[Congressional Record Volume 148, Number 127 (Wednesday, October 2, 2002)]
[House]
[Pages H6967-H6974]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
FISCAL REVERSAL
The SPEAKER pro tempore (Mr. Flake). Under the Speaker's announced
policy of January 3, 2001, the gentleman from South Carolina (Mr.
Spratt) is recognized for 60 minutes as the designee of the minority
leader.
Mr. SPRATT. Mr. Speaker, I rise tonight along with my colleagues to
address an issue of great importance which is receiving hardly any
attention at all. It is about our fiscal reversal, about the tide of
red ink that has overtaken our budget, about the resurgence of deficits
that we thought after long, long years of trying we had finally laid to
rest. Lost in the clutter, drowned by the drums of war, the deficit
sinks deeper and deeper and deeper; and there is no apparent plan by
this administration or this Congress to deal with the problem.
You can look at this chart here which shows graphically the deficit
and
[[Page H6968]]
how we have grappled with it over the years and see what a difficult
struggle it has been. The surpluses that we had for a brief period of
time did not come easily. They did not drop like manna out of heaven
upon the Earth beneath. In the Reagan-Bush years, we adopted in 1985
something called Gramm-Rudman-Hollings. It did not work, but it did
help us focus attention and frame the problem and turn the attention of
the Congress to deficit reduction as a top-drawer concern.
When Bill Clinton came to office in 1992, we had reached an agreement
a couple of years before with President Bush I, George Herbert Walker
Bush, called the budget summit agreement. It was 6 months in the
making. Its effects were eclipsed by a recession. It did not appear to
have succeeded, but in fact it laid the basis for the surpluses that we
were to enjoy in the latter part of the 1990s.
President Clinton sent us a budget plan on February 17, less than a
month after he was in office, to show the significance he attributed to
the problem. And look what happened. This red ink here represents the
deficits accumulated, the precipitous decline in the budget during the
Reagan years. This represents the dramatic improvement. Every year from
1993 through the year 2000, every year the Clinton administration was
in office as a result of the Clinton budget adopted in 1993, the budget
got better, the bottom line of the budget got better, so much so that
by the year 1998, the Federal Government achieved the first unified
balanced budget in 29 years. Unified means all the accounts of the
budget, Social Security, Medicare, all the trust funds which are in
surplus, and that helped.
But in fiscal year 1999, we achieved the first balanced budget in 39
years without using the Social Security trust fund, without counting
the Social Security trust fund, the first balanced budget in 39 years.
Nobody would have even bet money on enormous odds that that could have
been done in 1993 when the deficit was $290 billion, but we did it in
1999. And in the year 2000, the Federal Government achieved its first
surplus excluding Social Security and Medicare. Backing the surplus in
both of those accounts out of the budget, we had a surplus for the
first time in the overall budget.
In effect, what we did then, it is hard to believe now, less than 2
years ago, this was the situation of the budget; this was the situation
that we presented to President Bush, the second President Bush when he
came to office on January 20, 2001. For the first time in recent
history, certainly since the Great Depression, for the first time, we
presented President Bush with a budget in surplus, big-time surplus. By
the estimation of his Office of Management and Budget, the surplus
looming over the next 10 years would accumulate altogether to a total
of $5.6 trillion. In 2 years, that surplus is virtually gone.
As this next chart will show, what happened to the $5.6 trillion?
This layered graph right here represents the $5.6 trillion that
accumulated between 2002 and 2011, over that 10-year period of time.
The little green tip at the far end, the upper layer, shows you the
surplus that we presented President Bush when he came to office. It was
his. An enormous advantage. He then took the estimate of $5.6 trillion
and basically bet the budget on what was a blue-sky forecast. In doing
so, as you can see from this top green layer, the remaining surplus, he
left next to no room for errors and no room for the unexpected. And,
guess what, there were estimating errors of major proportions and the
unexpected, 9-11, came along.
When it came, we had no reserve, we had no cushion, we had no margin;
and the consequence was the surplus that we had depended upon turned
out to be about 43 percent lower than we had anticipated, 10 percent of
it because the economy was overestimated, another 33 percent because we
bet the budget on the assumption that the revenue growth of the 1990s
would continue.
Here is the bottom line in about as stark a manner as we can possibly
present it. This was the surplus in May 2001 when this body, the House
of Representatives, under Republican leadership, passed the Republican
budget resolution that called for about $1.4 trillion in tax cuts. In
addition to that, the additional interest cost would have been about
$400 billion on top of that. Here is where we are in August 2002 as a
result of not allowing any margin of error or any margin for
misestimation or any margin for the unexpected.
Tonight we want to address that problem and the consequences of it
because what has happened is the most dramatic reversal we have seen
probably since the Great Depression in the fortunes of the Federal
budget. Just 2 years ago, it is hard to believe that every year for 8
years we had seen a better bottom line. Now every year the budget is in
deficit for the next 10 years if you do not include the Social Security
surplus, and by law we are not supposed to include the Social Security
surplus. It is a trust fund surplus. The deficit this year by our best
estimation will be about $315 billion, excluding the surplus in Social
Security. Next year, 2003, it is barely better, $315 billion. These are
estimates of the Congressional Budget Office, our mutual nonpartisan
budget office that does this work for us with no axes to grind. That is
their best guess, that next year the budget gets no better. Even though
the economy, they assume, will get better, we still have a deficit of
$315 billion.
