[Congressional Record Volume 146, Number 33 (Wednesday, March 22, 2000)]
[House]
[Pages H1251-H1257]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
RESPONSIBLY MANAGING OUR NATION'S DEBT
The SPEAKER pro tempore. Under the Speaker's announced policy of
January 6, 1999, the gentleman from Minnesota (Mr. Minge) is recognized
for 60 minutes as the designee of the minority leader.
Mr. MINGE. Mr. Speaker, this evening I wish to address this body with
respect to the problem of our Nation's debt and how we responsibly
handle this debt in a time of budget surpluses. We are indeed fortunate
as Americans to have the robust economy that we have experienced over
the last 8 years. It is unprecedented. We have had the strongest
sustained period of economic growth in the 220 year history of the
United States of America.
At the same time, we have a record debt. I would like to begin my
remarks by sharing with my colleagues an anecdotal story that is
commonly used in my home State of Minnesota and it refers to two
fictitious individuals named Oley and Lena. I happen to be of
Scandinavian ancestry and one of my grandfathers was named Oley, so I
do not know if it is my grandfather, but in any event, the story goes
as follows.
Oley got up one morning and Oley went outside to do his business in
the outhouse. And as he pulled up his bib overalls, a couple of
quarters fell out of his pocket and down into the hole. Well, Oley was
disgusted. He took out his wallet, took off his watch and he threw them
down the hole as well. Oley went back in the house and did not have
much to say and Lena said after a while, well, Oley, what is wrong? Why
do you not talk to me?
{time} 1945
Olie just said, humph. She kept pressing him. Finally, Olie shared
with his wife Lena the account of what had happened out at the
outhouse.
Lena said, well, Olie that was a dumb thing to do. Why did you throw
your watch and wallet down the hole? Olie said to Lena, well, you did
not expect me to go down after 50 cents, did you?
Well, this may be humorous and it may appeal to grade school
children; but on the other hand, it holds a certain kernel of truth
with respect to the problems that we face out here.
We struggle with the losses that we have had as Americans, the losses
in terms of an enormous national debt. We try to figure out what to do
about it. Sometimes we think that by creating a little bit more debt
and then going down and rescuing what we just created that maybe we
have solved the overall problem. But I submit that is not the case. A
lot like Olie, we go back into the house, and there is a certain order
to us, and we really do not have any more to show than before we
started.
I would like to just use a couple of charts here to illustrate this
problem with the accumulating national debt, and then I know I have
some colleagues here; and I would like to make sure that they join in
the colloquy here this evening and that we fully inform the other
Members of this body as to the gravity of the situation and the
opportunities that await us.
This first chart shows the accumulation of the debt that we have at
the Federal level in the United States. This goes back to 1980 when the
debt was approximately $1 trillion, which would be about $4,000 at that
time for every man, woman, and child in our country.
As my colleagues can see, there is a tremendous amount of red ink. By
the time we get to 1998, the debt has exploded to $5 trillion. It has
expanded by more than 500 percent. Now it is up to about $5.7 trillion,
or about $20,000 for every man, woman, and child in our country.
So it is important for us as Americans to understand that, when we
talk about a balanced budget, it does not mean there is no debt.
Indeed, the debt is unprecedented. When we think of $20,000 for every
man, woman, and child in our country, we are talking about a very
serious situation. It is not just the humor of an Olie and Lena story.
It is important for us to understand the difference between the words
``debt'' and ``deficit.'' This next chart shows the birth and the sort
of the difference between the debt and the deficit. Now, remember that
we had that $5.7 trillion debt. The deficit is how much we have gone
into debt each year. It is an annual figure.
Again, if we go back to, in this case, we are going back to the
1970s, 1969, we had a little bit of a surplus. That was in President
Johnson's administration. Then in the 1970s, during President Nixon, we
have some losses. We see the yellow. During President Ford's
administration with the green, we have some more losses. President
Carter's administration, now we can call it red ink. It is getting red.
During President Reagan's administration, we have an enormous amount of
red ink. During President Bush's administration, we can see the
turquoise.
So these are deficits. Each year we are accumulating more debt. That
is what leads to the $5.8 trillion we talked about.
Here is President Clinton coming in. We can see that we have a large
deficit the first 4 years. The fifth year, it is a fairly modest size
deficit. Then finally we begin to show some surpluses here in 1999 and
2000.
So this talk about a surplus has to be understood against the fact
that we have an existing $5.7 trillion debt. We cannot be confused by
the difference between the debt and the deficit. It is kind of like,
Mr. Speaker, we have got to go back to budgeting 101.
Mr. Speaker, I yield to the gentleman from Texas (Mr. Stenholm) to
continue our discussion because there are many more developments here
that are important for us to consider if we are going to do a
responsible job as Members of Congress in developing a budget for the
year 2001.
Mr. STENHOLM. Mr. Speaker, I thank the gentleman from Minnesota (Mr.
Minge) for yielding to me. I thank him for his leadership on the budget
and for his calling this special order tonight to talk about deficits
and debt.
The Blue Dog budget that will be hopefully eligible or allowed to be
considered tomorrow is one in which we emphasize paying down the debt.
We are going to hear a lot of rhetoric perhaps later tonight, and I
know we will tomorrow, about surpluses.
One thing that everyone needs to understand, Mr. Speaker, is when we
are talking about $4 trillion in projected surpluses, they are
projected. The lion's share of those surpluses are projected to occur
in 2006, 2007, 2008, 2009 and 2010. Now, who among us can predict
tomorrow much less predict 5 years, 6 years, 7 years from now?
That is why the Blue Dogs have taken the position for the last 2
years that the conservative thing to do with projected surpluses is to
apply as much of them to our debt as we can. That is the conservative
thing to do just in case they do not materialize.
