[Congressional Record Volume 148, Number 122 (Tuesday, September 24, 2002)]
[House]
[Pages H6538-H6544]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     THE NEED FOR A NEW BUDGET PLAN

  The SPEAKER pro tempore (Mr. Platts). Under the Speaker's announced 
policy of January 3, 2001, the gentleman from Illinois (Mr. Phelps) is 
recognized for 60 minutes as the designee of the minority leader.
  Mr. PHELPS. Mr. Speaker, I represent the 19th district of Illinois. I 
am honored to be here in my second term in Washington, D.C.; and, Mr. 
Speaker, tonight as one who is honored to be a member of the Blue Dog 
Democratic Coalition, we will be joined by hopefully several other 
members of the Blue

[[Page H6539]]

Dog Coalition tonight; and we want to focus our time on discussing the 
budget situation, the negative consequences of a return to deficits and 
debt, and the Blue Dog message about the need for a new budget plan.
  It is one thing to have a budget plan as we started this session and 
this budget year and as the President outlined in his budget plan. It 
is one thing to head in the direction we intend to go and meant to go, 
but then unanticipated obstacles, unfortunate happenings and incidents, 
dreadful experiences deter the plans and get us off the path and the 
goals in which we intended when we outlined our first intentions. Part 
of that we know was the recession, deeper than any wanted to 
acknowledge or to accept; and of course September 11, the impact that 
it has had we are still feeling and will for some time: tax cuts, 
spending. All that goes together in affecting that original plan that 
the President set forth in the budget resolution.
  So part of our job as elected people is to make sure, at least in my 
estimation, that we are flexible enough to adjust to situations that 
get us off that direction that we started. And our discussion tonight, 
at least from the Blue Dogs' perspective, hopefully will be to point 
out how far we have gotten off that path and to hopefully make 
suggestions as to how we can modify our direction and stay within the 
confines of a balanced budget, which, by the way, has not had any 
discussion in the 4 years I have been here, soon to be. I have not seen 
a balanced budget resolution brought to the floor, and I would think 
that we, as near a bipartisan group as one can almost get, meaning that 
one party does not have a super majority over another in either 
Chamber, that should mean that we are working together more because we 
have to, and the numbers dictate that. However, I have not seen that 
happening in the last few months, in a couple of years at least.
  Mr. Speaker, to get started on our focus and discussion of the budget 
situation and the negative consequences of a return to deficits and 
debt, our message is about a new budget plan and why we need to usher 
in as quickly as possible to make sure we acknowledge some of the 
things that happened that are not necessarily the fault of anyone and 
we should not be pointing our fingers at each other at this time. That 
is for sure. We can debate and talk about what happened, but we need to 
acknowledge that it is a different situation now than it was September 
11, 2001.
  So we, as Members of Congress, try to depend and must depend on 
authentic numbers, sound numbers that tell us how much resources we 
have to work with, what is in the bank, what we owe, what we can 
anticipate to come in from various sources of revenue, and what we know 
are going to be expenses that we are obligated to pay and as we go 
through a budget year in trying to reach a budget agreement before we 
adjourn for this session, trying to anticipate what the costs will be 
in this budget agreement. So we have a general outline. How we reach 
the end of that process depends on how much we work together and all 
the facts that come to us that were not there in the beginning of the 
presentation such as I alluded to with the President's budget 
resolution.