{time} 1815
The next year, 2004, it is $299 billion. Over the next 10 years, this
is a baseline forecast, assuming no change in policy except enough to
keep up pace with inflation, we will accumulate in the basic budget $2
trillion in deficits, and if we factor into that estimation policies
that we believe will be enacted, tax cuts that we believe will be
enacted, changes that we believe have a good possibility of being
enacted, CBO does not include them in its baseline forecast. When we
adjust this forecast for political reality, things in the pipeline and
likely to be passed, we add at least another trillion dollars to that
total.
So here we were 2 years ago talking about a better and better bottom
line. Now we are talking about a budget with deficits as far as the eye
can see. Two years ago we were talking about paying off in earnest,
both parties, literally talking about paying off $3.6 trillion in
national debt held by the public. Today we are talking about or looking
towards, unless we do something dramatic, a national debt that actually
increases over that period of time. From total payoff to an enormous
increase.
Finally, just 2 years ago we were talking about taking the trust fund
in Social Security and the trust fund in Medicare and locking it up in
a lockbox. That metaphor is now derided, but nevertheless we were all
that talking about not spending that money, using it solely to buy up
the debt held by the public so we would reduce the debt, add to the net
national savings of this country, and as a consequence lay the basis
for the first step towards the long-run solvency of Social Security.
All of that has been dashed by the budget policies of the last 2 years,
and that is what we would like to address tonight.
I yield to the gentleman from North Carolina (Mr. Price) to pick up
at this point.
Mr. PRICE of North Carolina. I thank the gentleman for yielding, and
I thank him for this enlightening presentation of just how serious our
budget difficulties are and how we got here. As the gentleman realizes,
the consequences are evident not just in these overall budget numbers,
but in the dilemma we currently face with respect to getting the
Nation's business done by the start of the fiscal year and passing our
appropriations bills on schedule.
If someone could prepare chart 18, I believe that would give us an
indication of how our situation this year compares with past years.
Since President Bush took office in 2001, our Republican friends have
held out the promise that we could have it all, that oversized
Republican tax cuts would not require tapping Social Security and
Medicare surpluses, and it would not require underfunding key
priorities such as education and health care.
Unfortunately, however, we cannot have it all, and it is not just
because of the war on terrorism, although that has had an impact on the
budget, but the cushion was not there to withstand that change in the
budget or the impact of Medicare and Medicaid costs. The fact is that
that cushion has never
[[Page H6969]]
been present, and now we are in a situation where our Republican
friends simply cannot get their business done. They cannot pass the
appropriations bills necessary to take us into the next fiscal year.
Mr. BENTSEN. Mr. Speaker, if the gentleman from South Carolina (Mr.
Spratt) would yield, is the chart that the gentleman from North
Carolina (Mr. Price) was talking about the chart right here that shows
that from 1993 through 2002, the number of appropriations bills that
have been passed by the House before the beginning of the new fiscal
year, and I think down here if I can see it, it is 2002 where the House
has passed only 5 of the 13 appropriations bills? Is that the chart
that the gentleman is talking about?
Mr. PRICE of North Carolina. That is the chart I am talking about. I
appreciate the gentleman's pointing this out. Our Republican friends
last week, when we were discussing this as the new fiscal year
approached, they said it is not unusual to pass continuing resolutions.
We pass continuing resolutions all time. It is certainly unusual to
have the entire Federal budget come crashing down and to have the
entire government running on continuing resolutions for months and
months into the new fiscal year, and that is exactly what we are facing
today.
The Republicans in July, Republican Conservative Action Team, the
group of the most conservative House Republicans, threatened to bring
the Interior appropriations bill down, and they said that the price of
their cooperation would be that the Labor-HHS-Education appropriations
bill would be considered next, and nothing would be done on
appropriations until that bill was dealt with. And I wondered, and I
expect all of us wondered during the month of August when we were home,
how are Republican leaders, in fact, going to pass that Labor-HHS-
Education appropriations bill within the President's totally inadequate
numbers? How would we get past this bill to the rest of the
appropriations agenda before the new fiscal year began?
But I must say it did not occur to me, never did it cross my mind,
that Republican leaders would simply disregard the start of the fiscal
year and let the entire budget come crashing down all to appease the
most right-wing members of their caucus.
The President and his OMB Director are apparently complicit in this
strategy. Actually it is an absence of strategy. It is just a
dereliction of duty, irresponsibility on a monumental scale. So what I
never dreamed would happen has happened indeed, and the continuing
resolution that we voted on last week did not just cover one bill or
two, it covered the entire discretionary budget.
So the gentleman is correct. We passed in the House five
appropriations bills, and that is a modern record, but the number of
appropriations bills that have been sent to the President is exactly
zero, and that, of course, is an institutional breakdown that does not
just mean that this institution has failed to do its duty. It has real
consequences for the people we represent.
Mr. SPRATT. Mr. Speaker, I yield to the gentleman from Texas (Mr.
Bentsen).
Mr. BENTSEN. Mr. Speaker, I thank the gentleman from South Carolina
(Mr. Spratt), the senior Democrat on the Committee on the Budget, for
yielding to me, and I thank the gentleman from North Carolina (Mr.
Price). I want to make sure that we got that, that the House has only
passed 5 of the 13 appropriations bills by the end of the last fiscal
year.
I want to go back to this chart because I think is terribly
important. Last year when we began putting together the budget for
fiscal year 2002 and really putting together the Republican economic
program for the next 10 years, we were told that the unified budget
surplus would be $5.6 trillion over the next 10 years after a lot of
hard work by the American people, by American taxpayers, to dig us out
of the years of deficits and debt that quadrupled the national debt.
