[Congressional Record Volume 141, Number 139 (Friday, September 8, 1995)]
[House]
[Pages H8712-H8714]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        THE BALANCED-BUDGET MYTH

  The SPEAKER pro tempore. Under the Speaker's announced policy of May 
12, 1995, the gentleman from Texas [Mr. Gonzalez] is recognized for 60 
minutes as the designee of the minority leader.
  Mr. GONZALEZ. Mr. Speaker, I want to preliminarily begin with some 
general remarks and then as I go into my allotted time, I will be more 
specific in the issue that I feel is in urgent need to be discussed.
  The reason I wanted to have some preliminary remarks by way of 
explanation is that this period set aside that we designate as special 
orders is a very interesting one with a very interesting history in 
which I am very proud of the role I played in developing it into an 
accepted and formal part of the procedures.
  In the beginning of my career here in the House, which of course 
spans quite a number of years going back to 1961, it was not the custom 
to practice what we call today special orders. It was looked upon as a 
quite radical if not an unaccustomed practice, and the procedure was 
very, very formal, very standardized, and allowed for no real 
participation even during the general consideration of the full House 
for any but the very few selected leaders who exercised total power at 
that time.
  Well, of course, that is a long time ago. Those of us who have 
managed to span these years have noticed, with some gratification, the 
changes since that rather straitjacketed and quite sterile period of 
time. Of course in the interim the country has literally been shaken to 
root and marrow with some very, very substantial issues and 
developments that have engulfed it, not because there were issues born 
spontaneously from within our country, but as the work shrunk and the 
United States after the war became an inescapable even though quite 
reluctant leader of 

[[Page H 8713]]

the world, has had to accept those issues and those matters that were 
very seldom confronted in the House in any kind of a general debate.
  There have been quite radical and innovative changes since then. I am 
recalling a period of time in which any but the leadership, very select 
leadership, participated in the general procedures. There was no such 
thing as an individual Member, not part of that very select and small 
group, initiating or even addressing the full House.
  So by dint of the force of circumstances and the great historical 
occurrences that hit the country and because of the worldwide changes, 
that, of course, changed the whole aspect and it has been reflected in 
the internal proceedings in our House. I believe that I have witnessed 
about every single major occurrence, or as I call it, great landslides 
in developmental history of this country, both social, economic, and 
political.
  In the first place, I consider myself and want to acknowledge the 
privilege that I have been given by virtue of our institutional system 
in our country, one born of freedom, one born of equal access to all 
citizens depending on the citizen's own exertions and energy and 
whatever innovative changes he was motivated to bring about. When I 
first came to the House, it was not that way at all. It was very 
formal, very staid, very rigid.
  I do not recall sessions of the House being held more than at the 
most 2 or 3 days a week, and of a duration of not more than 2 hours on 
each occasion. But, of course, this was before the great watershed 
developments that engulfed us as well as the rest of the world. We must 
remember that I am talking about a period of time that antedated the 
Berlin Wall crisis, which today who recalls such other at that time 
Earth-shaking crises, and then, of course, the internal and the vast 
sea changes in our domestic, economic, and social structural 
composition.
  Now today, though, I want to take advantage of this opportunity, 
which is a great opportunity. I am proud of the contribution I have 
made to providing this hour which we call here and designate special 
orders, but which is really born out of one of the original legislative 
practices mounting back to the very first Congress, and that was the 
privilege, because that is what it is, it is a privilege under our 
system of legislative procedures based on hard and fast rules, of a 
multiple body in which it is quite understood and it makes common sense 
to understand that if you have a multiple body such as this, 435 
Members, you have to have some order of selectivity in the recognition 
of the Members. Otherwise, it would be confusion, worse, confounded and 
compounded.
  But today I am here to set the record straight about a very 
misleading slogan which is being broadcast from the rooftops and the 
airwaves through our country, in Washington, from various groups around 
the country, and last weekend from most of the speakers at Ross Perot's 
meeting at the Dallas Convention Center we were hearing the same 
refrain, quote, balance the budget, balance the budget, balance the 
budget.
  Of course many swear their dedication to this goal or this slogan or 
this, I do not know what else to call it, but a myth of balancing the 
budget. It is said by them that once the budget is balanced, we will 
all be saved from the dire consequences that having the deficit in the 
Government budget imposes on us.
  I have been one of those that from the beginning of my career have 
noted this balance-the-budget outcry and have followed it all through 
these 35-plus years in the House.
                              {time}  1300