That is why we have suggested that any non-Social Security, and let
me emphasize that because the record will clearly show that both sides
of the aisle are now dedicated to not touching Social Security
surpluses or Social Security trust funds, and that is good. That is
positive. It is the non-Social Security Trust Fund or surpluses or
dollars yet to be achieved that we are talking about.
Just for rounding off purposes tonight, we are talking about $2
trillion. Many people are going to contend that that is your money,
meaning the American people's money; and, therefore, it ought to be
returned to you. But some of us will be contending that it is also your
debt.
There are charts that the gentleman from Minnesota (Mr. Minge) has
just shown, the one that stands to his right right now showing the
build up of the debt and then the building of the debt and showing that
we now owe approximately $5.6 trillion.
Now I ask all of you who are so exuberant about a tax cut so we might
return it to those of you earning it today, what about your children
and grandchildren? Why not take this longest sustained economic
expansion in the history of our country that has occurred in the last 7
years, why not take this period in which a lot of folks are doing very,
very well and use this opportunity to pay down some of that debt which
this generation has built up?
That is the message that we are going to continue to hammer on. We
think it makes sense. We think it is the conservative thing to do. We
do not
[[Page H1252]]
think there is anything conservative about giving a tax cut and
spending our children and grandchildren's future now, particularly when
these surpluses may not occur.
This is one thing that has really bothered me and why I have on
occasion said that the trillion dollar tax cut proposed by some is the
most fiscally irresponsible bill to come before the House of
Representatives in my 21 years here. Many people almost get to fighting
with me when I say that because they say I can point to others. I say,
no, you are misunderstanding what you are saying. It is not the current
effect of the tax cut that worries me. It is 2014. It is when this debt
to our Social Security retirees, the baby boomers, are about to retire.
It is in 2014 when we are going to see the surpluses built up by
Social Security suddenly evaporate, and then that Congress in 2014 will
either have to increase taxes or reduce benefits, promised benefits to
that generation.
Now, to me that is fiscally irresponsible. It is why we are saying
that, when we look at tax cuts that start slow and then explode in 2010
to 2014 to 2020 at exactly the same time that the economy to pay off
Social Security is going to require tremendous additional dollars, it
is irresponsible for this Congress in 2000 to have a tax cut that
ignores that debt and that deficit that will occur in 2014. No one
disagrees with that.
This is why, again, going back to the short term, and that is
tomorrow and the budget, why the Blue Dogs have proposed a budget that
will pay down the debt held by the public by 2012. Now that may not
sound like much compared to 2013. The Republican substitute says that
they will pay it down by 2013. We say we will do it by 2012, one year.
But here is the significant thing about our deficit reduction
package. We retire over 30 percent of the debt held by the public
within 5 years, and 80 percent of the debt held by the public would be
retired within 10 years because we have a plan that actually reduces
the debt.
I believe it was the idea of the gentleman from Minnesota (Mr. Minge)
who came up with the 50/25/25. I do not remember. But I think it was.
He came up with this proposal originally when we started down this
path, taking 50 percent of any surpluses and using that to pay down the
debt.
Mr. MINGE. Mr. Speaker, reclaiming my time, I know we struggled with
this question, what is an appropriate balance. I think that most of us
in our Blue Dog Coalition Group felt that our responsibility is first
to our children and grandchildren; and that reducing the debt and the
interest burden on the next generation is critical; and that our
generation has had the benefit of many of these Federal expenditures.
We should not demand that we continue to eat dessert indefinitely and
that part of what we needed to do was to pay down the debt. So the
first 50 percent there. Then we also recognize that there are some
priority programs, especially for young people, for veterans, other
sectors of our society that are struggling; and, finally, that some tax
relief is needed. We have some inequities in the tax code.
Simplification should be done, and these adjustments in the tax code do
affect Federal revenue. So we try to strike a balance of that.
One thing that we have noticed is we are joined by the gentleman from
Mississippi (Mr. Taylor). I know that he has fought long and hard with
respect to this challenge of how we responsibly deal with this era of
surplus.
Mr. Speaker, I yield to the gentleman from Mississippi (Mr. Taylor)
to give him a chance to share his views. I know that he is very
forceful on this subject.
Mr. TAYLOR of Mississippi. Mr. Speaker, I would hope that one of the
thoughts I could leave with the American public tonight is that, yes,
Congress did balance the budget last year; but there was a lot of
trickery in the budget to achieve that goal.
One of the tricks that I regret the most about that budget that was
done in order to balance it was the fact that the troops have
traditionally been paid on the last Friday of the month. As the
gentleman from North Carolina (Mr. Jones) pointed out earlier, we have
a lot of troops who are just getting by.
It is interesting to note that a higher percentage of people in
uniform are married than the general public, about 60 percent of them.
Many of those young couples have instant families, two, three, four
children within a very short period of time. They tend to be the ones
who end up on food stamps because they simply are not getting enough in
their pay and in their benefits.
So I found it particularly distressing that, in the Republican budget
this year, that in order to balance the budget, they delayed the pay
raise for the troops from Friday, September 29 to October 1, the
following Monday.
Now, for a Congressman who is making very good money, over 130,000 a
year, delaying our pay for 2 days really is not a big deal. But when
one is an E4 or an E3 and one has three kids, probably several of them
in diapers, that means a weekend of somebody digging around in the
cushions of the couch and rolling pennies so one can have diapers for
the babies and formula for the kids, and that is wrong.
So to run around and, as the gentleman from Texas (Mr. Stenholm)
talked about, give away a trillion dollar tax break when one is playing
games just to make ends meet is highly irresponsible.