And, in fact, as the gentleman will remember, we had tremendous
arguments about not how much more debt we were going to add, but how
much debt we could pay down and how fast we could pay it down. But we
were told this is the number, $5.6 trillion, even though the
Congressional Budget Office told us there was a margin of error of 20
percent, good or bad, over a short period of time, that these numbers
could be off, but that we should accept this number.
Lo and behold in really a year's time, we now see that the number is
no longer $5.6 trillion, but rather it is $300 billion. That is a
substantial error, and what that means is that rather than talking
about paying down the national debt and having money left over to fix
Social Security and Medicare for the long haul, what it means is we are
now deep back into borrowing against Social Security and Medicare. What
that means is we are not just going to argue about paying down debt, we
are going to have down the road, in just 8 short years when the baby
boomers retire, having to borrow trillions of dollars from the public
markets in order to fund Social Security without doing one thing to
extend its life. We have dug ourselves deep in the hole.
Mr. PRICE of North Carolina. Mr. Speaker, if the gentleman from South
Carolina (Mr. Spratt) would yield, the gentleman may remember that a
little over a year ago, the Secretary of the Treasury was expressing
concern that the Nation was going to pay down the public debt too
quickly. Is that a problem that we now need to worry about?
Mr. BENTSEN. No. The Republican economic program has solved that
problem. There is no risk now of our paying down the national debt. In
fact, if the gentleman will look here on the projections what we
received from the Congressional Budget Office, last year the debt
baseline was looking like it would go down, and really by 2008 we would
have paid down the publicly held debt completely. What has now occurred
as of this August is our baseline has the debt actually going up from
where we are today.
The bigger problem goes beyond this because this is just a current
service debt. This does not tell us anything about the public debt that
will be required at the time that the baby boomers begin to retire in
earnest and we have to convert the bonds held by the trust fund in the
public debt. So not only do we not have the trillion dollars that we
were told was being set aside in the Social Security Trust Fund to fix
Social Security for the long haul, we, in fact, are going to have to
borrow several trillion more dollars in order to, one, just to meet
obligations that already exist on the books, not to mention the
trillion or so more that will be necessary to ensure that every
American in the Social Security System gets the benefits that this
country long ago decided was something we want do.
Mr. PRICE of North Carolina. This, of course, also means that we are
paying interest, far more interest in servicing that publicly held debt
than was anticipated last year.
Mr. BENTSEN. In fact, that is true. We now are projected to pay three
times the amount of interest over the next 10 years, almost $2
trillion, as opposed to a little more than half a trillion dollars that
we were looking at last May of 2001. This is $2 trillion that goes
nowhere but out the door, into the pockets of bond holders. It is good
for the bond holders, but it means we are not buying any hard assets
with the American people's hard-earned tax dollars, whether it is
tanks, whether it is more school books, whether it is more health care,
prescription drugs. All that is gone because now we are adding debt,
not paying down debt.
Mr. PRICE of North Carolina. The money that we pay in this interest
on the debt, money down the rat hole, one might say, each year over
$200 billion. I wonder if there is anyone in this Chamber who could not
think of better public and private uses for those funds than simply
paying interest on the debt. And as we look forward to the retirement
of the baby boomers and the reversal of the cash flow in Social
Security, is it not true that to prepare, to prepare to start redeeming
those bonds that the Social Security Trust Fund is holding and making
good on those obligations, is there any better way we could prepare for
that than to pay down the publicly held debt and get rid of this $200
billion burden around our necks every year in interest payments?
Mr. BENTSEN. There is no question.
Two things. Number one, if we were not paying this interest and we
were paying down the debt, number one, we could fund a program like a
universal
[[Page H6970]]
prescription drug program for senior citizens who are crying out for
it. We could put more money in education like the President says that
he wants to do. We could fund the defense build-up that many feel is
necessary.
But the second thing that is terribly important, and the gentleman
raises this point, the United States runs a very high current account
deficit based upon cash flows which we can afford because of the
strength of our economy, although it is fairly flat right now. If we
run a high fiscal deficit as well at the time that we have to start
selling even more debt into the future, we run the chance of driving
down our currency and driving down the value in the American economy
that we will pay for for many years. We see this in countries like
Argentina and others. It should not happen in the United States.
So I thank the gentleman for the question.
Mr. SPRATT. Mr. Speaker, I yield to the gentlewoman from Wisconsin
(Ms. Baldwin).
Ms. BALDWIN. Mr. Speaker, I am most honored to be a member of the
Committee on the Budget, and I want to commend the gentleman from South
Carolina (Mr. Spratt) and the other members of our committee this
evening for laying out what I think is a critical message at a moment
of critical importance.
I came to this Congress just about 4 years ago at a moment of what I
regarded as real opportunity. I was excited about the fact that we were
whittling away at the deficit and, in fact, on this upswing towards
surplus. We were really paying down our national debt, and things were
going in an extraordinarily hopeful direction. I viewed the moment that
I came to Congress as an opportunity to start responding to some unmet
challenges in this Nation. Perhaps we could call it righting the
domestic wrongs that still exist.
{time} 1830
Well, clearly, we are now in a very, very different time. We are now
looking at deficits for as far as the eye can see and squandering an
opportunity which I think has been squandered for a wide multiplicity
of reasons, but a number of them have to do with ill-advised policies
enacted by the majority in this last 2 years.
