[Congressional Record Volume 145, Number 156 (Monday, November 8, 1999)]
[House]
[Pages H11697-H11700]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                               THE BUDGET

  The SPEAKER pro tempore (Mr. Simpson). Under the Speaker's announced 
policy of January 6, 1999, the gentleman from Connecticut (Mr. Shays) 
is recognized for 60 minutes.
  Mr. SHAYS. Mr. Speaker, this is the first time I think all year I 
have taken a special order. I have done a number in past years, but I 
am very grateful to have the time to do this.
  Before I discuss the budget, which I intend to talk about in my 
special order, I would just make the comment that quite often the 
criticism on the other side of the aisle is that we spend too much or 
we are not spending enough. And it is really important, I think, for 
the other side of the aisle to decide on one of their arguments and 
then we can have an honest debate about it. We want an across-the-board 
1 percent cut, and yet we are hearing on the other side of the aisle 
that we should not make that reduction; yet we are also hearing that we 
are spending too much.
  Before I talk about my budget, we have the chairman of the Committee 
on Education and the Workforce, the gentleman from Pennsylvania (Mr. 
Goodling), really the most informed and most dedicated person on the 
issue of education, and I would like to give him an opportunity to make 
some comments on what we are doing in education.
  Mr. GOODLING. Mr. Speaker, I thank the gentleman for yielding to me.
  One of the most frustrating experiences I have had in my entire 
career in the Congress of the United States is to see us, and in very 
well meaning efforts, budget billions of dollars and then appropriate 
billions of dollars to try to reduce the gap between the advantaged and 
the disadvantaged students in this country and to sit there and realize 
that no matter how well meaning the attempt was, in many instances it 
was wrong from day one.
  We know that, and knew from the very beginning, that the manner in 
which we were trying to deal with Head Start was not going to give the 
youngsters a head start. We knew very well that it became a poverty 
jobs program instead of a program to make sure that disadvantaged 
youngsters and poor youngsters had an opportunity to become reading 
ready before they went into a failing 1st grade experience.
  We did the same thing with Title I, more than $120 billion. Again, we 
realized in many instances that that became a poverty jobs program 
rather than a program to reduce the achievement gap between advantaged 
and disadvantaged youngsters. And, in fact, unfortunately, we even have 
examples of where the opposite happened; that the gap even widened.
  That is why it is so difficult for me now to watch us make the same 
mistake with the 100,000 teacher idea that is presented by the 
administration. I am not certain that my colleagues realize that in the 
first group where the contracts were let, it is somewhere between 
21,000 and 29,000 new teachers, we cannot quite find out exactly how 
many it is, but there was no accountability whatsoever. The only 
requirement was a reduction of class size.
  Well, everybody knows that if a parent has an opportunity to have 
their child in a classroom with a quality teacher with 28 students, or 
they have an opportunity to have their child in a classroom with 18 
students with mediocrity leading that class, parents are going to 
choose the quality teacher. But every one of those grants that went 
out, nothing was asked in return in relationship to we will improve the 
academic achievement of all of these students, the most needy students, 
the most disadvantaged students. They just had to reduce class size.
  So we came to the floor of the House and, with a bipartisan effort, 
passed the Teacher Empowerment Act. And in that act we said the first 
responsibility, the major responsibility, is to reduce class size, but 
do not do it unless a qualified teacher can be put in that classroom; 
and do not do it if there is no classroom to put the new teacher in. As 
a matter of fact, if it must be used, use it to improve the quality of 
the teachers presently in the system.
  And today the headline in the New York Daily News is ``Not Fit to 
Teach Your Kid. In some city schools 50 percent of teachers are 
uncertified.'' And all we are doing is adding to that lack of 
certified, lack of qualified teachers in the classroom by merely saying 
take this money, reduce class size, it does not matter who it is that 
is teaching in that classroom.
  Now, I would imagine that of this 50 percent there are probably 25 
percent of those people who could become very excellent teachers in a 
very difficult situation if they could divert money to properly prepare 
and train them to teach. One of the requirements the State says is that 
we will require that, for instance, a high school teacher has to be 
certified to teach the subject they are teaching. Big deal. I would 
hope so. I would hope a math teacher or a science teacher is certified 
and qualified and knows how to teach math and knows how to teach 
science.

