[Congressional Record Volume 148, Number 42 (Tuesday, April 16, 2002)]
[House]
[Pages H1318-H1324]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
RAISING THE FEDERAL DEBT LIMIT
The SPEAKER pro tempore (Mr. Johnson of Illinois). Under the
Speaker's announced policy of January 3, 2001, the gentleman from
Indiana (Mr. Hill) is recognized for 60 minutes as the designee of the
minority leader.
Mr. HILL. Mr. Speaker, this evening the Blue Dog Coalition will once
again be discussing the administration's request that Congress raise
the Federal debt limit, and that is what we want to talk about this
evening. The Blue Dog Coalition, for those who are listening, is a
group of about 30 Democrats who believe it is important for the Federal
Government to be fiscally responsible; in other words, not to spend
more money than it takes in. I think the American people, with their
families, try to practice their own home budgets in the same way, and
the Blue Dog Democrats have adopted this principle. Balancing our
budgets helps us keep interest rates lower so that businesses and
families can borrow money at lower interest rates. It is the only right
and common sense thing to do. The Blue Dogs tonight want to talk about
some problems that are going on with our present Federal budget that I
think the American people need to hear.
This past August, Secretary of the Treasury O'Neill wrote the first
of three letters to Congress requesting an increase in the debt limit.
In these letters, he asked for a $750 billion increase. None of these
letters, however, mentioned how long $750 billion would keep the
Federal Government in the clear. More important, none of the letters
recognized the irresponsibility inherent in asking Congress to hand the
administration a three-quarters of a trillion dollar blank check
without also requiring it to explain how we are going to get back to
balanced budgets and a Social Security surplus that is off limits.
Many of my Blue Dog colleagues have pointed out on past Tuesdays that
the Federal debt limit is a lot like the credit limit on any credit
card used by any American. The difference in this example is that the
administration has hit its credit limit at $5.95 trillion dollars, but
not indicated a willingness to examine its own fiscal policies. Few
things in life are certain, but I feel confident in saying that the
average family in southern Indiana, if faced with a maxed out credit
card, would step back for a moment and figure out how he is going to
pay it off.
In early April, Secretary O'Neill sent another letter to Congress.
This time he was writing to inform Senate and House leaders that he was
tapping Federal Government retiree accounts, let me repeat that again,
that he was tapping Federal Government retiree accounts in order to
give the Federal Government the breathing room it needs to continue to
meet its spending obligations.
Now, Mr. Speaker, in the private world, if a business tried to raid
its pension fund and was found guilty of doing that, they would go to
jail, but here we are doing a similar thing with government retiree
accounts in order to give the government the breathing room it needs to
continue to meet its spending obligations.
Six years ago, 225 members of the majority party voted to reprimand
and prohibit then-Secretary of the Treasury, Robert Rubin, from taking
these same actions. Now, one could argue that the old saying, what is
good for the goose is good for the gander is in order here. Even if
one-quarter of the 147 who remain in the House had been moved to action
by Secretary O'Neill's recent maneuver, there is little doubt in my
mind that together we would have already sat down to discuss some kind
of compromise, a plan to, one, raise the debt limit enough to get the
government through this fiscal year; and two, to get our budget back in
balance without relying on Social Security surpluses.
Historically, partisan squabbling has characterized the debate over
whether to increase the Federal debt limit. There are many Blue Dogs,
however,
[[Page H1319]]
who would like to put an end to political gamesmanship and get down to
business. We do not believe in political brinkmanship, especially when
the ability of the United States Government to continue to meet its
lawful financial obligations is on the line.
No one among us is suggesting that the Federal Government be allowed
to default on its debt. Secretary O'Neill's recent tapping of the
Federal employee retirement funds, however, does not change the fact
that we are bumping up against the debt ceiling. In fact, action is
still needed and the Secretary now has one less accounting trick up his
sleeve. As of this evening, the administration has put only one option
on the table: raise the debt limit by three-quarters of a trillion
dollars. That is it; that is the only option.
In early 2001, it was projected that the debt limit would not need
raising until 2008. Let me repeat that. In early 2001, last year, it
was projected that the debt limit would not need raising until 2008.
Even though the administration has requested an increase in the debt
limit far sooner than we expected, there has been no talk about its
evaluating its own budget policies, no talk about fashioning a plan to
get back to a balanced budget without using the Social Security
surpluses, and no talk that maybe, just maybe, we have a problem here
that needs to be dealt with.
The basic Blue Dog position has not changed. We still say that along
with any action on the debt limit must come a recognition that we have
a problem and a plan to correct that problem.
The current budget situation is like the elephant living in the
living room. He is there and he is larger than life, but very few, if
any, of our colleagues on the other side of this aisle, they will not
acknowledge him. Several of my Blue Dog colleagues and I have been,
over the past couple of months, trying to alert everyone who will
listen, to the elephant's presence. Rest assured that we will keep
coming down here to the floor and pointing him out until everyone
acknowledges that he exists and he is in the living room.
This elephant, unfortunately, comes with his own set of numbers. In
one year, the projected 10-year surplus decreased $4 trillion. The
Federal Government will run a deficit, both this year and next year.
