Rand Paul on Budget & Economy
Republican Kentucky Senator
PAUL: We had an Audit-the-Fed vote, which was the biggest thing my dad had been advocating for, for 30 years, Ted didn't have time to show up. He was the only Republican that didn't show up for it.
CRUZ: I very much respect Ron Paul; to win in the Republican Party [a candidate] has to be able to bring together the disparate elements of the Reagan coalition: conservatives and evangelicals and libertarians. When it comes to the Audit-the-Fed bill, as Rand knows well, I was an original sponsor of the bill, I'm strongly supportive of it. It didn't have the votes to pass. And I had commitments to be at a town hall in New Hampshire. But I look forward to signing that bill into law as president and auditing the Fed and providing needed accountability at the Federal Reserve.
What does that mean? It means the dollar that was once as good as gold ultimately became backed by the full faith and credit of the U.S. government. And since the panic of 2008, your dollar is now backed by bad home loans, bad car loans, and derivatives. Is anyone comforted?
Over the past one hundred years the dollar has lost 96 percent of its value. If the Fed were forced to do, what every ordinary bank must do--take its "assets" and mark them to their current market value--many believe the Fed would be insolvent.
Sen. Bernie Sanders (I-VT) and I don't agree on much, but I thought he did a great job of describing the Fed and the bank bailouts as: "A clear case of socialism for the rich; and rugged-you're-on-your-own-individualism for everyone else."
The Fed, with unlimited ability to print money, now prints that money to lobby against Congressional oversight. It is a disgrace and every citizen in the land should rise up and say: We the people are in charge and we demand an audit!
Some worry about Fed independence. I do too. I worry about the Fed's independence from the Executive branch. The Fed is supposed to be overseen by Congress. Congress created the Fed. The Fed is now in every nook and cranny of banking regulation since Dodd-Frank and it is a necessity that we not let the Executive branch gain unlimited power.
Any audit of the Fed should attempt to bring regulatory power back under the control of Congress. Some worry that an audit would reveal which banks are shaky and lead to a panic. The audit doesn't occur until a year after the bill passes. When the 2011 audit occurred, no bank-runs ensued.
Minutes later, Paul, who last month introduced the Federal Reserve Transparency Act, drew raucous applause when he warned its policies are undermining U.S. currency. "Anybody here want to audit the Fed?" Paul said. "Anybody feel that the Fed is out to get us? They're all over the TV! They're going to be out there saying, 'Oh, we can't audit the Fed.' What, are they too big to be audited? Too secret to be audited?"
[Remembering his father's campaign in Iowa], Paul said chuckling, "We used to have an 'end the Fed' dunk booth over there," pointing toward a nearby sidewalk. "People threw balls at Ben Bernanke in order to get someone in the tank."
Over the past 4 years the President has added over $6 trillion in new debt and may well do the same in a second term. What solutions does he offer? He takes entitlement reform off the table and seeks to squeeze more money out of the private sector.
He says he wants a balanced approach. What the country really needs is a balanced budget. Washington acts in a way that your family never could--they spend money they do not have, they borrow from future generations, and then they blame each other for never fixing the problem.
Every dollar we print to service our debt, reduces the value of the money in your pocket. Rand will fight to strengthen the value of our Dollar so our purchasing power is not destroyed by the sneakiest tax of all: inflation.
A: No, I oppose it because you're taking money from the entitlement and then spending it n other items. They're taking money from Social Security, and they're going to spend it on the military and they're going to spend it on domestic spending. When you look at raising the debt limit, it should be leveraged to try to reform government. We should use the debt ceiling to force budgetary reform.
PAUL: I'm willing to compromise. But we're borrowing more than a million dollars every minute. So, we do have to address that. I think the one thing I cannot accept is the Democrats want to exceed the sequester caps, these things that we put into law to restrain spending already. And it's funny, they're all about ObamaCare being the law of the land, but so is the sequester. The sequester is the law of the land, and if we exceed that, it's a real big step in the wrong direction.
