[Congressional Record Volume 147, Number 21 (Wednesday, February 14, 2001)]
[House]
[Pages H359-H365]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     THE ECONOMIC FUTURE OF AMERICA

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 3, 2001, the gentleman from Florida (Mr. Boyd) is recognized 
for 60 minutes as the designee of the minority leader.
  Mr. BOYD. Mr. Speaker, it is a real pleasure to be here today to talk 
about something I think that is critically important to the future of 
this country. I want us to look, if we will, deep into the 21st 
century, and I think we start that by looking back historically and 
seeing where we have come from. I want to talk a little bit about the 
economic future of this country.
  Mr. Speaker, after all, as a government, the people of this country 
expect us to be an economic model, to provide a structure, an economic 
structure, that will enable the private sector to flourish.
  It has worked as well, Mr. Speaker, as any plan that has been put 
together in the history of mankind. We have something here in this 
country that is very special. This economic model, this experiment we 
are on now for over 225 years, has taken us to be the most powerful 
Nation in the world, not only economically, but also militarily and 
politically.
  Let us look back, Mr. Speaker, just a few short years, back into 
1990. We just came out of the decade of the '80s. Ronald Reagan had 
served us 8 years wonderfully as our President. He had spent a lot of 
his time focusing on the Soviet Union and the Cold War, and actually we 
saw the fall of the Soviet Union in the late decade of the '80s.
  But if you looked at what was happening fiscally in our country, Mr. 
Speaker, at that time, we were in pretty bad shape. Economically we 
were headed down the wrong path. If you go back to 1990, you would have 
found annual deficits in the range of $250 to $300 billion a year. You 
had a mounting debt that was climbing a quarter of a trillion dollars 
annually.
  Many of us who were in the private sector at that time thought that 
the economic experiment that we were involved in in this country was 
headed for an economic disaster as we moved toward the 21st century.
  But as you know, in 1990, with the leadership of President Bush, the 
first step was taken to change the economic direction of this country. 
As a matter of fact, those changes, led by President Bush, probably 
cost him his reelection in 1992.
  Then again in 1993, under the leadership of President Clinton, 
another big step was taken to sort of build the wall around that 
foundation that President Bush had built to get us headed back in the 
right direction. With that economic plan in 1993, this government, this 
economic model that we are involved in here, began to head in the right 
direction and lower its deficits and head toward a day where we could 
actually pay our bills on an annual basis and would not be swallowed 
with red ink.
  I know when I ran for Congress in 1996 it was the major campaign 
theme. The major campaign theme was balancing the budget, removing the 
deficits, the annual deficits that we had. So this is not something 
that is new, not something we just started talking about. This is 
important stuff for the long-term health of this country.
  Under the leadership of the House and the Senate, Speaker Gingrich, 
Majority Leader Lott in the Senate, and President Clinton, in 1997 a 
Balanced Budget Act was put into place, put into law, which was a plan, 
a blueprint, to lead us out of red ink and lead us into an era when we 
could actually pay our bills. This model we have is so wonderful that 
we actually achieved that goal of getting away from deficits about 5 
years ahead of that schedule. The 1997 Balanced Budget Act had us 
balancing the budget in, I think, the year 2003-2004, but we actually 
achieve that about 3 or 4 years ahead of that schedule. We have a 
wonderful window of opportunity here now to continue the work, to 
continue the job.
  Mr. Speaker, the budget process is like a business plan. It is like a 
business plan that our businesses all across this Nation do on an 
annual basis. They sit down and they look at what kind of business they 
want to do, what their objectives are, what parts of their business 
they have to fund, what revenue they can expect to come in, and then 
they put all that together in a budget and then they go out and 
implement it.
  Mr. Speaker, that business plan allocates, in the case of our Federal 
Government, limited Federal resources to our priorities that we think 
are important.
  Mr. Speaker, the surplus is currently projected at $2.7 trillion. 
That is if we do not use Social Security and Medicare. We all know the 
CBO, Mr. Speaker, which I have a summary here which we want to examine 
a little bit closer as we spend some time in this next hour, the CBO 
report talks about a $5.6 trillion figure over the next 10 years, and 
that is true; but we know that of that $5.6 trillion, that about half 
of it is money that comes into the Social Security trust fund and the 
Medicare Trust Fund.
  So we really ought to all get on the same page and talk about the 
current surplus, the projected surplus, Mr. Speaker, being at $2.7 
trillion, because even just as late as yesterday this House voted, I 
think unanimously, to reinsert its belief that the Social Security 
funds and the Medicare funds ought to go in a lockbox, and they ought 
not to be touched for any purpose, other than those two specific 
purposes.
  So, Mr. Speaker, we want to spend the next hour examining some of the

[[Page H360]]

priorities that this Nation needs to deal with as we have this debate 
about surpluses, about tax cuts and about our economic plan.
  Mr. Speaker, at this time I am glad to recognize the gentleman from 
Texas (Mr. Stenholm) to spend a few minutes talking about his 
perspective.