My constituents are worried. My constituents are very concerned about
the country's economic security. They are worried about their family's
financial security; they are worried about their retirement security;
they are worried about their health security.
Mr. Speaker, looking at chart 8, I want to just talk about the
direction that we are going in, and I think this is subtitled, what
should be going down is going up, and what should be going up is going
down. If my role this evening is nothing else, I know that my
colleagues laid a good groundwork on the big picture. I want to really
localize this issue. I want to put a face on what is happening with our
economy and the stewardship that we are not seeing of it right now.
I want to focus right in on that second one on that list, the health
care costs, because I cannot spend a moment in my district in Wisconsin
without hearing the incredible concerns that people have. Whether it is
a small businessowner who talks not about double digit increases, but
sometimes 40, 50 percent health insurance increases; or a person who
has just gone through a bargaining session with their employer and
their entire cost-of-living increase has been wiped out by the health
care costs; or whether it is one of my self-employed farmers who, at
times of historic low commodity prices, can hardly afford, and many are
not covering, their families any longer with health insurance because
of the costs; whether it is the senior citizen who is struggling, once
again, to try to figure out how to maintain their health, extend their
life with a needed medication, but they cannot either afford that or
maintain their other basic necessities; or whether it is the total lack
of attention in this Congress on the plight of the uninsured and the
underinsured. These are the people, these are the faces, these are the
impacts that are being felt by the economic situation that we find
ourselves in.
Mr. Speaker, I can tell my colleagues that my constituents are asking
questions. They are asking, What is on the congressional agenda? Why
are you spending all of your time passing senses of the House and
telling the other body what they should or should not be doing when we
have an economic situation here in the country that needs your
attention, that needs addressing immediately? The inactivity, the
inaction on the part of the majority of this House is inexcusable at
this time of great stress and great tension and great anxiety in our
districts, and we have to see that turn around.
Mr. SPRATT. Mr. Speaker, I yield to the gentleman from Virginia (Mr.
Scott).
Mr. SCOTT. Mr. Speaker, I am going to just let the charts tell the
story. We have seen this chart. We do not create a graph like this by
accident. My colleagues will notice that the Carter administration left
a deficit; Reagan and Bush came in, they passed their budget, they
never suffered a veto override. President Clinton came in, passed a
budget without a single Republican vote, vetoed some Republican budgets
when the Republicans took over the House and the Senate, and maintained
fiscal responsibility to a surplus and, in one year, we are back down
to a deficit.
Now, it is interesting to say, if we could see the next chart, that
we are down to where we started; and it is going to get worse before it
gets better. If we look at the surplus that was inherited in the year
2000, 2001, this yellow line is Medicare. We spent all of Medicare. The
red line is the Social Security surplus. By next year we will have gone
through all of the Social Security surplus and then some deficit on top
of that. For the rest of the Bush Presidential term, he will be
spending all of Medicare, all of the Social Security surplus that we
have promised to protect, and then, running up a deficit on top of
that. In fact, for the next 10 years we will be dipping into Medicare
and Social Security that we promised to save.
Mr. Speaker, if I could see the next chart. How did this happen?
According to OMB, 40 percent of that was because of tax cuts which we
will remember were mostly to benefit the upper income. What happens as
a result of this? We see on the next chart, number 9, we see the
economic growth, the worst we have had in 50 years. We have seen on
chart number 1, we have seen the number of jobs held by Americans is
down. On the next chart, number 12, unemployment is up a third. We see
foreclosures, how home foreclosures are going up month after month. We
have another chart showing the stock market, and I think people are
familiar with what that chart would look like.
And what are we doing? Chart number 18 shows that every year for the
past 10 years we have passed either all 13, 12, 12 or 13 of the
appropriations bills by the first of the year. This is what the House
does. Not blaming it on the Senate, the House can pass its bills. We
may have an excuse that the House and Senate cannot agree. This is just
what the House did in 2002, only 5 of the 13 appropriations bills have
been passed. And what are the proposals? There are no proposals, other
than just passing 5 of the 13.
Now, a great political philosopher once said, ``If you don't change
directions, you might end up where you're headed.''
Let us see where we were headed in May of 2001. We would have paid
off the entire national debt held by the public by 2008. The discussion
was, What are the economic implications in paying off the debt? What
will it do to the bond market? That was the discussion that we would
have had, a surplus of Social Security and Medicare, so that the money
would be there when the baby boomers, like myself, retire; the money
would be there. But no, we passed by 2002 legislation that has resulted
in a debt; essentially nothing paid off.
Mr. Speaker, it is going to get worse before it gets better, because
if we look up here, if we adopt the policies of this administration, we
are going to be running up even more debt. We need to change. If
September 11 was the cause of this, then we need to change policies. In
past years when we had a war, we sacrificed. We do not give juicy tax
cuts to those that have the most, while other people are losing their
jobs. We
[[Page H6971]]
need to change directions, and we can begin by passing responsible
appropriations bills and not by passing more juicy tax cuts for the
privileged few. We need to go back to the fiscally responsible years of
the Clinton administration and keep the promise of protecting Social
Security and Medicare surpluses so those funds will be available when
needed.
Mr. Speaker, I appreciate the leadership of the gentleman from South
Carolina (Mr. Spratt) in trying to bring fiscal sanity to this budget,
advocating the responsible things that need to be done and pointing out
the irresponsible direction that we are headed in.
