Congressional Record, Volume 149 Issue 25 (Tuesday, February 11, 2003)

[Congressional Record Volume 149, Number 25 (Tuesday, February 11, 2003)]
[House]
[Pages H374-H381]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

THE STATUS OF THE FEDERAL BUDGET

The SPEAKER pro tempore. Under the Speaker's announced policy of
January 7, 2003, the gentleman from South

[[Page H375]]

Carolina (Mr. Spratt) is recognized for 60 minutes as the designee of
the minority leader.
Mr. SPRATT. Mr. Speaker, I wanted to address a very grave matter that
affects our country, and that is the status of our budget. It is hard
to believe that just 2 years ago when we began the budget process as we
do now this country looked forward to a surplus of $5.6 trillion. That
was the projection of the Office of Management and Budget of the Bush
administration in January of 2001. We have come a long, long way since
January of 2002, since that fiscal year was concluded.
In the last fiscal year of the first Bush administration, there was a
deficit of $290 billion. That was the deficit that President Clinton
found on the doorstep waiting for him when he came to the White House
on January 20, 1993. On February 17 he sent us a budget that would deal
with that deficit, and over the next 8 years every year, every year,
the bottom line of the budget got better, better to the point that in
1999 for the first time in 30 years, we balanced the budget.
In the year 2000, we had a surplus of $236 billion. So from 1992
until the year 2000, we took the budget from $290 billion in the red,
in deficit, to $236 billion in surplus, a phenomenal record. President
Bush the Second came to office, and we gave him an advantage that no
President in recent times has ever enjoyed, a balanced budget, a budget
that had a surplus the first year he was in office of 126, $127
billion.
Today, 2 years later, this is what has happened. That surplus
cumulative over 10 years, the years 2002 through 2011, has declined
from $5.644 trillion as projected by the Bush Office of Management and
Budget to $2.122 trillion in the red, in deficit. From $5.6 trillion
dollars in the black to $2.1 trillion in the red, that is a swing in
the wrong direction of $7.2 trillion over a period of 2 years. We have
never seen that at least since the Great Depression, such a dramatic
fiscal reversal in our account.
That is what we want to address to you tonight because as this next
chart will show, we face some decisions in the next couple of months
that will determine the fiscal fate of this country for years to come.
This is where the Bush administration began 2 years ago. This was a 10-
year surplus, $5.6 trillion. They now say, and these are the numbers
presented to us just last week by the Office of Management and Budget,
that there was an overcalculation, a miscalculation due to the economy
of $3.174 trillion so that the real surplus was really $2.463 trillion,
$2.4 trillion instead of $5.6 trillion.
That is only part of the bad news. The rest of it is that the Bush
administration bet the budget on this blue-sky forecast and over the
last 2 years has committed $2.6 trillion in enacting policies, two
thirds of which went to tax cuts. We have more than spent the
cumulative surplus during that period of time so that this year we
start with a cumulative deficit of $129 billion.
But the point to note here is that we are going to decide this year,
in the next few months, whether we take that deficit, $129 billion in
the red, a bad enough reversal since 2002, and add to it almost $2
trillion so that we add to the national debt $2.1 trillion. If we do
that, it will be because we have chosen to do that. We could possibly
out of abundance of charity say to those who passed the budget 2 years
ago they thought they had a $5.6 trillion surplus, we told them we
thought they were overstating it, but we will acknowledge that maybe
this was negligence, this was a mistake, this was a miscalculation. Now
we have to say if they go forward knowing what they know using their
own projection, they will be deliberately, willfully, wantonly, and
intentionally adding $2.1 trillion to the national debt.
Notice that this period of time is a critical period of time in our
country's fiscal history because this is when the baby boomers, 77
million of them now marching to their retirement, first begin to retire
in 2008. In 2010, 2011 they begin to draw not only their Social
Security but their Medicare. So this is a period of time when we should
be husbanding our resources so we can meet our obligation to the baby
boomers who will be retiring in huge numbers and will double in time
the number on Social Security and Medicare. Instead, during that very
period of time we are incurring, if we follow the budget proposals
before us, mostly the tax cuts proposals that have been made, $2.122
trillion in additional debt.
A large part of that additional policy will go to tax cuts. This
chart shows the Bush tax cut in 2001, $1.349 trillion in revenues
committed to that tax cut. This shows what we did a couple of years ago
when we had a first stimulus package to try to get us out of the
recession that we felt ourselves slumping into. Now the Bush
administration has come up with an additional tax cut. They want to
exclude dividends from taxation. I can understand why that would be
appealing to a lot of people, but the revenue cost to us of the latest
Bush tax proposal is another $615 billion. Those tax cuts made in June
of 2001 were not permanent. In order to shoehorn them into the budget,
they artificially terminated or truncated the taxes at the end of 2010.
If we make them permanent, which the Bush administration is
proposing, that adds another $692 billion. Then there is another
problem we will not even get into tonight, but it is on the tax agenda.
Democrats and Republicans, the Congress and the White House will soon
have to face the problem of the alternative minimum tax. Pretty soon
millions of Americans will be paying more in the alternative minimum
tax than they pay under the regular taxation. If we add all of those
together and add the debt service that we have to pay additionally
because we have used these tax cuts to dispense with our revenues, we
have got a tax agenda here of $4.4 trillion. And this is coming at a
time when I said we have some critical obligations to meet, we are
draining the revenues dry.