  But all we do with the 100,000 teachers is say they must reduce class 
size. It does not matter where there is inequality. And that is a 
tragedy, because we know that cannot work. We know that they have to 
have the flexibility to use some of the funds to properly prepare the 
teachers that they have. This city would not have 50 percent 
uncertified teachers. They do not do that because they want that to 
happen, they do it because they do not have qualified teachers and they 
cannot get certified teachers.
  And, of course, just being certified does not mean they are 
qualified. However, what it does mean is that the State of New York has 
said that the minimal requirement they should have before they go 
before a class as a teacher is what the State has outlined. These 50 
percent do not have those minimal qualifications.
  So I would hope, and again this is a budget issue, this is an 
appropriations issue, but, gee, let us do something about closing that 
gap between the advantaged and the disadvantaged. Let us not just give 
lip service to the fact that if somehow or other we reduce class size 
all of that will happen.
  The most important person in a child's life is, first, the parent; 
second, is a quality teacher; and, third, and we do this in Even Start, 
those who are parents that are not able to prepare their child for a 
good learning experience by the time they reach first grade we also say 
we need to help make sure that that parent is the child's first and 
most important teacher.
  So as we go through this budget debate, as we go through this debate 
in relationship to appropriations, I hope that we will think about 
children, and I hope that we will realize that the programs have not 
worked. And all the auditors have ever done is say the money went to 
the right place, but they never said we accomplished anything to change 
that achievement gap.
  So again I appeal to the administration. Let us talk in terms of how 
we make sure that every teacher in that classroom is a qualified 
teacher so every child has a chance to succeed. And I thank the 
gentleman for yielding to me.
  Mr. SHAYS. It has been my pleasure. Mr. Speaker, when I was elected 
in 1987, I had had 12 years, actually 13 years experience in the State 
House in Connecticut, where I was the ranking member of both the 
appropriations committee and the finance committee. And it amazed me as 
a member in the State House how Members in Congress could ignore the 
requirement to get our country's financial house in order. On the State 
level we simply had to stay within a budget, we had to stay within the 
flow of funds that presented themselves in terms of revenue.
  We are in an extraordinarily interesting time because we have seen a 
lot happen since 1987 when I was first elected. When I was first 
elected, I joined forces with my colleague, the gentleman from Ohio 
(Mr. Kasich), who really led the fight as a minority member at the 
time, who started to present ways to slow the growth of what we call 
mandatory spending, which are what others refer to as entitlements and 
to actually cut what government spends.
  When we look at our Federal budget, only one-third is what we vote on 
each

[[Page H11698]]

and every year. Over 50 percent are actually on automatic pilot, unless 
we change the requirements. If a program fits the title, they get the 
money, whether it is Medicaid, Medicare, Social Security is a 
retirement system, but if an individual puts into the fund, they are 
entitled to certain benefits, and there are other entitlements as well. 
So we have about one-third of the budget that we actually vote on and 
two-thirds we are just on automatic pilot.
  And everyone seemed content to allow that to happen. Part of that 
automatic pilot was interest on the national debt, which is almost 14 
percent of our overall budget.