                              {time}  2030

  So we find ourself in a new time, new day, new circumstances. Our 
plea as Blue Dogs is we would acknowledge this as a body which has been 
elected from every State in the country, and even within my own State 
the great diversity that we face should help us instead of prevent us 
in coming to a reasonable agreement.
  We have fiscal reporting offices, bureaucracies, and departments to 
give us an idea of our situation in the past few months, what we 
thought we had and could depend on, what we have presently to depend on 
with revenues and outlook, and what our plans should embrace depending 
on the information we can best conjure up for the future, the short 
term as well as the long-term future.
  So most of the discussion about the budget, the tax cuts, the 
receipts, the revenues and everything in the last 4 or 5 years has been 
about a 10-year projection, which I personally feel is a false premise 
to begin with. How in the world would anybody have anticipated 
September 11 or the recession making as much impact as it did on our 
economy?
  So we need to weigh all those things now in a different light. So we 
do have the Congressional Budget Office, which confirms what we have to 
work with as Members of Congress so we can relate to our constituents, 
the voters, the taxpayers, the citizens, just exactly how we should be 
guided through the process that we were elected to do to arrive at a 
financial, sound way of managing the resources that this country 
produces and gives to the government sector, to give back through the 
process of which we decide priorities that are outlined by everyone's 
discussion here, the input that comes from individual Members. That is 
why we are in the greatest deliberative body in the world right here in 
the House of Representatives.
  So the nonpartisan Congressional Budget Office, that is the fiscal 
reporting group that should not be swayed or influenced and was put in 
place by one party or the other, or leadership or those that are more 
powerful to the seniority years. Those things are very important for us 
to take into consideration when we receive the information from the 
Congressional Budget Office.
  So the Congressional Budget Office confirms that the surpluses 
projected last year have been replaced by deficits and growing debt. 
The CBO, which I will refer to the Congressional Budget Office as, has 
released updated economic and budget projections for the next 10 years. 
There again we are on this 10-year kick which I feel is shaky ground.
  The report documents the continuing deterioration in the 10-year 
budget outlook. Last year the CBO projected that the government would 
run a budget surplus of $3.4 trillion, excluding the Social Security 
surplus, meaning the Social Security revenue, FICA, that comes in from 
those who work every day, coming from their earnings to pay into the 
Social Security and Medicare Trust Fund.
  That surplus was excluded from the $3.4 trillion surplus. The CBO now 
projects that the government will run a non-Social Security, that means 
not counting the Social Security receipts and revenues, budget deficit 
of $1.5 trillion. That is reversal of nearly $5 trillion in a year and 
a half.
  The CBO projections do not include costs of additional tax cuts or 
increased spending proposed by the President or being considered here 
in Congress. Extending the expiring provisions of the 2001 tax cut law 
would add more than $600 billion to the deficit projections over the 
next decade, in which this Congress has chosen to choose the way to 
project budget, give tax cuts, obligate spending and look at debt.
  The first major violation occurred in our agreements over the last 
several years when we broke the lock on the lockbox and raided Social 
Security. For the past couple of years the other side has made promises 
to protect Social Security. This budget is far from protecting Social 
Security, and I defy any Member to prove to me otherwise. Many of my 
constituents depend on Social Security as a means of comfort after they 
have worked hard all their life, over the many years that they have 
labored in their occupation.
  This budget calls for tapping the Social Security Trust Fund to 
support other government programs every year for the next 10 years for 
a total of $1.5 trillion. Now, I am concerned about that, and that is 
why I am spending my time trying to communicate the situation to the 
American people and those who I represent in the 19th Congressional 
District of Central and Southern Illinois.
  Our Nation cannot afford to put our Social Security system at risk 
when it is depended on by so many of our citizens. Social Security and 
Medicare are the two crown jewels of social programs in the history of 
our Nation. They have been very successful, but yet we have not managed 
them properly, and we are about to get to that breaking point where it 
is going to be unmanageable.
  Let me just talk about running up the national debt before I 
introduce my colleague. During the budget debate last year, Republicans 
in Congress claimed there was a danger that the government would pay 
off the debt held

[[Page H6540]]

by the public too quickly, something I laughed at and thought, my, what 
a great fortune that would be. Little more than 1 year later, the 
Congressional Budget Office now projects that the publicly held debt 
will increase from $3.32 trillion at the end of fiscal year 2001 to 
$3.865 trillion by the end of 2006, a $545 billion increase in the 
debt.

  As a former teacher, as a father and a grandfather, I have always 
tried my best to do what is right for the next generation, the future 
generations even beyond the next generation. We cannot afford to leave 
our children in a mess that they cannot clean up. The administration 
says the publicly held debt will begin to gradually decline in 2005. 
Even if that is true and even if the debt does start to decline and the 
government does its part in beginning to pay it down, we still need to 
remember the impact this is having on our system of Social Security. 
This is where our children are going to be impacted the most.
  From my understanding, the total debt of our Nation is going to 
continue to increase. That is right. Even though the administration 
suggests that the publicly held debt will begin to decline, the fact is 
that the total debt will continue to rise due to the fact that we have 
not kept the commitment to save the Social Security Trust Fund surplus. 
We all made that commitment. We have broken that commitment. That is 
just fact. That is just the truth.
  The statutory debt limit, which has increased by $450 billion to $6.4 
trillion just 2 months ago, will need to be increased again next year. 
I would gather that is why we are probably going to find ourselves in a 
lame duck session because too many of these facts are too severe for 
some of us to want to face and to tell the American people the truth 
about the situation we face. So it is time to regroup. It is time to go 
back to the table and say let us acknowledge what has happened. Before 
it is too late, let us look at another plan. The Blue Dogs presented 
that several months ago, and we have yet to receive or be responded to 
in a serious nature from the other side of the aisle or from the 
administration or from leadership here in the House.
  Mr. Speaker, let me introduce a member of the Blue Dog Coalition who 
came to Congress the same year I did, is a member of my same 
Congressional class, and is one of my closest friends, the gentleman 
from Indiana (Mr. Hill).
  Mr. HILL. Mr. Speaker, I thank the gentleman from Illinois (Mr. 
Phelps) for his leadership on this particular issue. I have come to 
know the gentleman from Illinois (Mr. Phelps) now in the last 4 years, 
and he is in fact a dear friend of mine and we have shared a lot of 
stories together. I have also come to respect his honesty and 
integrity. When the gentleman says something, you can put it in the 
bank that the facts have not been massaged and it is the truth. What 
the gentleman said a few minutes ago is right on the mark and I applaud 
the gentleman and what he does for his constituents back home in 
Illinois.
  Mr. Speaker, I had an opportunity and challenge to get elected to the 
Indiana legislature back in 1982, and during that time I will never 
forget it, we went into a special session right away. In that special 
session the legislature raised taxes to overcome budget deficits that 
they were having in the State of Indiana.
  Here in Washington during that time there was a new President who was 
advocating tax cuts and increased military spending. In the process of 
doing that, huge budget deficits occurred. It seems to me that we are 
in that same situation now because if we look around the Nation, all 
over America, State governments are increasing their taxes while 
Congress is cutting Federal taxes, increasing the military spending 
dramatically, and in many ways justified because of the war on 
terrorism, and we are starting to run up huge deficits all over again. 
It is deja vu all over again, just like it was in the 1980s. These are 
policies that have been put in place that are getting in my view 
undesired results because deficits are a problem.
  During the 1990s, we changed course from the 1980s and we adopted new 
economic policies. Our emphasis was on debt reduction. We were largely 
successful in the 1990s for reversing those policies of the early 
1980s.