Q: The sequester means forced budget cuts that unless there is some agreement on Capitol Hill about spending, they go into place.
PAUL: Yes, and to clarify what the sequester cuts are, they're a cut in the rate of increase of spending, because over ten years, even with the sequester, government will grow. It goes down for a year or two, but over 10 years, it grows.
After the sequester, it was announced that the White House would stop giving tours. Administration officials said that it was due to "cuts" imposed by the sequester. Meanwhile the President found an extra $250 million to send to Egypt. You know, the country where mobs attacked our embassy, burned our flag, and chanted death to America. I say: not a penny more to countries that burn our flag. The President says he can't find anything to cut except for White House tours.
To begin with, we absolutely must pass a Balanced Budget Amendment to the Constitution! The amendment must include strict tax and spending limitations.
Liberals complain that the budget can't be balanced but if you cut just one penny from each dollar we currently spend, the budget would balance within six or seven years. The Penny Plan has been crafted into a bill that millions of conservatives across the country support.
Where would we cut spending; well, we could start with ending all foreign aid to countries that are burning our flag and chanting death to America. The President could begin by stopping the F-16s and Abrams tanks being given to the radical Islamic government of Egypt.
Republicans and Democrats alike must slay their sacred cows. Republicans must acknowledge that not every dollar spent on the military is necessary or well-spent, and Democrats must admit that domestic welfare and entitlements must be reformed.
The House Republican proposal will freeze this much of the budget at 2008 levels and will add $3 trillion to the debt over five years. It's too little. It's not enough. It's too timid, and we must be more bold.
My father, a Congressman, told me that he had banking lobbyists calling him and asking him about certain sections of the boll, and he said, "What bill?" He didn't have a copy yet. They replied, "We do, would you like to see it?" You know government is out of control when lobbyists have the bills before members of Congress. Who is writing the bills, Congress or the lobbyists?
PAUL: But here's the problem. You say you want new lending from small banks, but you support the banking regulation bill. The problem was with government banks--Fannie Mae, Freddie Mac--bad policy at the Federal Reserve caused the recession, caused the credit crunch. But yet Jack supports--President Obama supports--the new banking regulations, which every bank in Kentucky will tell you it wasn't our problem. No banks failed in Kentucky. But it's much harder to get a loan in Kentucky now.
The Contract from America, clause 3. Demand a Balanced Budget:
Begin the Constitutional amendment process to require a balanced budget with a two-thirds majority needed for any tax hike.
The Contract from America, clause 6. End Runaway Government Spending:
Impose a statutory cap limiting the annual growth in total federal spending to the sum of the inflation rate plus the percentage of population growth.
A bill to increase the statutory limit on the public debt from $14.294 trillion to $16.7 trillion..
[Explanatory note from Wikipedia.com "Debt Ceiling Crisis"]:
The US debt-ceiling crisis was a financial crisis in 2011 that started as a debate in the Congress about increasing the debt ceiling. The immediate crisis ended when a complex deal was reached that raised the debt ceiling and reduced future government spending. However, similar debates are anticipated for the 2012 and 2013 budget. President Barack Obama and Speaker of the House John Boehner announced on July 31 that an agreement had been achieved. After the legislation was passed by both the House and Senate, President Obama signed the Budget Control Act. On August 5, the credit-rating agency Standard & Poor's downgraded the credit rating of US government bond for the first time in the country's history.
Under US law, an administration can spend only if it has sufficient funds to pay for it. These funds can come either from tax receipts or from borrowing. Congress has set a debt ceiling, beyond which Treasury cannot borrow. The Obama administration stated that, without this increase, the federal government would shut down and the US would enter sovereign default, thereby creating an international crisis in the financial markets. Alternatively, default could be averted if the government were to promptly reduce its other spending by about half.
