[Congressional Record Volume 142, Number 29 (Wednesday, March 6, 1996)]
[House]
[Pages H1759-H1766]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
BALANCING THE BUDGET
The SPEAKER pro tempore (Mr. LaTourette). Under the Speaker's
announced policy of May 12, 1995, the gentleman from Maine [Mr.
Longley] is recognized for 60 minutes as the designee of the majority
leader.
Mr. LONGLEY. Mr. Speaker, it is a privilege to be here in the House
this afternoon, and I would like to discuss one of the aspects of the
budget debate that I think we have not been paying enough attention to,
and that is that, and I know that there is a great deal of concern
amongst the public in terms of what is really happening in Washington,
and I guess I have got some reassuring news.
The reassuring news in that I think this Congress has succeeded in
stopping the spending train in Washington dead in its tracks, and in
all honesty I wish that we could have done it in, perhaps, a cleaner
and a more polished manner.
But I would like to offer a little bit of historical perspective on
some of the difficulties that we have been facing, and what this
Congress really means, particularly in comparison to prior Congresses,
and what prior Congresses have attempted to do to control spending, and
I would like to go back to 1975.
1975 was the year that my father was elected Governor of Maine,
Governor Longley. He was an independent, and I had just graduated from
college, was doing some volunteer work, not only in his campaign, but
later in his term of office, and at that point first became personally
aware and met many of the members of the Maine congressional
delegation, which at that point, in 1975, included Senator Muskie as
well as Senator Hathaway, both very well respected Members of the U.S.
Senate, also Congressman Emery and Congressman Olympia Snowe of Maine
who were representing the State of Maine in the House of
Representatives. And knowing and having met these individuals on a
personal basis was, of course, a very special experience for myself as
a recent graduate of college and as a law student, and I took
particular notice of the fact that at that time the Congress was
grappling with the issue of the Federal budget.
In fact I believe it was 1975; it was very significant in the sense
that Congress passed the Budget Reform Act which was attempting to
address what was then viewed as a systemic problem in the Congress, in
the U.S. Government, in terms of how we really dealt with managing the
spending of the Federal Government, and in that year we created the
House Committee on the Budget in the House of Representatives, in this
Chamber, and we also created the Senate Budget Committee, and 1975 also
marked the establishment of the Congressional Budget Office which was
to be a special office of the Congress that was going to be geared to
address fiscal issues in this country and provide honest advice,
nonpartisan advice, to those of us here in Washington who were
attempting to deal with the issue of how to control Federal spending.
I mention that because at that point the Federal debt was somewhere
below a trillion, possibly about a half a trillion dollars, and yet is
was still viewed, the national debt was still viewed, as a serious
potential crisis, and the level of federal spending and the deficits
were also viewed as a crisis.
Now mind you that was almost 20 years ago, but as a country we had
accumulated a record of unbalanced budgets, of running deficits, that
were exceeding the prior 30 or 40 years.
I believe that presently, here in 1996, I have been advised that we
have only balanced our Federal budget in 9 or 10 of the last 60 years,
and clearly we have almost 50 years, going back 60 years where we did
not balance the budget, and so 20 years ago, to put this in context, we
had acquired a record of unbalanced budgets, felt it was a serious
crisis, needed to act on it. And again I need to underscore that that
was 20 years ago.
I had another personal connection in this issue, and that was that
the following year, in 1976, Governor Longley was appointed as one of
the first national cochairmen of the Committee for a Balanced Budget
Amendment, and so against a member of my family, somebody that I love
very much was given this responsibility of calling the country's
attention to the crisis that our budget deficits represented.
Now I mention that as backdrop to the fact that I asked Greg Winter
of my staff to go back and look at the major congressional actions
taken to
[[Page H1760]]
deal with the budget crisis and give me a breakdown of the different
acts and what they might represent, and I am stunned to discover that
going back just to 1980 there have been 16 major pieces of legislation
designed to deal with the Federal budget crisis.
In 1980 we passed, the Congress passed, the Omnibus Reconciliation
Act. 1981, we passed the Omnibus Budget Reconciliation Act. In fact
that title became so popular that we later passed six additional acts
with that same title over the last 15 years. And of course in 1982 we
had the Tax Equity and Fiscal Responsibility Act. It is famously known
as TEFRA to nearly every accountant in the United States. 1983, we
passed Social Security amendments again designed to deal with
controlling the growth of spending particularly in the Social Security
System and to bring the revenues at that point which were under threat
based on the increasing payments, it was felt 12 years ago that we
needed to act to protect the integrity of Social Security. 1984, we had
the Deficit Reduction Act, and then in 1985 we had the Balanced Budget
and Emergency Deficit Control Act. In fact some of these titles
actually become somewhat ridiculous. We have the Omnibus Reconciliation
Act of 1986, and then the following year, in 1987, the Balanced Budget
and Emergency Deficit Control Reaffirmation Act.
In fact in audiences, as I have spoken to audiences in my district, I
have joked that the only thing that we have missed in the last 18 years
is the words really, really, really serious about balancing the budget
act, and the underscores, I think, a great concern that many of us
have, and I know that the public and certainly this Member feels very
strongly that we need to work together, Democrats and Republicans, to
deal with this important issue. Balancing the budget should not be a
partisan political issue.
But I also have to say that there comes a time when you must focus on
what your objectives are, and unfortunately partisan fights do arise
and occur, and maybe sometimes for good reason, but I would point out
that in looking at these 16 pieces of legislation that were passed that
each of the parties at different times supported 12 of the 16 acts, and
on 8 instances majorities of each party in this Congress supported the
acts, which basically means that both majorities, of both the Democrats
in the Congress and Republicans in the Congress, passed or supported 8
of the 16 acts, and, as I indicated, the Republican Party per se
supported 12 of the 16 pieces of legislation, and the Democrats
supported, again also supported, 12 of the 16, and in 8 of those years
they were in agreement in passing these bills.
Now what was the problem? Well, I think, first of all, the focus was
on the deficit, and when you get right down to it, I think that one of
the lessons that we have learned in the last 2 years is that the
deficit per se is not the issue. The deficit is the symptom; spending
is the issue. And controlling spending has become, I think, a priority
in this Congress.