Mr. SPRATT. Mr. Speaker, I thank the gentleman for participating, and
I yield to the gentleman from New Jersey (Mr. Pascrell).
Mr. PASCRELL. Mr. Speaker, first, I would like to thank my good
friend, the gentleman from South Carolina (Mr. Spratt), for his
exemplary leadership.
As the ranking member of the House Committee on the Budget, he has
the almost unbearable task of trying to correct the hazardous economic
course the current administration is charting. The gentleman has been
trying since early last year to correct that course on this economic
ship, and I salute the gentleman sincerely.
I have never seen such fiscal mismanagement in my life. None of us
can quite explain it, but we do try with some consistency. We are at a
point in time when critical decisions must be made. The reverberations
of these decisions will be felt for generations to come.
Iraq is on the forefront of everyone's mind, and rightfully so. But
as Members of Congress, we cannot focus solely on any one issue at any
one time. It is our absolute duty to address every major issue that is
before us, and we shall. Our budget, our economy are major, major
issues. That is why we are here tonight.
We are not going to politicize this issue. I will not adhere to blind
idealogy. There is no need to do that. But as Sergeant Joe Friday would
say, It is just the facts, Ma'am; and that is what we are about to talk
about and have been talking about.
Mr. Speaker, chart 3, right here, the surplus declines. When the
administration took office, it received a benefaction unparalleled in
our history. The largest budget surplus ever projected to a total of
$5.6 trillion over the next 10 years. Fact: the nonpartisan
Congressional Budget Office now reports that the surplus is at $336
billion over 10 years. That is a swing of $5.3 trillion in the wrong
direction in 18 months. The numbers roll off our lips: trillions. The
budget is now in substantial deficit. Mr. Speaker, $157 billion is
projected for this year alone at this moment. Private sector
forecasters believe that the budget will suffer $200 billion annual
deficits as far as the eye can see.
What does this mean for you at home? Running deficits are going to
drive up interest rates on car payments, mortgages, and student loans.
How many of us are covered by those three issues alone?
We are back to piling up massive debt for our children and our
grandchildren, and weakening Social Security and Medicare for
beneficiaries today and tomorrow. Budgetary choices impact people's
lives daily, not unlike elections. We should remember that the next
time we hear the House leadership tout the virtues of permanent tax
cuts for the wealthy, which we cannot afford.
My Republican friends have tried to shift the responsibility for the
dissipation of the surplus just about anywhere. They blame the
terrorist attacks, they blame the recession, they blame Bill Clinton,
they blame the plague; but tonight we are dealing with just the facts.
Fact: the mid-season review by the Office of Management and Budget
reports that 40 percent of this dissipation of the surplus, the largest
single share rests with the administration's tax cuts. I did not make
it that way; I did not vote for it. All other legislation is
responsible for only 17 percent, and more than half of that is normal
national security spending. The economy is responsible for only 10
percent of the dissipation of the surplus. About one-third of the
worsening of the budget was caused by technical errors, largely
overestimates of revenues. We know about that in New Jersey, where the
outgoing Governor cooked the books. It looked like we had a $1 billion
surplus, and we wound up having a $6 billion deficit. That is called
cooking the books. I think we invented it in New Jersey. Large
overestimates of revenues, does that sound familiar of what we have
been hearing on the corporate level?
{time} 1845
That is why the Republican cries for even more tax cuts are
nonsensical. Indeed, their claims ring hollow. Maybe that is why the
administration has backed off its next batch of tax cuts.
Remember, when the economy was prosperous, they told us that the tax
cuts were about returning the people's money. Then, when the economy
took a downturn, we were told that tax cuts were about stimulating the
economy. They want it both ways. Apparently, that is the Republican
philosophy in any economic time, regardless of the situation,
regardless of the circumstance.
But even blind allegiance to the ideology cannot prevent the
Republicans from realizing that the 10-year $1.35 trillion tax cut was
deeply involved in the greatest plunge in tax receipts since the repeal
of World War II surtaxes 56 years ago. This is a disgrace. Remember,
just the facts.
The budget deficit ties the hands of Congress in our efforts to
alleviate the pain of all those who have become unemployed. What are we
going to do for the 2 million people who have lost their jobs under
this administration? The silence is deafening. Tell me, what are we
going to do? Are we going to pass further tax cuts?
New claims for unemployment insurance have risen 400,000 per week in
the last 5 weeks. This means that private sector job gains will remain
weak at best in the immediate future. But what are we going to do? The
administration is proposing many cuts in order to try to make a catch-
up. We have nickeled and dimed our veterans, we have nickeled and dimed
our first responders, and we talk out of both sides of our mouths.
The $270 million for our veterans, $150 million for our first
responders is not a lot of money with regard to the totality of things,
but we nickeled and dimed the very people who put their lives on the
lines, and put them on the lines today as we speak and sit comfortably
here in the House of Representatives.
Our budget in this economic situation is in disarray, I say to the
gentleman from South Carolina (Mr. Spratt). Is there any Republican
willing to stand up to the administration's disjointed agenda and say,
Enough. I want the facts.
Mr. SPRATT. Mr. Speaker, I thank the gentleman. I yield to the
gentlewoman from California (Ms. Sanchez).
Ms. SANCHEZ. Mr. Speaker, I thank the gentleman for allowing me to
talk about something that I am very concerned about, and it is the
economy.
