[Congressional Record Volume 148, Number 17 (Tuesday, February 26, 2002)]
[House]
[Pages H545-H551]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     AMERICA NEEDS A WARTIME BUDGET

  The SPEAKER pro tempore (Mrs. Capito). Under the Speaker's announced 
policy of January 3, 2001, the gentleman from California (Mr. Schiff) 
is recognized for 60 minutes as the designee of the minority leader.
  Mr. SCHIFF. Madam Speaker, this evening the Blue Dog Democratic 
Coalition in the House will discuss the administration's request that 
Congress raise the Federal debt limit, an issue that we must address 
tonight in light of our current fiscal situation.
  Simply put, America needs a wartime budget. We need a budget that 
will provide the resources necessary to win the war on terrorism, but 
not a dollar of wasted spending, that will stimulate our economy 
without aggravating our long-term deficits and that will protect and 
reform Social Security and Medicare but not finance the war out of its 
trust funds.
  In sum, our country needs a budget that will call on the American 
people to make sacrifices to win, sacrifices they are willing to make 
if only their leaders will have the courage to ask and speak plainly.
  The President's budget is not there yet. The budget calls for the 
most significant increase in military spending in more than 2 decades, 
and most of that increase will enjoy broad bipartisan support. We will 
do everything necessary to protect this country and our armed forces.

  The budget also proposes more than $500 billion in additional tax 
cuts, and it also proposes some additional domestic spending.
  And the budget requires sacrifice. There is only one problem. It is 
not we who are being asked to sacrifice, it is our children. America 
will win the war on terrorism whether we have a wartime budget or not. 
Such is the resolve of the American people. But if we do not manage our 
Federal budget properly during this time of war, we will have precious 
little for anything less, schools, roads, health care, our future, our 
kids. In our victory, it will be our children who have borne the full 
cost of the battle. Not only are they the ones who will do most of the 
fighting, but the war will have been financed from their retirement, 
from their Social Security, out of their Medicare, and from their GI 
bill.
  Because we are in a two-front war, after all. We are in a war around 
the world in more than 60 countries that harbor terrorists like al 
Qaeda, nontraditional foes that do not wear army uniforms, do not carry 
a national flag and do not have any qualms about the deliberate killing 
of innocent civilians.
  And we are in a second war on another very large front called the 
United States where we must guard our civilian aircraft, our water 
supply, nuclear power plants, and a thousand other possible targets, 
and winning this war will be costly under the best of circumstances.
  Every generation of Americans can be the greatest generation. 
Courage, patriotism, love of freedom and love of country course through 
American veins. That spirit did not die out among the generations of 
World War II, Korea, or Vietnam. We saw that clearly after September 
11. But there is one virtue we have yet to demonstrate before we can 
take our rightful place among the greatest generations: the willingness 
to sacrifice.
  The price of freedom is high, and Americans have always paid it, 
President Kennedy said. We must pay it still. We should not, we must 
not, make our children pay it for us.
  America has always been willing to sacrifice. She still is. But she 
must be asked by leaders who are willing to speak candidly about what 
is at stake and what it will take to win. She must be asked by leaders 
with faith in the essential generosity of the American people and who 
will not tell us that we can have our cake and eat it, too.
  Members of the Blue Dog Coalition have always believed in crafting a 
budget in a balanced and thoughtful way that maintains our fiscal 
discipline, continues to pay down our national debt and does not rely 
on rosy or unrealistic long-term projections. That has been a hallmark 
of this group's legacy in Congress. A central component to fiscal 
discipline is putting forth a budget that is responsible and honest.
  The administration has come to Congress and has asked this body to 
approve raising the debt limit so our country can continue to operate. 
We agree that this action is necessary, but we urge the administration 
to work with us to establish a long-term plan that is based on a 
realistic budget proposal. Only with an honest account of our economic 
outlook can we responsibly plan for the future of this Nation.
  As we craft a budget for fiscal year 2003, we need to understand 
fully what our Nation requires and we need to use real numbers. We must 
accurately account for every tax reduction, and we need to include 
government expenditures that are virtually certain to occur.
  Unfortunately, many costs have been left out of the administration's 
budget calculations. The budget is not balanced, and I would encourage 
my colleagues to take a closer look at some of the calculations used in 
this year's budget proposal. Here are a few examples:

  First, the budget makes recently proposed and enacted tax cuts 
permanent. However, it does not include the cost of extending the 
individual Alternative Minimum Tax beyond 2004, which is almost certain 
to occur. The budget assumes that there will be 39 million taxpayers 
subject to the AMT by 2012, but there is almost no possibility that 
that will be allowed to take place. In fact, the Joint Committee on 
Taxation estimates that the cost of addressing this problem alone 
amounts to several hundred billion dollars over the next 10 years, a 
cost which the administration budget leaves out.
  Second, the administration's budget extends certain popular tax 
credits for only 2 years, while it is almost certain that they will be 
extended for the full 10 years. Research and development tax credits, 
for example, have been in place since 1981 and have been instrumental 
in our Nation's ability to develop technology, biomedical research, and 
scientific breakthroughs. We cannot realistically expect that these tax 
credits will be phased out in 2 years. But the administration's budget 
proposal only includes them for 2 years instead of 10.
  Finally, the budget proposal also underestimates the costs of all the 
new proposed tax cuts by phasing them in very slowly so that their full 
cost will not appear until late in the decade. For example, the 
proposed deduction for charitable contributions would not become fully 
effective until the year 2012.
  The budget that came from the White House estimates its tax cut 
proposals as costing $665 billion between 2003 and 2012. In reality, 
the cost would be much higher. The Center for Budget and Policy 
Priorities estimates the true cost is closer to $1 trillion over the 
next 10-year period, and that is not all.
  Under the House-passed economic stimulus bill, huge retroactive tax 
relief would be provided to some of America's largest corporations. 
Enron itself would have been the beneficiary of more than $250 million 
in tax benefits, all at a time when we are spending the Social Security 
surplus.
  The President, as well as the House leadership, must rethink the 
magnitude of these new tax cuts which have been proposed. Some tax cuts 
are desirable. They have a stimulative impact on the economy if they 
are designed to affect current spending, and they empower the taxpayer 
to control more of his or her own financial choices and destiny.
  When we had a $5.6 trillion surplus and no war, we could afford a 
substantial tax cut, and I supported the President. But now we are at 
war. We have no surplus, and we are spending the Social Security trust 
fund.
  While I would not blame the President for the recession and none can 
fault him for the war that has been thrust upon us, the fact remains 
that we now have both and we cannot shrink from the consequences. We 
need a plan for the long-term budget that brings us back to a time of 
fiscal responsibility. We are spending money faster than it is coming 
in and, in doing so, we are risking the long-term solvency of our 
Federal budget and, worse, we are mortgaging our children's future. We 
must come together to offer an honest budget for the American people, 
one without gimmicks

