[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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