About 15 years ago, when my husband was deciding on whether he was
going to ask me out on our first date, he had never seen me, he went to
one of his colleagues in the same firm who had worked with me before
and he said, what about this Loretta Sanchez? What is she like? And the
guy said, well, you know, 2 years ago, the last time I saw her, she was
a looker, but, you know, a lot can happen in 2 years; and let me tell
the Members, a lot can happen in 2 years.
In 2 years, after the Clinton administration and after we worked so
diligently to get surpluses to begin to pay down the debt of the United
States, when people were employed, people who had creative ideas were
accessing capital markets for the money they needed to put those ideas
into play, everything was going right.
What has happened in 2 years? This chart shows the Bush economic
record. What should be going down is going up, and what should be going
up is going down.
The Republicans' failed economic agenda, or lack of an agenda, is
really the problem here. This has led us into fiscal deterioration,
into economic hardship, and into an erosion of Americans' retirement
security, a lack of an economic agenda.
Let us just take a look at this chart here. We all know, for example,
that one of the biggest costs that business is
[[Page H6972]]
facing right now is the cost of health care. That is why we see people
unable to afford the larger premium that their employers are now
charging for them to have health care insurance; or no health care
insurance is being offered, something which, when it hits a family, is
detrimental to their stability.
Foreclosures of homes are up. Our national debt is up. Goldman Sachs
says it is going to be at least $200 billion a year for the foreseeable
future; nothing close to the numbers that the White House gives us as
projections, but the financial markets are understanding that it is
getting worse and worse by the moment.
And, of course, right now, long-term interest rates are low; but what
happens, what happens when we start going into the market to borrow
more and more to finance this almost $6 trillion debt that we have on
our hands as a Federal Government? Those long-term interest rates will
shoot up.
The only positive light in the economic sector that we have right now
are all those refinancings that people are doing on their mortgage,
their 15- and 30-year mortgage rates, because long-term interest rates
are down. But when we start to borrow and take money out of the system
to finance this debt, this deficit that is adding to it, these higher
interest costs, a bigger piece of pie to finance year after year after
year, what happens? Those long-term interest rates go way up, and then
that $100 or $150 extra we have because we refinanced, it is not going
to be available anymore. There will be no refinancing to do. There will
be no bright spot in the home market purchasing going on.
The Social Security Trust Fund, we will be raiding it and taking
those monies to pay for these deficits that we are running.
Now, let us take a look at what is going down, which should really be
going up. Our economic growth is down. In my area, it is actually an
area that is a little buffeted right now, and we have 1 percent growth
going on; but we had projected 3 percent or 4 percent or 5 percent this
year, not 1 percent.
Other areas are suffering: job losses, foreclosures. People do not
know what to do.
Business investment? People do not want to lend money. People are
afraid of the economic conditions that we find ourselves in, and they
see it getting worse. They are holding onto their money instead of
investing.
The stock market? We know what has happened with the stock market,
just $5.5 trillion over the last 18 months of losses in the stock
market value. Trillions, what do we mean by that? It is so hard to have
that concept. But just this past September, in 1 week alone we lost
$420 billion of wealth in the stock market. These are real numbers.
This is our wealth slipping away, our retirement accounts.
Enron, Global Crossing, all of these companies, our net worth, it is
going down, down, down. The last 4 months, the consumer confidence
level is down, down, down, down.
Retail sales just this month, this back-to-school month, which is an
indicator of what will happen in the holiday season for retailers:
down. It is an indication that the place where we make money in retail,
the holiday seasons, are projected to be down, and still we cannot pass
an increase in the minimum wage.
The fiscal condition of our country. For 2 years the gentleman from
South Carolina (Mr. Spratt) has been telling us that these things are
happening, and somehow the Republicans and this administration do not
want to talk about putting together a plan to begin to turn this
around.
I am glad that the gentleman is here tonight and that the gentleman
is leading this effort. It is imperative for America to get this turned
around, and the way to do it is to sit down and concentrate on what is
the most important piece of stability and security for an American
family: the national budget.
Mr. SPRATT. Mr. Speaker, I yield to the gentleman from Rhode Island
(Mr. Langevin).
Mr. LANGEVIN. Mr. Speaker, I thank the gentleman for yielding to me.
Mr. Speaker, I rise today to express my deep concerns about our
Federal budget and its impact on our Nation's economic future. I would
also like to commend my colleague, the gentleman from South Carolina
(Mr. Spratt), for organizing this special order on such an important
issue.
Mr. Speaker, I stand united with the President and my colleagues on
both sides of the aisle in our commitment to defeating terrorism and
doing what is necessary to preserve national security, both at home and
abroad. However, despite the many new security and economic challenges
confronting us, our homeland protection efforts and fiscal policies
should not and need not shortchange our domestic priorities. We can win
the war against terrorism without raiding Social Security and Medicare,
and without increasing the national debt.
Last year I joined many of my colleagues in cautioning that the
administration's budget simply did not add up. Sadly, our warnings were
ignored, and we were instead continually reassured that we could afford
an enormous tax cut, ensure the solvency of Social Security and
Medicare, pay down the national debt, fund our domestic priorities, and
still have a large reserve fund for unanticipated emergencies.
As it is now very clear to us all that that budget was based on
unrealistic surplus projections that never materialized, and we now
face deficits and an ever-increasing national debt that stretches far
beyond the temporary economic downturn or the costs of the war on
terrorism.