[[Page H546]]

that disguise short-term costs and inhibit long-term stability.
  We must work together in Congress and with the administration to 
resurrect a balanced budget, applying accurate economic and fiscal 
assumptions and without using the Social Security surplus.

                              {time}  2030

  Madam Speaker, we have several members of the Blue Dog Coalition here 
this evening to address these issues, and the first Member I would like 
to introduce is from the State of Indiana (Mr. Hill). The gentleman 
from Indiana (Mr. Hill) has used his experience and financial 
background to make great contributions to the budget debate in Congress 
and has been a leader on the issue of fiscal responsibility.
  Mr. HILL. Madam Speaker, I thank the gentleman from California for 
yielding.
  Madam Speaker, the Federal Government is up to its eyeballs in debt 
once again. Now the administration is asking Congress to throw it a 
life preserver so it can, in the words of the Treasury Secretary, 
``restore the American economy to the path of long-term growth and 
ensure the premier status of the Federal Government's debt 
obligations.''
  Now, what is the price tag for accomplishing these aims? Three-
quarters of a trillion dollars; three-quarters of a trillion dollars in 
additional debt, three-quarters of a trillion dollars more debt for our 
kids and our grandchildren.
  Now, let me be clear: I am committed to making sure the United States 
Government can meet all of its fiscal obligations. We Blue Dogs are not 
down here this evening to propose that Congress should let the Federal 
Government drown in its own debt. But let me also be clear that it 
makes no sense for Congress to toss Treasury a 24-karat-gold life 
preserver, when the administration has not explained how it will put us 
back on the path of fiscal responsibility.
  Being back home in southern Indiana the last 11 days gave me the 
opportunity to listen to Hoosiers and their concerns. Without 
exception, the people I heard from know what it means to be fiscally 
responsible. They understand you cannot spend more than you take in. 
They understand that if for some reason you are in debt, you need to 
plan to get out of debt. They understand planning from week to week and 
month to month will require them to make some tough choices.
  Our constituents deserve nothing less from us. I am prepared, my Blue 
Dog colleagues are prepared, and we all must be prepared to make the 
tough choices here in Congress.
  Tonight we are asking the President to take the lead and show us the 
way back to a balanced budget that does not use the Social Security 
surplus. The President's proposed budget makes clear that there is much 
work to be done in order to achieve this goal. In fact, it projects 
deficits financed by borrowing the Social Security surplus through the 
year 2009.
  Times have certainly changed. In 1999 and 2000, the entire Social 
Security surplus was available to pay down the national debt. By 
contrast, this year and next the Federal Government will spend every 
single dime of the Social Security surplus on everything but Social 
Security and paying down the debt. As a consequence, the national debt 
is now expected to be roughly $2.75 trillion larger than was estimated 
just a year ago.
  It should come as no surprise, Madam Speaker, that Hoosiers also 
understand how this increased debt burden can make their already-tough 
choices even tougher. With the Federal Government again borrowing from 
the public, long-term interest rates almost certainly will not come 
down. In fact, they probably will rise. As long as these rates are 
static, or, worse, on the rise, small business people, credit card 
users and home buyers will get pinched.
  Plain and simple: the size of the national debt matters, not only to 
those who make their living crunching numbers and working in think-
tanks.
  The President has performed admirably while prosecuting the war on 
terrorism. Tonight, Madam Speaker, we are asking that he exhibit the 
same leadership by proposing a way to get the country's budget back on 
track, and that means balanced budgets and hands-off on Social Security 
surpluses.
  Mr. SCHIFF. Madam Speaker, I thank the gentleman for his comments 
this evening and his leadership on this issue.
  The gentleman talked about the impact of a deficit-spending pattern 
on long-term interest rates, and when we talk about a mortgage on our 
children's future, this is not simply rhetorical; it really is 
literally a mortgage. As we have seen over the last several months, as 
the Federal has lowered short-term interest rates it has had very 
little effect on long-term interest rates. Why is that? Because, over 
the long term, given the budget that we have, there is the expectation 
that the government will continue to borrow and borrow more and borrow 
more, and those long-term rates are remaining stubbornly where they 
are.
  What does that mean for our children and for ourselves? It means that 
many people will be priced out of a home and that others that have a 
home will have that home with a mortgage that is far higher and they 
will be paying more for it.
  There is no free lunch here with deficit spending. We pay for it, and 
we pay for it in the form of higher interest rates and sacrifices we 
make to our children's future.
  The gentleman from Indiana (Mr. Hill) talked about the reason why we 
are here tonight, the Secretary's request for $750 billion in new 
authorization for new debt. Where does that come from? Why does the 
administration come to Congress to ask for the authorization of new 
debt?
  Congress has always played a vital role in managing the national 
debt. Prior to 1917, Congress approved each issuance of debt, including 
determining its interest rate and term. Then Congress passed the second 
Liberty Bond Act of 1917, which allows the Treasury to borrow as 
necessary to finance Federal activities up to a specified legislatively 
adopted limit.
  That law was initially adopted to facilitate wartime planning during 
World War I and to accommodate the Treasury's need for flexibility in 
financing growing government activities. It also freed Congress from 
having to legislate each issuance of government debt.
  The limit persisted after World War I and has been raised 
periodically as government debt has increased, which leads us to where 
we are today. The administration has come to Congress asking us to 
raise the debt limit a full 7 years earlier than it predicted when the 
budget was submitted only last year.
  Of course, we all recognize much has changed in the past year. We 
acknowledge the needs of our Nation during a time of war and recession, 
and we agree that the debt limit should be raised in order to avoid a 
financial crisis. However, we cannot simply write a blank check to 
increase borrowing authority without safeguarding the American 
taxpayers from even further increases in the national debt.
  The request to raise the debt presents us with an imperative that we 
examine our long-term budget policies. We must first understand how we 
got to this point. The national debt is an accumulated IOU that the 
government owes the people and institutions that have been lending it 
money for decades. Our current debt stands at nearly $5.95 trillion. 
This debt represents the amount borrowed by the public to cover the 
Federal Government's budget deficits, and the debt held by the 
government accounts represents the amount of Federal debt issued to 
specialized Federal accounts, primarily trust funds like Social 
Security.
  Now the administration estimates it will hit this current $5.95 
trillion ceiling by late March, jeopardizing the timely payment of 
government bills. The Secretary has asked Congress to provide $750 
billion in additional borrowing authority to last until 2004.
  It seems ironic that just last year the administration predicted that 
there would be no need to raise the debt limit until 2008. In fact, if 
you recall, and it seems quaint today, we were warned about the dangers 
of paying down the debt too fast.
  Certainly it is true that unforeseen circumstances, including the 
devastating events of September 11, our involvement in the war on 
terrorism and the downturn in the economy have contributed greatly to 
this situation, and we all recognize the necessity of