But something else is important to understand. Many of these pieces
of legislation contain fiscal notes that called for in some cases
revenue increases, in many cases spending cuts. But when you look at
the actual numbers, the fact of the matter is that in no single year
over the last 16 years has the Federal Government ever reduced
spending, and by that I mean actually spent less money in 1 year than
it had spent in the prior year.
And the message is clear, that spending has continued to increase
unabated for the last 16 years, despite the fact that we have had 16
major pieces of legislation designed to deal with reducing spending so
that we could get spending in line with revenues and work towards
balancing the budget.
The point that I would like to make, and I see that Representative
Neuman has come into the Chamber, and I would just end with this one
comment and then perhaps ask for some comments from the gentleman from
Wisconsin, Mr. Neumann. But the point that I would make is this:
I think many of us who were just elected to this body realize in
hindsight that this Congress, albeit well intentioned, was focusing on
the wrong aspects of the problem and was attempting to deal with the
symptom; i.e., the deficits, and not the fundamental problem which was
overspending; and the second recognition that we all have is that what
we have seen truly is a failure of will, a failure of Congress to
insist on the measures that were necessary to actually bring revenues
in line with expenditures, and I would suggest that one of the major
mistakes that we want to avoid, that this Congress wants to avoid, is
that it would be very easy for us to enter into a look good, feel good
agreement with the administration on a budget, and we could all hold
news conferences and pat each other on the back. But unlike prior
congresses, none of us wants to be in a position where in 10 or 20
years we find out that our children are really paying the bill.
And I notice that the gentleman from Wisconsin, Mr. Neuman is here,
and, Mark, welcome to this special order.
Mr. NEUMANN. I will just carry on a little bit on just what you were
just saying here, that when I go home to our district, and I turn on my
TV set, and I hear about cut, cut, cut, cut, and then I come back out
here to Washington, and I take a look at the numbers, and the numbers
are not going down, they are going up in spending; spending today is
about $1530 billion or about $1.530 trillion, and by the year 2002 that
spending is slated to go all the way up to 1.8 or $1,835 billion.
So when people talk about these spending cuts, I think it is
important to note that they are not cuts in spending. What they are is
reductions in the amounts of increases, and in fact, as you can see
looking at these numbers in the spending line, we have got spending
increases of $350 billion from the year 1995 to the year 2002. Spending
is continuing to go up. And you are right on the money with what you
are talking about, that the real goal here needs to be to get the net
revenues into line with the amount of spending that we are doing. That
is how you get to a balanced budget.
{time} 1700
The way to get a balanced budget is to control the amount of money
that you were spending out here. In fact, that is what the Republican
plan would have done had it been signed into law by the President. Of
course, it was most recently vetoed. I think it is real important to
know that that spending and bringing that spending into line is what is
absolutely essential.
Again, when we look at this chart, we see revenues of 1.356 or $1,356
billion today, going all the way to 1,841. The problem with charts like
this one I have in my hand here is there are so many numbers in my
charts that we lose sight of what this really means. What this really
means, it is not about these numbers. It is about the next generation
of Americans. It is about our children, it is about our grandchildren.
If we do not accomplish this, the picture is not very bright for our
children. But if we manage to bring this about, it opens all kinds of
opportunities for our children that absolutely were not there before.
Balancing the budget, according to Alan Greenspan, means a 2-percent
reduction in the interest rates. That means our children, that means
young Americans, get to buy homes and get to buy cars.
Mr. Speaker, what a lot of people forget when they go down this road
of discussion is that when these young people buy homes and when they
buy cars, somebody is going to be building those homes and somebody is
going to be putting those cars together and building those automobiles.
That means jobs. So we are not only talking about the ability for them
to live the American dream, to own their own home, we are really
talking about them being able to live the American dream and have a job
that allows them to work and provide for their families. This is truly
the opportunity to achieve the American dream.
This is absolutely essential. These numbers are nice, but it is not
about numbers. It is about our children and the opportunities they have
here in America. It is about keeping our jobs here at home instead of
watching them to overseas. It is about the job opportunities and the
opportunities to live the American dream. That is what this chart is
really all about.
Mr. LONGLEY. That is very important.
Mr. Speaker, I yield to the gentleman from Connecticut [Mr. Shays].
[[Page H1761]]
Mr. SHAYS. I thank the gentleman for making sure we kept this time.
Mr. Speaker, this is an extraordinary opportunity that we have to
just really clarify certain issues and just make sure that we are all
focused on our ultimate objectives. We want to get our financial house
in order and balance the budget, and we want to save our trust funds,
particularly Medicare, from bankruptcy. We thought they were going to
start to go insolvent and be bankrupt in the year 2002, if we did not
do anything. Now we learn it started to go insolvent last year, and
will be bankrupt just at the turn of the century, so we have some heavy
lifting to do to save our Medicare plan for seniors, even present-day
seniors.
Then that third issue, and it all relates, we want to transform this
caretaking social, corporate, even farming welfare state into what we
would call a caring opportunity society. We want to help people kind of
grow the seeds instead of just hand them the food.
Mr. Speaker, the gentleman related it so well to our children. It is
amazing to me that in the last 22 years we have allowed the national
debt to increase 10 times, from about $430 billion in 1974 to about
$4,900 billion; just 22 years in a time of relative peace. There it is.
It is growth out of control. In that case you are doing it from 1960.
But if we notice the number of 1975, down there, it just starts to go
up at an alarming rate.
I think former Prime Minister Rabin, who was assassinated, he was a
politician, and he used to enjoy telling people and reminding all
politicians around the world that elected officials are elected by
adults to represent the children. We are going to be judged on our
success on what kind of world we leave our kids. The kind of world we
are leaving our kids is not a hopeful one unless we get this incredible
runaway debt in line.
I thank you for letting me share this time with you which you have
claimed, and I am grateful you have.