Something the gentleman from Texas (Mr. Stenholm) mentioned, and
again I do not think it can be said often enough, yes, it is their
money. Yes, it is their country. Yes, it is our debt. Almost all of
this debt has occurred in our lifetimes. If you are listening to me
tonight, most of that debt has occurred in your lifetime. Between 1776
and 1980, our Nation acquired $1 trillion worth of debt.
{time} 2000
From 1980 to 1988, the debt doubled, from $1 trillion to $2 trillion.
But, sadly, it continues to get worse. From 1988 until now, our Nation
is now $5.7 trillion in debt. And just like anyone else who is in debt,
not only does it have to be paid off, but it has to be paid off with
interest. The biggest shocker for most of the people I encounter is
when they find out that the biggest expense of their Nation, the
biggest outlay of their tax dollars is interest on that debt; a billion
dollars a day.
I come from an area that is very pro military. We have a number of
shipyards; we have a number of military bases; a lot of kids enlist. I
regularly have moms and dads write me saying why is my son flying
around in a 30-year old helicopter? Why is he flying around in a 30-
year old transport plane? Why is he traveling on a 30-year old ship?
Well, the truth of the matter is for what we are squandering in
interest, we could be buying a destroyer a day for the United States
Navy. A new destroyer a day.
Instead, because of a lack of money, we are only going to buy three
destroyers this year. For what we are squandering in interest, we could
buy 10 B-22s a day, or about, geez, 30 new UH-60 Blackhawk helicopters.
The list is endless for what we are squandering on interest.
The other thing I really think our citizens need to be aware of is
the change in demographics. Because not only do we have to pay off this
debt, but the window of opportunity for paying off this debt is rapidly
closing. My dad is still living, and my dad was born in the 1920s.
Therefore, when my dad was a teenager in the 1930s, when Social
Security was just starting, there were 19 working people for every one
retiree. Right now, the year 2000, there are three working people for
every retiree. If I live to 2030, and I hope I do, there will be only
1.5 working people for every retiree.
So not only has this generation run up an incredible debt, but the
number of workers available to pay that debt off is shrinking, and it
is shrinking on a daily basis. And it will simply be impossible for
that young person who is a page today up here, that young person who is
in grammar school, or that young person who is in high school, when
they reach their peak income earning years it will be physically
impossible for them to pay their house note, take care of their kids
and retire our national debt if we do not take those steps right now.
That is something I would hope Americans would consider.
Quite frankly, I am distressed when I hear folks tell me,
particularly young
[[Page H1253]]
folks, I want a strong military, but do not ask me to serve. I want a
strong Nation. I want this to be the best Nation on earth. I want the
best roads, the best canals, the safest air travel, with the most
secure future as far as medicine, the most secure future as far as my
retirement but, by the way, I do not want to pay for it.
It is the same thing. We do not get to be the best by taking the easy
path. And what troubles me the most about my Republican colleagues when
they talk about these tax breaks is that they somehow imagine we can
spend all kinds of money and not pay for it; that we can somehow have
great health care, a great defense, that we can have great roads and
great public safety in the air and on the roads, but that we do not
have to pay for it. That is not what life is all about. Life is if we
want good things we have to earn them. And if our Nation wants to
continue to be the best, we have to earn that as well.
Demographically, we are going to have, as I mentioned, in 2030, an
extremely small percentage of Americans who are eligible to serve age-
wise in the military services. That is why we need to modernize our
military. In the past few weeks, the Joint Chiefs of Staff came before
the House Committee on Armed Services and identified $16 billion worth
of unfunded requirements for this budget. And that is why I want to
commend the gentleman from Minnesota (Mr. Minge), the gentleman from
Texas (Mr. Stenholm), and the other people who put together the Blue
Dog budget, because the Blue Dog budget would increase the Fed's
spending this year and for each of the next 5 years $15 billion over
the Republican plan.
Better than that, the people who made this Nation great, the greatest
generation, the people who got us through World War II, they are
reaching that point in their lives where they need some help
healthwise, and particularly our veterans. Because, again, I mentioned
the travesty of cheating the troops on their pay, but what aggravates
me even more is that for 3 of the past 4 years the Republican Congress
has flat-lined the VA budget. No increase at all. And only last year,
after a group of us got together and said what is more important,
taking care of our veterans or tax breaks, did they finally realize
that taking care of our veterans was more important.
The Blue Dog budget would increase veterans care by $10 billion more
than the Republican budget over the next 5 years and fully pay to
fulfill the promise of free lifetime health care for our military
retirees. The Republican budget does not do that.
Great nations keep their words. One of the words that we have to keep
are those words to our military retirees that they would be given free
health care for themselves and their dependents the remainder of their
lives if they served their country honorably for 20 years. The Blue Dog
budget, which will be on the floor tomorrow, will do that; and I
commend all my colleagues for making that possible.
Mr. MINGE. Mr. Speaker, I would like to thank our colleague from
Mississippi. He has been an outstanding fighter, one of the most
articulate Members of this body, in forcefully addressing this problem
of how do we responsibly deal with the surplus.
I would like to next yield to my colleague from Wisconsin (Mr. Kind),
who has worked long and hard on this. And I know he has a little levity
that he can share with us on how we should assess our Nation's
priorities.
Mr. KIND. Mr. Speaker, I thank my good friend from Minnesota for
yielding to me, and I commend his work, as well as the gentleman from
Texas (Mr. Stenholm) on the Blue Dog budget. I am not a member of the
Blue Dog Coalition, but I have consistently in the past supported Blue
Dog budgets when they have been offered as alternatives during these
budget resolution debates that we have had, because I feel that when we
put these Blue Dog budgets together that they are more in line with
where I think the American people are and where our priorities really
should exist.