[[Page H547]]

allowing the Federal Government to continue operating by raising the 
debt limit. But we also recognize the responsibility of Congress to 
work with the administration and ensure that we have a long-term 
economic recovery plan.
  Let me now introduce my colleague, the gentleman from Arkansas (Mr. 
Berry). As a pharmacist, he has been active on prescription drug 
issues, and has been dedicated to paying down our national debt and 
saving the Social Security Trust Fund and Medicare.
  Mr. BERRY. Madam Speaker, I thank the distinguished gentleman from 
California, and I particularly appreciate his efforts this evening to 
address this issue that we are going to be faced with very shortly.
  The first year I served in this House, 1997, I think was the last 
time that we raised the debt ceiling; and I remember for as long as I 
can remember the talk on this floor was that we had to have a balanced 
budget, that we should pay off the debt, that it is our job to be 
fiscally responsible. We have all heard that. I would bet there is not 
a Member of this House or a Presidential candidate or a Member of the 
United States Senate that has not sworn their allegiance to that idea, 
that we have to live within our means.
  There are certain times that one never forgets. One of mine is last 
year, just about this time, the new Director of the Office of 
Management and Budget came to the Blue Dogs and he made this statement: 
``My greatest fear is that we will pay off all of the national debt and 
no one will be able to buy a United States Savings Bond and they won't 
have a safe place to invest their money.''
  It is with great regret this evening that I have to tell you that 
those bonds are going to be available for a long, long time. The bad 
news is, our children and grandchildren are going to have to pay them 
off.

  We have all heard that we should run government like a business. This 
is no way to operate. And yet here we are going to be forced to vote to 
increase the debt. We should not do that until there is a plan in place 
to deal with this problem.
  We have spent all of the Social Security Trust Fund. It is all gone. 
There is no money left in it, and we are going to borrow a lot more to 
go with that. Then we are going to turn around and say to our children 
and grandchildren, we squandered it; we had the chance, and we did not 
do anything about it. We blew it. We spent it all, and now you deal 
with it. It is your problem.
  That is no way for the greatest Nation in the history of the world to 
operate. It is irresponsible, and we should not let this happen.
  Our Blue Dog Coalition has been dedicated all the time I have been 
around and before that to fiscal responsibility, and I am proud to be 
associated with all of the Members that participate in the Blue Dog 
Coalition because of their commitment to this one idea, that we can 
operate within our means, and we should operate within our means.
  It is a heartbreaking thing for me to think that we will spend all of 
the Social Security Trust Fund, and borrow more money than that, and 
turn around and pass that debt to our children. What responsible person 
would do that to his children, to his family, and what responsible 
Congress would do that to their country?
  I want to thank the gentleman from California again for his 
leadership in this matter, and thank him for yielding time.
  Mr. SCHIFF. Madam Speaker, I want to thank the gentleman from 
Arkansas for his statement this evening. It so clearly mimics, I know, 
what my family taught my brother and me. It was very important to my 
parents that they pass on to their children more than what they 
inherited; that they passed on a safer community, better schools. They 
wanted for their children more than what they had.
  I feel that same commitment. I am a relatively new dad. I have a 3-
year-old, and I have a new child on the way; and when I think about 
what we are going to leave for my children, and I ask myself the 
question, will they have as good public schools as the ones I went to, 
will they have a decent health care system, will they live in a safe 
community and a safe country, what will be set aside for their future? 
It is times like now that we are put to the test as a generation. What 
will we leave our children?
  Madam Speaker, I would now like to introduce another colleague from 
the Blue Dog Coalition, the gentleman from Utah (Mr. Matheson).