                              {time}  1400

  Mr. STENHOLM. Mr. Speaker, I thank the gentleman for yielding to me, 
and I thank him for taking this time today.
  I hope that everyone will pay particular attention to some of the 
comments that many of our colleagues are going to be making. We will 
have the gentleman from Mississippi (Mr. Taylor), who will be on the 
floor momentarily, and will talk very accurately about the fact that we 
really do not have a surplus.
  When we look at the Social Security trust fund, the Medicare trust 
fund, the Military Retirees trust fund, highways, airports, that really 
and truly, there is no $5 trillion, 600 billion surplus.
  We ask our colleagues, particularly our friends in the majority, to 
not just look at part of the CBO report, but take a look at the whole 
report. Notice where they make a very sound observation in that, first 
off, projecting the economy of the world for 10 years is almost 
impossible. No one pretends to be accurate. Yet, here we are now all of 
a sudden taking 10-year projections, and we hear $5.6 trillion of 
surpluses, and we have folks beginning to act like it is real, really 
beginning to say, ``We are going to spend that money like it is real.''
  Here we ask Members to consider one major fact, that 70 percent of 
the projected surpluses that we are talking about do not occur until 
the years 2007, 2008, 2009, 2010, and 2011. Who of us can project 
tomorrow, much less 2011?
  When we go past 2011 for this same CBO report, the $5,600,000,000,000 
surplus, they show through another chart that we have serious problems. 
In fact, it is projected in the next 20 years after 2010 we will be 
consuming 200 percent of our gross domestic product every year. We all 
know if that were to happen, if it were to happen this year, that 
Congress would have a very difficult time dealing with that kind of an 
economic situation.
  What the Blue Dogs have suggested in the past, are suggesting today, 
and will be suggesting tomorrow, let us understand a few basics: The $5 
trillion, 600 billion number we have here is a projected surplus. We 
think the conservative thing to do is to be conservative with those 
surpluses.
  As the gentleman from Florida (Mr. Boyd) observed a moment ago, the 
actual number of these projected surpluses that we have to deal with is 
2.7, because we have already decided in an almost 100 percent 
bipartisan way that we are no longer going to spend the Social Security 
and Medicare surpluses in the unified budget. We are setting them aside 
in a lockbox.
  Now, I was not very happy with the cuteness of the vote yesterday, of 
the actual bill yesterday, because it left a loophole. I hope the 
American people will hold us accountable not to the loopholes of being 
able to potentially spend these trust funds twice, which was possible 
by that resolution yesterday, but to really and truly mean it when we 
say we are not going to spend, and let us put it more positively, we 
are going to take this short-term benefit that we have with Social 
Security in which we are taking in more than we are paying out to 
today's beneficiaries and we are going to take that money and pay down 
the debt held by the public.
  That is good. When I say that is good, that is being interpreted by 
the markets as being good. Everyone perhaps looking right now or 
listening to this right now should ask themselves, and answer a simple 
question, would they rather have 6\3/4\ percent home mortgages or 9\3/
4\ percent home mortgages? When we are buying a new car, would we 
rather have a 6, 7, 8 percent loan, or an 18 percent loan?
  As a result of the economic policies that have been followed over the 
last 8 or 10 years and the budget actions taken by the Congress over 
the last 6 or 8 years, we now find ourselves in a position in which the 
markets are reacting. Yes, we are collecting more tax revenue because 
people are making more money. That is good. That is not bad. But the 
question we have to ask is, how long will it continue?
  We had a budget alternative, the Blue Dogs, last year which focused 
on reducing the national debt. This is our budget again this year. We 
had a budget that focused on saving Social Security first. My personal 
preference is, I wish we would have had the first serious discussion on 
this floor this year on saving Social Security and Medicare.
  I happen to represent a rural district, and my hospitals and now my 
nursing homes, my nursing home constituency has been pointing out over 
the last several months, we are hurting, too. The BBA of 1997 reduced 
the reimbursement rates of the nursing homes, as well as the hospitals, 
below what it cost them to stay in business. We have to address that, 
and that is going to cost some money.
  I want to make it very, very clear, the Blue Dog Democrats favor 
cutting taxes. We are very strongly in favor of dealing with the 
marriage tax penalty; a perfect day to discuss it, Valentine's Day. We 
are for it. We will vote for it. We encourage it to be in the final 
package.
  We are for dealing with the estate tax, the so-called death tax. We 
believe that it is not helpful to have a penalty assessed to a small 
businessman or woman that spent a lifetime building up their business, 
and it will be in our budget.
  We would like to see across-the-board tax cuts, if that is possible 
for us to do.
  Some of us, myself being in this category, I would like to see us 
take this opportunity now to do more than just complain about the 
energy problems of this country.
  A couple of years ago we had a depression in the oil patch. No one 
was worried about the domestic oil and gas producers, who were going 
broke in droves because no one can produce oil and gas at $7 a barrel, 
but no one was concerned about it then because we were all enjoying the 
cheapness of energy.
  Well, today everyone, including those of us living in the oil patch, 
are complaining about the price of energy. Why would this not be a good 
time to look at using the Tax Code to accomplish some much needed 
improvements in our energy policy in this country?
  A simple question I ask, and unfortunately it is not in the 
President's plan yet, but the President has said, I am amenable to 
change. I have submitted my plan to the Congress. We would like to hear 
Congress's opinion on where we go. I would like to see us deal with 
this.
  I would like to see us deal with some environmental incentives, some 
production incentives, doing some things we clearly need to do for the 
benefit of this country. Most everyone would agree to that. There are a 
lot of things going on on both sides of the aisle to prepare us for 
this national energy policy. I mention that because that is not in the 
current numbers we hear being kicked around.
  I know I have other colleagues that want to take a little bit of time 
now, so let me kind of summarize where we are as far as the Blue Dogs' 
input into the budget considerations this year. I can summarize it 
pretty quickly: Let us bring a budget to the floor of the House first. 
Let us not bring tax bills to the floor that everyone will feel 
inclined to vote for because they do not want to explain why they are 
opposed to it. Why not deal with the budget first, bring the budget 
out, and agree on what the budget should look like.
  Here it is pretty simple. In a $5.6 trillion projected surplus, 
Social Security is 2.5 of that, Medicare is .4 of that, that leaves 
$2.7 trillion. How much of that $2.7 trillion surplus can we afford to 
spend on a tax cut? That is a simple question.
  A lot of folks are saying, ``There he goes, he is talking about 
spending like it is their money. Taxes are our money.'' No, let us not 
continue to forget that the Social Security system has an unfunded 
liability of almost $9 trillion. Part of that money we are talking 
about I think needs to be devoted back to saving Social Security. That 
is not in the current discussions that we hear. Medicare, the same.
  For military retirement, we will hear from the gentleman from 
Mississippi (Mr. Taylor) in a moment, it is several hundred billions of 
dollars. Let us deal with that first. Then let us also agree how much 
additional spending we want