                              {time}  2045

  In the late 1990s when the gentleman from Illinois and I came to 
Congress, we actually experienced budget surpluses for the first time 
in many, many years. Then there was a Presidential race, of course, in 
the year 2000. This Congress and this administration has returned to 
the policies of the 1980s which again are resulting in huge budget 
deficits. Some called it supply side economics. At one time it was 
called voodoo economics. I do not know what to call it, but all I know 
is we are running up huge deficits once again.
  The Blue Dogs are a group of 33 Members of Congress, the gentleman 
from Illinois and I are two of those 33, that believe that we ought to 
be fiscally responsible and try to get us back on a path where we do 
pay our debts just like every American family does all across America.
  I have been back in the district for the last several weekends, and I 
have discovered that people are hurting. The economy is not doing so 
well. The families back in the ninth district in Indiana who are not 
doing so well are changing their budgets to reflect the bad economic 
times that they are having. They know, the good folks of southern 
Indiana, just like the good folks in south central Illinois, that when 
you fall upon hard times, you have got to readjust your budgets in 
order to pay your bills. That is the honest way to do things. That is 
the forthright thing for people to do. By and large, the good people of 
southern Indiana that I have the fortune to represent redo their 
budgets to reflect the times.
  Congress for some reason feels like it does not have to do that. As a 
matter of fact, we are spending money like it is growing on trees 
again. The Blue Dogs are a group of 33 that thinks that we ought to sit 
down as Democrats and Republicans in a bipartisan fashion and try to 
come up with a plan to get us out of this deficit, just like families 
back in southern Indiana do; they come up with a plan to get us out of 
these deficits. Congress needs to do the same thing. The Blue Dogs have 
been a strong voice calling for a budget summit, for us to come down as 
Republicans and Democrats to figure out a way how we are going to get 
out of this budget crisis that we are in.
  I would like to cite some statistics. Last year, CBO, the 
Congressional Budget Office, projected that the government would run a 
budget surplus of $3.4 trillion excluding the Social Security surplus. 
The Congressional Budget Office now projects that the government will 
run a non-Social Security budget deficit of $1.513 trillion, a reversal 
of nearly $5 trillion in only a year and a half. So those huge budget 
surpluses that we experienced in the late 1990s are gone in a year and 
a half, and we are accumulating a $1.513 trillion reversal.
  The Congressional Budget Office projects the government will run a 
unified deficit of $157 billion in the current fiscal year. When the 
Social Security surplus is excluded, CBO projects an on-budget deficit 
of $314 billion, $162 billion higher than that projected in January. 
For fiscal year 2003, the CBO projects a unified budget deficit of $145 
billion and an on-budget deficit of $315 billion when Social Security 
is excluded. The government is projected to borrow virtually all of the 
Social Security surpluses to finance deficits in the rest of this 
budget.
  The gentleman from Illinois was talking about how many of us, myself 
included, pledged to put a lockbox around Social Security and not spend 
the Social Security surpluses, to use Social Security for only what it 
is supposed to be used for, and that is Social Security. If you ask 
your people back home if that is the right thing to do, I guarantee you 
overwhelmingly people will say that is the right thing to do. We should 
not be using these Social Security surpluses to finance the debt that 
we are incurring. It is irresponsible. Nearly $1 trillion, $964 billion 
to be exact, over the next 5 years and more than $2 trillion by the end 
of this decade will be used from Social Security surpluses. That is 
wrong.
  During the budget debate last year, some Members of Congress actually 
came to this microphone and claimed that there was a danger that the 
government would pay off the debt held by the public too quickly. As we 
think about that today, that was just plain

[[Page H6541]]

laughable. Little more than 1 year later, CBO projects that the 
publicly held debt will increase from $3.32 trillion at the end of 
fiscal year 2001 to $3.865 trillion by the end of 2006, a $545 billion 
increase.
  I would assume that most people who are listening to these budgetary 
figures, their eyes have got to be glazing over now. These are numbers 
that nobody understands. So let me try to put it in perspective a 
little bit better. If this holds true, if these deficits hold true, it 
will be the largest increase in debt in the history of this country in 
one year, the largest increase in the history of this country. So we 
have returned to the early 1980s and those economic theories, where you 
cut taxes here, the States have to raise taxes back in our homes, we 
increase funding for military spending and we run up huge deficits 
again. It is deja vu all over again.