                              {time}  2130

  It was interesting as Congress pre-1987 had adopted Gramm-Rudman. 
That was a program that was adopted before I was elected. The 
interesting thing about Gramm-Rudman, it basically said you had to stay 
within certain budget caps, except it only was on that one-third of the 
budget. And so what Members started to do is they could not stay within 
the budget caps of what we vote on in defense and nondefense budgets, 
the 13 budgets that we work on, so what they did is they started to put 
things into the entitlements and make the automatic pilot grow even 
faster and faster.
  I would like to go through certain budget charts and I would like to 
thank my own staff member, Peter Carson, who is my AA, or what we refer 
to as an AA is really your chief of staff and serves with me on the 
Committee on the Budget as well as Dick Magee who is on the Committee 
on the Budget as a staff member and who helped me prepare these charts. 
I would like to go through 10 charts and describe what has happened 
since 1992 and what we project out to the year 2009.
  What is interesting to me is that when I was elected early on in 
1987, we were looking at deficits as far as the eye could see. But just 
before you had a new Republican majority, the estimates for what that 
deficit would be are shown in the lower red line on this chart to my 
right. We were looking at deficits in the estimate in 1992 of $291 
billion, then going to $310 billion, $291 billion, but by the year 
1999, the year we just concluded, we were looking at deficits of $404 
billion. And in the budget we are in the process of adopting, deficits 
of $455 billion, just in that one year. In other words, $455 billion 
more money going out than coming into the Federal Government.
  When we made the estimates in 1995, we were still looking at 
deficits, the middle red line, as far as the eye could see, not above 
the line in which we have more revenue coming in than going out. Even 
in our estimates in 1997, just before we adopted the balanced budget 
agreement, we were looking at deficits of $108 billion, $124 billion, 
$120 billion, $147 billion, ad infinitum. Only deficits. We passed an 
historic budget agreement in which we slowed the growth of entitlements 
and we cut government spending. From that, we started to see a 
significant change.
  This second budget chart just shows you the change in revenue 
estimates based on October 1999 and January 1999. The blue line was the 
estimate in January 1999. Even then, just within a year, we are seeing 
a significant increase in the amount that we anticipate, just over a 
change of 10 months. Revenues are coming in at a much greater rate. 
They are coming in for a number of reasons. First and foremost, we have 
an extraordinarily well educated populus that compete with anyone in 
the world. The cold war is over and admittedly the world is a more 
dangerous place but we are able to focus more now on economic 
competition with our trading allies and we are finding that we are 
quite able to compete. And so revenues are coming in at a much greater 
rate because of that. But it is also coming in because Congress in 
particular, and this new Republican majority, quite frankly, put the 
emphasis on getting our country's financial house in order. We started 
to reduce our deficits, which started to reduce the interest payments 
that we have to make, which started to help contribute to lowering 
interest rates in general and helping to increase the employment rate 
and decrease the unemployment rate.
  This next chart illustrates why this Republican majority is concerned 
about taxes. Revenues are coming in at an extraordinary rate. People 
have become quite successful, our businesses are able to compete with 
the best in the world, and we are seeing a lot of small businesses that 
are generating awesome economic activity and even our large businesses 
have become much more efficient and they are able to produce more at a 
cheaper cost and able to pass on some of that cost savings to consumers 
and also able to make a profit and to pay their employees more who in 
turn can buy more goods. But what is of concern to us is in 1945, just 
at the end of World War II, we had the gross domestic product, revenues 
constituted 20.4 percent of all of the gross domestic product of our 
country, 20.4 percent were coming into the coffers of the Federal 
Government. In 1950, that went down to 14 percent. But you can see that 
it has gotten back to its all-time high of 20.7 percent, and we 
anticipate that it is going to continue to grow and grow. The question 
is, what is going to happen to that revenue?
  Now, another chart that illustrates our concern with taxes are the 
fact that in 1947, if you took all of the Federal, State and local tax 
revenues, it accounted for 21.7 percent of our gross domestic product. 
But our Federal, State and local revenues now constitute 31.2 percent. 
Again, our concern is with the increase in revenue that is coming to 
both the Federal, State and local government, what is to happen to that 
revenue? Are we going to spend it and make all three governments larger 
and larger and larger? Or are we going to look to return some of that 
revenue back to the taxpayers who are paying that?

  The next chart that I want to show is a chart that illustrates 
Congressional Budget Office estimates since 1992 to the year 2009 of 
the total amount of receipts coming in with the total amount of 
outlays, the money going out. The key point is the year 1998, in which 
for the first time since 1968 that we had more revenue coming in than 
going out. Now, since 1960, the Federal Government has been spending 
Social Security reserves. It has been spending it on mandatory spending 
and it has been spending it on the appropriations expenditures that we 
have, the 13 budgets. We have been taking since 1960 Social Security 
money and spending it. Basically it is being used to disguise the 
overall debt of our country.
  But the first thing we had to deal with before we even dealt with 
that was to just make sure that we had an economist's view of a 
balanced budget, which was more money coming into the Federal 
Government than going out. Not only were we spending Social Security 
money but even with the Social Security money, we were still spending 
more than was coming in.
  So our first objective in the balanced budget agreement of 1997 was 
to reach that point, that point in which receipts started to overtake 
outlays. We had a 5-year plan to do it. We passed it in 1997 and we 
anticipated by the year 2002 that we would finally reach that point in 
which revenues would exceed our outlays or our expenditures. But it 
happened in the first year of the balanced budget agreement. In other 
words, revenues came in at a faster rate than even we anticipated. 
Again, I raise the question, what is to happen to those revenues? Do we 
spend them? Do we pay down debt with them? Or do we return them to the 
American people by cutting taxes?
  This chart is really one of the ones I find most interesting, at 
least in trying to explain why in the world would this Congress want to 
cut taxes and why by such a large amount of money. The Congressional 
Budget Office anticipated, and so did the Office of Management and 
Budget of the President, that in the next 10 years, we would have $3 
trillion more money coming in to the Federal Government than going out. 
Both OMB, the Office of Management and Budget, and CBO, the 
Congressional Budget Office, both of them agreed that of that $3 
trillion, $2 trillion was Social Security money, and $1 trillion was 
true surplus. In other words, no longer having to spend that Social 
Security money since 1960, even then we would still have a surplus over 
the next 10 years of $1 trillion, or almost $1 trillion. Admittedly, in 
the first year, it would be $147 billion, in the year 2000, rather, 
$147 billion of Social Security reserves that we would