Recent Congressional Budget Office projections confirmed the dramatic
deterioration in the budget outlook since the current administration
took office. Less than 2 years ago, the administration and Congress
were looking covetously at a staggering $5.6 trillion cumulative
surplus through 2010. Much of it I hoped would be used to pay down what
was then a $4 trillion national debt. Sadly, it has become clear that
the fiscally irresponsible policies of the Bush administration and the
Republican-led House have squandered these opportunities. The CBO's
current surplus projections now total only $366 billion.
Even worse, CBO's current projections are optimistic, as they do not
reflect the cost of the likely extension of several expiring tax cuts,
relief from the expanding alternative minimum tax on individuals,
potential new tax breaks for businesses and investors, and an expanded
war on global terrorism, or a new Department of Homeland Security. If
these initiatives are all enacted, we could be faced with a $386
billion deficit over the next 10 years. When Social Security funds are
not counted, the deficit could balloon to $2.7 trillion.
Mr. Speaker, the American public is already paying $1 billion on
interest-only payments on the debt every day. Further, the interest
payments on our debt are on a fast track to become our single largest
annual expenditure. By continuing to rack up debt on the national
credit card, we are saddling future generations with our poor choices,
and endanger the fiscal stability of this Nation.
Our rapidly deteriorating fiscal outlook presents a serious challenge
for every Member of Congress. The government is now on track to raid
more than $2 trillion of the Social Security surplus over the next 10
years to cover deficits in the rest of the Federal budget. When I was
elected to Congress, I promised my constituents that I would protect
Social Security and the Medicare Trust Funds.
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And I was not alone. As many of my colleagues on both sides of the
aisle made this same vow, it is time to honor our commitments by
acknowledging our current situation and working together to craft a
budget that is fiscally responsible and protects Social Security.
Mr. Speaker, I urge my colleagues to heed this call and do the right
thing.
Mr. SPRATT. Mr. Speaker, I recognize the gentlewoman from the Virgin
Islands (Mrs. Christensen).
Mrs. CHRISTENSEN. Mr. Speaker, in a recent column, Washington Post
columnist EJ Dionne opened with a statement: ``Perhaps the White House
and Congress might just take a little time away from war planning to
consider what the economic downturn has been doing to poor Americans,
especially the working poor.''
Mr. Speaker, we are talking about the leaders of this country and
this
[[Page H6973]]
body who have the votes and, therefore, the responsibility. Certainly
they must know that in the last year alone the number of uninsured
increased more than 1.4 million; that poverty rates are up for the
first time in 8 years; that 1.8 million jobs have been lost; and that
thousands of people in this country have seen their retirement savings
disappear.
In the health care arena, the impact is hard now and likely to be
devastating as time goes by. Already 41 States are cutting Medicaid
programs this year. That means that people are losing coverage and
children are the hardest hit. This is happening at the worst time
because with the economic downturn, 2.3 million more Americans were
unemployed in August of 2002 compared with July the year before.
The saying that when the rest of the world gets a cold, minority
communities and our territories get pneumonia is holding true. As of
2001, of the 41 million uninsured, 18 percent were Asian Pacific
Islanders; 19 percent African American; and more than a third, 33.8
percent, were Hispanic. Thirty-eight percent of the people in my
district were uninsured. The median household income of black families
after rising by almost 30 percent between 1993 to 2000 fell from
$30,495 in 2000 to $29,470 in 2001.
Nearly 23 percent of African Americans lived below the poverty level
last year. Our unemployment rate as of August 2002 is 7.5 for African
Americans and 6.5 for Hispanics. Economists have long reported that
even when there is any recovery and other Americans begin to return to
work, we will still have unemployment for at least a year to 18 months
after.
When the President sent his tax cut to Congress last year, many of us
opposed it because we knew what it would mean to funding for the needs
of the poor in minority communities as well as the rest of America.
After September 11, we were and we remain in full support of efforts to
rescue, recover and rebuild, as well as to go after the terrorists; but
our fears that the important health, education, and economic issues
would be ignored have been realized.
Now that we are poised for an attack on Iraq, no matter what Congress
says, economic issues are off the radar screen. But minorities, the
poor, and even the middle class are suffering. As a matter of fact, the
rise in the uninsured was particularly noted in people with moderate
and high incomes.
Yes, we must strengthen pensions, enforce corporate reform laws, pass
a prescription drug benefit, and protect Social Security; but the needs
of the poor, minorities and Americans living in the offshore
territories demand even more.
It is important for all of us who are here tonight to be here with
our leader on the budget, the gentleman from South Carolina (Mr.
Spratt). We thank him for his leadership and for bringing us here this
evening to talk about these important issues.
It is important for us to be here to say to the leadership of this
House and to the administration that we are heading towards a domestic
disaster. We can no longer afford to ignore the millions of families
who are losing income, jobs, health coverage, and retirement pensions;
and we must do more to help those who have never had any of these. So
we have to get back to our priorities. The leadership needs to forget
about expanding tax cuts. They need to join with us on this side of the
aisle to pass sound appropriations bills to improve the lives of all
Americans.
Mr. SPRATT. Mr. Speaker, I yield to the gentleman from New Jersey
(Mr. Holt).
Mr. HOLT. Mr. Speaker, I thank my friend and colleague, the gentleman
from South Carolina (Mr. Spratt), and at risk of being somewhat
repetitive of what our other colleagues have said, I just want to
finish by emphasizing some really very important points.