                              {time}  2045

  The gentleman from Utah (Mr. Matheson) is a member of the Committee 
on the Budget. He has been committed to working in a bipartisan fashion 
to ensure that the Federal budget is fiscally sound and balanced, and 
all I can say to the gentleman from Utah is if we could get the budget 
in as good of shape as the Olympics were run in Utah, we would be in 
very good shape.
  Mr. MATHESON. Madam Speaker, I thank the gentleman for conducting 
this session tonight with all of the Blue Dogs to talk about what I 
think is such a critical issue.
  Let us remember why we are here. We are talking about a request that 
has come in for us to raise the debt limit by $750 billion. We throw 
numbers around here all the time, and sometimes they lose a little of 
their meaning. We should really think about this. This is a lot of 
money, and it is going to extend the debt limit by a lot.
  Think about how this relates to us in the private sector. Before I 
came here, I worked in the business world. There were times when I used 
to develop a couple of large projects and I had to go to a bank because 
I did have to borrow money to help pay for the project. There are times 
when one does need to go into debt to borrow money for a project in the 
business world, to take out a mortgage on a house. But what I had to do 
when I took that money out for that business project is I had to have a 
story I could tell to the lender about how I was going to pay that 
money back over time. When I took out a mortgage on my house, I had to 
explain to the lender how I was employed, how I had a salary, and how I 
was going to be able to pay back that mortgage over time.
  The problem we have here now as Members of Congress is that we are 
being asked to take on this new mortgage, $750 billion, in fact, a 
pretty big mortgage. The story has not been told about how we are going 
to get out of this pattern, about how we are going to get out of going 
back to borrow and borrow, about how we are going to pay this mortgage 
off. I think that is a relevant question to be asking.
  I do not want to force the government into some financial catastrophe 
by having to be put into a situation where Congress is not willing to 
ever raise the debt limit, because there are circumstances where 
sometimes the government is going to have deficit spending: times of 
war, times of economic recession. We may have some difficulties in 
certain circumstances.
  But the notion, the notion that we should raise this limit by this 
huge magnitude, $750 billion, with no story, with no story about how we 
are going to stop the red ink and how we are going to ultimately pay 
this off, that is fiscal irresponsibility.
  So I call on the President, I call on my fellow Members of Congress. 
We need to work to articulate a story for how we are going to get out 
of this mess, get out of the deficit spending pattern; and if we are 
going to raise the debt limit, $750 billion is not necessarily what we 
need to do. Maybe we should look at a lot lower number while we work on 
a plan to get away from this deficit spending habit.
  That is the way it works out in the real world, in the business world 
when we need to borrow money to finance a business, in one's personal 
life to borrow money to purchase a car or a home, and Congress should 
act in much the same way.
  So that is the thought that I want to pass on tonight.
  Mr. SCHIFF. Madam Speaker, I thank the gentleman from Utah for his 
leadership on this issue and for the bipartisan way he has approached 
it. In fact, as a member of the freshman class that we share, the 
gentleman from Utah is the liaison to the Republican freshman class and 
has endeavored on many, many issues to work together and find common 
ground, and what more important area to find common ground than this, 
than the future of our country, than fiscal responsibility, which both 
parties espouse, but here is

[[Page H548]]

