62 taking discounted early Social Security and putting more pressure on the system.

We could fix Social Security tomorrow just like they did in 1983 and not take a penny away from anybody. We could move the eligibility out to be more reflective of life expectancy. I know Medicare is the big political football and everyone wants to say the Republicans are trying to kill Medicare, and the Democrats love to say they are trying to protect it. Heck, I want to protect it. I have nine grandchildren. The rest of my life is about those grandchildren. I want to see to it they have a country that is as free, as productive, and safe, and that the benefits are there for them that have been there for me. It is important we save Medicare, but we can't save it by looking the other way or by taking it off the table. We can't demonize a Democrat or a Republican for making a constructive decision to save Medicare.

Instead of trying to make it the political issue of the 2012 election, we should make it the personal issue of each Senator. We should sit around that kitchen table, work together, and try to find a meaningful solution to a problem that saves Medicare for future generations, and also doesn't cause an escalation in our debt and deficit. We are capable of doing it, but we have not demonstrated a will to do it.

I challenge my colleagues to do the same thing, and I challenge my colleagues to do one other thing--to hold a tele-townhall in the next couple of weeks. Talk to 3,500 of the citizens in your State and listen to the questions they are asking. They are scared, they are worried, and they feel threatened, and Washington is making it worse.

Madam President, I yield the floor, and I suggest the absence of a quorum.