Tomorrow we will have a very important day on a budget resolution.
This establishes the blueprint of where the Federal budget is going to
be heading throughout the duration of this year and for many years to
come. We are in a position now with the strength of our economy, with
some projected budget surpluses around the corner in the future, that
hopefully will materialize, to do some extraordinarily good things for
the future of this great Nation of ours.
I am afraid, however, that when we start the debate tomorrow it will
be, as Yogi Berra once said, ``Deja vu all over again;'' that what the
majority governing party in this Congress will be offering on the floor
tomorrow will be an emphasis on their first and main priority, which is
trying to pass the biggest tax cut that they possibly conceivably can
do here in this Congress, as they have now over the last couple of
years.
Fortunately, we have had a President in the White House who has felt
that that has not been the fiscally responsible best approach that we
should be taking as a Nation. And yet tomorrow we will be seeing a
budget resolution which is very comparable to past years' budget
resolutions, ones with a heavy emphasis on large tax cuts.
That is also unfortunate because the district I represent in western
Wisconsin, I think, brings a lot of common sense to this debate. They
tend to view the Federal budget process similar to their own family
finances, and that is that if they start running into some good times
in their family, what should be the first obligation is taking care of
already existing obligations, and that includes already existing family
debt, before they give themselves a vacation or spend whatever excess
funds that they might have on a new item for the family.
I think if this Congress were to operate under the same type of
principles and values, we would be a lot better off as far as securing
economic opportunity and ensuring a very bright and hopeful future for
all of our children.
I have two young little boys back home in Wisconsin, Johnny will be 4
in August, Matt will be 2 the end of May. Much of what I do here in
Congress in the votes that I cast are done through their eyes and with
the hope of a very bright and prosperous future that they have to look
forward to. With the advancements of medical science we are seeing
today, which is truly mind-boggling, these young kids that are being
born today could, in all likelihood, live to see the 22nd century,
which is amazing when we think about it. So the decisions that we are
making are not just decisions that are going to affect us today and
tomorrow and for the next fiscal years but for generations to come.
That is why I think it is so important that we make these decisions
and get them right. That is why I feel so strongly that a $1 trillion
tax cut that will be proposed tomorrow over the next 10 years, one that
is anywhere from $150 billion to $200 billion over the next 5 years,
which would virtually spend every nickel, every dime of a projected
surplus that, hopefully, will materialize, and there is no guaranty
that the surpluses will materialize to that magnitude, with the energy
crisis we are in today, with a lot of indications out there where this
economy could turn south on us, that if we pass large permanent tax
cuts today, they could come back to haunt us tomorrow.
Mr. MINGE. If my colleague would allow me to interrupt for a moment,
he referred to the energy costs and tax cuts. I had a very interesting
experience just this last week. I visited a small trucking company, and
the founder of the trucking company pulled me to one side. He is an
older gentleman. And he said, I always want tax cuts. I always want tax
relief. We are going to have a bad year or two here with these high
fuel costs. But he said I want you to go back to Washington and pay
down on the debt.
And I must say that that made a deep impression on me, because he
shared his priorities. He said, I vote Republican almost every
reelection, but this is what I think is right for the Nation.
Mr. KIND. Well, that is what I am hearing back home as well, from
Republicans, from wealthy families. They understand we have existing
obligations that really need our attention at this time.
We have a $5.7 trillion national debt. I am glad the gentleman was
able to bring those charts tonight highlighting when this debt was
accumulated. By and large 85 percent of that $5.7 trillion was
accumulated during the 1980s and
[[Page H1254]]
1990s, relatively recently. This is a new phenomenon for this Nation.
We have never seen a debt burden of this magnitude, except during time
of war, such as the Second World War, and it was accumulated recently,
with our generation.
If we want to talk about morals and values in Congress and what we do
around here, what is more immoral than passing on a huge debt burden on
to our children and grandchildren and future generations? That is
exactly what we will be doing tomorrow if we pass a budget resolution
that places the first and foremost priority on large tax cuts in the
future rather than getting serious about debt reduction.
There are a lot of merits to debt reduction, a lot of economic
benefits to it. And people do not have to take our word for it tonight,
they should just listen to what Chairman Greenspan consistently
testifies about when he is before our committees here on Capitol Hill.
He has consistently, over the recent years, said that if we do anything
with projected budget surpluses, we should first see if they
materialize and, if they do, use it for debt reduction, because that
will mean less Federal borrowing in the private sector. It will enable
the Federal Reserve to lower long-term rates in this county, which is
going to make it cheaper for people and businesses, farmers, even
students to borrow money for their purposes, and create jobs. Invest in
the infrastructure. With lower rates, that is really the key, I think,
of this extraordinary growth that we have seen in this Nation.
I brought with me today just a few quotes from Chairman Greenspan
based on his previous testimony before Congress. When asked about the
wisdom of passing large tax cuts today, his response was, and I quote,
I'm saying hold off on tax cuts for a while. I'm saying
that because the timing is not right.
What he means by that is if we pass a large tax cut now, which will
spur consumption in this country, it has the potential of igniting
inflation. And with the increase in inflation, or any type of
inflationary indicators out there, the first thing the Fed is going to
do is really start raising rates up, as they have been trying to do
recently by tapping on the brakes. But with a large tax cut that could
spur inflation, they will slam their foot on the brakes, and that is
going to stop the growth that we have had in the country.
That is why Chairman Greenspan is saying hold off, make sure what we
do not do is something that will be inflationary in our economy. He
also stated, and I quote,
Therefore, as I have said previously, my first priority, if
I were given such a priority, is to let the surpluses run. To
me, currently, the first best is to allow the surpluses to
run and the government debt to run down.