the time where the rubber hits the road.
  The gentleman from Utah talked about this mortgage and these interest 
payments, and I think it is not only a problem because of the interest 
that we will pay or the debt that we will accumulate but the lost 
opportunity that that interest represents. The Blue Dog Coalition has 
always been concerned about the vanishing surplus and what this 
represents in terms of our lost opportunities.
  The new budget reports indicate that the government will return to 
deficit spending and raid the entire Medicare surplus and further raid 
Social Security by more than $1.5 trillion over the next 10 years. 
During the budget debate last year, Congress and the President agreed 
that the Social Security Trust Fund surplus would be put in a lockbox 
and saved to prepare for the retirement of the baby boomers. The new 
projections show this promise will not be kept; and, unfortunately, the 
new projections instead show a return of budget deficits, borrowing 
from Social Security, and rapidly increasing national debt.
  What is so worrisome about raising the debt limit is the effect it 
will have on the amount of interest we will pay on that national debt. 
The public debt, that is the debt that is held by public investors, is 
subject to rising interest costs, and the budgetary effect of that 
higher debt is obviously higher interest payments. This reveals a major 
change from last year's budget forecast.
  Last year's budget forecast projected net interest payments on the 
debt of $1.13 trillion over 10 years, with a payment in 2011 of only 
$20 billion. This year's budget projects net interest payments of $1.79 
trillion over the same 10-year period, with a 2011 payment at the 
whopping sum of $159 billion. Over $1 trillion in the next decade will 
be spent solely to pay interest on our debt, over $1 trillion that we 
cannot use productively for Social Security, for a prescription drug 
benefit under Medicare, to facilitate a Patients' Bill of Rights, to 
improve our schools, to reduce class sizes, to rebuild crumbling 
infrastructure. That is $1 trillion in interest payments that cannot be 
used for anything else.
  A close look at the growing interest rates on our national debt 
reinforces the importance of long-term debt reduction. It is reasonable 
and appropriate to run temporary deficits during a recession and war, 
and we support the President's effort in the war on terrorism. However, 
under a responsible fiscal policy, the temporary deficits incurred must 
be offset by a return to budget surpluses when conditions improve. The 
most effective way to achieve economic growth and ensure our country 
returns to that era of budget surpluses is to increase our national 
savings, and the most direct way the government can increase national 
savings is to reduce its debt and thereby free up resources that the 
private sector can turn into productive investments.
  The last decade has shown the undeniable connection between declining 
budget deficits and increasing investment. The best way to maintain 
business investment, productivity growth, and low interest rates is to 
implement fiscal policy targeted towards reducing the debt. We cannot 
let all that we gained during the economic boom in the 1990s to be lost 
in the early years of the 21st century. So while we are confronted with 
this need to raise the debt ceiling, we must keep in mind, as my 
colleagues have pointed out, the principal element we must ensure, and 
that is long-term fiscal discipline and economic growth.
  I would now like to yield to an outstanding leader of the Blue Dog 
Coalition, the gentleman from Texas (Mr. Stenholm). The gentleman from 
Texas is respected on both sides of the aisle. He has reached across 
partisan lines to promote fiscal responsibility and has been a leading 
advocate for years on debt reduction.
  Mr. STENHOLM. Mr. Speaker, I thank the gentleman from California for 
yielding to me. I thank him for leading this discussion tonight.
  I know that perhaps there are some that are watching tonight and are 
saying, what is your alternative? Let me remind everyone that just a 
year ago, the same Blue Dogs stood in the well, stood at this mike, 
stood at others, and we offered an alternative budget. We at that time 
pointed out that the so-called surplus of $5.6 trillion was projected. 
We did not believe it was the conservative thing to do, to allocate all 
of that $5.6 trillion. We suggested paying down the debt with half of 
it, and then we suggested being very fiscally responsible with the 
spending as well as the tax cuts.
  We lost that vote. Our friends on the other side of the aisle said, 
thanks, but no thanks. We have the formula, we have the plan, and the 
surplus is real.
  We also pointed out to our friends on the other side of the aisle 
that, yes, we had a surplus, but many of my constituents were saying, 
how can we talk about a surplus when we have a debt? We owed $5.6 
trillion last year at this time. That is $5.6 trillion. We also were 
completely ignoring the $20 trillion unfunded liability of the Social 
Security system. We Blue Dogs said we thought it would have been the 
prudent thing to do last year to deal with the future of Social 
Security and Medicare. We said that is what we should have done first.
  But no, the leadership of this House, and this is certainly within 
their prerogative, they said, no, the important thing for us to do is 
to have a tax cut; and that is what we did.
  Well, here we are now, and I want to show this chart here. This was a 
letter dated February 13, 2002, to the gentleman from New York (Mr. 
Rangel), the ranking member, from Secretary O'Neill. The interesting 
thing about this letter is, yes, he talks about the fact that the war 
has changed things, the economy has changed, and all of us agree to 
that. There is no question from any of us tonight that we must pay for 
the war, and there is no question that we are in a recession and that 
recession started considerably more than just a few months ago.
  But the interesting thing about this letter is that in this letter he 
admits that we were going to have to increase our debt ceiling in 2003. 
Not 9 years, not 8 years, not any of the other rhetoric that we have 
heard.
  I show this to indicate that, as we will be seeing more and more of 
us on the floor over the days and weeks ahead, that we really and 
truly, as the gentleman from Utah (Mr. Matheson) said a moment ago, we 
have a credit card. Most everyone has a credit card today. I have a big 
mock-up here we will use a little bit later showing one from the 
Republican National Committee. When we have a credit card, we have a 
debt limit, we have a borrowing limit, we have a credit limit on what 
we can borrow; and when we reach that limit, then we have to go to the 
credit company and convince them that we are worth taking a little 
additional risk on. We go to the bank. That is true. When you borrow to 
your limit, then you have to come up with a plan of how you are in fact 
going to convince your banker that they ought to loan you more money.
  That is the most upsetting thing to we Blue Dogs tonight. What we are 
going to continue to suggest is that raising the limit to $750 billion 
in one vote, without a plan, does not make sense, does not make sense 
to any small businessman or woman, does not make sense to any working 
man or woman, does not make sense to anyone that finds themselves in a 
credit difficulty to believe that you can go to your banker and 
convince them that they ought to loan you $750 billion until you come 
with a plan.
  That is the problem that we face tonight, giving a blank check to the 
administration without having a plan. Now, here again, many of my 
friends on the other side of the aisle say, well, what is your plan?
  We have a plan. We had a plan. We voted on it last year. We lost. We 
are perfectly willing, in fact, we pleaded with the other side of the 
aisle time and time again, where is the meaning of bipartisan? We are 
ready to reach out and to work with the majority party in coming up 
with a plan. It is their plan that we are concerned about, and for them 
to believe that anyone on our side of the aisle would vote for their 
plan that is going to use all of the Social Security surplus for the 
next 9 years does not make sense. It does not make sense to me, and I 
do not believe it makes sense to the American people.
  The last two votes to raise the debt limit in this body came at a 
time when Congress and the President were engaged in bipartisan 
negotiations on a

[[Page H549]]

balanced budget plan that ultimately led to the Balanced Budget Act of 
1997. The current situation is very different. The President has 
submitted a budget which projects deficits financed by borrowing the 
Social Security surplus for the next decade and beyond, without first 
passing a plan as to how we are going to save Social Security for our 
children and grandchildren. That is to many a small item; and, yes, 
there are two small items in my case, and they are my grandsons. I 
resolved 6\1/2\ years ago when the first grandson was born that I did 
not want him to look back 67 years from that day and say, if only my 
granddad would have done what in his heart he knew he should have done, 
we would not be in the mess we are in today.