[[Page H11699]]

have and not spend, and then $14 billion that was a true tax 
overcharge, in other words, more money coming in. What is to happen to 
that $14 billion? What is to happen to the $38 billion in the year 
2001? What is to happen to the $28 billion in the year 2002? These are 
excess moneys, what I call a tax overcharge. We are taxing people more 
than we are actually going to spend. And then in the year 2005, $92 
billion. And in the year 2006, $129 billion. And then 2007, $146 
billion; 2008, $157 billion; 2009, $178 billion. What is to happen to 
that? That amount of money that I have mentioned is marked in red. It 
was our view that most of it should be a tax cut, we should return it 
back to the American people.
  Now, if I was a dictator, not even President, but if I was a 
dictator, what would I want to have happen? I would want to take all of 
this tax overcharge and I would want to pay down debt. That would be my 
first choice. But I happen to believe that if it is left on the table, 
it is going to get spent. In fact, the sad part of the story is that is 
actually what is starting to happen, because the President vetoed our 
tax cut. So you had $3 trillion, $2 trillion of it is truly for Social 
Security. What did we do? We took all of this money in this area here, 
the Social Security surplus, and we took that money and we did not 
spend it, we paid down debt with it. We reduced the debt of the United 
States owed to the American people and to businesses and to foreign 
interests that have helped fund our debt and we just started to pay 
down those obligations. That is what we want to do, $2 trillion of it. 
It was this $1 trillion that we debated.
  Now, our Republican majority decided that we would provide a tax cut 
of almost $800 billion, which is about 80 percent of the total amount 
of what we call the true surplus.
  I will illustrate it in another chart. This chart again illustrates 
the total amount of surplus, and in red is the amount for a possible 
tax cut. That is what is available. That is what is the true surplus. 
This part here is the money that we want to reserve for Social 
Security. The interesting thing is that the budget that we just 
concluded, we came so close for the first time in not spending Social 
Security reserves. In fact, the Congressional Budget Office determined 
that we actually had a true surplus of $1 billion. But the Office of 
Management and Budget, the office out of the White House, decided that 
they would hold $2 billion more in reserves, and by doing that, they 
are saying we are still spending $1 billion of the Social Security 
surplus. They determined that by simply deciding to hold on to $2 
billion more in reserves. But whatever number you are using, whether we 
use the Congressional Budget Office that said we have truly for the 
first time since 1960 not spent Social Security, or even using the 
President's number of only spending $1 billion of it, in other words, 
even using the President's office, we have had a surplus of $123 
billion, a true surplus of $123 billion. Actually, I want to say it 
differently. We have had a Social Security surplus of $124 billion, and 
a unified surplus of $123 billion. The White House says we are still 
spending $1 billion of Social Security money but the Congressional 
Budget Office says we have spent not $1 billion but actually have saved 
$1 billion.

  Why would we want a tax cut? And how would we compare with the 
President? When the President presented his budget the beginning of 
this year, he did not want a tax cut. He wanted a tax increase.