Mr. LONGLEY. Mr. Speaker, I would just add to that particularly with
reference to the chart of the gentleman from Wisconsin, [Mr. Neumann,]
that what we do not hear our attackers saying, and we hear an awful lot
about, for instance, how much money we are going to be spending on
medical care for our senior citizens, and believe me, that is a very
important priority; but what our attackers do not acknowledge is that
there is one program for which we will pay more money in the next 7
years than we will spend on medical care for our seniors. That is
interest on the Federal debt.
I think that the public would be absolutely amazed to learn that we
will spend more money on interest on the Federal debt in the next 7
years under any of the programs being discussed than we will spend on
medical care for our seniors. That is how critical the issue has
become.
Mr. Speaker, I notice the gentleman from Georgia. [Mr. Kingston], has
arrived, and I yield to him.
Mr. KINGSTON. I think it is important to follow up that comment, Mr.
Speaker, in saying that that interest does not pay down one dime of the
principal, that people will still continue to pay all the other taxes
involved in it. The gentleman from Wisconsin [Mr. Neumann], has said
that two reasons, real quickly, to balance the budget is it saves
America from economic disaster. We are paying almost $20 billion each
month in the interest on the debt already. Nations cannot survive with
that much debt service.
No. 2, the gentleman had said that there is a great interest or
dividend in terms of the homeowner. If you have a 30-year home mortgage
for a $75,000 house, a 2-percent drop in interest rates, which is what
the Federal Reserve would estimate balancing the budget would bring
permanently, bringing lower interest rates permanently, that would mean
$37,000 less that American homeowners would pay on that mortgage. If it
is a $15,000 car loan, American consumers would pay $900 less.
One thing that the gentleman from Wisconsin [Mr. Neumann] did not
mention, a third reason you want to balance the budget is because it
will lower your taxes. Middle-class America right now has gone from
paying about 5 percent Federal income tax in the 1950's to, currently,
24 percent. In all State, local, and Federal taxes, middle income, it
is about 45 percent for Americans now. If President Clinton had not
vetoed our bill this April, this April, 6 weeks from now, Americans who
have children would have $500 in their wallet.
Mr. SHAYS. Per child.
Mr. KINGSTON. In their wallet, right here. I do not know how many
American families would benefit from that in Maine or the other States,
but I can promise you, in Georgia it would mean a tremendous amount.
That is real money. The gentleman from Wisconsin [Mr. Neumann] said let
us get off the chart. That is what we are talking about, a $500 per
child tax credit in your wallet today.
Mr. SHAYS. If you had three children you would get $1,500. It is
important to point out, we did not just have a tax cut without paying
for it. The way we pay for it is cut government spending or slow the
growth of some programs in order to afford to reduce taxes by probably
about $180 billion by the time we ultimately have an agreement with the
President. If we do, it is in that range, we want it about $240.
That $140 billion was paid for by reducing government more so we
could afford that tax cut.
The thing that just simply amazes me is we have some of our
colleagues who say, ``I want to balance the budget, but I do not want a
tax cut for the wealthy,'' quote unquote. The irony of that is that our
$500 tax credit is going to families who make less than $75,000. That
is the bulk of our tax cut. They are hardly wealthy people.
But they say they do not want that, as if they want to balance the
budget. The crazy thing is they want to still balance the budget in 7
years without a tax cut, so it means that they are going to spend the
money that we save for a tax cut, they are going to take and spend it
for more government. So they are not balancing the budget any sooner.
They are just making government larger than we would make it.
Mr. NEUMANN. Mr. Speaker, if the gentleman will yield, I think that
point is so important. I have found that to be such a big
misconception, talking to folks here in Washington versus talking to
folks at our town hall meetings back in Wisconsin. The people back in
Wisconsin think if we do not do the tax cuts, that means we will borrow
less of our children's money and get to a balanced budget sooner. If
that were the case, I would sure listen to that argument.
But that is not what is being talked about here in Washington. That
is Wisconsin. Out here in Washington what we want to do or what is
being discussed is getting rid of the tax cuts and spending the money
on more bureaucratic programs here in Washington. That I am opposed to.
If we talk about what the Wisconsin people think we maybe ought to be
thinking about doing, and that is getting to a balanced budget sooner
and borrowing less of our children's money, that is a good
discussion. But that is absolutely not the discussion going on out here
in Washington. The discussion out here is totally centered around if we
do not do the tax cuts, then we get to spend more money, like somehow
that money belongs to us. That is not our money. That is the American
taxpayers' money. It is our children's money that we are borrowing
here. It is not our money to spend.
Mr. KINGSTON. Mr. Speaker, if the gentleman will yield, one thing
that is very important for us to remember, and I believe all four of us
here worked for that lockbox provision in an appropriations bill that
said when you reduce spending by x amount of dollars, that money goes
to deficit reduction, rather than just being unearmarked and open for
the general budget to spend any way you want.
What is so important about that is the Washington liberals and the
administration fought that lockbox provision, and now we have been
unable to pass that. It passed out of the House, but we cannot get it
out of the Senate because of the Washington liberals fighting it.
That is the very thing people in Wisconsin are saying. If you are
going to put that $500 directly into deficit reduction, that is one
thing, but we know what it is going to do is to feather the bed of
another bureaucracy, and another bureaucrat is going to spend it.
Mr. LONGLEY. Mr. Speaker, this goes back to a point that I attempted
to make before each of the Members arrived on the floor.
[[Page H1762]]
Mr. SHAYS. You mean while we were running to get over here, when you
took over the floor?
Mr. LONGLEY. I had gone back, actually, and I had mentioned 1975 and
Senator Muskie's appointment as chairman of the Senate Committee on the
Budget, and that was the year the House Committee on the Budget was
established and the Congressional Budget Office was established,
because 20 years ago we viewed the debt and spending as a serious
problem, and we created special committees to deal with it. Yet, 20
years later, we are still struggling with the same issue.
Mr. SHAYS. In fact, it has gotten much worse.
Mr. LONGLEY. What has been amazing to me is, as I mentioned, from
1980 forward, there have been 16 major pieces of legislation. Most of
this legislation passed on a strong bipartisan basis. I do not say this
to be critical.