  The real problem is that the budget is projected to continue to run 
on-budget deficits requiring the government to raid Social Security and 
Medicare trust funds even after the economy recovers and returns to 
strong growth. We face long-term budget problems that go far beyond the 
impact of the war on terrorism or the downturn in the economy. Running 
deficits and increasing the debt over the next decade and leaving in 
place long-term fiscal shortfalls will make it even harder to meet our 
commitments to workers who will retire in the next decade and beyond. 
Higher debt means higher spending on interest payments. You want a tax 
cut? Pay down the debt so that we can reduce interest, so that people 
can buy their homes and their cars and make their loans more cheaply. 
That is money in everybody's pocket.
  The government will spend nearly $2 trillion paying interest on the 
debt over the next 10 years. We will spend $170 billion in interest 
payments just this year. And spending on interest will continue to 
increase through 2007. Spending on interest on the debt is the most 
wasteful use of taxpayer dollars. The amount of the budget consumed by 
spending on interest takes away resources that could be used for other 
priorities, such as defense, health care, education, et cetera.
  More than $1 trillion of the national debt, roughly one-third of the 
publicly held debt, is held by foreign investors. In 1998, the U.S. 
Government paid $91 billion in interest payments to foreign investors. 
The national debt places a drag on the economy and a burden on the 
family budget by keeping interest rates higher than they would 
otherwise be. Budget deficits and a large national debt have a major 
negative impact on the economy and the finances of American families by 
keeping interest rates high. Continuing to allow the national debt to 
grow will impose an increasing tax burden on future generations to pay 
for the current consumption. The President must work with Congress to 
put its fiscal house back in order, just as families back in Indiana 
facing financial problems must work with the bank to establish a 
financial plan in order to get approved to refinance their debts.
  In short, we need a budget summit, as the gentleman from Illinois has 
already outlined. We need to reach out, Republicans and Democrats, 
within the Congress of the United States and to the President, to try 
to come up with a plan like families back in Indiana do themselves, 
coming up with a plan to try to get us out of the problem that we face, 
and it is a problem.
  Mr. Speaker, our young men and women are fighting terrorism all over 
the world right now as I speak. Of course we need to support them. It 
is immoral for us to require them to fight these wars and then to come 
home and in the later years when they are in the Congress of the United 
States, be responsible for somehow figuring out how we pay this debt 
off that we, our generation, has incurred. It behooves me and this 
Congress and the people who might be listening, certainly the people of 
southern Indiana, to get our fiscal house in order by calling a summit, 
asking Republicans and Democrats to come together to figure out a way 
how we are going to return to fiscal responsibility.
  Mr. PHELPS. I thank the gentleman from Indiana. Let me just say, 
knowing this gentleman for the last 4 years, we came in, as I said, the 
same year. You would think as very enthusiastic freshmen, honored to be 
elected and serve in this great body, naturally we shared some of the 
same commitments and priorities as education and health care, those 
things that are basic to our well-being and our communities and our 
families, both of us, as well as all the Blue Dogs.
  But as freshmen Members, I remember having the discussion how 
important Social Security and Medicare protection was to us as 
freshmen. As far beyond any other thing that we were concerned about, 
that was at the top of the list. It was not rehearsed. It was not 
something we conjured up. That is the way we felt when we first entered 
this body. Now we find ourselves in this situation, and we have seen it 
decline. As I said before, some of it is not our fault. It is out of 
our own power that things have happened, and circumstances.
  But it is within our power to recognize and acknowledge a problem and 
say, what can we do together from here knowing this situation happened 
9-11, the recession was deeper, we want to acknowledge or at least 
accept; and the tax cuts, how much impact did all of that have and the 
projections of 10 years being too rosy, painting a rosy picture, 
downplaying the liabilities. That is what has got us in this situation. 
So it is not time, even though it is right before the election, to 
start pointing fingers and say that it is your fault, it is your fault, 
but it is our fault if we do not recognize it is time to come together 
and acknowledge and embrace a new plan that will reflect what has 
happened to us.
  With that let me thank the gentleman. If he would like to interject 
anything from now to the end of our time allotted, feel free. We can 
have open discussion, but it is my honor to now introduce, I started to 
say the oldest Blue Dog, but I will just say the most senior of the 
Blue Dogs who actually was instrumental in forming this coalition 
which, I think, has had its impact on the Nation and someone who has 
been a mentor to me, even though we come from extreme distances away, 
from Texas to Illinois, believe me, it is scary how close our thinking 
is on line together, my dear friend, the gentleman from Texas (Mr. 
Stenholm).
  Mr. STENHOLM. I thank my friend from Illinois, and I thank my friend 
from Indiana for their discussions tonight. I want to begin by building 
on the major points that they made in their conclusions. We are here 
tonight not for fingerpointing, but in an offer to work in a bipartisan 
way for a solution. We offered ours last year in the budget debates and 
we were turned down. That is perfectly the prerogative of this body. 
The majority can ignore the minority anytime you would like. You passed 
your economic plan. We thought it was poorly conceived, but you did 
not. And now we have the results. Today the stock market reached the 
lowest point that it has been in 6 or 7 years. Unemployment is 
beginning to move up. We have a lot of concerned people around this 
country, concerned about whether or not their jobs are secure, their 
savings are secure; and we still have the very real concern about 
Social Security, because we can talk all about, we can blame all we 
want to, and I am a little bit perturbed with both sides regarding the 
Social Security arguments that are taking place today, but the one 
thing we cannot say is that anybody is doing anything about it.
  If you are perfectly satisfied with running the largest deficit in 
the history of our country, then continue to come to this floor and 
demand to continue to follow the economic game plan that we are now 
under and that is a perfectly honest position to take and then assume 
the responsibility for what that policy brings. Because that is what is 
happening today. We cannot undo it, what has happened to this point; 
but we can make a difference in what is going to happen from this day 
forward.