                              {time}  2145

  He actually wanted a net tax increase of $52 billion and, over 10 
years, it would be $96 billion. So one can imagine our concern when we 
start seeing more surplus coming in, we are looking in 10 years of a 
true surplus of $1 trillion; and the President, instead of wanting to 
return that to the American people still wants to spend $52 billion 
over 10 years, have a tax increase of $52 billion over 5 years and $96 
billion over 10 years. He wants a tax increase; we wanted a tax cut.
  Now, our tax cut over 10 years, admittedly, would be $792 billion, 
about 80 percent of the protected surplus. Over 5 years, it would have 
been $156 billion. The reason we want that tax cut is, if we do not 
have a tax cut, it will be spent. It will be spent because Congress, 
even some of my colleagues on my own side of the aisle have programs 
they want to spend money on, and if it is left on the table, it will be 
spent.
  Why do I know it will be spent? Because it has been in the past. We 
have had a budget agreement in 1997 where we had budget caps, but even 
before the agreement in 1997, we had the pay-go agreement with 
President Bush that said that one could not increase an entitlement 
unless one found another way to pay for it; one could not have a tax 
cut unless one found another way to pay for it.
  Now, our problem was not the same in 1990 because we still had a 
deficit. We want a tax cut because we now have surpluses.
  But this is my concern. And one will notice that there is a sharp 
increase in what happened in the budget of 1999, the one that just 
concluded. And that sharp increase occurred because a year ago at this 
time, the President of the United States, just before the congressional 
elections, decided that he would not agree to a budget unless we spent 
more. And sadly, too many on both sides of the aisle concurred with the 
President and agreed to spend more. We have never been within the 
budget caps because Congress has declared emergencies and Congress has 
done other approaches that have enabled us to go over the budget caps.
  My big concern is this number right here and the trend line. Now, 
this is where we will be in this new budget agreement; and the question 
is, will we then go down and actually cut spending, or will it continue 
to rise? The one value to the budget caps have been that there has been 
some uniformity at least staying close to them. But sadly, a year ago, 
when the President demanded more spending, he got it. So why would I 
want a tax cut and why would other Members want a tax cut? Because if 
the money is left on the table, it is going to be spent. The sad point 
is that it is already being spent. All the money that we had reserved 
for a tax cut in our $800 billion tax cut that we sent the President 
and he vetoed is now being spent. It is not there for a tax cut.
  Let me just show one last chart. This is a good news story, for the 
most part. It basically is showing what is happening to our national 
debt. Our national debt is starting to level off and it is starting to 
level off because we have surpluses, and it is starting to level off 
because we are going to use the Social Security surpluses and pay down 
public debt. Our debt to the trust funds continues to rise, but our 
debt, our public debt is going to fall and continue to fall because we 
are using the money from the trust funds to now at least pay off debt 
until we can reform Social Security.
  I have a number of concerns about where we are at this point. The 
good news is that 10 years ago we had extraordinarily large deficits 
and when we looked at our estimates, those deficits were high then and 
they were looking to be even larger. We elected a new 
Republican majority. And I say new Republican majority because this was 
the first Congress that wanted to look at entitlements and slow their 
growth and wanted to cut some spending. And the end result has been 
that we have seen actual surpluses take place.

  My concern is that we not begin to designate too much emergency 
spending that again allows us to go over the caps, that we do not have 
too many advanced appropriations that begin to appropriate money; the 
Committee on Appropriations appropriates money, but not spend out over 
13 months instead of 12, and that we do not do other items that 
ultimately make our efforts to balance the budget next year more and 
more difficult.
  The bottom line, we are getting our country's financial house in 
order. We are seeing an economy that is thriving; we are seeing more 
and more revenue come into the Federal Government, and what the 
American people are going to have to decide is what do we do with those 
surplus monies.
  My hope, my prayer, and my votes are going to be to pay down the 
national debt. But if that is not going to happen, then it must be 
returned to the American people in tax cuts, because if it is not 
returned to the American people in tax cuts, then it will be spent as 
we are seeing happen right now.
  What I would like to place ultimately the greatest emphasis on is we 
have

[[Page H11700]]

been using Social Security funds since 1960, and we came so close this 
past year in not spending any Social Security money, according to the 
Congressional Budget Office, we have not according to the President, 
given the fact he took $2 billion out in reserves, and we have spent $1 
billion of it. But next year, we intend to spend no Social Security 
money. We are going to use all of that to pay down the public debt. It 
is not going to be used to pay for programs. We are going to ultimately 
reduce our total debt.
  The question is, what happens to that true surplus, above and beyond 
Social Security? Will it pay down public debt? Will it be returned to 
the American people in tax cuts, or will it be spent? And sadly, while 
we are in next year's budget not going to be paying, using Social 
Security money to balance our budget, we are not going to be using that 
money, I am afraid that the money that we had reserved for taxes is now 
being spent, and it is being spent frankly, in large measure, because 
my colleagues on the other side of the aisle are critical with our 
efforts to cut spending, even though they say we are spending too much 
in certain areas, they have opposed any efforts to try to cut spending 
or slow the growth in spending.
  Mr. Speaker, if we cannot cut spending, if we cannot control the 
growth in government spending, there will be no money for tax cuts. It 
will all be spent.

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