Mr. SHAYS. What was this legislation intended to do?
Mr. LONGLEY. To reconcile spending.
Mr. SHAYS. It is more process-oriented?
Mr. LONGLEY. The Omnibus Reconciliation Act. There were seven omnibus
budget reconciliation acts. We had a Balanced Budget and Emergency
Deficit and Control Act. Then we later had a Balanced Budget and
Emergency Deficit Control Reaffirmation Act. We literally had
everything except the we are really, really, really serious about
controlling spending act.
I just checked this afternoon the yearly rates of increase in Federal
spending in the 1980's. I say this, whether we are Republican or
Democrat, let us deal with the facts. The facts are that spending
increased at tremendous rates during the 1980's. Yet, at the same time,
we had Congress working together on a bipartisan basis, probably
everyone believing they were trying to do the right thing, but what
they were trying to do is, frankly, nibble around the edges of the
problem. We were tinkering with Social Security, we were tinkering with
retirement programs, we were tinkering with details of the bureaucracy.
We were talking about spending cuts, but yet, my research tells me
there is not a single year in the last 20 years, if any even in the
history of this country, where the Federal Government has spent less in
1 year than it has spent in the prior year.
Mr. SHAYS. Really what the gentleman is describing, if the gentleman
will yield, he is describing a situation where people think we have a
revenue problem, and we know that we have a spending problem. Revenue
keeps going up every year. It is just that our spending is going up by
a greater amount.
Mr. KINGSTON. I think it is also important, Mr. Speaker, that as an
outsider, I am relatively new to Congress, but it looks to me that
every time Congress has made a deal in a bipartisan fashion, the tax
increase came at the beginning of the deal and the savings or the cuts
came later, and then that was the time for a new Congress to come in,
and the cuts never happened.
Mr. LONGLEY. It is even worse than that, I would say to the
gentleman. The revenue increases always happen. The spending cuts,
reductions, never happen. There had never been a cut in Federal
spending in the last 15 years. The Federal Government has consistently
spent more money each year than it did in the prior year. All of the
talk about spending cuts or spending reductions was part of the
hypothetical wherein you created an artificial level of increase, then
said you were going to reduce the artificial increase, but you did not
tell people that you were not cutting, you were still increasing
spending.
Mr. SHAYS. If the gentleman will yield, this is just an exact
circumstance. When I was first elected in 1987 I kept hearing that we
were cutting spending, and we actually had bills that said we were
cutting spending. I would go back to my district and say, ``We cut so
much.'' At one community meeting someone said, ``Young man,'' and I was
younger then, ``how come the budget keeps going up?'' A good question.
I went back to my office, and we learned about this amazing thing
that started to happen in 1974, which was called baseline budgeting. We
spent $100 billion this year, and then they said it would cost to run
the same level of service $105 billion and Congress spent $103 billion,
and they would call that a $2 billion cut, even though we were spending
$3 billion more.
One of the things I hope we do in this special order is to really
just talk about where are we cutting, where are we freezing, and where
are we allowing growth to continue to grow, quite frankly, at a
significant rate.
I know our colleague from Michigan, Mr. Smith, is here. I don't know
if he wants to be on theme. If he is going to be on theme, we would
welcome him to participate.
Mr. KINGSTON. He is always on theme.
Mr. SMITH of Michigan. Mr. Speaker, if the gentleman from Maine will
yield, I think the theme is to remind ourselves how bad it is for not
only making our kids and our grandkids pay all this overspending and
what we borrow back, but it is also tremendously negative on the
economy. So what we have said is such things as a child born today is
going to have to pay $187,000 in their lifetime just to pay their share
of the interest on the national debt.
Mr. SHAYS. Not to pay back the national debt, just to pay the
carrying charge.
Mr. SMITH of Michigan. Just to pay their share of the interest. It is
time everybody, that is, however you want to put it, you are a young
man relatively, I would say to the gentleman from Connecticut [Mr.
Shays], but everybody had better start looking at what this Government
is doing to their lives and the lives of their children.
Not only is it immoral to make our kids and grandkids pay our bills
today, like they are not going to have their own problems when they
grow up, but it is tremendously negative on the economy, because our
demand for money, for more borrowing, has driven up interest rates by 2
percent.
Mr. KINGSTON. One of the things I wanted to point out is that on the
chart that the gentleman from Wisconsin [Mr. Neumann] showed us
earlier, there is an urgency. When you have a Federal budget that has
been going like this, or excuse me, a deficit, and then it goes like
that, people have said particularly to the freshmen, ``You are going
too far too fast.'' I disagree. When it is the third largest
expenditure in the national budget, the national debt----
Mr. SHAYS. If you can clarify.
Mr. KINGSTON. I am trying to turn this thing around. If you are
trying to balance this budget and bring down that orange peak line,
what you are trying to do is do it in 7 years. The folks back home, the
business people I know say, ``Why can't you do it in 1 year?''
President Clinton as a candidate on June 4, 1992, promised to do it in
4 years.
{time} 1715
I believe we should be arguing, is 7 years not waiting too long?
Should we not try to balance it in 3 or years? Indeed I supported the
balance that the gentleman from Wisconsin [Mr. Neumann] had, which was
a 5-year.
Mr. NEUMANN. I would just add on that, it is possible to do this even
faster than 7. Seven is a compromise that is putting off how long it
takes us before we start this line going back in the other direction.
Again, this line shows the growth in the Federal debt over the past
years, and we are on a steep incline. I told my folks back home at the
town hall meetings that my goal was to someday stand before them, my
dream for the future of this country, and say, yes, here is what we
have done in Congress. We have stopped that growth and we have started
it back down again so that our children have a future in this country
of ours. That is my goal for my service here.
Mr. LONGLEY. If the gentleman would yield, if I could add to what he
is saying, and I do not have a chart to go with it, but I also added up
the, quote, ``Tax increases that were called for in these 16 pieces of
legislation.''
Mr. SHAYS. Does the gentleman mean since 1984?