Because of these deficits, the Federal Government will have to borrow
money to pay its bills and, to pay these bills, the government will
borrow almost $2 trillion more this decade than was expected when the
CBO published its numbers in January of 2000.
{time} 2100
All told, by the time the interest payments are added in, the
national debt will be almost $3 trillion larger than earlier projected
when the 10-year budget closes. And, to top it all off, Social Security
surplus dollars will be used to help balance the budget through the end
of the decade. This is our problem: The elephant is a fiscal house not
in order.
Last year, the Blue Dogs presented a plan that was prudent, fiscally
responsible, and dealt with the future of both Social Security and
Medicare. Our plan would have cut taxes and paid down the debt.
Unfortunately, we were not successful in passing our plan.
Now we are being asked to green-light an additional three-quarters of
a trillion dollars in debt to help implement the plan that carried the
day. That is too much to ask when we have not at all yet acknowledged
the elephant in our midst.
The conventional wisdom here in Washington is that the long-term
increase in the debt limit will be attached to the supplemental
appropriations request. This $27 billion supplemental spending request
to fund the immediate needs in the war on terrorism is very obviously
important. The war is important, and we need to fund it. From the
beginning of this war campaign, we have been supportive of doing
whatever it takes to make sure our fighting men and women can do their
jobs. But pairing an increase in the debt limit to this important bill
is not necessary. In fact, it could complicate consideration of the
supplemental request.
So as members of the Blue Dog Coalition, we are ready to sit down and
work with the administration to come up with a plan to get our budget
back in balance without using Social Security surpluses, and provide
for a short-term increase in the debt limit. It is time for all of us,
Democrats and Republicans, to roll up our sleeves and get the work
done.
Mr. Speaker, it is my pleasure to yield to the gentleman from the
great State of Utah (Mr. Matheson), another member of the Blue Dog
Coalition, a new member who has done an outstanding job on the
Committee on the Budget.
Mr. MATHESON. Mr. Speaker, I thank my colleague, the gentleman from
Indiana, for yielding to me, and also I appreciate the very good
description he has given of the circumstances we are finding ourselves
in.
This is not an easy circumstance. It is a challenge we face. The
answers to this challenge are not simple.
If they were simple, we probably would have already taken care of it,
but we have not. Instead, we find ourselves in a circumstance where our
country has a war on terrorism, our country faces increased
requirements in terms of providing for homeland security, and those are
issues that we as Blue Dog members support. We fully support that
effort.
We are also in a recession. We are hopefully coming out of that
recession right now.
But those factors, the increased resources going to the war on
terrorism and to homeland security and our country's recession, have
clearly put us into a circumstance where right now we are running a
deficit this year.
I do not like deficits and I do not like debt. I think most members
of the Blue Dog Coalition, in fact, I think all members of the Blue Dog
Coalition, would agree with me on that. But we recognize that there are
times in the short term where it is appropriate, in extraordinary
circumstances. Being at war, in a recession, it is appropriate to see a
deficit.
But just like in the business world, there are times when we have a
bad year and maybe we put more money out than we pay in revenue; but in
the business world, if we keep doing that year after year, we get in
trouble.
The problem here is we do not have a plan yet for how we are going to
get out of the problem. For the administration to request an increase
in the debt limit of $750 billion, I have to tell the Members, we throw
a lot of numbers around in this town, but that is a lot of money. To
suggest we raise the limit by that much without identifying any plan
for how we are going to end this pattern of increased deficit spending,
that is just not being responsible, and that is not really what my
constituents elected me to do.
I am not here to force this country to face some type of problem that
they are not able to pay off their obligations. I would be more than
happy to support a short-term limited increase in our debt limit to
accommodate the current circumstances we are in, where the war on
terrorism and the recession have clearly put us into a deficit
situation. I will accept that for the short term. The Blue Dog
Coalition is prepared to support a clean, limited increase in the debt
ceiling to accommodate that purpose in the short term.
But what we have to have happen along with that is a commitment to
sit down and really take on this long-term problem. There are no easy
solutions, as I said at the outset. It is going to require a lot of
work, a lot of work by people on both sides of the aisle.
That is why I have to suggest that I am really proud to be part of
the Blue Dog Coalition, because I think the Blue Dogs really have a
reputation for sitting down, rolling up their sleeves, and putting
their plan out on the table. We do not try to use a lot of rhetoric, we
try to talk about real numbers, and we welcome people to sit down with
us and tell us where we are wrong, because we are open to a dialogue
and we are open to suggestion. I wish more people in the House would
take us up on that offer, because this problem we face right now is a
serious one, and it is one that is of great concern.
I look at this issue, quite frankly, as I look at a lot of issues,
through the eyes of my 3-year-old son. I try to think about what life
is going to be like for him. I think about the extra burden we are
placing on his generation as we rack up more and more debt, and a
bigger slice.
[[Page H1320]]
Do Members know those pie charts we always see, where that slice of
the pie that represents interest payments is just going to keep
expanding? That is not a future I want to leave for my son. I do not
think it is a future anybody in Congress would want to leave for the
next generation, and that ought to be the focus that we have right now
as we make those decisions.