[[Page H361]]

to make in the area of defense. How much is it going to be required to 
make sure we maintain the strength of America that has allowed peace to 
become a prevalent word in this world today? How much?
  We are going to build a missile defense system. The cheapest version 
I have heard is $50 billion over the next 10 years, probably more than 
that. So we are saying, let us have a tax cut. Let us put at least half 
of that projected surplus, though, against the debt. Let us have an 
absolute tough decision on spending.

  Let us revise or bring back what worked so well for us over the last 
several years, at least prior to 1997. Let us put some caps on 
discretionary spending that we agree to, numbers, and then let the 
appropriators spend that money, but let us stay within that 
discretionary level.
  We can do it. It can be done. We can meet the needs of defense, of 
veterans, of education, of health care, of agriculture. We can do all 
of these things if we truly reach out in a bipartisan way.
  That term is getting overworked, but here today, we are on the floor. 
We would love to have a discussion with someone on the other side of 
the aisle regarding some of the points that I have made, that the 
gentleman from Florida (Mr. Boyd) has made, that our other colleagues 
will make here in a few moments.
  The basics are, we think we ought to have a budget first. Let us have 
that debate first, and then let us debate the makeup of the tax cut and 
how much money we are going to spend or save. But even more 
importantly, let us not forget that the first priority today should be 
saving Social Security first. If we do not do that, if we do not make a 
serious effort to do that this year, it will be postponed for another 4 
years, because we will never be able to bring it up in the climate that 
will be present here.
  Mr. BOYD. Mr. Speaker, I thank my friend, the gentleman from Texas, 
who has been in this Congress a long time and is recognized as probably 
the major deficit hawk in Congress. I know that he is very pleased that 
we have come so far with the 1997 Balanced Budget Act, and I know that 
he is somewhat pained by the fact that we may be reversing that policy 
with really good spending caps in place.
  I say to the gentleman from Texas, the 1997 Balanced Budget Act did 
put into place some very good spending caps. Those have expired I think 
as of this year. I really believe that it may be time for Congress to 
look again at what worked for us in 1997 and has really helped us 
tremendously, and hopefully we would take another step on the spending 
side to make sure that we do not let spending run out of control again.
  Mr. STENHOLM. If the gentleman would yield again briefly, Mr. 
Speaker, the problem with the 1997 budget caps were that they were 
unrealistic. There was not anywhere close to a majority on the majority 
side of the aisle to live up to it. Therefore, it is extremely 
important that when we set the caps, be realistic. We have to increase 
money in the defense of this country, I will say that.
  As I say that to the gentleman, I am talking about spending the 
people's money, because Congress does not make money. The only way we 
get money to spend is we have to tax people to get it. I am prepared to 
say, we have to spend a little bit more of our taxpayer dollars on 
defense. So let us put that in the budget. Let us not be unrealistic, 
as we were in saying we are going to increase defense but we are going 
to cut health care, we are going to cut agriculture, we are going to 
cut highways, we are going to cut justice, knowing the votes are not 
there.
  This is where bipartisanship has to come forward. We will have a 
significant number of Democrats and a significant number of Republicans 
that can agree on a realistic set of caps.
  Mr. BOYD. Reclaiming my time, Mr. Speaker, I think the important 
point is that any prudent business person would establish what the 
spending levels are first before they begin to implement any part of 
the budget. I think that is what the gentleman is recommending.
  Mr. Speaker, I yield to the gentleman from Texas (Mr. Turner), 
another leader in the Blue Dogs. He came in the same year as I did, 
after the 1996 election, and he has been a leader on these budget 
issues.
  Mr. TURNER. Mr. Speaker, I thank the gentleman for yielding to me. I 
appreciate the opportunity to share this hour with my fellow Blue Dog 
Democrats, the voice of fiscal conservatism in this House. We have 
worked long and hard on fiscal issues: paying down the debt, cutting 
taxes, balancing the budget.
  I am glad to be here with the gentleman from Florida (Mr. Boyd), the 
gentleman from Texas (Mr. Stenholm), my colleague, the gentleman from 
Utah (Mr. Matheson), and the gentleman from Mississippi (Mr. Taylor), 
to talk about what will be the dominant issue in this Congress for the 
next several months.
  I think we all understand that when we began this Congress, we all 
shared a commitment to try to work together in a bipartisan way. I was 
pleased to see President Bush, who I served with when he was Governor 
of Texas, come with a pledge to try to work in a bipartisan way, 
because for too long the two parties in this House and in this Congress 
have warred with one another in such a way that the American people 
have become tired of seeing the bickering that exists here, and perhaps 
we have an open window of opportunity to work together in a more 
congenial and more bipartisan way in the common interest of all the 
American people.

