[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.
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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
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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.
____________________