                              {time}  2100

  That is where I think the market is crying out for some direction and 
leadership and for us in this body to quit the finger pointing.
  We had two sense of Congress resolutions on the floor last week that 
were, with all due respect, ridiculous; us, we in the House of 
Representatives, who have only passed five appropriations

[[Page H6542]]

bills, blaming the Senate because they have not passed a budget, and 
the only thing that divides us is $9 billion. $9 billion is what the 
finger pointing is all about, and this body and the wonderful 
leadership we have here is saying it is all the Senate's fault.
  Now, that is laughable. From where I come from in Texas and from 
where I think the gentlemen from Illinois and Indiana come from, if you 
are going to finger point, my people want me to say okay, then what 
would you do differently?
  Well, here we have offered and we will continue to offer what we 
would do differently. We need a summit on the budget. We need to sit 
down and put everything on the table and work ourselves out of a very 
difficult situation this country finds itself in, very difficult. But 
there seems to be no interest in that.
  You know, here we had some safeguards, some policy procedures, that 
were put into effect in the 1997 budget, even going back to the 1990 
budget, in which we suggested that having caps on spending agreed to 
would be helpful to resolving our budget differences. Now, this year 
the Blue Dog Democrats said, in agreement with the majority, that the 
$759 billion number is a good number and we are prepared to support our 
colleagues on that number, or at least some of us are.
  Pay-go, we have had a pretty good little budget process in which if 
you are going to propose increasing spending, then pay for it. If you 
are going to propose additional tax cuts, pay for it. Do not borrow it 
on our children's and grandchildren's future. That expires September 
30. I am told, and I hope I am wrong, and I would love to be proven 
wrong and have someone come to the floor of the House and say right 
now, Charlie, you are wrong; we are going to reimpose the pay-go rules. 
We are going to have those rules, and, by the way, instead of ignoring 
them, as this body has done for the last 2 years, we are going to live 
up to them.
  It is kind of amusing to me sometimes, we are out here arguing for 
pay-go rules, and we waive them every time a rule comes to the floor 
that has something to do with sense of Congress resolutions, or with 
spending resolutions, or the favorite is tax cutting resolutions. If we 
are going to have a rule of the House, live by it.
  We are prepared to back the majority party, and we will propose on 
the CR tomorrow, or the next day, when we have the continuing 
resolution, which is an indication of a failure of this body to do our 
work, when we cannot pass 13 appropriations bills and send them to the 
other body. If we passed our 13 and sent them to the other body and the 
other body did not act, then we would have the right to criticize the 
other body. But the gall of my friends on the majority side who will 
stand up and be critical of the other body when we have not done our 
work, it just defies my imagination.
  Mr. Speaker, we increased the debt ceiling earlier this year, and at 
the rate we are borrowing money now and with the projected additional 
spending over and above what is in current law, the gentleman from 
Indiana a moment ago stated it correctly, this Congress is going to 
preside over the largest single increase in our Nation's debt in the 
history of this country, and yet the majority claims they are 
conservative.
  Now, that, with all due respect, is argumentative, and I would love 
to see a serious debate on some of these issues, other than just the 
stone-walling and the blaming and the finger pointing that is going on 
and trying to blame the other body because of inability of this side to 
pass appropriations bills.
  Whatever happened to the legislative process in which you have 
differences of opinion and you sit down and work them out together? If 
you have got the votes, you pass them, and, if you do not have the 
votes, you fail them. That is kind of what the majority is doing today, 
I suppose. But yet you seem to not be willing to assume the 
responsibility of the actions that you continually vote out of this 
body, and you seem to be wanting to blame the other body.
  I do not understand that. I do not understand the logic of that. That 
is why the Blue Dogs are going to be on the floor day after day after 
day until we are adjourned asking the simple question, what is wrong 
with a budget summit? What is wrong with sending a message to the 
investment community, the investors of this Nation, saying we are going 
to sit down and actually work on some new solutions, or come to the 
floor and say we have the perfect solution and we want to continue and 
we want the results to be our responsibility.
  Social Security: I have been in this body now for almost 24 years. 
When I was first elected in 1978, 2011 was a long time away. Today, 
2011 is 9 years away. 2011 is when the baby-boomers, the greatest 
generation, those that we rightfully pay homage to on a regular basis 
for their tremendous patriotism and support in the winning of World War 
II, it is when the baby-boomers begin to retire, that the largest 
single drain on the economy of the United States in paying off the debt 
to the trust funds that we must honor will begin to come due.