When we talk about this debt limit issue, I often like to refer to an
experience I had before I came to Congress, in the private sector. I
worked developing independent power plants, co-generation facilities. I
developed a couple of facilities, and each cost $100 million. I had to
go out and convince a bank to lend me money to build those power
plants. That bank required me to have a story that I could tell them, a
story about how, over the long run, they were going to get their money
back.
That makes sense. We can all relate to that. Whether we have been in
the business world and had to borrow a business loan, or whether we
have taken out a home mortgage or a car loan, we have to pass a test.
We have to be able to have a story about how I have the capability to
pay that back.
We are being asked to raise this debt limit $750 billion, and we do
not have that story. We are here as Members of Congress. We are the
banker here. We have to represent the people's interest in making sure
there is a story about how this is going to be paid back. Until we have
that, it is just not responsible. It is not responsible to raise this
by $750 billion.
So I am so pleased that the Blue Dog Coalition has made this an
issue. We keep coming here to the floor to raise this issue, because we
are looking for people to work with. We are looking for an opportunity
to sit down and roll up our sleeves.
We recognize the magnitude of this problem and the complexity of this
problem. There is no easy way out. We cannot do it alone, so we call on
everybody on both sides of the aisle: Please, let us sit down, let us
develop a long-term plan. Let us not be irresponsible and just give a
blank check to Congress and to the administration to rack up another
$750 billion of debt with no way out of that pattern.
Mr. HILL. Mr. Speaker, I thank the gentleman from Utah for an
outstanding presentation.
One of the things that I heard the gentleman talking about was that
we are not opposed to raising the debt ceiling. There is a war going
on, and there are certain responsibilities that we have to think about.
That is one of them.
But one of the reasons why I like the Blue Dogs so much is they are a
group of Democrats that are responsible. It is responsible to raise the
debt ceiling to fight the war, but it is also our responsibility to
have some kind of a plan. Right now, there is no plan.
Mr. Speaker, I have come to know the gentleman from Illinois (Mr.
Phelps) very well for the last going on 4 years now, and he is a man
with a distinguished record in the Congress of the United States, and
one of the outstanding Blue Dogs who feels very strongly about this
issue. I yield to the gentleman from Illinois (Mr. Phelps), a person
that I came into Congress with back in 1998, and a person who serves on
the Committee on Agriculture and the Committee on the Budget.
Mr. PHELPS. Mr. Speaker, I thank the gentleman for yielding to me. I
thank my friend, the gentleman from Indiana, for his leadership and his
persistence on this issue.
I would also like to thank my colleagues on the Blue Dog Coalition
for giving me the opportunity once again to speak on this important
issue.
We, as the fiscal policy leaders of this great Nation, have a
responsibility to look out for future generations. How can we say that
we are doing our best to look out for our children when we are not
keeping our commitment to save the Social Security and Medicare trust
fund surpluses?
We need to be fiscally responsible. My Blue Dog colleagues and I
realize that. That is why we are spending these hours and these weeks
trying to drive this point home.
It should not be hard for others to understand that, as well. Fiscal
responsibility does not mean raising the debt limit when we are already
in debt by $5.9 trillion. Fiscal responsibility does not mean tapping
into the Social Security trust fund to support other government
programs every year for the next 10 years, for a total of $1.5
trillion. Fiscal responsibility means working together as a team on
both sides of the aisle to get the budget back in check without
tampering with our Social Security surplus.
I completely understand that our Nation is in a different place than
we were 7 months ago, and we need to be effective and properly fight
this war on terrorism. I believe we are. We stand behind this President
and his Cabinet to do this.
However, we should be able to come up with a solution that battles
the war against terrorism without taking away from crucial resources
here at home, resources that our citizens depend on and resources that
our children are counting on us to protect. Social Security funds
belong to the people that paid them out of their own hard-earned
dollars, just like they have all the other taxes they have paid.
I have heard much around here about giving back money to the
taxpayers. These are their dollars they have entrusted us, their
government leaders, to save for the purpose for which they were
intended. But there are those around here who want the taxpayers to
believe that there is enough money to return taxes from the same source
twice, and then try to convince them that Social Security can remain
solvent and do all this other good stuff we claim we are going to do.
That just is not so.
I want to pay down the public debt, balance the budget, give tax cuts
that are affordable and reasonable, as I have voted, such as repealing
the estate tax and the marriage tax penalty, those that are affordable,
and that we can make Social Security then solvent.
But all of this cannot be done if we travel down this path and this
policy direction. We must be honest with the American people, the
citizens of this Nation, and level with them from the standpoint of
what is realistic.
There is a big price to pay for strong leadership, and to be
responsible. It is not easy, coming before the American people and
telling them that those on both sides of the aisle emphasized the point
just this time last year that the Social Security money and the
Medicare trust fund were in a lockbox, locked away where we would not
touch it. But now we are saying that we have enough money to do all
this by projecting 10 years in the future the rosiest forecasts that
reflect the best the economy ever has been in our history, without
acknowledging what has happened to us after September 11, and without
acknowledging the loss through the recession and the tax cuts that we
did a year or so ago.