Mr. LONGLEY. Since 1980. Theoretically Congress has only raised taxes
by just about $500 billion over the last 16 years. The reality is we
have increased spending somewhere in the vicinity, in other words, if
one took the baseline approach which was at $590 billion a year in 1980
and carried that forward, despite officially raising taxes only by
[[Page H1763]]
$500 billion, there has been over $5 trillion of increased spending.
What is going on? What has really happened is because much of the tax
system is on a percentage basis, we have built in automatic tax
increases into the Tax Code that generate more and more revenue every
year, whether or not the tax increases were legislated. Then on top of
those increases, we have added additional increases in taxes in a
manner that has always protected the Government, always made the
Government look as if we were the innocent party.
Mr. SHAYS. The bottom line to this issue, though, is that revenues
are increasing significantly, and the challenge is that expenses are
increasing even at a greater amount. We need to start to slow the
growth of spending.
I am seeing where the gentleman from Michigan [Mr. Smith] is, and
basically the minority has accused us of, say, cutting the earned
income tax credit, which is a tax credit that was designed to help
working poor, transition them to a point where they are actually making
enough to not be poor. They do not pay any taxes, they actually get a
credit back from the Government.
We are expanding that program. But this is what we are being told. We
are being told that we are cutting the earned income tax credit, that
we are cutting the School Lunch Program, that we are cutting the
student loan program, that we are cutting Medicaid and Medicare. That
is what we are being told, and they call it a cut.
This is what is happening. Our bill increases the earned income tax
credit from $19 to $25 billion. It increases the School Lunch Program
from $5.2 to $6.8 billion in the seventh year. The student loan
program, and that is the one that really gets me, is going from $24 to
$36 billion. Only in this place and in this city when you spend 50
percent more, it is $24 billion now, we are going to add $12 billion to
be $36 billion in the seventh year, do people call it a cut.
Mr. NEUMANN. If the gentleman will yield, I would like to ask the
gentleman a question, again, that I ask at all the townhall meetings.
You talked about the student loans, you used the $24 billion and $36
billion numbers. I would like to ask how many of the American people
would be willing to accept a pay cut from $2,400 a month to $3,600 a
month. Let me ask that question again. How many would like a pay cut
from $2,400 to $3,600?
Mr. SHAYS. In other words, a 50-percent increase. I think we would
all like it, especially if we could get away with calling it a cut.
I am not proud that there are certain parts of the Government that
are going up. I would like to be able to get a better handle on
spending. It is just that I think if you tell the American people the
truth, they will tell you to do the right thing. If you kind of
obfuscate it and you distort it, they are going to give you a mixed
signal back.
The fact is the earned income tax credit is going up, the School
Lunch Program is, the student loan, and Medicaid. Medicaid is going
from $89 billion, which it was last year, to $127 billion.
Medicare is growing from last year, $178 billion to $289 billion. We
are going to spend 7 percent more each year on Medicare, we are going
to spend 60 percent more in the seventh year than we did now. And on a
per beneficiary, because everybody says we have more seniors, you have
more seniors, but even if we take all the seniors, we are going from
$4,800 to $7,100 in the seventh year, $7,100 per senior, a 49 percent
increase in the seventh year over now. Hardly a cut.
Mr. SMITH of Michigan. If the gentleman will yield, when I go to my
town hall meetings, and you can picture that group of people out there
that are having a hard time with their own budgets, they start saying
when we hear what the gentleman from Connecticut [Mr. Shays] has just
said: ``Well, why aren't you cutting faster? Why don't you cut more?
Why are you spreading it out so long?''
Then they hear that even with the Republican plan we are still
borrowing $100 billion a year, even at the end of 7 years, from Social
Security and the other trust funds.
Mr. SHAYS. We will still be borrowing from the trust funds, the
gentleman is right.
Mr. SMITH of Michigan. They say, ``Look, you've got to do better than
this.''
Is it not sad that we cannot get some of the liberals, the President
of the United States, to say, Yes, we are going to do the right for the
future and we are going to stop playing political games? It is so
frustrating that we cannot cut some of this spending and make this
economy stronger, and leave our kids a paid-off mortgage rather than
the big debt.
Mr. LONGLEY. Just to pick up on one example, I think if someone asked
me what has bothered me the most perhaps since I came to Washington, I
have to say the lack of honesty, the lack of directness, being candid
about the difficult issues that we are confronting.
Mr. SHAYS. The gentleman likes that Maine honesty. You want people in
here to speak like the people in Maine.
Mr. LONGLEY. It is hard, I think, for people across the United States
to recognize the extent to which people in this body frankly can become
so clever with language and words that they have made an art form out
of disguising the truth. As an example, let us just take the Medicare
situation.
I campaigned 2 years ago on the fact that the Social Security
trustees, and this was in 1994, actually 1993 and 1994, that the Social
Security trustees had reported that the system was in serious
difficulty, and in 1994 they projected that the three major Social
Security funds, the disability fund, the Medicare fund, and the Social
Security retirement income fund were all going broke. Specifically they
projected that the disability fund was going to be broke last year,
that the Medicare fund would be broke in 2002, and when I say broke,
there would not be a nickel left in it, and that the general trust fund
for Social Security would be broke as early as 2029.
I have a number of insurance and financial companies in my district.
I checked with some of the professional economists and they said that
the private projections are that Social Security could be broke as
early as 2010.
I say to people, when you have an official report, signed by the
Secretary of Treasury, the Secretary of Health and Human Services, and
the Secretary of Labor telling you that three major Social Security
trust funds that the public depends on, particularly the Medicare fund,
which right now is a very critical program for our senior citizens,
when you are told by your Government that the program is going
bankrupt, what do you do?
Then I told people that when I came to Washington, I had people
seriously tell me, ``Don't worry about it, they say that every year.''
When I go back to my district, they are astounded.
But I go one step further. It turns out, in the middle of this budget
crisis, that as early as November, that the Medicare trust fund went
into deficit a year earlier than it was projected because spending was
almost $5.5 billion more than the trustees had estimated, and we did
not even hear about it.
I have to question who is in control and why are they not being
truthful with us about the nature of the problem we are trying to
confront?