                              {time}  1415

  Mr. Speaker, I think the President's first test of bipartisanship 
will probably be the proposal on tax cuts. The Blue Dog Democrats 
believe there are two ways to put more money in the pockets of the 
American people. One is to cut taxes, two is to pay down our national 
debt and realize the lower interest rates that will flow for all 
Americans if we are fiscally responsible enough to pay down our 
national debt.
  It is not only the right thing to do for our children, not to pass 
that big debt to them, but it is the right thing for all Americans, 
because the combination of cutting taxes and paying down debt will put 
more money in their pockets.
  Economists estimate that if we can pay down our national debt, the 
publicly-held portion of it, over the next 6, 8 or 10 years, that we 
can lower interest rates by 2 percent for all American families. Now, 
that is a big deal, if you have to borrow money.
  I come from a poor district, where people have a relatively low 
average annual income, and a lot of folks I represent have to go to the 
bank occasionally to borrow money to buy a new car or to borrow money 
to buy a new home or to borrow money to send their children to college.
  For a family that has to borrow $115,000, for example, to buy a new 
home, if they pay that out on a 30-year mortgage at a fixed rate, 8 
percent interest would cost them a monthly payment of $844. If we can 
get interest rates down just 2 percent for that family, that monthly 
payment would be $155 less. That is $1860 a year that we could put in 
the pockets of that family if we could get interest rates down.
  Paying down the national debt not only will prevent us from passing 
on that terrifically huge debt to our children for them to figure out 
how to pay off, but it will put money in the pockets of American 
families today; so that is the choice.
  Are we going to be for the big tax cut that does not allow us to pay 
down the national debt, does not allow us to protect and preserve 
Social Security and Medicare for the future, that does not allow us 
room to strengthen our national defense? That is the choice that the 
American people and this Congress have.
  I know we all believe in tax cuts, and I want the biggest tax cut 
that we can afford, but this Congress must operate the same way that we 
all know we must operate in our own households. When we sit down at the 
beginning of the month, we balance our checkbook and we determine what 
our income is, and we divide that income up among the bills that we 
owe.
  If there is something left after we pay our bills, then maybe we can 
go out for a fancy dinner or maybe we can even decide to buy a little 
nicer automobile or maybe we can afford to take a trip, but at my 
household, and I know at yours, we decide that on a month-by-month 
basis.
  I do not know anybody who has ever sat down at the kitchen table and 
said,

[[Page H362]]

talking to their wife, you know, honey, I think, that we are going to 
be able to afford some things on down the line. I think I will probably 
get a raise every year for the next 10 years. And since I probably 
think I may get a raise, that means we have a surplus, and I think we 
ought to go ahead and spend that surplus now.
  That is what this Congress is doing when this Congress decides to cut 
taxes in an amount equal to the surplus that is estimated to arrive 
here over the next 10 years. You would not do that at your household, 
and this Congress should not do it either.
  We really have a very fundamental issue that I think every American 
family can understand. When you owe money, you pay your debt first. And 
if there is anything left, then we can cut our taxes, or we can spend 
on something like national defense or something that this Congress 
would like to support.
  These budget estimates of surpluses are really funny numbers. We tell 
the Congressional Budget Office to develop an estimate of how much 
money might come into the Treasury over the next 10 years under a whole 
bunch of assumptions that do not make a whole bit of sense. One of the 
assumptions is that Federal spending go up at the rate of inflation.
  Government spending, for the last 5 years, even under the Republican 
Congress, and all of us who have joined with them trying to hold down 
spending, government spending still went up at the rate of the gross 
domestic product. That is a fancy word, but it is a number that is 
bigger than inflation.
  If we just continued to spend on defense at the rate of the gross 
domestic product, $450 billion of this surplus we are talking about 
over the next 10 years would disappear. If we simply continue to spend 
on education at the rate of the increase in the gross domestic product, 
$400 billion of that surplus would disappear.
  What makes us think, after all of the efforts that we have made to be 
fiscally conservative and to hold down spending for the last 5 years, 
that we are going to be able to do even better than that? I hope we are 
better than that, frankly, but to cut taxes in an amount that prevents 
us from being able to meet the legitimate need of this country in areas 
like national defense is foolish.