Why is this important? Again, no one has to listen to us here
tonight, listen to what Chairman Greenspan has had to say, someone that
I think has an incredible amount of credibility when it comes to
managing the economy in this country. He went on to say,
It is precisely that imprecision and the uncertainty that
is involved which has led me to conclude that we probably
would be better off holding off on a tax cut immediately,
largely because of the fact that it is apparent that the
surpluses are doing a great deal of positive good to the
economy in terms of long-term interest rates, in terms of the
cost of capital and the ability effectively of the American
government to borrow when it has to. Because as we reduce the
amount of debt outstanding, the borrowing capacity of the
Federal Government rises, which is a very important long-term
issue.
{time} 2015
That is why I think we are right now at the crossroads of being able
to pursue what is a very fiscally responsible and disciplined course.
As a member of the New Democratic Coalition, that is our first
priority is to maintain fiscal discipline and bring fiscal
responsibility into the creation of these budgets and in these budget
debates. But it is sad that we are having a rehash of previous year
budgets that we are going to have tomorrow morning, an emphasis on
large debt reduction, less of an emphasis on the need to reduce the
national debt, less of an emphasis as far as taking care of our
existing obligations, which means shoring up and saving Social Security
and Medicare for future generations.
Mr. MINGE. Mr. Speaker, I really appreciate the insights of the
gentleman on this. I think it is helpful to those of us in Congress. It
certainly, I hope, is helpful to the staff and everyone else that we
work with.
It is interesting, there are several groups, my colleague has alluded
to one, the New Democratic Coalition, the New Democratic Network. We
have the Blue Dog Coalition. So within the Democratic Caucus here, the
205 or 207 Democrats in the House of Representatives, we have subgroups
that have a deep commitment to reducing the Nation's debt. The people
that are speaking here this evening are drawn from these two subgroups
of the Democratic Caucus.
One thing that is also of interest to me is that the gentleman from
Wisconsin (Mr. Kind) and I are from the upper Midwest, so we started at
the northern end of the country, Minnesota, went down to Texas, went
over to Mississippi, now we are up to Wisconsin. And we have got a
couple of colleagues here from the east coast and the west coast; and
as much as we sometimes think could we not just let those coastal areas
go out to sea, we better also get the benefit of their wisdom here.
Mr. KIND. Mr. Speaker, before we conclude with our comments tonight,
I again commend the gentleman from Minnesota (Mr. Minge) for the
outstanding leadership that he has provided on this issue. But I do not
want people to be under the impression that we do not believe that we
can provide some tax relief in these budgets. I think we can as long as
we do it in a fiscally responsible and disciplined manner so we do not
lock into some long-term commitment that could come back and haunt us
and start adding to rather than detracting from the debt.
It is sad tomorrow we are going to have a budget resolution that
virtually spends the entire projected surplus that may not even
materialize. But what is even sadder is that we have got the Republican
candidate for President out there running who is calling for an even
larger tax cut plan than what is being proposed in the majority party's
budget resolution tomorrow.
I just brought with me today what perhaps is the saddest part of this
whole debate, and that is that there is a comic strip in this country
that is probably more reflective of where the American people are on
our responsibilities and Social Security and Medicare and debt
reduction than the governing parties in this Congress.
I do not know how many of my colleagues saw the Doonesbury cartoon
that appeared about a week ago or so, but I thought it was very
insightful as far as the feedback I am getting from my constituents
back in the district.
Just to go through it real quickly, there is a group of men here
talking amongst themselves it looks like in a cafe. One guy says,
``Heads up. He's coming this way.'' There is an empty hat that appears
that I think is supposed to depict Governor Bush. And one of the other
gentlemen says, ``Try not to make eye contact.'' Governor Bush says,
``Hi, fellas. I'm Governor Bush and I am asking for your support. If
you vote for me, I will give you a huge tax cut. How is that for a
straight deal, huh?''
The gentleman responds, ``Well, I'm not sure. I mean, I can see how
the wealthy might get excited. They will be averaging $50,000. But it
wouldn't mean much to a guy in my bracket. Besides, I care a lot more
about shoring up Social Security and Medicare and paying down our
national debt.''
``Yeah, didn't fiscal responsibility used to be a Republican issue,''
another gentleman says. And then the Governor responds, ``But, but,
but, you don't understand. I'm offering you something for nothing, free
money. Don't you want free money?''
``Sure, but not until we pay our bills.''
``What is the matter with this country,'' Governor Bush says.
``I guess we have grown up a lot as a people. I know I have.''
I thought that comic strip was very insightful of what I think is, by
and large, where the American people are on this issue, that if we do
have surplus money, let us use it for debt reduction to secure future
generations opportunities in the country and let us start taking care
of Social Security and Medicare rather than putting ourselves in this
box that we have created.
[[Page H1255]]
Mr. MINGE. Mr. Speaker, my friend the gentleman from Texas (Mr.
Stenholm) is on his feet, and I yield to the gentleman.
Mr. STENHOLM. Mr. Speaker, I want to use this opportunity since it
might appear to everyone listening to us that the Blue Dog budget has
no tax relief. We do. We provide for approximately $250 billion in tax
cuts over the next 10 years. We provide for a true and honest
mitigation of the marriage tax penalty that we have talked about so
much on this floor. But we truly attack the marriage tax penalty, not
the added on $100 billion.
We expand the earned income tax credit. We facilitate financing of
school construction and renovation. We provide for increasing credits
and deductions for tuition for postsecondary education. We have foster
community development and combat urban sprawl relief.
We reduce the death tax. Remember that one? This is one of which we
provide that every small businessman or woman, farmer and rancher, with
a $4 million estate would have immediate exemption from all death
taxes. In this budget we are talking about, that is possible to do. And
many others.