Then I say to my audiences, particularly in my district, young and
old alike, a lot of business people, individuals, I say, Now what do
you do if you are in that situation? Let me tell you the piece that is
not being talked about when it relates to Medicare reform.
We are hearing all the attack ads about Medicare and we are being
accused of just the most cold-blooded actions that anyone could
conceive of, putting our seniors on the street, et cetera. Nonsense.
Clear scare tactics designed to prey on a very vulnerable population.
I say, put those attacks aside. Who is talking about what our
alternatives are? What happens if we do not do what we are trying to
do? Let me tell you the options. I say this to an audience, Anybody
here in favor of cutting benefits? Nobody responds.
How about doubling or tripling payroll taxes? And have we forgotten
that barely 2 years ago the administration had a request on the table
in the Committee on Ways and Means to increase payroll taxes by 10
cents a dollar of wages? I say, Anybody here think that increasing
payroll taxes or doubling or tripling them is going to solve the
problem?
[[Page H1764]]
That would just be wonderful for employment, because what also
happened in the middle of this debate is AT&T laid off 40,000 workers,
and across the country it has become an epidemic for large companies
and small companies to realize they cannot afford to pay the tax burden
and the liability burden that Government is imposing on them for the
workers they are hiring.
Mr. SHAYS. So what is the bottom line?
Mr. LONGLEY. First let me tell what the third option is. We ruled out
cutting benefits, we ruled out increasing payroll taxes. If anything,
we said, we need to reduce payroll taxes and lower the tax burden,
particularly on working people.
The third option is, we will borrow the money. We will borrow our way
out of the crisis. Then I tell them that do you know that we are going
to be spending more money on interest on the Federal debt in the next 7
years than anyone is going to spend on Medicare?
Of course we reject those three options out of hand because not a
single one of them deals with the real problem. In fact, every single
one of those measures creates more problems than it solves.
I say we settle on the one choice that made the most sense, which is
make the tough decisions to reform the program, create options for
senior citizens, protect those who want Medicare but give other
choices, and that if we give more power--and this is a radical idea for
this city--if we give senior citizens the right to make choices about
their own health care, I mean, the very idea that we are going to give
the beneficiaries of a program the right to make choices, and I
describe to people in Maine that in Washington that is sacrilege.
Mr. SHAYS. If the gentleman will yield, the bottom line is we did the
heavy lifting with a lot of programs, but in some cases, and
particularly with Medicare, we have a better program and yet we save
about $240 billion. We do it by not increasing the copayment, not
increasing the deductible, not increasing the premium for Medicare Part
B. The seniors should have still paid 31.5 percent, which is what they
paid last year. That is what we said, just keep it at that rate.
We did say that the very wealthy in our society would pay more for
Medicare. If you make more than $125,000 of taxable income, you would
pay more for Medicare Part B.
Then we get into how are we able to make the savings? By, as the
gentleman has pointed out, giving seniors choice. They are allowed to
go into a variety of private health care plans. We still keep Medicare.
No one has to leave. But we allow seniors to get private care, and the
private care has to be as good or better, otherwise they are not
allowed to participate. They cannot offer seniors less service and
charge them less. They have to provide equal to or better, and the way
they are going to attract them is by providing eye care or dental care,
prescription drugs, allow copayment rebate or deductible rebate or even
give MidiGap.
Mr. LONGLEY. If the gentleman will yield, more astounding, we are
actually increasing spending on the program, in that the average
payment per beneficiary this year is $4,800 a year and within 7 years
it is going to exceed $7,000 a year. That is actually a healthier rate
of increase than the administration itself proposed.
What we are going to be doing, and this is what will save the
program, is that we will be running it more efficiently, managing it
better, giving more people control over their health care and
eliminating a lot of fraud and waste, particularly as it relates to
unduly burdensome regulatory structures. We are going to run a better
program, we are going to be providing more money for the beneficiaries,
they are going to have more choices and, frankly, we will be able to do
it in a manner that will bring revenues in line with expenses.
Mr. SHAYS. Before the gentleman yields to my colleague, I just want
to make sure that we cover this, because we do not want any senior to
think that they have to participate in choice. They can keep their
traditional fee-for-service, their 1960 Blue Cross/Blue Shield model.
If they choose to get into private care and they do not like it, they
have 24 months, each and every month within these next 2 years, they
can get out of the private care and right back under the system they
had.
I know my colleague wanted to speak.
Mr. NEUMANN. Just a couple of things on this. I think all of this
discussion about what is happening in Medicare, I just reemphasize that
if our seniors do nothing, they keep Medicare as they know it today.
A lot of times people forget that our friends and our own parents are
on Medicare, and they forget how concerned we are about the senior
citizens we know. When I jog with George, a good friend of mine, he
talks to me about his mother. When I ride to basketball games with Tom,
where our kids play on the same team, we talk about his parents and we
talk about the meaning of Medicare to these senior citizens.
{time} 1730
Somehow in this whole discussion we lose the fact that we care a lot.
We have a responsibility. It is like this with Medicare today. They are
writing out checks for more money than they have in their checkbook. We
all know they cannot keep doing that.
We have a responsibility to George's parents and to Tom's parents and
to George and Tom and our responsibility to these people, to the people
we represent, is to make sure we do not allow this system to go
bankrupt so their parents can continue to receive these benefits.
We would be totally out of line to allow the Medicare system just to
continue down the road it is going down right now. I care too much
about Tom's parents and George's parents and the other parents like
them across our district.
Mr. LONGLEY. Not only that, it is clear that we have people in this
city who have made a career out of taking more and more and more money
from the public for their purposes, not for the public's purposes.
Mr. SMITH of Michigan. Mr. Speaker, I think there are a lot of people
watching maybe that are saying, well, look, you are the Congress of the
United States. You have the majority. Why do you not do it? What has
happened is Congress has given away the ability to control spending
over the last 40 years. We have, in effect, passed into law so-called
entitlement programs that say the money is going to be there
automatically without being appropriated on a yearly basis from
Congress, and so into these laws of food stamps and AFDC----
Mr. SHAYS. Basically, it is half the budget.