  I am convinced that the tax cut that the President has proposed is 
too big. We simply cannot afford it. So what can we afford? I think the 
Blue Dogs have a reasonable plan. We have always said, as this whole 
Congress has repeatedly pledged, we will not touch the surplus that 
accrues in the Social Security trust fund or the Medicare trust fund. 
Those trust funds are going to need every penny that will accrue in 
those funds.
  What do we have left even under the optimistic estimate? We have 
about $2.7 trillion over 10 years. The Blue Dogs have said repeatedly 
take half of that and use it to pay down our national debt; take 25 
percent of it and let us cut our taxes and let us set aside 25 percent 
to be sure that we save Social Security and Medicare and strengthen 
national defense and provide our kids with the kind of education that 
we know they need.
  That is a fiscally conservative approach to budgeting, and the Blue 
Dogs believe foremost of all that we have to have a budget first.
  The President sent his tax cut down here the other day. He has not 
sent his budget yet, and he has pledged to us that his tax cut will fit 
within his budget. Frankly, I do not think it will, but even if he 
moves the numbers enough to make it fit, there is going to be some 
things that will have to be neglected that I think most Americans want 
to protect; foremost among those is to protect Social Security and to 
protect Medicare.
  Our seniors and those of us who will soon be seniors deserve the 
protection of a sound Social Security system, and we need to protect 
Medicare. Health care costs are going up. Many of the hospitals in my 
rural district are threatened with closing. I want to protect Medicare 
because those hospitals depend largely upon Medicare revenues to keep 
the doors open.
  We believe in fiscal responsibility. The Blue Dog Democrats are going 
to fight for fiscal responsibility, and I am glad to join my colleagues 
on the floor today to advocate what I think is in the best interests of 
the American people.
  Mr. BOYD. Mr. Speaker, I want to thank the gentleman from Texas (Mr. 
Turner), my friend, one of the leaders of the Blue Dogs, for his fine 
leadership on these issues.
  Mr. Speaker, I yield to the gentleman from Utah (Mr. Matheson), one 
of our new Members.
  Mr. MATHESON. Mr. Speaker, I want to say to the gentleman from 
Florida (Mr. Boyd), it is a pleasure to be here today to talk about the 
importance of fiscal responsibility.
  Mr. Speaker, I would like to tell the gentleman that when it comes to 
this type of issue, I am true to my Scottish heritage when it comes to 
money, especially the people's money.
  I do not like deficits, and I do not like debt. It means that we live 
within our means. I come from the State of Utah. I feel the way a lot 
of my constituents feel. We conduct our lives in a way where we live 
within a budget. We try to face the future in a way where we pay down 
our debts when we have the opportunity to do so, and we try to plan for 
the future and invest in the future to make the world a better place 
for our children.
  That is the type of attitude I think we ought to have as we approach 
this budget issue here in Congress, and that is why I am so proud to be 
associated with the Blue Dog coalition.
  The Blue Dogs was first introduced to me when I was a candidate, and 
we sat down and we shared our thoughts about budget issues, about our 
desire to pay down the debt. Issues that make sense to me. Common sense 
solutions.
  The Blue Dogs have a reputation of being up front with people about 
telling the truth, about trying to cut through a lot of the rhetoric 
that we have in terms of addressing such important issues. That is why 
I am proud to be here today with my fellow Blue Dogs to talk about 
these issues. I think as we look at this issue, it is important that we 
have the right perspective.
  I have learned in my life as a businessman and in my personal life 
that it is very easy to get caught up in the short term day-to-day 
pressures and emotions of the moment, and that dominates your 
perspective. And, yet, we all recognize the benefit of taking a step 
back and taking the longer view when we make decisions.
  We make better decisions when we do that; that same applies to 
Congress. I think too often we have a short-term perspective here. 
People look out to the next election when they make decisions.
  We should not be driven by the next election. When we are making 
decisions, we should be looking at the next generation in how we make 
decisions on these important issues of maintaining fiscal 
responsibility, that is the perspective that I would like to have 
brought before this whole House of Congress.
  Let us make it clear there will be tax cuts this year. I have 
certainly campaigned on the notion of tax cuts in terms of addressing 
the marriage penalty and estate tax issues, and I think there is great 
support within Congress to pursue that type of tax cut.
  As we move forward in this tax cut discussion, I would offer a quick 
list of five items that should be considered, common sense 
considerations, that ought to be included in any discussion of these 
issues.
  The first is that let us be up front about the nature of these budget 
projections. We ought to be skeptical about this. We are talking about 
a 10-year projection, and what is interesting is over 70 percent of the 
projected surplus takes place in the second 5 years.
  Does it really make sense for us today to make a commitment assuming 
that is going to happen then? What is the rush to make that decision 
today? The responsible thing to do is to live within our means, do what 
we can to try to have our economy grow. And we hope that surplus 
occurs. We should all do what we can to make that occur, but let us be 
skeptical about the notion that this surplus is definitely going to 
happen.
  I am a businessman. I have dealt with projections before. When we 
make projections of the future, the one thing we know, the minute we 
write it down on the paper is it is probably going to be wrong, so we 
ought to be cautious and we ought to be smart about that.

[[Page H363]]

  But let me talk about a future prediction where we can be certain, 
that is the second consideration we ought to keep in mind. The second 
prediction about the future is that we are going to have a whole bunch 
of baby boomers starting to retire in about 10 years, so wherever the 
economy goes, we know, in terms of the demographics of our country, we 
are going do have a lot more people moving into the retirement phase of 
their lives, and that is going to place far more pressure on Social 
Security and Medicare.
  We have the opportunity now, while times are good, to address that 
issue. Let us not squander the prosperity we have today with short-term 
thinking. Let us take that longer view when it comes to Social Security 
and Medicare.
  A third issue I will mention, a consideration we ought to think about 
as we look at these tax cuts. Most of us have put together a budget in 
our lives. Those of us in the business world have done that a lot. 
Everybody has probably done it for their own household, and when we 
look at a budget, simply stated, you look at money in and you look at 
money out. You have revenues and you have expenses, and you match them 
up, and you figure out what makes sense.
  Right now we are only looking at half of that equation. How can we, 
as an institution, make informed decisions about tax cuts which affect 
the revenue side without also understanding how it fits with projected 
expenses?