                              {time}  2100

  To raise the debt ceiling and borrow another $750 billion over the 
next few years, and then to increase our debt over the next 10 years 
under the plan that we are now under by $2.75 trillion, is something I 
could not do, cannot do, will not do under any circumstances.
  We will stand here and we will suggest, and I think the gentleman a 
moment ago made a good suggestion, let us borrow the amount of money 
necessary to fight the war. Whatever it takes to make sure that we 
continue to fund the Federal Government fighting the war, let us do it. 
But let us continue to have a little discussion on the other aspects of 
the economic game plan that we are under today. Let us talk about it; 
let us discuss it.
  If there was some reaching out to our side, we would find there would 
be an agreement. I conclude just as I started: I am sick and tired of 
hearing my friends on the other side say, ``Well, what is your plan?'' 
We had a plan. We put it on the floor last year. They did not like it. 
They passed their plan. Now they are coming back and saying, oh, by the 
way, we have to borrow $750 billion more to implement that plan.
  That is not what they said when they stood on the floor last year. In 
fact, if Members remember, we were worried that we were going to pay 
down our national debt too quick. We actually had colleagues saying, 
``Well, we cannot pay down the debt as quick as we are going to pay it 
down.'' Would that not have been a wonderful problem? Because last year 
at this time nobody foresaw 9-11-01. No one foresaw that.
  We are not prophetic. All we Blue Dogs said is that there just might 
be something that would happen, or maybe the stock market might not go 
up forever, just maybe something is going to happen; and it would have 
been the conservative thing to do to plan for that. Nobody listened to 
that.
  Well, we had a pretty good vote. If there had been 14 more votes, we 
would have been here defending our plan tonight. Instead, we are here 
saying, ``Let us rethink borrowing $750 billion. Let us go to the 
drawing board. Let us work out the future of Social Security. Let us 
work out the future of Medicare. Let us do it within a conservative 
budget and a conservative principle.''
  Borrowing money to the rate that the other side is talking about 
doing is not conservative, in my book. I thank the gentleman for 
yielding, and I appreciate his leadership on this. I appreciate all of 
my Blue Dogs.
  Members are going to see and hear a lot more of us, and I hope very 
soon we will be joined by some colleagues on the other side of the 
aisle as we try to find an answer to this question, other than just 
borrowing and going further into debt.
  Mr. SCHIFF. Madam Speaker, I thank the gentleman from Texas. He has 
long been a clarion call to fiscal responsibility in this House, and I 
remember like it was yesterday the gentleman from Texas standing on 
this floor and talking about the unreliability of 10-year projections, 
how it was simply not prudent to anticipate that only the most rosy 
scenario would materialize; and indeed, even in August, before the 
tragic events of September, we could already see the wisdom of the 
words of the gentleman from Texas (Mr. Stenholm) as we saw those 
projections already being radically revised downward.
  Would that we had more colleagues on this floor listen to those words 
last year, and we might not be in the fiscal predicament we are in 
today.
  The gentlewoman from California (Ms. Sanchez) has put her financial 
background to use in Congress and has stood out as a leader, both in 
education and in issues affecting our Armed Forces. The Congresswoman 
has worked in a bipartisan way to shape policies that benefit the 
people of Southern California and our country in a fiscally-responsible 
manner.
  Madam Speaker, I yield to the gentlewoman from California (Ms. 
Sanchez).
  Ms. SANCHEZ. Madam Speaker, I thank my colleague, the gentleman from 
California. It has been a pleasure to have him here in the Congress and 
to work together as Blue Dogs on issues that really affect us.
  I always tell my friends who ask me, what do the Blue Dogs do, I tell 
them, we are sort of like the bean counters, the accountants, the 
people who really want to set the record straight about what is 
happening with the money issues of the Congress. We do not want to do a 
lot of smoke and mirrors; we just want to talk about what it takes to 
do what we want to do and have a fair vote up and down on what we want.
  I was happy to hear my colleague, the gentleman from Texas (Mr. 
Stenholm), talk about the fact that a year ago, as we discussed this 
large tax cut that was passed mostly with Republican votes and signed 
by the President, that many of us who have been in the financial 
industry, and I was an investment banker, many of us said, we need a 
plan. Whenever we go and look at the future of what is happening, we 
have to have an idea of what we are going to do with the money, and if 
we have overruns, where we are going to get that money. We have to have 
cushions to what we are doing.

  Many of us said to that tax cut that the biggest problem with it was 
it was done on rosy projections at a time when all of us knew that the 
economy was stalling on us, and we just knew that those numbers were 
not going to work.
  So here we are today. Last year, no politician, no policymaker, none 
of us could have imagined that we would be here talking today about 
raising the statutory debt ceiling. At that time, the administration 
and the Congressional Budget Office were predicting that no increase 
was going to be necessary in this until 2008, if at all.
  What a difference a year makes, and it was not about 9-11. Yes, we 
are spending a little more on defense and on home security, but that is 
not what this is about. This is about raising the debt ceiling and 
raising it without a plan in place.
  When I used to issue debt for agencies or for companies, when I would 
put bonds out there, one of the things that we had to do was write a 
prospectus and talk about what we were going to do with the money, why 
we were borrowing it, how we were going to make the money back, and how 
we were going to make the payments on that debt in order to bring the 
debt down. But here, this administration wants a $750 billion increase, 
and they do not even have a plan.
  So I agree with the rest of the Blue Dogs here tonight that we need a 
plan, and we need to keep pushing for a plan. We do not need to 
increase this to $6.7 trillion, an increase of $750 billion.
  Since 1940, the debt ceiling has risen by over 12,000 percent, and 
here we go again. The money right now, $5.95 trillion, that is the debt 
ceiling we have right now. It is even hard for people to imagine back 
home what $5.59 trillion is. I tell people, if they imagine all the 
people in the world, and each one of those owed $1,000, every man, 
every woman, every child in the world, they would get close to what 
that debt ceiling is.
  So where does it stop, with $750 billion this day, another $750 
billion the next year? What about the budget that we have from the 
President right now, the one that says he wants to extend these tax 
cuts? We are going to have to keep increasing this debt ceiling because 
our debt is going to keep going up.
  One of the problems is, the more debt we get, the more interest we 
have to pay, the more we add to our debt. Think about those credit 
cards we have. When we make that minimum payment every month, the 
interest rate makes it be more the next month, so we keep making 
payments, but what we owe on the credit card is more and more and more 
as every month comes along.