Now we are talking that we can do all of this, keep it solvent, and
still look the public in the face and say we are being honest about the
budget. This is not so. It is my responsibility to tell the truth,
because I did not take it lightly when I took that oath of office and
said that I would deal with the facts as I see them and the truth as I
know it.
That is why I feel so strongly about this issue tonight, and want to
communicate it in the best terms possible. It is a complex situation,
but we must face it. This is your money, too. We said we should save it
for the purpose for which you gave it, not say it is a tax return that
we can ignore, building up the debt at the same time, and never
communicate truthfully.
Mr. HILL. Mr. Speaker, I thank the gentleman from Illinois for his
remarks. He is exactly right, that this is people who paid their
payroll taxes. It is their money, and we should be making sure that we
preserve it for them in their retirement years, and not be using it for
other things.
{time} 2115
I would like to call on one of the deans of the Blue Dog Coalition, a
man I have really come to respect very much. He is a leader on this
issue, leader on the Committee on Ways and Means, a leader for the
Congress of the United States. So I would like to yield some time to
the gentleman from Tennessee (Mr. Tanner).
Mr. TANNER. Mr. Speaker, I come tonight to talk about debt. That
seems to be the topic of the day, and I have got to tell my colleagues,
I watched the previous hour and I was thinking
[[Page H1321]]
all of the time I was watching that these are the same folks that last
year touted the tax plan as presented and now tonight say, oh, no, it
is terrible because it was not permanent. We were criticized last year,
but let me talk about what is happening in this country.
My colleagues are seeing a group, a minority within a minority
really, the Blue Dog Democrats, my colleagues are seeing a group emerge
from all of the rhetoric here in this town, partisan rhetoric. They are
seeing a group emerge that has some credibility on the debt. What was
missing and what is missing and what will be missing on Thursday
morning when we talk about making the tax cut bill that the House
passed last year and the Senate passed last year permanent, what they
do not say is that we have right now in, and the citizens of this
country right now last year paid $360 billion in interest on a revenue
total of $1.991 trillion. This comes out of a CBO publication of March
of this year.
That is an 18 percent mortgage on this country. There is no business
in the world, in America or anywhere else that I know of, that can
withstand an 18 percent mortgage on their inventory, on what they are
doing in terms of their business. If we take away the interest on the
debt that was paid as far as Social Security goes, we have a net total
of $206 billion, which on nonSocial Security revenue, amounts to 16
percent. Said another way, this country right today has a 16 percent
mortgage on it that we all have to pay.
Now, if we want to ensure and people want us to ensure that not only
those that are my age but my children and my grandchildren will be
overtaxed all of their lives and all of the foreseeable future, then
keep us on the road of the Republican policies that have been
enunciated here and will be enunciated here Thursday, and that
basically is we are going to spend more because we are in a war, which
we should. We are going to do a tax break for those of us in my
generation passing on to those who are in uniform tonight in
Afghanistan, fighting the war and their children. We are going to
borrow money so that we can have a tax break to spend more money,
knowing we have an 18 percent or 16 percent, whichever figure we want
to use, mortgage on this country.
If people want to make sure that we are going to be overtaxed as an
American public for the rest of our lives, then continue down the
Republican policies. Because what it means is it means cut taxes now,
spend more and borrow, and borrowing means interest and that interest
has got to be paid before we do anything, before we have a missile
system, before we have a submarine, before we have an aircraft carrier,
before we have an interstate highway. Before we have anything, we have
got to pay the interest.
If my colleagues want to make sure that we are going to overtax
ourselves and those who follow us for the rest of their lives and ours,
then just follow down this road and borrow more money and borrow more
money, and we will make sure, we will make very sure that we are
overtaxed and they are overtaxed as follows.
This is something that they do not say. Nikita Khrushchev once said
that an American politician is a fellow that likes to promise to build
a dam or a bridge where there is no river. This is not easy stuff, to
stand here and say to the American public we cannot do what some of
these people around here want to tell them that we can do.
We cannot spend the money that is necessary to win and fight, fight
and win the war on terrorism. We cannot cut taxes for everybody in this
land right now and spend that money without borrowing money to do it,
and when we do, we are making a mistake that I think generations will
pay for because that interest keeps going, whether someone is on
vacation, whether someone is sleeping, whatever they are doing they
have got to pay the interest.
People know that and so I am proud that the Blue Dogs took this hour
to talk about fiscal responsibility. There has not been in my mind a
sitting down and talking about prioritizing what we have to do. We have
got to win the war on terrorism. Whatever it takes, we have got to do
it. We are willing to do that, but by gosh, to cut taxes on somebody
making $50 million a year at the same time my colleagues are trying to
ask everybody else to sacrifice is simply not right. It is not right
generationally.
We do not want to leave this country to our children with rivers and
streams that fish cannot live in and kids cannot swim in. We do not
want that. We did not inherit that and we sure do not want to leave it.
We do not want to leave a country where kids have to wear a hospital
mask to ride their bicycle because the air is so polluted that they
cannot breathe unless they have a mask on. We did not inherit that, and
we do not want to leave that. We did not inherit a country that was
broke, and I do not want to leave my kids a country that is broke.