An increase in the debt ceiling requires the approval of both houses of Congress. A large majority of Democratic legislators (who held a majority in the Senate) favored tax increases along with smaller spending cuts. Supporters of the Tea Party movement pushed their fellow Republicans to reject any agreement that failed to incorporate large and immediate spending cuts or a constitutional amendment requiring a balanced budget.
[The Cut-Cap-and-Balance Pledge is sponsored by a coalition of several hundred Tea Party, limited-government, and conservative organizations].
Despite our nation's staggering $14.4 trillion debt, there are many Members of the U.S. House and Senate who want to raise our nation's debt limit without making permanent reforms in our fiscal policies. We believe that this is a fiscally irresponsible position that would place America on the Road to Ruin. At the same time, we believe that the current debate over raising the debt limit provides a historic opportunity to focus public attention, and then public policy, on a path to a balanced budget and paying down our debt.
We believe that the "Cut, Cap, Balance" plan for substantial spending cuts in FY 2012, a statutory spending cap, and Congressional passage of a Balanced Budget Amendment to the Constitution is the minimum necessary precondition to raising the debt limit. The ultimate goal is to get us back to a point where increases in the debt limit are no longer necessary. If you agree, take the Cut, Cap, Balance Pledge!
I pledge to urge my Senators and Member of the House of Representatives to oppose any debt limit increase unless all three of the following conditions have been met:
- Cut: Substantial cuts in spending that will reduce the deficit next year and thereafter.
- Cap: Enforceable spending caps that will put federal spending on a path to a balanced budget.
- Balance: Congressional passage of a Balanced Budget Amendment to the U.S. Constitution -- but only if it includes both a spending limitation and a super-majority for raising taxes, in addition to balancing revenues and expenses.
Congressional Summary:JOINT RESOLUTION: Resolved by the Senate and House of Representatives: That Congress disapproves of the President's exercise of authority to increase the debt limit, as submitted on Jan. 12, 2012.
Congressional Vote: Vote #4 in the House: 239 Yeas; 176 Nays; Senate declined to vote on the Resolution.
OnTheIssues Explanation: On Jan. 12, 2012, Pres. Obama notified Congress of his intent to raise the nation's debt ceiling by $1.2 trillion, two weeks after he had postponed the request to give lawmakers more time to consider the action. Congress then had 15 days to say no before the debt ceiling is automatically raised from $15.2 trillion to $16.4 trillion. Hence the debt ceiling was increased.
In Aug. 2011, the US government was nearly shut down by an impasse over raising the debt ceiling; under an agreement reached then, the President could raise the debt limit in three increments while also implementing $2.4 trillion in budget cuts. The agreement also gave Congress the option of voting to block each of the debt-ceiling increases by passing a "resolution of disapproval." The House disapproved; the Senate, by declining to vote in the 15-day window, killed the Resolution. Even if the resolution were passed, Pres. Obama could veto it; which could be overridden by a 2/3 majority in the House and Senate. The House vote only had 57% approval, not enough for the 67% override requirement, so the Senate vote became moot. The same set of actions occurred in Sept. 2011 for the first debt ceiling increase.
The Federal Reserve Transparency Act directs:
A Liberty Candidate will Defend the Great American Principles of Sound Money and Constitutional Government, [such as the views of] Peter Schiff, Senate 2010 candidate from Connecticut, on the Economy: "Strong fiscally conservative principles and beliefs that our economic recovery should be left to the free market through businesses and individuals--not the federal government."
And [such as the views of] R.J. Harris, Congress 2010 candidate from Oklahoma on Ending the Federal Reserve: "What goes on at the Fed is a clear example of the infringement upon our liberty and national sovereignty through Congressional delegation of its authority. Now, the Fed refuses to even let us see how much and to whom our money has been loaned or how much they have indebted the American People. They do so by rightly asserting that they are a private entity and therefore do not have to comply with orders to open their books. Our Congress has completely lost control over the creation of money and credit and now we are all going to pay the price of that abrogation of their duty."
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Retiring in 2014 election:
Retired as of Jan. 2013:
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