                              {time}  1430

  I say that if we are going to behave in a responsible manner, it is 
important to look at the whole budget before we make decisions.
  Fourth, the issue we ought to remember is let us recognize the true 
cost of any tax cut. The projections we have right now about the 
surplus are based on nothing happening, on taxes staying the way they 
are now. If we do have that surplus, the assumptions in these 
projections are that we are going to pay down our debt. As we pay down 
the debt, we lower government spending on interest on that debt. If we 
are going to cut taxes, there is going to be a corresponding increase 
in government spending because we are not going to be paying down the 
debt as fast and there is more of an interest expense.
  We are going to pursue tax cuts, but as we talk about it, let us be 
honest. Let us talk about the full cost of any tax cut that we pass in 
Congress. There is a cost in terms of increased interest because the 
debt will not be paid down as fast.
  A fifth point that is a consideration, as we look at tax cuts is the 
notion that paying down the debt creates so many benefits, so many 
benefits in the short term, so many benefits in the long term. We bring 
down interest rates. That is good. We give ourselves greater 
flexibility if we remove that as part of government spending. Right now 
interest is the third highest expenditure of the Federal government 
behind Social Security and defense. We all like the notion of trying to 
cut government spending. This is an easy one. All we have to do is show 
some discipline, pay down our debt and lower expenditures on interest. 
That makes sense to me.
  I think that it is important to have this discussion today as Blue 
Dogs, but I think it is important to have this discussion with our 
friends across the aisle. If we can take that longer view and set aside 
considerations of just the next election, there will be a better 
opportunity to have some bipartisan consideration and to really affect 
this in a positive way. We ought to have a bipartisan agreement to be 
fiscally responsible. I think we share a lot of values on both sides of 
the aisles. I am convinced that the Blue Dogs are prepared to engage in 
those discussions.
  Mr. BOYD. Mr. Speaker, I want to thank the gentleman from Utah (Mr. 
Matheson) for coming. He is obviously going to be a very productive and 
bright Member of this Congress as we move through these critical times 
for this Nation.
  Next, Mr. Speaker, I want to call on the gentleman from Mississippi 
who has been a leader on military views, particularly issues which 
relate to the welfare of our troops, all of our military men and women 
around the world; and obviously our national defense is maybe the most 
important role of this Federal Government.
  The gentleman from Mississippi (Mr. Taylor) is going to spend some 
time now talking about the budget, and I am honored to yield to the 
gentleman from Mississippi.
  Mr. TAYLOR of Mississippi. Mr. Speaker, I want to thank the gentleman 
from Florida for this opportunity.
  If I were to walk into a town hall meeting and tell the people there 
that I discovered this magic cure to where our Nation can quit wasting 
a billion dollars a day, I would think that they would be excited about 
it.
  People always say how about stopping wasteful foreign aid, which is 
about $13 billion, or why can we not cut back on food stamps which is 
about $30 billion. A $1 billion a day is $365 billion a year. If I can 
tell you that I had a way to quit wasting $1 billion a day of your tax 
money, I think you would be excited about it.
  It is that easy. We just pay off the national debt. Each day this 
Nation squanders $1 billion in interest on the national debt. We did it 
yesterday, we did it the day before that, and we will do it tomorrow; 
and by the way, we are going to do it every day for the rest of your 
life until we pay off the national debt.
  With that money do we educate a child, build a road, contribute to 
national security, fulfill our promise of lifetime health care to our 
retirees, no. That is why it makes it the most wasteful thing that we 
do as a Nation, is squandering your tax money in interest on the 
national debt.
  What troubles me in this whole tax cut debate is how many of my 
colleagues from the Republican party are ignoring the fact that this 
Nation is $5.7 trillion in debt.
  All of us have a tendency to think, well, I am 47 years old so I 
guess my generation has done my share of that debt because the Nation 
has been around for a long time. I wish that was true; but it is not. 
You see, almost all of the debt has occurred since 1980. And I think 
1980 is a magical year. I hope we will keep it in mind during this 
whole debate. People say the Reagan years were a model for prosperity. 
They cut taxes and revenues went up and everything got better. Not 
quite true.
  Actually during the Reagan administration with a Democratic House and 
Republican Senate, the debt doubled. All of the debt in the first 200 
years of our Nation doubled in those 8 years. It set in motion a series 
of events which continued to get worse and only got better this last 
fiscal year when the Nation, for all of the talk of huge surpluses, had 
a tiny $8 billion surplus after we take into account the trust funds.
  One of the things that I fear my Republican colleagues are doing, and 
I hope I am wrong and I want to give them an opportunity to tell me I 
am wrong, is misleading the American public as to the true nature of 
the debt. These are trust funds, and the key word here is trust. People 
in the military trust that money is set aside to pay for their 
retirements which adds up to $163 billion. They trust that that money 
is set aside and will be there to pay for their retirement.
  Mr. Speaker, Americans know that a portion of their salary is taken 
out every month in their Social Security payment; and they trust that 
that money is being set aside so that when they retire, it will be 
there to pay their benefits. Americans who have a job also know that 
they are paying into the Medicare trust fund. Again, they are trusting 
their Nation to take that money and set it aside so when they get old, 
and if they get sick, we are going to help them with their medical 
bills.
  Those people who work for our Nation have a trust fund as well. It is 
called the Federal Employees Retirement System. Again, money is taken 
out, it is supposed to be set aside so it is there to pay their 
benefits when they retire.
  The net value of all of these trust funds is $2.348 trillion. But let 
me tell you the bad part. There is not a penny of it anywhere in any 
bank anywhere in the world. All there is for the $2.348 trillion are a 
bunch of IOUs. So when my Republican colleagues and our new President 
talk about all of this money