  Instead of us dealing with that as the Blue Dogs asked and pleaded 
last year when we were talking about a $5.6 trillion projected surplus, 
we were emphasizing that is projected; do not spend money that is not 
there. But we were not heeded.
  We suggested taking half of that projected surplus and paying down 
the debt, then the other half of that surplus divided equally between 
tax cuts targeted for purposes that will benefit the economy and the 
other one-fourth or half of the remaining projected surplus, increased 
spending in priority areas which started with defense and then veterans 
and then healthcare and then education and then rural America. That was 
our priorities.
  But we also said before we do any of that, let us sit down as a body, 
Democrats and Republicans, and work out the answers to the future of 
the Social Security system and the Medicare system and the Medicaid 
system. We have got a crisis out there in our nursing homes all across 
this Nation, in my home state and in every other state, and instead of 
us dealing responsibly with trying to come up with policies that will 
answer the nursing shortage and the tort reform and the malpractice 
reform and all of the things we need to be doing, what are we doing? We 
are going to pass a CR, a continuing resolution, and we are going to 
punt into the next election, and we are going to poison the well on all 
of these issues that will make it even more difficult to deal with it 
next year.
  We said, let us deal with it last year, but, again, the majority 
said, no, we have got a better idea. And that is the prerogative, Mr. 
Speaker, of the majority. Many times I come to the floor and I will get 
a few calls that will come in and say, you Democrats are just spouting 
sour grapes. Well, if that is your opinion, I respect everybody's 
opinion. But we are sincerely here tonight, as we were last week, as we 
will be tomorrow, saying we have got a problem.
  No one, no one in the entire United States today, argues that there 
is not a problem with the Social Security System, in the future. No 
one. We all agree. We have got different solutions. I have got mine. I 
worked with the gentleman from Arizona (Mr. Kolbe) for the last 6 years 
on a proposal. We know what we are for, or what we think we are for.
  But I respect anyone that has got an opinion. If we would just spend 
some time in this body in the committees dealing with that problem, 
instead of bringing sense of the Congress resolutions to the floor of 
the House saying that it is really all the other body's fault, and 
doing that with a clear, unsmiling face.
  We are this body. We are the House of Representatives. We are the 
people's House. We are the ones that are elected by a majority of the 
people within our district. And, just as my colleague from Indiana said 
a moment ago, the people in Indiana are asking us to come up with a 
solution.
  Why are we not? What is it about politics today that has all been 
turned over to our promoters and issues, and no one ever, ever asks us 
to be accountable for our actions except the blame game?
  Well, Social Security and the trust fund and the trust fund problem 
are very, very real, and I venture to say that not a single one of the 
435 of us in this body tonight, both sides of the aisle, would disagree 
with that very calm statement. But when you are in the minority, you 
cannot effectuate

[[Page H6543]]

the direction of policy. Only the majority can determine what can come 
to the floor and how it comes to the floor.
  Yes, we are a little bit testy on the Blue Dog side, because when we 
come to the Committee on Rules and ask to have some of our ideas 
considered and voted upon, we have been denied and denied and denied. 
What is it that the majority party of this body today that calls itself 
conservative is suddenly afraid of ideas and letting ideas come to the 
floor and be voted upon? What is it? I do not know. But I am a little 
bit frustrated. But that comes with being in the minority, I am told, 
and that is the way our system is supposed to work.
  We are living in some very trying times, and I will predict that 
there is going to be tremendous support for our President when we deal 
with matters of tremendous importance and seriousness regarding 
international affairs. We certainly will find strong bipartisan support 
for standing with the young men and women that were mentioned a moment 
ago that we will send perhaps into harm's way, as we already have in 
Afghanistan. And, yes, there is a cost, a tremendous cost. War is not 
something that should ever be taken for granted or expressed in 
simplistic terms. It is one of the most serious matters to come before 
this body, and we will deal with it in this body, and I have every 
confidence that this is one issue that will have adequate airing and 
discussion in the people's House.