If we continue down the path we are going, where we are spending
more, cutting revenue, and borrowing more so we pay more interest, that
is exactly the formula that we have been asked to pass, and I just
think it is wrong. I think it is wrong generationally, not only to
people, our contemporaries, but it is wrong to our children, and I hope
that we can, the Blue Dogs and others who are here with us tonight, can
impress on the American people that it is not easy to be against tax
cuts.
It is not easy to be against more spending, but there has to be
priorities given to what we need, and we are willing to cut and cut
spending any way we can to make sure that we are doing the things only
that are necessary, but we have got to have the revenue to pay for what
we want. If we are not willing to do that, then I think we are
generationally immoral with regard to what we are giving to our
children.
I appreciate the gentleman taking this time. I do not know if anybody
is listening to what we are saying or not, but when we have got an 18
or 16 percent mortgage on this country and we do not make any attempt
to get back in the black, I think what we are doing is passing the
buck, and I think that is wrong.
Mr. HILL. Mr. Speaker, reclaiming my time, would the gentleman agree
that it was just a couple of years ago when we began to reverse this
trend of debt, the United States Government incurring debt, we were
actually running a surplus, and would he agree within a very short
period of time, say within the last 12 months, we have completely
reversed that policy of surplus budgets into deficit spending once
again?
Mr. TANNER. Mr. Speaker, I would agree, but whether I agree or not, I
think the facts speak for themselves. Last year at that time we were
told there was money as far as the eye could see. We had a $5 trillion
surplus. That did not come true.
The budget that the President submitted shows red ink for the next 10
years. Once this interest figure gets up 20, 25 percent, I have never
seen a country that was proud, free and broke. There is not one on the
face of the earth, and we are going broke under these policies, and
people are going to begin to realize that I think that, unlike maybe
public perception now, at least when it comes to the Blue Dog
Coalition, there are some Democrats around here that are more fiscally
and financially responsible than all the Republicans who want to tell
my colleagues, as they have, we are going to cut taxes, increase
spending, but they do not say more borrowing, and more borrowing means
more interest, and more interest means more taxes from now on, forever.
Mr. HILL. Mr. Speaker, I thank the gentleman for his leadership on
this issue. The gentleman from Tennessee can say it just about as good
as anybody in the Congress can say it, and he is exactly right, and his
leadership on this issue is very much appreciated.
I would like to call on a freshman Member of Congress who has
asserted himself as a rising star in the Congress of the United States,
the gentleman from California, (Mr. Schiff).
Mr. SCHIFF. Mr. Speaker, I thank the gentleman from Indiana for
yielding and for his leadership and the bipartisan ethic he has brought
to this House, which has certainly been a model for this freshman.
Once again, I join my Blue Dog colleagues on the House floor tonight
to bring attention to an issue that has long-term implications for our
Nation's future. The administration has come to Congress asking us to
raise the debt limit by $750 billion. This request
[[Page H1322]]
comes to us a full 7 years earlier than was predicted when the budget
was submitted just last year.
The request to raise the debt limit presents us with an ideal
opportunity to re-examine our long-term budget priorities and
particularly our commitment to protecting the Social Security surplus.
Perhaps second only to the hanging chad, the enduring political buzz
word of the 2000 election, was ``lock box.'' It seems almost quaint now
to think back about lock box, but this Congress and the President
promised the American people that the Social Security trust fund
surplus would be placed in an iron clad box and used solely to fund the
retirement of the baby boom generation. Do my colleagues remember that?
Democrats and Republicans all agreed on this. The inviolable lock box.
Here we are now with a budget that promises to break that lock box
wide open regardless of the long-term fiscal consequences.
Social Security faces a serious financial crisis, and this budget
would do away with the lock box entirely and allow the surplus to be
raided to pay for tax cuts and additional Federal spending. The primary
source of the Social Security revenue is the payroll tax paid by
millions of American workers and their employers.
According to the 2001 Social Security trustee's report, Social
Security outlays will exceed payroll tax revenues in less than 14
years. By 2025 Social Security will face an annual cash shortfall of
$400 billion. An annual cash shortfall of $400 billion. By 2038, the
last year the trust funds are technically solvent, the annual shortfall
will be over a trillion dollars.
Despite these ominous numbers, the administration's budget, according
to the Office of Management and Budget, will consume the entire trust
fund surplus in just a few years. This debate is not about whether
Social Security needs reform. It does. This debate is not about whether
preserving the trust fund surplus will save Social Security in the long
term. It will not.
This debate is about common sense and fiscal responsibility. It is
common sense that we should not in any way consider tampering with the
trust fund before Congress agrees to and passes Social Security reform
legislation. Spending the surplus will leave our children holding the
bag. They will have to pay for the unfunded obligations that build up
in the Social Security trust fund if we spend the surplus, and to pay
for these obligations, the Treasury will step in, pay the entitlement,
and to come up with that cash, Congress will have to cut spending,
raise taxes, or borrow even more as if the trust funds had never
existed, and our children will pay the consequences. They will have to
deal with our lack of fiscal responsibility.