[[Page H364]]

laying around in Washington, I challenge them to show me where that 
$2.348 trillion is. It is not there.
  And so would you not think that since honesty is going to be the 
order of the day under this administration, the most honest thing that 
we could do is pay back the money that we owe them. The military 
retirees who defended our Nation in places like Vietnam, Korea, Kosovo, 
Desert Shield, Desert Storm, do you not think that we ought to honor 
their commitment by paying them back the $163 billion that we owe them?
  How about the folks that have paid into Medicare with the assumption 
that that money is going to be there when they get old. Do you not 
think that we ought to pay that money back? And it is to date $228 
billion that we owe. It is gone. All we have is an IOU.
  How about Social Security. Between old age survivor's insurance and 
the disability under Social Security which you paid into, we owe you 
$1.66 trillion. How can there be a surplus when we owe you that much 
money. Their buzz word is it is your money. They are right, and I think 
we ought to pay it back. I think that is a higher priority than giving 
some Americans a tax break. The groups that I talk about constitute 
every American, and the most honest thing that we can do is pay you 
back.
  So let me tell you what has happened in the first 11 days of the Bush 
administration that troubles me. This publication used to come out at 
the end of the month for decades. It was called the Monthly Statement 
of the Public Debt. It was available on the World Wide Web for every 
American to see on a monthly basis, whether the politicians were paying 
down the debt or making it bigger. Within 11 days of the Bush 
administration taking over, what forever was called the Monthly 
Statement of the Public Debt of the United States was changed to the 
Monthly Statement of Treasury Securities of the United States.
  Now, I have just got a hunch if I were to walk into a restaurant or 
coffee shop anywhere in America and went up to an unsuspecting couple 
and said would you like some of the public debt, they would probably 
tell me, no. That is your problem. But if I went to that same couple 
and said how would you like some Treasury Securities, they would 
probably take me up on that deal.
  Do you remember the book 1984 where when there was a word they did 
not like, they came up with a new word to disguise the nature of it and 
they called it ``news speak.'' Folks, this is news speak. This is an 
attempt by the Bush administration to mislead the American people as to 
the true nature of the public debt; and it is wrong. I have written the 
President. I do not think that he personally did it. I think somebody 
in his administration did it, but I want him to be aware of it. I think 
it ought to be changed.
  Mr. Speaker, I think it is time we as a Nation were honest with the 
American public and paid them back the Social Security that we owe to 
them; paid them back the Medicare that we owe to them; paid the 
military retirees the money that we owe to them; and paid the 
Federal employees the money that we owe to them.

  Mr. Speaker, after we fulfill those commitments, then we start 
looking for new ways to give some American tax breaks.
  Mr. BOYD. Mr. Speaker, I thank the gentleman from Mississippi. You 
can see that he does his home work. He understands these issues very 
well, and he has certainly been a leader on the military and budget 
side as it relates to the Federal debt.
  At this time I would like to call on my friend the gentleman from 
Indiana (Mr. Hill) who is a wonderful new member of the Blue Dogs, 
actually moved out of the blue puppy category into a sophomore.
  Mr. HILL. Mr. Speaker, I thank the gentleman from Florida and my good 
colleagues on the Blue Dogs Coalition.
  Mr. Speaker, 2 years ago when I joined the Blue Dogs, I didn't know 
exactly what to expect, but I have discovered in the last 2 years that 
this is an organization of conservative Democrats that are very honest 
about what they say.
  Mr. Speaker, everything that we have heard here today is exactly as 
it is. One of the great things about being a Blue Dogs member, and 
there are 33 of us, is that one can rely on the information that one 
receives. What the American people have been receiving in terms of the 
speeches that have been made here this afternoon is the truth. If the 
truth is known to the American people, I think that they will agree 
what we are talking about in terms of paying down the debt is an 
important component of this budgetary process and something that we 
ought to be doing.
  Now, I cannot do as well as the other speakers have done so I will 
not repeat what they have said, but I do want to bring up one point and 
that is when CBO has made all of these huge projections of what the 
surpluses are going to be over the next 10 years, they will also tell 
us in their report that there is a 50 percent chance that they are 
going to be a hundred billion dollars wrong in the first 5 years. Most 
people do not realize that. Members of Congress I am sure do not 
realize that. If you do not take my word for it, go to the Web site. It 
is www.cbo.gov.
 Mr. Speaker, the other projection they talk about is in the following 
5 to 10 years there is a 50 percent chance that they will be off at 
least $250 billion. So we are talking about at least, at a very 
minimum, of a $350 billion potential swing in these projected budget 
surpluses. That is why the Blue Dogs have never come up with numbers, 
they have always come up with percentages. The idea of paying 50 
percent of these surpluses down on paying the debt is a realistic 
approach to this budgetary process that does not lock us in and 
jeopardize our future in terms of going back to the old days of deficit 
spending.
  Mr. Speaker, I want to make a point that there is a huge room for 
error in these projected surpluses, that we need to be cautious. The 
most important thing that we can do is pay down the debt in a way that 
is fiscally responsible and do tax cuts in a way that is fiscally 
responsible.
  Mr. BOYD. I yield to the gentleman from Washington (Mr. Inslee).
  Mr. INSLEE. Mr. Speaker, I am not a member of the Blue Dogs 
Coalition, but I would like to be an honorary one today because I think 
this organization truly is the voice of fiscal responsibility in this 
institution, and I am so happy that my colleagues are here today with 
this message.
  I have three points. Point one has to do with a story from this 
weekend. I was talking to a colleague who went to a meeting this past 
weekend, and he started to talk about the surplus. An older gentleman 
came up and poked his fingers in my colleague's chest and said, what do 
you mean by the surplus, you man, and my colleague started to explain 
it. He said, no, no, no, hold it right there.