So I do not want anyone to get the misimpression that we are opposed
to all tax cuts. Remember the 50/25/25? We are saying any available
surpluses, 50 percent should go to pay down the debt; 25 percent should
be spent on priorities, of which the gentleman from Mississippi (Mr.
Taylor) spoke so eloquently about, priority of defense, veterans' and
military retirees, which we fully fund, at least the retiree part of
it; and then we have 25 percent of the projected surpluses that can and
will be and should be used for tax relief. That is in this what we are
talking about.
Mr. MINGE. Mr. Speaker, I know that we are joined here this evening
by our colleague from North Carolina (Mr. McIntyre) and I would like to
yield to the gentleman.
Mr. McINTYRE. Mr. Speaker, each of us are expected to balance our own
checkbooks. We all go through that ritual usually at least once a month
when we pay our personal and family bills and our business bills back
home. So why should we ever expect any less from the Federal
Government?
Right now, with our debt being about $5.6 trillion, this is
approximately $21,000 for every man, woman, and child in this Nation.
That is outrageous. And as my colleague from Mississippi (Mr. Taylor)
spoke a minute ago when he was talking about the military, and I, too,
serve on the Committee on Armed Services, we are spending more on the
interest on the national debt than on our entire national defense
budget.
Now, when people do say why are we in 30-year-old fighter planes and
40-year-old bombers and 30-year-old ships, we know the answer. Now is
the time. Now is that window of opportunity to reverse this terrible
trend and to restore financial integrity to our financial Government.
As the gentleman from Wisconsin (Mr. Kind) was saying, we do want to
have moral integrity in Government. We also need to have financial
integrity. And that is part of what it means to offer the moral type of
leadership in this Nation is to be honest with people and to quit
running up debt. Because, after all, as we all will too well realize
come April 15 next month, it is not the Government's money, anyway; it
is the people's money. And this is the people's House. And as stewards
of that money, we ought to be paying down debt.
I had a phone-caller the other day on a radio show back home in North
Carolina who said, why is the term ``surplus'' even being used?
Personally, I think he made a good point. When we look at our budgets,
if we owe money, I do not consider myself having a surplus if I owe
money. And our Nation owes money. We owe a lot of money when we talk
about $21,000 per man, woman, and child.
So, under the Blue Dog budget, we have got a great opportunity now to
pay off that debt; and by doing that we are giving the best tax break
of all.
We do have some targeted tax cuts, as the gentleman from Texas (Mr.
Stenholm) was saying. But we also get the across-the-board tax cut that
everybody will feel who has a credit card or who has a home mortgage or
has a car loan. That is most of all of us in America, whatever our
socioeconomic status may be or whatever part of the country we may live
in by reducing interest rates. Everyone will feel that type of tax cut
by having lower interest rates on their credit cards and their home
mortgage payments and their car loans.
And by paying down the national debt, that puts us in a position of
strength, strength to help us shore up Social Security, strength to
help us shore up Medicare, and to allow families who do have debt ahead
of them, such as for college education, to be able to better afford
that for their children.
Mr. MINGE. Mr. Speaker, if my colleague would allow me to just
illustrate the point he has made.
Here is a graphic depiction of the type of interest rate reduction
that Chairman Greenspan has said is realistic if we make a substantial
reduction in the outstanding Federal debt.
On a home mortgage, we could reasonably expect interest rates to drop
by 2 percent if we reduce the public debt by about $2 trillion. On a
home with a mortgage monthly payment of $844, that would provide a
dividend of $155. That is an annual dividend that would be equal to
what most families would expect in any tax cut.
So not only do we reduce the debt, which is a benefit to our
children, but we have this dividend, as well. That is exactly what the
gentleman is talking about. And this plays out. We can look at the
farmer buying a combine. We can look at the college student with his
college loans. And that dividend is important. And that is a type of
tax cut, if you will, in and of itself.
Mr. McINTYRE. Mr. Speaker, that is the best of all because everyone
benefits from it.
The saying is that the time you fix a leaky roof is while the sun is
shining. Well, thank the good Lord the sun is shining on our Nation.
Some areas are not prospering as much as others.
My home county and Robison County, North Carolina, and the adjoining
county of Columbus County have more than twice the unemployment rate of
our State. We are suffering. We need to find a way to help pay down the
debt that we can then let people invest in their jobs and have job
opportunity for economic growth in the underserved rural areas of our
Nation, as well.
This is the time, while the sun is shining, to fix the leaky roof
that all Americans can share in the prosperity; and the best way to do
that is to pay down the debt that we all, as Americans, owe.
This, indeed, is our golden opportunity. As I said, it is not the
Government's money. It is our money. Let us do the responsible thing
and let us pay down the debt.
With that, I look forward now to going from coast to coast with the
gentlewoman from California (Ms. Sanchez), as I know she is getting
ready to speak, from North Carolina to California.
Mr. MINGE. Mr. Speaker, like the gentleman has indicated, we are
going to the west coast. We have a distinguished member of the Blue Dog
Coalition and of the Hispanic Caucus, the gentlewoman from California
(Ms. Sanchez). Would she please share with us some of the analysis that
she brings to bear on this from her perspective in California.
Ms. SANCHEZ. Mr. Speaker, I thank the gentleman from Minnesota (Mr.
Minge) for yielding.
Mr. Speaker, it is really a pleasure, actually, to be a member of the
Blue Dogs. I know that there are quite a few people across the United
States that have not really found out about our group here in the
Congress on the Democratic side. But the reality is that one of the
reasons I really enjoy being a part of this group is because I do have
a financial background, having a degree in economics and an MBA in
finance and having been in the financial industry for 14 years before I
got to this Congress.