This Congress cannot afford to take such a risk in light of the
fiscal challenges that we face in the next 10 years. Social Security is
the most successful government assistance program ever. Millions of
senior citizens rely on it to survive. Millions of working Americans
are currently paying Social Security taxes, expecting their money to be
used for its intended purpose, and we understand that we are now faced
with the challenges of fighting a war and bringing our country out of
this economic slowdown.
We have accepted this reality and we are willing to work together to
develop fiscal policies that reflect our wartime needs, protect the
Social Security trust fund and set our country back on the path toward
fiscal responsibility.
{time} 2130
Mr. Speaker, while we examine the need to increase the national debt,
we must tread carefully and remain constantly aware of the burden we
are placing on future generations because this debate is about more
than our current economic situation. It is about what we will pass on
to our children and to their children. We must continue to work in a
bipartisan way to return to a balanced budget and fiscal discipline
without using the Social Security surplus. This is a promise we make,
and a promise we must keep.
Mr. HILL. Mr. Speaker, I thank the gentleman from California (Mr.
Schiff) for his outstanding remarks and his leadership.
The gentleman was talking about Social Security and how important it
is and how we need to preserve it for our senior citizens and to
protect it. I was in Columbus, Indiana, in a retirement home about a
month ago; and I was talking to some retirees in that home. One of the
senior citizens spoke up to me and asked a question, Where does Social
Security come from? My reply to her, It comes from payroll taxes. And
she said, Who pays the payroll taxes? And I said, People who work and
employers.
She said, What gives the right for people in Congress to steal our
money then if we pay the taxes? She is exactly right. If we are
spending Social Security surpluses for things other than Social
Security, we are in effect stealing that money. Strong words on her
part that makes some sense.
At that same meeting was a good friend of mine who is going to be the
next Speaker, the gentleman from Maryland (Mr. Hoyer), who is the
ranking member of the Committee on House Administration, and the other
night his basketball team from Maryland beat my basketball team from
Indiana University. And if there was going to be any team that beat the
Hoosiers, I would just as soon it be the team of the gentleman from
Maryland.
Mr. HOYER. Mr. Speaker, I thank the gentleman for yielding and for
being such a great sport and a representative of such a great team with
such a great coach with Mike Davis, their coach handling himself so
well. We are proud of the job he did.
Mr. Speaker, 1 year ago President Bush and congressional Republicans
promised us that we could have it all. They said we could afford the
largest tax cut in a generation and still be able to invest in domestic
priorities, strengthen Social Security and Medicare, and pay off our
publicly held debt. When we Democrats questioned whether we could
afford the President's $1.7 trillion tax cut, and that is absent the
additional interest we have to pay, which the gentleman from Tennessee
(Mr. Tanner) talked about, and still pay down the debt, our Republican
colleagues responded there was a danger in paying off the publicly held
debt too quickly.
Well, worry no more because we are not in any hurry to pay off any
debt. In fact, we are in a hurry to incur a lot more debt. The OMB now
projects that our national debt, which includes publicly held and
intergovernmental debt, will approach $7.8 trillion by the end of 2007.
That is $275 billion more debt than was projected at the beginning of
last year. Just this month after congressional Republicans again
rebuffed the request of the Secretary of Treasury, Mr. O'Neill, to
increase the statutory debt limit of $5.59 trillion by $750 million,
the administration was forced to borrow Federal employee retirement
funds to ensure that the government meets its obligations. In other
words, Federal employees' pension dollars are now funding government.
The gentleman from Indiana (Mr. Hill) spoke of that earlier in his
remarks.
Do Members remember the last time that happened? It was back in 1995,
and the GOP was blocking an increase in the debt ceiling in an attempt
to get President Clinton to sign their budget. Treasury Secretary Rubin
used the same short-term device that Secretary O'Neill is using to
avoid a default. How did congressional Republicans respond? They
reprimanded him. They threatened to impeach the Secretary of Treasury,
and former Speaker Gingrich derided the tactic as ``looting.'' The
gentleman referred to stealing Social Security funds. Mr. Gingrich, the
Speaker of the House, said that what Bob Rubin was doing so we would
not default in the payment of the monies that the richest Nation on the
face of the earth owed, that he was prepared to say that he was looting
the Treasury.
I have not heard one Republican come to this floor and say that
Secretary Paul O'Neill is looting the Treasury. Now, I represent 58,000
Federal employees. I do not think we ought to be doing this policy; but
frankly, we have an obligation to pay it back, and I think we are going
to do that. But the fact of the matter is if Secretary O'Neill did not
do it, this government would default on its debt. If that happened, the
finances of the world would be put at risk.
Republicans, when Secretary O'Neill did it, neither criticized the
administration for doing precisely the same thing that Secretary Rubin
had done,
[[Page H1323]]
and which sent them in orbit 7 years ago, nor accede to an increase in
the debt ceiling. In other words, they do not want to make sure that we
do not default, and they do not want to raise the debt. That is the
definition of irresponsibility. That is the definition of pretending
you are doing something when you are doing just the opposite.
My good friend, the gentleman from Tennessee (Mr. Tanner) said it
exactly right. If we defaulted, interest rates would skyrocket. Average
people, no matter how deeply their taxes were cut, could not afford
their mortgage payment, particularly if they were an ARM, an adjustable
mortgage. They could not afford to buy consumer goods with interest
because interest rates would skyrocket. That would be an irresponsible
policy, but it is the policy that we are pursuing today.