  Now, our friends in the other party, the Republican Party, say that 
their miracle cure on this goal of balancing the budget will take only 
7 years. However, those of us who were around during the Republican 
administrations of the 1980's and early 1990's find their plan to be 
like an arsonist; someone who sets the fire to a building, and then 
brags about how quickly he can come around with the firearm and put it 
out.
  Before the first budget request of these Republican administrations, 
at the beginning of 1981, and recall I have been through all of this, 
the total Government debt, mind you, minus debt held by the Government 
itself, was $769 billion. that is a lot of money, but it is nothing 
like the $2.8 trillion debt they left behind in 1992.
  Mind you, an 11-year period, and from that amount, $769 billion to 
$2.8 trillion is quite a bit of a difference and a accumulation of what 
I said then and continue to say is unacceptable debt.
  During these Republican administrations, these are Republican 
administrations, mind you, even though it was the Democrats that were 
constantly pilloried as the spenders and wastrels by these same 
Republicans, but it was during these Republican administrations, I 
repeat, that the deficit of the Federal Government, that is the amount, 
the Federal Government spends over and above its revenues, grew to 
large proportion of the country's total income.
  In 1983, the deficit was over 5 percent of the Nation's total income, 
and it was over 4 percent in 1984, 1985, and 1986. Now, in 1995, the 
deficit has come down. After 3 years of a Democratic administration, 
the deficit is slightly over 2 percent of the Nation's income. This is 
at least some substantial progress.
  Mr. Speaker, it is not success, but it is certainly a big march down 
the road toward that. Now, the truth about what the deficit is going to 
be in 7 years, that is in the year 2002, is that nobody, under any 
plan, knows with any precision what that deficit might be. By the year 
2002, the total income of everyone in the country will grow from its 
present level of about $7 trillion to somewhere around $8.4 trillion, 
if it grows at about 2.7 percent per year, as it is projected.
  Nobody, no economist, no statistical expert, and no Republican 
budgeteer spewing a constant barrage of projections and balanced budget 
slogans could possibly tell you with any certainty whether the budget 
deficit will be plus or minus 2 percent of the Nation's income in the 
year 2002. Given the unknown course of the economy, which is now 
struggling through a period of slow growth, no one could even predict 
with any certainty what total income will be 7 years from now.
  Now, many so-called experts didn't even know last year how slow 
income would grow this year. Certainly the Federal Reserve did not know 
when they doubled short-term interest rates again and again in only 13 
months, and I protesting every inch of the way, and protesting since my 
coming to the Congress at this type of an action, because that is the 
heart of the matter.
  Any power in any country that controls interest rates controls the 
life of that country. That is what I have said all along and repeat it 
now.
  And now, they have begun to retreat with lower interest rates after 
they have seen the consequences of this foolish policy. In the race of 
the balanced budgeteers, there are now attempts in the Congress to 
forget about the people who have no well-heeled
 lobbyist working the halls of the Nation's Capitol in their behalf.

  Many of us are familiar with the increasing problem of poverty in our 
country, even though it is not much discussed and even though it can 
conveniently be out of sight of the general middle-class public.
  We know the people who will be hurt the most. There are numerous 
statistics showing the Nation's distribution of income is continually 
getting worse. This week an international study, the nonprofit 
Luxembourg Income Study, financed by the U.S. National Science 
Foundation, made some international comparisons that point to this 
critical problem in the United States.
  The researchers found that the gap between the rich and the poor 
families with children in the United States is the largest among the 18 
industrial countries that they studied and rated. The largest. Our 
country with the largest gap between the rich and poor families with 
children in the world in the industrial world.
  One of the authors of the study, Timothy M. Smeeding, said that while 
the gap between rich and poor is generally wider in the United States 
than in other developed countries, U.S. social programs for the poor 
are less generous. In an interview this week, Smeeding is reported to 
have said, and I quote, ``Some people say we're such a rich country 
that even our poor kids are better off. It isn't true.'' 

[[Page H 8714]]

  So what is the Congress now doing in the face of this national 
tragedy? On the table there are proposals to turn back welfare 
legislation to the States and eliminate Federal standards and 
supervision. For example, there is proposed legislation to abolish the 
aid for dependent children, this real spinal column of all aid 
programs, and replace it with a temporary family assistance block grant 
to States. Under that program, there would be no Federal guarantees, 
which will mean much lower assistance to most of our Nation's citizens 
who happen to be poor.
  This means more deprivation for poor children. This is no gimmick; 
this is the truth. The history of welfare payments since 1970 shows 
that this type of proposed legislation is misguided.
  For example the State aid for families with dependent children 
payments have been jointly funded by the National and the State 
governments, but they are set at the State level. AFDC, as this program 
is known, began in 1937, and benefits increased for three decades. In 
1940, the average States' benefit paid to a family was $287 in 1993 
dollars. In 1970, it reached its top amount of $608, and then began to 
drop, reaching $349 in 1993, again measured in 1993 dollars. That is 
almost the same level as in 1940, and this is a shame.
  Since 1970, these welfare benefits corrected for inflation, have 
declined because States have been fearful they would attract poor 
people if their benefits were high. This was the so-called undesirable 
magnet effect.
  Mr. Speaker, it is a travesty to commit to a policy to further 
deprive the Nation's poor and destitute at a time when the problems of 
poverty are becoming worse. In 1993, 39.3 million of our citizens, that 
is 15.1 percent of the population, were considered poor under the 
official measure based on family income during the year.
  This is an increase of 1.3 million people from 1992. In 1993 over 
one-fifth, 22 percent, of all children were poor and there is a good 
chance that new poverty figures will not show any improvement. The 
Government poverty-income cutoff for a family of four was $14,763. The 
Federal Government has a duty to provide assistance for those citizens. 
It does not benefit anyone in this country, rich or poor, to let 
conditions of poverty continue without help from the Federal 
Government.
  One example of a beneficial effect of Government programs is the 
poverty rate for older people, at one time higher than that of 
children, which dipped below the child poverty rate in 1974 and has 
remained that. However, that could change if Medicare is seriously 
underfunded as the Republicans are now proposing in order to give a tax 
break--net tax break--to the wealthy.
  It is an embarrassment to rational reasoning, and a con game with 
terrible consequences, to use the balanced budget slogan to justify 
gutting our already lean program designed to help the less fortunate. 
We should not, and will not balance the budget of America on the backs 
of the poor.
  The CHAIRMAN. Under the Speaker's announced policy of May 12, 1995, 
the gentleman from California [Mr. Dornan] is recognized for 60 minutes 
as the designee of the majority leader.

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