It is always important to me to apply the financial rules that I know
that I use in my daily life or that I would expect somebody coming
through the front door and asking for a loan to apply. And first and
foremost of that, of course, is, What is your liability situation? What
are your assets? What is the income that you are earning or what you
think you are going to have as far as money coming in on a monthly or
annual basis? And it should not be
[[Page H1256]]
any different for what we do here in Congress.
First and foremost, when we have the good times, as my colleague from
North Carolina (Mr. McIntyre) said, when the sun shines, we need to
think about what we do with this extra money that is coming in.
Most families, most businesses, a lot of us pay down the liabilities
that we have, we pay down our debt. If we have gotten into tough
financial times and we have had to go to the bank or we have had to put
a second mortgage on our home, and then if it gets worse, we go and we
use the credit cards we get through the mail, sometimes a little too
easily these days, but we go and we get the credit where we can get it.
And every time, I am sure most families think they are going to get the
credit at the least amount and then, as they need more, they get more
and more credit at a higher rate.
This is what we did during that 1980's time period. We increased the
debt to pay several programs that we had ongoing, without the money
coming in to pay for those programs.
Now we are in the reverse. Now we have a good economy. We have a
strong economy. But it is not going to last forever. So what do they do
when they finally have that good job where they are getting the extra
money? First they pay down the credit cards. Then they take the second
mortgage off of their home. They pay back their family the money they
borrowed. And maybe they keep a little bit of debt. But they certainly
do not keep all of that debt, because there will be at some point some
sort of a downturn and they have to prepare for that.
Sometimes we forget about that when we are in the good times. We have
had 7\1/2\ years of really good times in the United States. And I, as a
lawmaker, want to see all the people in my district and as many
Americans continue that. But things do change, and we all know that.
Today we have a prime example of that. When I was younger and first
driving my first car, I remember standing in lines of 50 cars waiting
to try to get some gas into my car the last time we had a real oil
crisis.
{time} 2030
At that time we paid almost anything just as long as we could get
that gas in our cars to run it. While we were going through that, we
said to ourselves as a Nation, as a people, we said, ``Never again.
We're never going to let this happen again to us. We're going to drive
more efficient cars. We're going to find alternative fuels.'' As the
good times came, we began to forget that. Today, about 15 or 20 years
later, here we sit again and guess what? The prices of gas are going
up. I sit there and I think to myself, maybe we will have a recurrence
of this. So we have to remember things go in cycles. We are in the good
part of the cycle. We need to take that money and we need to pay down
the debt. The Blue Dog budget does that. It says, ``Let's take care of
the first thing first.''
It also says we are not afraid of tax cuts. We realize that we can
give tax cuts to people, tax cuts that are important if you are
investing in a business, if you are investing in research, let us allow
American businesses and people to do that. If you are investing in
yourself, if you are investing in your children by getting an
education, let us help Americans decide that that is the right thing to
do. If we want to invest in our schools and new school construction
like we all run around and say, then let us give tax credits so
communities will step up to the plate and do what is right and build
that new classroom or build that new high school that they need. Our
budget allows Americans to do that. It also allows us to work on the
programs that need to be worked on, like Social Security and Medicare.
Mr. MINGE. Maybe before the gentlewoman gets into any of the
specifics there, we could just give some of the numbers actually on
this debt reduction. The Blue Dog proposal which we have been talking
about over 5 years would reduce the national debt by $85 billion. Given
the size of the debt, that is just a small nibble. But compare that
with the bottom line here. The Republican proposal with the tax cuts
that they are including, modest actually by comparison to ones that
they have proposed over these last few months, and if they are going to
do the prescription drug correction that they have promised they are
going to do, would leave us about one-tenth of that amount. In the
middle is the proposal coming from the Democratic Caucus, which is, as
you can see, fiscally more conservative than the Republican proposal.
Let us take a 10-year projection. Here we are beginning to see larger
sums. Approximately 10 percent of the debt would be paid down, maybe 9
percent under the Blue Dog proposal. Under the Republican proposal
actually we would go to more red ink. Again we are assuming the tax
cuts that they have been talking about, we are assuming some of the
program expansions that they have been proposing. So there is a
dramatic difference. I think that we also have to be careful that we
are not misled by talk about the so-called public debt and the
privately held debt and all of these things. There are proposals to
have Social Security trust fund money saved for Social Security and the
net effect of that is to reduce the amount of debt that is outstanding
in our hands as individuals, the Arabs, foreign investors and so on,
but if you wrap it all together, the Social Security trust fund and the
debt that is held by those of us as individuals, they in their 10-year
plan will not be making a dent in that debt. It is still $20,000
roughly for every man, woman and child that is owed to the Social
Security trust fund and is owed to individuals, banks, institutions
that hold these Federal bonds.
Ms. SANCHEZ. I would agree with my colleague. I guess I will just end
with the old adage. If it sounds too good to be true, then it is
probably not true. The Republicans have offered an enormous tax cut.
Granted not as enormous as the guy who is running for President that is
a Republican, but it is enormous. They have promised to do the
prescription drug benefits. They have promised to build defense up.
They have promised that education is important to them and they are
going to do something about it. Promise after promise after promise.
You cannot do it all and get there. They have promised to help make
Social Security safe for the next 60 years. You cannot do all of these
all at once and offer the type of tax cut that they want to do. But
politically, they think that you are going to believe all of that. So
the reality is what do we choose to do? Let us bring down the debt. Let
us give some tax cuts. Let us invest. And let us reward people for
doing that. And let us make sure that our veterans are taken care of,
that some schools are built for our children, and that we invest in
education for our kids. I think that the Blue Dog budget reflects those
priorities.