Mr. SMITH of Michigan. The blue part represents these welfare
entitlement programs. A majority of Congress cannot reduce these
programs and change spending without the consent of the President, and
the President has now vetoed changes in the Food Stamp Program. The
President has now vetoed changes in the work requirement in the welfare
program.
Mr. NEUMANN. Just to comment on that, it is very important for the
American people to know that on that half where we do not get to vote
on it, spending went this year from last year to this year, went up by
$46 billion. That money is spent and it is gone. We have no control
over that, no vote over that. It went up $46 billion. Contrast that to
the part that we do have control over, about $500 billion out of a $1.6
trillion; that went down by $14 billion.
Mr. SMITH of Michigan. Let me show you where that is on this little
pie chart. That is the little red section on this pie chart that
represents the 12 appropriation bills other than the defense
appropriation bills. This is where Congress has control. If we do not
pass the appropriation, if the President vetoes it, there is no money
there, so we have been unsuccessful here, and by the year 2002, we are
going to see the welfare entitlement portion of this budget grow to
almost 60 percent, and then you have got the interest on the national
debt. The service, paying the interest on the national debt, is also on
automatic pilot unless we follow what these gentleman have been saying
and we started reducing the rate of increase in spending.
Mr. SHAYS. If the gentleman will yield, the bottom line is this: As
you point out, the gentleman from Wisconsin [Mr. Neumann], 50 percent
of the
[[Page H1765]]
budget is on automatic pilot. It is entitlement. We do get to vote on
it, but if we do not vote on it, it stays the same, and so Congress
simply never voted on it.
I have been in Congress since 1987. I never got to vote on changes.
The majority party never wanted to change the entitlements and to
control their growth. So I never had an opportunity to vote.
Mr. SMITH of Michigan. Up until now, in the Balanced Budget Act.
Mr. SHAYS. Up until now, with the balanced budget, for the first
time, this is the Congress that is willing to take on the heavy lifting
of controlling 50 percent of the budget that is basically on automatic
pilot. We voted on a third, as the gentleman pointed out so well, those
appropriation items, defense and nondefense, that come out of
appropriations. There is the 15 to 16 percent of interest on the
national debt which we do not vote on. We have been voting since I have
been here on a third of the budget, trying to control it. For the first
time, we are trying to control the entitlements. All we are trying to
do is slow their growth to 5, 6, 7 percent a year. We are not cutting
them. We are allowing them to increase. That is just bottom-line issue.
You know, I would love to just get into this issue. I would like your
reaction, I have been here now for about 9 years, and I am seeing good
men and women not run again, and some of them have very real personal
reasons. I just want to express my concern about some of them.
I happen to think of myself as a moderate Republican. I think of
myself as a centrist in terms of my ideology. I like to think of myself
as passionately moderate. I am in the center. I am seeing some of my
fellow moderates quit. They say this is not a fun place anymore. I am
thinking to myself, with all due respect, when has it ever really been
a fun place? I get up in the morning and say I have one of the best
jobs in the world. To call it a fun place, I have never known it to be
a fun place.
Now, to listen to them further, you know, people are getting nasty
with each other. I see that. I mean, to the public this must look like
a food fight when really what it is about is some very heavy lifting
about whether we end those obscene debts and annual deficits that we
have, whether we stop adding to the national debt, and this is what my
colleagues are saying. I think the Senator from New Jersey, even your
own Senator, with all respect; in my judgment, they have participated
in our getting deeper and deeper and deeper in debt by their silence,
in some cases, by their willingness not to step and stand out and say
no more, we are going to call the question.
So now that we are deeper in debt and we are clawing our way to get
out of this means, people are quitting, and then some, not your
Senator, but some Senators have said, ``You know, now I can be honest
with the American people. I can tell them now, since I am not running
again.'' And I am thinking, why did you not just be honest with them
when you were a candidate? Tell the American people the truth. They
will have you do the right thing.
So I just wanted to express some disappointment with some very good
people who are leaving, and my take on it is they are leaving now that
we have got to do heavy lifting, now that we have got ton confront
seniors, young people and everyone else and say, you know, we have got
to address this issue. Some things you may not like, but we have got to
do it for the sake of our country. I do not know if any of you have had
that same reaction.
Has this place been a fun place? No. Is it going to be a fun place?
No. Do we have heavy lifting? Yes. Are we deep in the hole? You darn
right, and we are clawing our way to get out of the hole.
Mr. LONGLEY. I think you are making an outstanding point. This is one
of the reasons I went back and looked back over these 16 years of
legislation. Literally, of these 16 acts, at different times the
Democratic Party supported 12 of the 16 acts, and the Republican Party
supported 12.
Mr. SHAYS. Both parties, not just one.
Mr. LONGLEY. That is exactly it.
Now, you look in the early 1980's in spending, 1981, spending went up
almost 15 percent; 1982, 10 percent; 1983.
Mr. SHAYS. The point is we are not blaming parties. But now we have a
chance.
Mr. LONGLEY. Not only, this is particularly with respect to the
current debate and the impasse between the administration and the
Congress, and clearly, as the gentleman from Michigan [Mr. Smith]
pointed out, the President has vetoed welfare reform. He has vetoed a
balanced budget. He has vetoed literally every significant initiative
that we are trying to bring to the table to deal with this crisis, and
the easiest thing in the world for us to do would be to pretend the
crisis does not exist, to just cook up some, come to some agreement
even though philosophically we are miles apart on some issues, we come
to some common ground, and we have editorial writers across the country
hailing our bipartisanship, the television crews showing up and just we
are all standing there smiling at each other and patting each other on
the back.
But the bottom line is, when we leave here, our kids are paying the
bill. I am not willing to do that.
Mr. NEUMANN. That is really the point. We keep talking about the debt
and deficit. It is not about the debt and the deficit. It is about a
moral and ethical responsibility that our generation has to stop doing
what has been going on for the last 15 or 20 years. This is a moral,
ethical, it is a values problem in our country. What kind of a society
would be willing to spend their children's money? Ask yourself, what
kind of society would do that? It is a moral and ethical responsibility
to stop the growth of this debt.