[[Page H550]]

  That is what we are doing to ourselves when we do not make a plan, a 
fiscally-responsible plan about how we are going to balance our 
spending with the revenues that are coming in.
  To my colleague, the gentleman from California, I thank him for 
allowing me to come down here and talk a little bit about how people 
back home understand how important it is to pay down this debt, not 
continue to increase it; and how, if they have to go to their bank to 
get a loan, they need to tell them how they are going to pay it back.
  I think most Americans across this great country understand that 
sometimes, in a time of war, we need to borrow and we need to make sure 
that we win this war. But they also want that plan. They want us to be 
fiscally responsible.
  Mr. SCHIFF. Madam Speaker, I thank the gentlewoman for her statement 
and for her leadership on this issue.
  The gentlewoman from California talked about when she was issuing 
bonds that she required a prospectus. The gentleman from Utah talked 
about when he went to a banker, he was required to give the banker what 
he termed a story, something that would account for why he could pay 
back the debt.
  So what is the administration's prospectus? What is the story? What 
is the plan to get us back to balanced budgets? As I understand it, 
according to the director of OMB, the plan is, well, if the economy 
grows at a faster than anticipated rate, maybe we will get back to a 
period of surplus again.
  Imagine telling that to our local banker when we are going out for a 
small business loan: Mr. Banker, if my business grows faster than can 
be reasonably expected, then I will be able to pay you back. That would 
not fly with our local bank, it would not fly with the municipality, 
and it ought not to fly with the Federal Government.
  Another one of my colleagues from the Blue Dog Coalition is the 
gentleman from Texas (Mr. Turner). The Blue Dog Coalition policy co-
chair, the gentleman from Texas (Mr. Turner), has led our coalition on 
many issues and has been recognized for his stalwart commitment to 
fiscal responsibility.
  Madam Speaker, I yield to my friend, the gentleman from Texas (Mr. 
Turner).
  Mr. TURNER. Madam Speaker, I thank the gentleman from California (Mr. 
Schiff) for his leadership in this hour tonight. It has been good to 
see so many of the Blue Dog Democrat Coalition members come to the 
floor and talk about this issue.
  Clearly, we are advocating fiscal responsibility because we believe 
it is important to the future prosperity and the future economic 
security of our country. In many ways, we might define the debate 
tonight as a debate for our national security, because maintaining 
fiscal responsibility is a very important part of maintaining our 
national security.
  We see examples all across the world of nations that get in trouble 
economically, Argentina being the most recent. We understand what debt, 
excessive debt, can mean to a country. Those of us here on the floor 
tonight want to try to start paying down that debt, rather than seeing 
it continuing to rise.
  We believe it is very important not to raid the Social Security Trust 
Fund. What business in America could get by if its corporate executives 
raided the retirement funds of its employees? Those executives would be 
put behind bars. But in Congress and in Washington, it seems that we 
routinely go into the Social Security Trust Fund, take those hard-
earned payroll tax dollars, and go out and spend them for something 
else, just at a time when Social Security is needing those funds with 
the retirement of the baby boom generation.
  We can look at the facts. They speak for themselves. If we just turn 
back just a year ago and look at the projections, what we see is that 
just a year ago we had a projection over 10 years that our debt, our 
publicly held debt, that is, the debt that is held by those third 
parties, those folks who hold those savings bonds, those Treasury 
bonds, those Treasury notes, we saw a year ago that the projections 
were that that debt would be eliminated over the next decade. In fact, 
it would be actually completely paid off to the tune of $129 billion, 
so we would be back in surplus.
  Yet, here we are in February of 2002, and the projections have 
completely changed. We find that the projection is that we will have an 
almost $2.8 trillion debt at the end of this decade. So what we see is 
a completely different picture.
  What has happened? Of course, we passed a major tax cut based on 
those projections of economic prosperity. Now it turns out that with 
the tax cut, with the slowdown in the economy, and with the war, that 
projection of surplus is gone and our projections now show an ocean of 
red ink.
  The impact of that on paying interest is just almost 
incomprehensible. We projected just a year ago that we would pay $709 
billion in interest on our national debt over the next decade. We are 
actually paying close to $1 billion a day right now just on interest on 
our national debt, but that was going to go down because the 
projections were that we were going to pay off that publicly held 
national debt.
  Well, what does it look like today? Here we are with projections that 
we will spend almost $1.8 trillion in interest, almost, over the next 
decade, $1 trillion more in interest. What a waste. What a waste.
  We believe firmly that we must end the practice of deficit spending 
in Washington. Congress engaged in it for 30 years, until just 4 years 
ago when we passed the Balanced Budget Act, and we have seen 3 years of 
annual surpluses in our Federal budget. But here we are in 2002 with, 
once again, a projection that we will be back into deficit spending.
  Some people say, ``What is the big deal? Deficit spending, it sounds 
kind of like Washington talk.'' It simply means that we are spending 
more money than we are taking in. If Members did it at their houses, 
they would be running up a debt on a credit card, or going down to the 
bank trying to figure out how to borrow enough money to pay the bills.
  In our houses, if we have a credit card, it usually has a limit on 
how much debt we can go into before they say, no, they cannot charge 
anymore.