  But tonight we talk about the lack, the lack, of allowing serious 
debate of a change of economic policy for this country. Again, if we 
are wrong and we do not need this change and we do not need a summit, 
then so be it. Obviously that is the answer coming from the majority 
side. That is obviously the answer. ``We like the game plan we are 
under and we are perfectly willing to stand up to that game plan 
because it is working.''
  Well, that is the kind of debate that we ought to have in a little 
more open way, instead of the blame game. I hope tomorrow and the day 
after that that we will get away from these sense of the Congress 
resolutions, trying to blame somebody else for the inability of this 
House to deal with our own problems. I will not call us a do-nothing 
House, because we have done something. We have passed some resolutions. 
We have done some good. But it is the big undone good that we have 
tonight that we focus on as Blue Dogs, because by not facing up to the 
economic problems of this country, by not facing up to the ticking time 
bomb of 2011, by ignoring the interests of those who cannot vote, our 
children and grandchildren, those who do not have a vote today, by 
continuing to insist that the economic plan that we are under is good 
and that they should be the ones to pay for the debt that we are 
building up today, and standing on the floor as some are tempted to do 
and saying the debt really has not gone up, when we know it has gone up 
and will go up this year, the largest single increase in the Nation's 
debt in one year in the history of our country, is coming under the 
economic game plan that we seem unwilling or unable to make any changes 
in.
  The gentleman from Illinois, I thank him for taking this time 
tonight, and I look forward to hopefully in the days ahead joining in a 
spirited debate. Tonight, since we cannot seem to do it in the regular 
hours of the day, we cannot seem to find it in our heart to be in 
legislative session on anything but after 6:30 on Tuesdays and going 
home on Thursdays, and yet we are blaming the other body for not doing 
their work, that maybe we could have a little time in these hours at 
night to have a serious discussion, and perhaps maybe some of our 
friends from the other side of the aisle, and we have many, and there 
are many more agreements in this body than there are disagreements, but 
it is the call of the leadership that determines the manner in which we 
debate it. That is my frustration.
  So if we get another hour tomorrow night, I hope maybe we will be 
joined by some of our colleagues, and we can have a good discussion as 
to why it is somebody else's fault that we are not doing our job.

                              {time}  2115

  Mr. PHELPS. Mr. Speaker, there is not a more aggressive leader in 
terms of how we deal with the budgetary challenges in this body than 
the gentleman from Texas (Mr. Stenholm). Both sides of the aisle will 
tell us in the corridors of this Chamber that the gentleman from Texas 
(Mr. Stenholm) has provided leadership that is unique, courageous; and 
the greatest compliment that one can have here is when they say that 
someone tells the truth. Even when we are into debate openly, many will 
not give credit for those terms; but the gentleman from Texas has 
earned that right, and I thank him very much, my friend and colleague, 
for his input and for his leadership to those of us who are new in the 
Blue Dog Coalition in terms of telling us how to communicate the 
urgencies at hands. I thank the gentleman for his input and for 
allowing me this time to manage the time tonight. It is a great honor 
for me.
  I will continue on my points that I was outlining before I turned it 
over to my colleagues, and the third point is that the deterioration of 
the budget outlook demonstrates the danger of making commitments based 
on uncertain budget projections, as I began my remarks tonight of how 
we have embraced this 10-year projected outlook of budgets, debts, 
obligations, priorities and everything else which I think is a false 
promise to begin with.
  But when Congress considered the budget last year, the Blue Dogs 
warned then about the danger of making long-term commitments for tax 
cuts or new spending programs based on projected surpluses and proposed 
setting aside of half of the on-budget surplus for a cushion to protect 
against unforeseen changes. The President and the Republicans here in 
Congress promised that we could afford to fund priorities such as 
defense, prescription drugs, agriculture, education, and many other 
priorities, and enact the President's tax cuts, and save the Social 
Security surpluses, and pay off the national debt. Well, the new budget 
reports indicate that the government will return to deficit spending 
and raid the Social Security trust fund, confirming that the warnings 
made by the Blue Dogs last year about the dangers of making expensive 
budgetary commitments based on these uncertain projections now are 
taking place. With the new budget outlook, any increases to fund the 
war on terrorism or other priorities will result in additional 
borrowing from the Social Security trust fund and increase the debt.
  While deficits may be inevitable in the short term, the real problem 
is what has happened to the long-term budget outlook.
  The primary source of the deterioration of the budget outlook in the 
short term is the economic downturn and spending for the war on 
terrorism. I completely understand, and united we stand behind this 
President on the war against terrorism and the need for spending what 
is necessary to win the war on terrorism and ensure the protection of 
our fellow Americans here at home. However, we need to work together in 
developing a plan that will fight the war on terrorism, but will also 
protect the Social Security trust fund and benefit our future 
generations. We really need to start thinking about our children's 
future.
  The real problem is that the budget is projected to continue to run 
on budget deficits, requiring the government to raid the Social 
Security and Medicare trust funds, even after the economy recovers, 
hopefully, when it does, and returns to strong growth. We face long-
term problems that go far beyond the impact of the war on terrorism or 
the downturn of the economy. The CBO, the Congressional Budget Office, 
estimated that the estimated budgetary impact of September 11 plus 
associated interest costs represents only about 11 percent of the more 
than $5 trillion total deterioration of the surplus since last year.
  Similarly, the CBO found that the economic downturn is responsible 
for just 10 percent of the deterioration of the budget projections and 
that the deficits will continue long after the economy is projected to 
return to strong growth. Running deficits and increasing the debt over 
that decade and leaving in place long-term fiscal shortfalls will make 
it even harder to meet our commitments to workers who will retire in 
the next decade and beyond.