In what can only be described as a perverse twist, House Republicans
intend to bring legislation to the floor in 2 days that will make last
year's tax cut permanent and drive us even deeper into the fiscal
ditch.
Mr. Speaker, I am not a Blue Dog; but I support much of what the Blue
Dogs support, particularly as it relates to fiscal policy. Why? Because
it is fundamental that if we do not manage our finances responsibly, we
will not manage anything else responsibly. In just 15 months, our
Nation has experienced the worst fiscal reversal in the history of the
world; $5 trillion in projected surpluses have evaporated. Think of
that. President Bush stood at this podium 12 months ago in February of
2001 and predicted, he said he was assured we were going to have a $5.6
trillion surplus over the next 10 years. We said you better be careful.
That is a long projection to make. You ought not to mortgage the farm
based on what you think your income is going to be 6, 7, 8 years from
now.
A month ago President Bush came to that same podium, presented a
budget, and lo and behold the surplus he now projects over that same 10
years is $1.6 trillion. That is $4 trillion less. What he does not
factor into that is because we have less surplus and are going into
debt, we are going to have an additional $1 trillion in interest. We
heard the gentleman from Tennessee (Mr. Tanner) talking about that,
which means we have lost $5 trillion in 12 months.
I wish Ross Perot would start having infomercials on that issue. It
is critical. We cannot operate this great Nation with our
responsibilities to our own citizens, and in the international
community, operating as fiscally irresponsibly as that. Five trillion
dollars. Our debt is climbing again, and according to the Congressional
Budget Office, our on-budget accounts will be in deficit every year for
the next 10 years, producing a total on-budget deficit of nearly $2
trillion.
Now, the gentleman from Indiana (Mr. Hill) talked about our policies
in the 1990s. They are instructive because in 1992 we had a $292
billion annual operating deficit. We could not, nor should we have
sustained that. So we came in in 1993, and we adopted a program. It cut
spending deeply and it raised taxes. Some people would say that is an
awful thing to do. What does raising taxes mean? I do not mean raising
them in terms of increasing them. It means this generation is committed
to paying for what it buys.
My position is if we do not want to pay for it, we ought not to buy
it. I do not mean that we ought not to buy an aircraft carrier that we
can amortize over 40 years. It is like buying a house, you mortgage it
and pay it over time. We ought not to be paying for salaries that are
used this year with borrowed money. That is how New York went bankrupt
and we had to bail them out. We need to be responsible.
There is an extraordinary American sitting on the floor with us. He
is the gentleman from Nebraska (Mr. Osborne), one of the greatest
football coaches in the history of this country. He taught his young
people fundamentals. He did not teach them to make some hail Mary pass,
he hoped that would happen from time to time. What he taught them was
how to block, how to tackle, how to run, how to watch what the other
fellow was doing, how to learn your plays. He taught the fundamentals.
He was convinced if those young people knew the fundamentals, they
would win games. Because, as Gary Williams knows, as Coach Smith knows,
if you teach young people the fundamentals, they will win games because
they will do it right. And sometimes, yes, they will do something
spectacular.
But a nation, a nation needs to pay attention to its fundamentals as
well. Do any of my colleagues in this Chamber remember what the
majority leader said last July? I talked about the President 12 months
ago. Last July the gentleman from Texas (Mr. Armey), majority leader of
this House: ``We must understand that it is inviolate to intrude
against either Social Security or Medicare; and if that means
foregoing, or as it were paying for tax cuts, then we will do that,''
said the gentleman from Texas (Mr. Armey).
We are now some 9 months later. On Thursday, we are not going to do
that. In our budget that we passed, not with my vote, just a few weeks
ago, we did not do that. We preached fundamentals, but we are not
playing fundamentals. And the losers will not be, frankly, any of us
who sit on this floor. It will be our children and grandchildren, and
it will be the fiscal integrity of this great Nation.
That promise turned out to be as empty as the GOP's lockbox stunt
last year. The rally is that the Republican tax cut is the single
largest factor in erasing our surpluses. Do we need to pay for the war
on terrorism? Absolutely. Is it going to cost us more money than we
expected? Yes. Should we follow that policy? Of course we should. We
are in lock step with our President in confronting those who would
undermine our security and safety in this land, and, very frankly, in
other lands as well.
However, the Social Security and Medicare surpluses which were
critical, as the gentleman from Texas (Mr. Armey) said, and would not
be touched, are in fact going to be used 100 percent.
I have some other things to say about this policy, but I want to
close with this. David Stockman in 1981 became director of the Office
of Management and Budget.
{time} 2145
He came in with a roar, like March, I suppose, and he was going to
see that this budget was balanced. In fact, Ronald Reagan, when he
signed the Reagan program in 1981 said the budget is going to be
balanced by October of 1983. Or perhaps it was 1984.