Mr. MINGE. I would like to thank the gentlewoman from California. I
see that we have been joined by another colleague from Texas. We have
so many Texans here we cannot keep them all straight. They are a fairly
tight, frugal bunch. They have a lot of good advice for us here in our
country. I yield to the gentleman from Texas (Mr. Hall).
Mr. HALL of Texas. I thank the gentleman from Minnesota for yielding,
and I am honored to be a part.
Mr. Speaker, I like others here rise to support the use of a portion
of our surplus to pay down on our national debt. We have got a golden
opportunity in front of us. For the first time in 30 years we have a
budget surplus. During most of my tenure here, the great budget
challenge has been to get control of the deficit. In the last 2 years,
the landscape has completely changed. We are now focused on what to do
with the surplus. That is a very good feeling. I am thrilled that the
term surplus has entered our vocabulary up here. Now comes the hard
part. Everyone has an idea as to the best way to use this surplus, tax
cuts, new government programs, protecting the solvency of Social
Security and Medicare and paying down the national debt.
As a Member of the Blue Dog coalition, I think the gentleman from
Texas (Mr. Stenholm) and the gentleman from Minnesota (Mr. Minge) are
members of that coalition, we have advocated using half of the on-
budget surplus for debt reduction, a fourth for shoring up Social
Security, Medicare, education and our national infrastructure and the
last fourth or parts of it for tax cuts. That can be eased around and
changed some, if it takes more for Social Security, Medicare, Medicaid,
[[Page H1257]]
infrastructure, national defense, whatever we see that is a necessity,
that we can move that fourth from one to the other. But I think what I
am hammering hard on is paying at least half of it on the debt. By
applying the framework, this framework to the budget, we are told that
we can pay off the national debt by the year 2012. It would retire over
30 percent of the debt in 5 years. I think that is just amazing. Many
of us can see 5 years down the road. I think this is the most sound way
to both plan for the future and reap both short and long-term rewards
from the growing surplus. As anyone outside the Beltway knows, when you
have some extra money, it is important to pay off your debts. This is a
simple idea that many Americans practice whenever they can. We should
learn from them and do the same thing here in Washington.
The benefits of paying down the debt are enormous and long lasting.
One of the most important is the more we lower the national debt, the
less we will have to pay in interest on that debt. As of 5 p.m. this
afternoon, this very day, our national debt was approximately $5.75
trillion. During FY 1999 we paid $229 billion, Mr. Speaker, in interest
on this debt. To put that number in perspective, during the same year
we spent $275.5 billion on national defense. That is only $46 billion
more than our interest payment. Our interest payment is estimated to go
down to $220 billion in our current budget year because we are paying
off a small portion of the debt. It certainly affects it. This is a
portion of our Federal budget that we cannot reduce by any other means
other than paying down on the national debt. Imagine how we can reduce
that number if we really dedicate ourselves to it. This is money that
would be available for tax cuts, many of which I support, assistance of
senior citizens and other efforts to maintain our economic growth and
improve the future for our children and for our grandchildren.
Tomorrow, Mr. Speaker, we will vote on a framework for the coming
year's budget. As we look at the surpluses from anywhere from $200
billion to $637 billion over the next 5 years, the most responsible
thing we can do is dedicate half of it to paying down on the debt.
Mr. MINGE. I would like to thank my colleague from Texas for that
comment. I would like to just emphasize for the benefit of all of our
colleagues that we have heard from people from the Midwest, from the
northern part of the country, we have heard from people from the
southern part of the country, from the East Coast, from the West Coast.
All areas have spoken out here this evening from within our ranks and
said that the first goal has got to be to pay down on this enormous
debt that we have, over $20,000 for each man, woman and child. If you
hear anyone on the other side of the aisle claim that this is not what
is happening, that the publicly held debt is going to be smaller, do
not be beguiled by that. What is truly happening is they are hiding
behind the Social Security trust fund and they are assuming that we do
not have to prepay whatever the Social Security trust fund buys in
terms of government bonds. That is just as much debt as any other debt
that we have. Ask why is it under the Republican budget that we have to
raise the debt ceiling, go up to $5.9 trillion? If we are reducing the
debt, we should not be increasing the debt ceiling. I sit on the
Committee on the Budget. I am embarrassed that that committee has
reported out a proposal, the Republican proposal, which in a time of
surpluses requires a higher debt ceiling than we have ever had before
in this country. This is fiscal irresponsibility of the greatest order.
You can tell from these charts, if what has been promised by the
Republicans on the Committee on the Budget is going to occur, the path
is towards a larger debt for this country, a greater burden for our
children and our grandchildren. This does not make sense. This is
fiscal irresponsibility. We have alternative budgets which will be
presented tomorrow coming from the Democratic Caucus, from the Blue Dog
group. They will respectively propose reducing our Nation's debt in a
realistic fashion. It is not just by hiding behind the Social Security
trust fund, it is by doing the heavy lifting and denying ourselves some
of the dessert that we would like to be able to have and a promise on
the eve of an election. I think that political strength and integrity
depends upon saying to our constituents, there are certain things that
are high national priorities and at the top of the list is dealing
responsibly with our Nation's debt and using our surplus to reduce it;
secondly, to recognize that tax simplification and tax fairness
requires some modest adjustments; and, third, that we have some
priority programs. This evening, my colleagues have discussed what
these programs are. Veterans, certain defense investments, education,
agriculture, health care. These are top priorities that we have as a
country. We have to fit it all together. We would like to be able to do
all things for all people. I would like to be in a situation where I
did not have to pay any tax at all. But we know that we are not going
to be able to sustain our country and deal responsibly with the affairs
of state unless we address not only priorities but also the debt burden
that we are leaving to the next generation.
____________________