[[Page H6544]]

  Higher debt means higher spending on interest payments. The most 
wasteful spending possible is spending on interest payments on the 
debt. The government will spend nearly $2 trillion paying on interest 
on the debt over the next 10 years. We will spend $170 billion in 
interest payments this year alone, and spending on interest will 
continue to increase through 2007. Spending on interest on the debt is 
the most wasteful, as I said, use of the taxpayers' dollars. The amount 
of the budget consumed by spending on interest takes away resources 
that could be used for our priorities such as defense, health care, 
education, et cetera.
  More than $1.2 trillion of the national debt, roughly one-third of 
the publicly held debt, is held by foreign investors. In 1998, the U.S. 
Government paid $91 billion in interest payments to foreign investors.
  The national debt places a drag on the economy and a burden on the 
family budget by keeping interest rates higher than they otherwise 
would be. Budget deficits and a large national debt have a major 
negative impact on the economy and the finances of American families by 
keeping interest rates high. Congress must also enact rules or extend 
rules enforcing budget discipline. Strong budget enforcement rules are 
important, as the gentleman from Texas (Mr. Stenholm) said, as a 
component of restoring fiscal discipline and making sure that the 
budget remains in balance.
  Mr. Speaker, having the privilege to go back to my home district 
every weekend since I have been a Member of Congress is one of those 
things that just maintains one's sanity, and I am sure the gentleman 
from Texas agrees; going back to the real world where the real problems 
are discussed. Just this weekend, where I direct the music in my home 
church, Sunday evening we had a church-wide groundbreaking for a new 
building project of a Christian life center. Less than 9 years ago, we 
broke ground for a new auditorium that seats nearly 500 people, the 
third building program we have had since I have been a member and known 
anything about that program, and building a church, the Star General 
Baptist Church there in North Eldorado, Illinois, where my grandfather 
was pastor way before I was born.
  And at that groundbreaking, the best news that we all, as Democrats, 
Republicans, Independents, and we do not even know party affiliations 
and most do not care, all those who I grew up with and know and worship 
with and serve in the community with and live with, that night we 
celebrated the fact that we would start several $100,000 building 
programs with a debt-free building program behind us. Debt-free. We 
even purchased a parsonage in the last couple of years, paid off, debt-
free. We did not do that by fooling ourselves, knowing that the 
mortgages and the debts that we created were incurred and that we would 
not be foolish enough to take on a new project, knowing that we could 
compromise our debt that we have at our local bank. That is integrity. 
That is about family values. We are teaching our children there. One 
does not start something bigger than what one already has that one has 
to pay for.
  Now, I realize in this body it may not be quite that easy, at least 
it has not appeared to be. But surely, as a group of reasonable elected 
people, we can acknowledge the magnitude of the problem. It is funny 
that the gentleman from Texas mentioned the blame game, because my 
pastor mentioned that Sunday morning, the blame game, shirking your 
responsibility, side-stepping, telling someone else it is their fault 
what has happened. Well, I do not think so. My son just turned 21 a 
couple of weeks ago, and he knows by now life's hardest lessons, to 
accept your own destiny, make your own decisions, and live by them. 
That is what we are doing now.
  I hope, Mr. Speaker, that we can come to grips with coming together 
and fashioning a Federal budget in the face of an economy that has been 
impacted in ways in which we did not anticipate, which is no one's 
fault; but let us acknowledge it is time to come to an agreement with a 
new plan to save Social Security and Medicare, pay down our debt, and 
still finance the priorities of the war on terrorism, education, health 
care, and those things that we have all promised, prescription drugs, 
and everything else that we would said that we would do.

                          ____________________