When this Congress began, the Republicans promised, in fact, everyone
promised to safeguard Social Security and Medicare. They said the trust
fund surpluses would be maintained and saving those surpluses would be
important for the retirement of the baby boomers. Their plan, however,
was to dissipate as much of the surplus as possible, in their words, to
get it out of Washington instead of paying off the debt.
The gentleman from South Carolina (Mr. Spratt) was so diligent in
pointing out again and again and again that they left no margin for
error. We all said that the projected surpluses were just that. They
were projections, not money in the bank; and we reminded Republicans
that they needed a margin for error. The gentleman could see it. I
remember when he said we did not know what unforeseen circumstances
would arise. But we could be sure that natural emergencies,
international crises, economic downturns or other things would arise.
Well, this dedication, this overwhelming dedication, fixation on tax
cuts, no matter what the circumstances or the consequences, has run the
budget into a ditch; and it now risks the livelihood of hard-working
Americans. Businesses are not investing. Real business investment which
had posted double digit growth in the 1990s is still declining. Scores
of corporations have gone bankrupt. Consumer confidence has dropped in
each of the last 4 months and is at the lowest level since November of
2001.
Why is that? Businesses understand that this is not sound fiscal
policy for our Nation. They understand that we are building up a debt
and the interest can crush us. An extra $1.3 trillion that will be
wasted on interest expenses would have been more than enough to cover a
decade's worth of cost in strengthening Social Security. May 2001,
interest was $621 billion over a 10-year period, 2002 to 2011. A month
or two ago it was up to $1.9 trillion.
Now, just to finish up, let me drive this home. For each American
this means about $7,000 of interest, each American, child, woman, man,
$7,000 to pay off, down the drain, for no productive use, no good to
anyone.
I thank the ranking member of the Committee on the Budget for
arranging this Special Order.
Mr. SPRATT. I thank the gentleman for his observations and
participation.
Mr. Speaker, I yield to the gentleman from North Carolina (Mr.
Etheridge).
Mr. ETHERIDGE. Mr. Speaker, I appreciate your courtesies and I also
today rise to join my colleague, the gentleman from South Carolina (Mr.
Spratt). I thank him for his Special Order and for my colleagues who
have joined him. I am proud of the work of my colleagues who have
worked together on a bipartisan basis to balance the budget for the
first time in a generation.
One of the first votes that I had the privilege of casting when I
came in 1996 was to start the process of balancing the budget. That
Balanced Budget Act finally stopped the flow of red ink that was piling
up trillions of dollars in national debt. In fact, when we balanced the
budget, we not only did it for one year, but we have put the Nation on
course to generate huge budget surpluses for years to come. Those
surpluses presented us with a golden opportunity to begin to pay off
the national debt, shore up Social Security, strengthen Medicare with
the benefit for prescription medicine for our seniors, and invest in
the education of our children and our Nation's long-term economic
growth.
As a former chief of my State schools in the State of North Carolina,
I was hopeful Congress would make wise investments in needed reforms
like school construction, teacher training, class size reduction, early
childhood education, reading initiatives, science and math instruction,
aid for college and other important priorities for America.
Unfortunately, the Republican leadership in this Congress did not
decide to do that. They have put together a budget-busting tax scheme,
blew the surplus, and has hamstrung our ability to meet those urgent
priorities.
Because of this scheme, Republican leadership is now severely
underfunding the education budget. Despite their rhetoric in support of
education and countless photo opportunities posing with children, the
leadership's handling of this matter is to say one thing and do
another. In each of the past 5 years, Congress has provided growth in
the education budget of roughly 13 percent average and 15.9 percent
last year. That was commendable at a time when student population was
growing rapidly. Those healthy investments will come to a screeching
halt under the Republican budget.
The budget also slashes funding for President Bush's education bill,
the No Child Left Behind Act. For example, instead of the $5.65
trillion increase in
[[Page H6974]]
title I funding for poor children in the No Child Left Behind Act, the
budget cuts 82 percent of that proposal. Despite the growth of our
immigrant population, the Republican budget cuts 10 percent per child
for funding to teach children to be proficient in English. Some may
think that is not important. Having been a superintendent, I can tell
Members that if we do not help those children, all children suffer.
The Republican budget freezes funding for education for homeless
children. When you account for inflation, the budget will mean 8,000
fewer homeless children receive this help next year. They are all
Americans, and they deserve our help.
We should not turn our back to fully fund special education and
forestall completion of that long-time goal by at least 4 years, but
this budget does that. And the Republican budget freezes funding for
after-school centers, which will eliminate 50,000 children from
participating in after-school programs. And I can tell Members that
having been a school chief, that is critical, because so many children
go home alone and stay by themselves. Despite the looming teaching
shortages across the country, the budget shortchanges teacher training
and denies this aid to 92,000 potential teachers who would be eligible
under the No Child Left Behind Act.
The budget cuts more than 95 percent of the school library
initiatives of the No Child Left Behind Act. And the budget guts school
reform grants of 24 percent, or $75 million, and the list goes on. But
let me talk about my home State of North Carolina.
More than $92 million from title I grants to school districts will be
cut, $1.5 million from language acquisition grants, $332 million from
special education, $10.2 million for the 21st Century Community
Learning Centers, $462,000 for education for homeless children, $9.5
million for teacher training, and $1.7 million for comprehensive school
reform.
Mr. Speaker, the list goes on and on. The bottom line is that this
Republican budget is wrong for education. It is wrong for our children,
and it is wrong for America. I join my fellow Democrats and urge the
Republican leadership to restore these educational cuts.
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