In any event, it did not happen. Mr. Stockman, of course, was the
director of OMB the same year I was elected to Congress. His mandate,
sell President Reagan's supply side economic program. President Reagan
assured us, as I said, that by fiscal 1984 we were going to balance the
budget. We did not. Instead of producing increased revenue, the Reagan
tax program threw us into fiscal freefall. The budget deficit, just
under $79 billion in 1981, exploded until, as I said before, peaking at
$290 billion in 1992. As David Stockman himself later admitted, and I
quote, David Stockman, OMB director, ``I knew that we were on the
precipice of triple digit deficits, a national debt in the trillions
and destructive and profound dislocations throughout the American
economy.''
David Stockman, in his book, looked back on his service with lament
because he knew where we were going. My friends, it is clear where we
are going if we continue to pursue these policies. What the Blue Dogs
are saying is that we need to work together, not Republicans and
Democrats, but 435 of us, elected by our people, to responsibly manage
their country, their dollars, their hard-earned wages. We need to
commit ourselves to doing that. I commend the Blue Dogs for their
leadership on this most critical fundamental responsibility of this
Congress.
Mr. HILL. I thank the gentleman from Maryland for that strong
presentation. The gentleman has been in the Congress for quite some
time and has an historical appreciation for the events as they have
unfolded on this particular issue. His presentation was an exposure of
the truth. That is what we need more of in this institution. I just
cannot say enough about that strong presentation. I am glad that though
he is not a Blue Dog Democrat, he has the same feelings that we do
about this issue and I appreciate his comments.
Another Member who is not a Blue Dog Democrat is the gentleman from
Wisconsin (Mr. Kind). He has asked to
[[Page H1324]]
have a few minutes to share with us about this very important issue. I
yield to the gentleman from Wisconsin (Mr. Kind).
Mr. KIND. I thank the gentleman from Indiana (Mr. Hill) for not only
grabbing this hour for an important conversation and debate that we are
going to be having later this week but for the leadership that he has
particularly shown on fiscal responsibility, maintaining fiscal
discipline. He has been very active in both the Blue Dog and also the
coalition of which I am a member, the New Democratic Coalition. We have
a lot of overlap in the membership between our two groups, and it is
because we are basically fiscal soulmates.
When it comes to the issues affecting the public purse, the Federal
budget, both of our groups, the New Dems and the Blue Dogs, believe
very strongly in maintaining fiscal discipline, keeping our eye on
taxpayer dollars, trying to promote policies that will best position
this Nation to deal with the challenges of the future, which to me
seems the looming budget debt and the implosion that is about to occur
starting next decade. Of course I am referring to the 77 million
Americans who are all marching virtually simultaneously to their
retirement, the so-called baby boom generation, who will start entering
into the Social Security and Medicare trust funds.
Yet this week we are going to have a very important policy debate in
regards to whether or not this Nation will have the resources to deal
with the greatest fiscal challenge we face, that is, this aging
population and the burden it will place on the Social Security program,
the burden it will place with rising health care costs and how do we
maintain some common sense and fiscal discipline to deal with that.
I am very concerned. It is almost like deja vu all over again,
pursuing the policies of the 1980s where we had large tax cuts being
proposed and enacted which left us in annual structural deficits year
after year, adding to the $5.7 trillion national debt that we now have
rather than maintaining the fiscal discipline which was needed. For me,
and I believe for a lot of people in this Congress, one of the keys to
future economic growth and prosperity, and it is something we hear
constantly from Chairman Greenspan when he is testifying, is keep your
eyes on the effect fiscal policy has on long-term interest rates. They
have consistently testified, and the history of fiscal policy shows,
that when you start racking up deficits again, adding to the national
debt rather than subtracting from it, having the public sector
squeezing the private sector for the limited resources in order to
finance ongoing government operations, it has an adverse effect on the
bond market and it leads to long-term interest rates going up rather
than coming down, which is a hidden tax then on all Americans, whether
they are wealthy or middle-income or low-income Americans, because of
the additional expense it will take for them to borrow money, whether
it is for home payments or car or credit card payments or to invest
capital in businesses. It is the long-term interest rates we need to
keep an eye on.
The best thing we can do as an institution here is to maintain sound
fiscal policy, reduce the national debt which will help reduce those
long-term interest rates and really set us on the course for long-term
economic prosperity. This is a serious issue. One of the concerns I
have is that the majority party in the House and the party at the White
House right now are pursuing policies that are not enabling our country
to best position ourselves for the challenges of the future. That is
what has to change.
I think people back home are beginning to realize that the tax cut
that was enacted last year is being financed now through the collection
of payroll taxes, FICA taxes, additional moneys that are supposed to be
going in and guarded in the Social Security and Medicare trust funds,
but which are now being raided in order to finance these tax cuts. If
anyone last year would have been told that this would be the reality,
that we would be passing tax cuts for some Americans and paying for it
through the collection of payroll taxes that are supposed to be going
into these trust funds, they would have thought it was crazy economic
policy to pursue. But given the economic slowdown, the change of events
of last September, that is, in fact, the situation.
I think it is time for groups like the Blue Dog Coalition and the New
Democratic Coalition to stand up and start making an issue of this. I
commend the gentleman from Indiana (Mr. Hill) for his leadership and
for the time he was able to get this evening to talk about this very
important issue.
Mr. HILL. I thank the gentleman from Wisconsin for joining us here
this evening.
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