Mr. SMITH of Michigan. If the gentleman will yield, I would suggest
this borrowing obscures the true size of Government. You know, if
people have to pay their taxes to afford this huge bureaucracy, they
would be saying, wait a minute, but we have somehow, politicians have
discovered if they borrow this money and say somehow, well, we will pay
this back later, our kids and our grandkids are going to have to do
it, but what we have done is we have had a Government become larger and
larger, and the bureaucracy so big now that almost half my time as a
congressman is spent being an ombudsman to help people move through
this political maze of this huge overbloated Government. If we stop
borrowing and people have to start digging into their pockets for this
size of a Government, they will say, no, wait a minute.
Mr. LONGLEY. We cannot even go, to go just one step beyond what you
are saying, most people cannot even afford the tax burden now, even
though we are not even paying for the entire Government. That is the
difficulty we are trying to confront.
Mr. NEUMANN. I would just add, if you would be interested, I have one
more chart left.
Mr. SMITH of Michigan. We like your charts.
Mr. NEUMANN. Would you like to know how much more an American family
of four would have had to pay in taxes over the last 15 years in taxes
in order to pay their share of what the Government spent? If the
Government were to break even over the last 15 to 20 years, an average
family of four in America would have had to spend or pay to the Federal
Government $76,000 more in taxes over that period of time if our
generation had paid for what they bought through this.
Mr. SHAYS. That is a great illustration of why it did not happen.
There is no way a family of four would have tolerated paying $76,000.
Mr. SMITH of Michigan. Now, the little young tots in that family of
four are going to be obligated to account for that money later on in
their lives. No. 1, it is immoral. No. 2, balancing the budget is going
to strengthen the economy.
Mr. NEUMANN. That is what this chart is showing. This is showing our
total debt as of right now. This is the amount they borrowed per
person, $19,100 for every man, woman and child in America, which has
been borrowed basically over the last 15 years. The kicker on this
chart is really the bottom line. The bottom line is our family of four
today has to pay $440 a month just to pay the interest on the Federal
debt. It is not for any goods or services, not for Medicare, Medicaid,
or any of the rest. The family of four today has to pay $440 a month
just to pay interest on the Federal debt.
I always like to reduce it down to what the actual impact is on my
[[Page H1766]]
friends and our constituents across our districts, and that really is
what it translates into. A lot of times they say, ``I don't pay that
much in taxes.'' I would like to remind, every time we walk in the
store and buy a loaf of bread, that store owner makes a small profit on
the loaf of bread bought in the store. When the store owner makes a
small profit on it, some of that profit comes in here to the Federal
Government in the form of taxes. When it is all added up, they are
paying, in fact, paying that $440 a month.
Mr. LONGLEY. This comes back to the point the gentleman from
Connecticut [Mr. Shays] made so well several minutes ago, that the
easiest thing in the world any of us can do is say, well, we are going
to create a program. Sure, we will give you more money, even though you
are getting increases and spending, we will double the rate of
increase. We can all look like heroes until the American public has got
to show up with the tax dollars to pay for it or to deal with the mess
that we have created.
Mr. SHAYS. One reason I like my community meetings, I call it my
community test, if I have got to go to my community in a community
meeting, I have got to tell them what we are doing, and if it does not
pass, you know, if I cannot pass it through my constituents in a
community meeting, I do not vote for it. There is no way I can justify
seeing what has happened in the last 22 years, and my constituents have
told me almost to a person, ``You get a handle on this Federal budget.
You stop the obscene annual deficits.'' Revenue is here, spending is
here, at the end of that year the deficit is added to the national
debt; they want us to end it. That is what we are going to do.
I mean we have three objectives. We want to get our financial house
in order and balance the Federal budget. We want to save our trust
funds, particularly Medicare, from bankruptcy, and we want to transform
this social and corporate welfare state into a true caring opportunity
society. We are not going to give up.
I noticed, you know, I just am in awe of my freshmen. I mean, I wish
I could be an honorary freshman. I know you all have taken some
criticism, but my take on what you have done is you basically watched
what we have done and said, ``I can't believe it.'' Men and women have
run and owned businesses, and you said, ``You know I am going to end
this.'' You do not care if you get reelected, and that is your
strength. If you do not care whether you get reelected, you are going
to do the right thing, and I tell my people, thank God for the
freshmen.
Mr. NEUMANN. If the gentleman will yield, we are nearing the end of
the time. I want to close my part by reminding us all this is still the
greatest country in the world. Sure, we have got some problems. As a
country, we have had problems before. What is going on out here right
now is a new era in America, and we have started down the right path
here toward restoring this great country of ours.
I have 100 percent confidence that we together, the people that are
here, along with the American people out there, are going to restore
this great Nation of ours. I have a lot of faith in the future of this
country. I know we are going to make a great country to pass on to our
children and to our grandchildren.
Mr. SHAYS. I just would like to thank both of you. You claimed the
time, and I thank the gentleman from Maine for doing that and just say
that we do live in the greatest country in the world, and we are going
to save it. I mean, we are not going to listen to polls. The polls are
not going to guide us. We are going to do the right thing. If Abraham
Lincoln had listened to polls, we would not be one Nation under God,
indivisible. We would be two nations very much divided. We are going to
stay one Nation, and we are going to pursue this.
Mr. LONGLEY. Just to end on that note, I think it is easy to forget
we as a country have faced greater crises in the past. We are going to
face greater crises in the future. What we have learned as a country,
and particularly I know the senior population understands this, the
generation that confronted the depression, that confronted World War
II, that put an end to the world fascism and another generation that
put an end to world communism, yes, we have had some big crises to deal
with. We have identified the problem. We have looked at the options. We
have acted to get the problem dealt with, and we move on.
I am very confident that we are going to deal with the issues we need
to deal with and that the public realize that it is in their best
interests, and we are going to move forward.
I thank the gentleman from Wisconsin [Mr. Neumann], the gentleman
from Connecticut [Mr. Shays], and the gentleman from Michigan [Mr.
Smith] for your participation tonight.
____________________