                              {time}  1445

  As long as we have got a big debt, we have not got a big surplus. And 
this was not Alan Greenspan talking, but this was a fellow who I think 
was in touch with the heartland of this country, who understands that 
with a $5 trillion debt we ought to take care of the deficit first. 
That gentleman understands that 14 percent of all of his taxes, $14 of 
every $100 of income taxes he paid last year were wasted, down the 
black hole. They did not get a teacher, they did not get a soldier or a 
sailor, but went to pay interest on the Federal debt. That gentleman 
understood we have to pay a commitment to the public debt.
  Second point. All of the numbers, which are essentially a fiscal 
hallucination about this alleged surplus, talk about this 10-year 
window of opportunity. But it is real interesting, because guess what 
happens the day after that 10-year opportunity? We baby boomers start 
to retire. The baby boom generation, which is going to drive us into a 
fiscal ditch, starts to retire in year 11, year 12 and year 13. And we 
know what will happen then: we will go right back down into deficit 
spending if we do not eliminate this debt first.
  It is time for the baby boom generation, which I am a member of, to 
grow up. It is time for our generation to be fiscally responsible. And 
I appreciate the Blue Dogs and their request of the new administration. 
I hope they are serious about bipartisanship. This will be the real 
test to see whether they engage us, the Blue Dogs, and everybody else 
in a discussion of what this tax cut ought to be.

[[Page H365]]

  Mr. BOYD. Mr. Speaker, I want to thank the gentleman from Washington 
for joining with us here on the floor, and we certainly do want to make 
him an honorary Blue Dog.
  Mr. Speaker, I would like to yield now to the gentleman from Texas 
(Mr. Stenholm) to summarize.
  Mr. STENHOLM. I thank the gentleman for yielding, and I want to help 
clarify some other rhetoric that we will be hearing from this floor 
regarding spending.
  I have served in the House of Representatives since 1979. When we 
look at discretionary spending by the Congress, it has declined by 36 
percent from 1978 until the year 2000 as a percent of our gross 
domestic product. Entitlement spending has gone up 3 percent during 
that same period. Revenues have gone up 14 percent since that period. 
Interest rates have gone up 43 percent.
  That is why we are emphasizing paying down the debt. Monies spent on 
interest are the least productive number of dollars that we can spend 
in this Congress. Money spent on defense, on veterans, on military 
retirees, on health care, on education, on agriculture are the most 
productive dollars that we can spend. So long as they are spent 
prudently and with policies that we can agree to in a bipartisan way, 
they are the most efficient and the best way to deal with our Nation's 
problems.
  Mr. BOYD. Mr. Speaker, I want to thank the gentleman from Texas and, 
in summary, I want to read from the CBO's report that just came out, 
the summary. It will just take a few seconds here.
  The summary starts out this way, Mr. Speaker, and I quote: ``In the 
absence of significant legislative changes and assuming that the 
economy follows the path described in this report, the CBO projects 
that the total surplus will reach $281 billion in 2001. Such surpluses 
are projected to rise in the future approaching $889 billion in 2011 
and accumulating to a $5.6 trillion figure.'' We know over half of that 
is Social Security. Here is an interesting sentence, Mr. Speaker: 
``That total is about $1 trillion higher than the cumulative surplus 
projected for the 10-year period in CBO's 2000 report, July 2000.''
  In 6 months, Mr. Speaker, the projected surplus changed by CBO's own 
estimates over $1 trillion. And I want to read one more sentence that 
goes on later in the summary report, Mr. Speaker, and this really 
should give pause to many of our American citizens:
  ``Over the long-term, however, budgetary pressures linked to the 
aging and retirement of the baby boom generation threaten to produce 
record deficits and unsustainable levels of Federal debt.'' Mr. 
Speaker, I want to say that again. ``Budgetary pressures linked to the 
aging and retirement of the baby boom generation threaten to produce 
record deficits and unsustainable levels of Federal debt.''
  I am reading directly from the summary of the CBO report which came 
out last month.
  Mr. Speaker, I want to thank the indulgence of the House and for the 
Speaker's courtesy today, as well as my colleagues who came and 
assisted today.

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