                              {time}  2115

  It is not that way in Washington. You can just keep running the debt 
up or at least some people seem to think that is the way this works. 
They act as if it does not matter how big the national debt gets. Why 
is deficit spending wrong? It is wrong because the debts that we incur 
today will have to be paid for by our children. That is wrong. It is 
wrong because as the demand for credit is increased by our government, 
it has the effect of pushing up interest rates in the economy. So we 
all pay, not only in higher taxes to cover this interest on this 
national debt; but every time we go out and borrow money to buy cars, 
send our children to college, buy a new home, we are going to be paying 
higher interest rates than we would had the government not engaged in 
such reckless deficit spending.
  Another thing the deficit does for us is forecloses a lot of options. 
If we have an emergency and we need to spend more, it is harder to go 
into debt when you are already deep in debt. When you are trying to 
solve the problem of Social Security and Medicare, which is going to 
get critical in about 10 years with the retirement of baby boomers, and 
you try to figure out how to solve that problem, if you are already 
deeply in debt, you are going to have trouble. If you are trying to 
help our senior citizens, as most of us on the floor tonight have 
worked hard to do with prescription drugs, where are you going to pay 
for it if you are already deeply in debt? It is wrong to raid Social 
Security in order to finance the activities of government. We need to 
be protecting Social Security. And deficit spending is wrong because 
ultimately it is going to erode the confidence in the U.S. economy.
  The only reason we stand on this floor tonight and have the luxury of 
borrowing money in order to run our government is because of the 
confidence people have in the American economy. In Argentina tonight 
you cannot borrow any money, the government cannot. But in the good old 
United States people still have confidence in our economy, and we can 
go

[[Page H551]]

out and borrow money. And you know what it is backed by? It is backed 
by people's faith and confidence in our economy and our willingness to 
pay those debts by taxing the American people someday. And if we allow 
that debt to keep growing and growing and growing, that interest to 
keep growing and growing and growing, there is going to come a point 
when the world is going to look at our economy and says, you all look 
an awful like an Argentina economy, and I do not believe we want to 
loan you any more money to finance that $5 trillion national debt. And 
I believe if we do, we are going to have to get a little more interest 
rates because we look at the economy much like those investors did when 
they were borrowing money a few years ago on those junk bonds, and 
junks bonds of course require very high interest rates for anybody that 
wants to buy.
  So if we undermine the economy of this country, in the long term it 
would destroy our economic security, our national security and our 
prosperity. That is what this debate tonight is all about.
  I commend the gentleman from California (Mr. Schiff) for his 
leadership. I commend the Blue Dogs for their willingness to come to 
the floor tonight and talk about this critical national issue.
  Mr. SCHIFF. Madam Speaker, I thank the gentleman tonight for his 
leadership on this issue. The gentleman also very successfully lead the 
House just a couple weeks ago successfully to gather the signatures 
required to discharge campaign finance reform which successfully passed 
the House. We thank the gentleman from Texas (Mr. Turner) very much for 
his contributions both then and now.
  Madam Speaker, I would like to introduce a fellow Californian, the 
gentleman from California (Mr. Thompson), who I had the privilege of 
serving with in the California State Senate. The gentleman has worked 
hard for the people of California and our Nation and is recognized for 
his bipartisan approach for the important issues facing our Congress, 
especially the debt limit. I yield to the gentleman.
  Mr. THOMPSON of California. Madam Speaker, I thank the gentleman from 
California (Mr. Schiff) for his leadership tonight in this effort to 
bring awareness to what I believe is a very, very important issue for 
all of the American people.
  Madam Speaker, we have come to a very critical point in our 
congressional work. We can create a long-term physical plan that will 
benefit this and future generations or we can send our government down 
the road of excessive borrowing and send the bill to the next 
generation of Americans. I believe this would be the wrong approach.
  As we have heard many times tonight, just a year ago the 
administration predicted Congress would be able to operate under the 
Federal debt limit for the next 7 years. Now we are being asked for a 
$750 billion increase in the Federal debt limit. The 
Treasury Department predicts this increase will cover government needs 
until 2005. So we went from being able to stay under the Federal debt 
limit in 9 years to being forced to raise the limit by $750 billion 
just so government can continue to operate for another 3 years.

  We are in danger of opening the flood gates of fiscal 
irresponsibility by increasing the Federal debt limit without having a 
plan in place to balance the budget and to pay our bills. Funding our 
national priorities such as homeland security and our efforts against 
terrorism must be done. However, to increase the Federal debt limit 
without having any mechanism of fiscal restraint will likely lead us 
down the path of deficits resulting from additional spending or 
additional tax cuts.
  In the span of 1 year, the Office of Management and Budget has 
reduced its 10-year budget surplus projections by $5 trillion. When 
investors around the world look to Washington to see the creation of 
huge budget deficits, they will inevitably push interest rates higher. 
When interest rates go up, the American consumer suffers. A homeowner 
in our country who holds $100,000 mortgage debt would save a total of 
$50,000 over the life of a 30-year mortgage if the mortgage rate was 
just 2 percentage points lower. American consumers hold about $6.5 
trillion in mortgage debt, so each percentage point of increase in 
their mortgage rate means an extra $250 billion in mortgage costs to 
Americans.
  In addition, local schools and local hospitals will be forced to pay 
higher interest costs as they issue bonds to raise the necessary funds 
they need to continue to educate our kids and care for sick Americans 
and injured Americans.
  Throughout the 1990's, the Federal Government maintained fiscal 
discipline; and the pay off to the American consumer was remarkable. 
Let us not throw these gains away. Instead, let us do what may be tough 
but obviously what is right. Let us put in place a mechanism for fiscal 
responsibility and fiscal constraint. Let us not allow this budget or 
this credit limit to increase and put future American generations in 
fiscal jeopardy.
  Madam Speaker, we should fund our war on terrorism and our efforts on 
homeland security, and we must save Social Security and Medicare from 
insolvency by adopting a more fiscally-responsible approach to budget 
priorities. Now is the time to make the tough choices to ensure future 
generations are not saddled with trillions of dollars of debt and stuck 
with a bankrupt retirement program. I thank the Blue Dogs for their 
effort in this regard.
  Mr. SCHIFF. Madam Speaker, I thank the gentleman from California (Mr. 
Thompson) for his leadership.
  Madam Speaker, in closing I want to thank the Blue Dog Democrats who 
have joined me here tonight in this discussion of raising the national 
debt limit and its implications for our Federal fiscal policy. I look 
forward to the opportunity to debate this issue in the days ahead as we 
continue to work to balance the budget and pay down our debt and 
protect the Social Security Trust Fund for the future.

                          ____________________