{time} 1945

Let me just stop on this point and recognize my friend, the gentleman
from Texas (Mr. Edwards).
Before doing so, look at the next 5 years. These are numbers taken
straight from the Bush budget, the Office of Management and Budget.
Over the next 5 years, this year, 2004, 2005, 2006, 2007, 2008, they
are proposing to spend a deficit of more than $400 billion in every one
of those years.
What is distressing is not necessarily the size of these deficits to
start with. If we are, after all, in a slumping economy, you would
expect to see a deficit then. But there is no abatement, no reduction.
There is no diminution of this deficit in any of these years.
These are the numbers you get if you back out Social Security. The
total amount of deficits we will incur in the general fund of the
budget if we follow this plan over the next 5 years, 2004 through 2008,
is $2.14 trillion. As I said earlier, that is not the result of what we
did previously; that is the result of decisions we are about to make
now. This is where it will take us.
Notice that they stop at the end of 5 years. Last year and in 2001 we
had a budget that went out 10 years, because we had found from
experience that fiscal discipline was served by projecting the
consequences of your fiscal actions out as far as you could, and 10
years was deemed to be a good projection period. But if you run this
out 10 years, the situation only gets worse.
Mr. Speaker, I now would like to yield to my friend, the gentleman
from Texas (Mr. Edwards) to pick up here and talk about some of the
consequences in this budget for programs that all Americans support.
Mr. EDWARDS. Mr. Speaker, I want to thank the gentleman from South
Carolina for leading the fight for fiscal responsibility in Congress.
Mr. Speaker, just 2 years ago the Bush administration promised my
then-3 and 5-year-old sons that by the time they graduated from high
school, America would have no national debt. A lot can happen in 2
years. Now, under the fiscal policies of this administration, my now-5
and 7-year-old sons are told that before they finish elementary school
this administration will add $1 trillion to $3 trillion in addition to
the total $6 trillion national debt that we presently have.
To average Americans, what does the national debt really mean? $6
trillion, $5 trillion, what does it matter?
Let me talk about the difference. It is said there is one tax in
America that cannot be repealed. It is called the debt tax. It is the
interest on the national debt. Last year alone, over $320 billion

[[Page H376]]

was paid in interest on the total national debt of America. That is
$320 billion that taxpayers have to be responsible for now and in the
future just to pay the interest on the national debt.
The fact is that not only does the debt tax hurt us by having to pay
additional taxes to the Federal Government to pay interest on the debt,
but every business is burdened with the debt tax. When you have a
deficit, once the economy gets back on its feet, you are going to drive
up interest rates. Every homeowner pays part of the debt tax because
they have to pay higher interest on the mortgages on their homes. Every
consumer that borrows and uses a credit card will have higher taxes in
effect because of the Bush administration increase in the national
debt.
Now, once in awhile, Mr. Speaker, an idea comes along in Washington,
D.C. that is so incredibly unfair that, frankly, it is hard to even
believe anyone would propose it seriously. Let me talk about a specific
provision of the most recent Bush budget.
This week and in the weeks ahead there will be 12,500 brave men and
women, Army soldiers from my district, from Fort Hood, that will be
deploying for the Iraqi theater. Within weeks or months they could well
be fighting to defend the interests of this country, perhaps even
giving their lives for our country.
I found it astounding that the same administration which has ordered
these brave men and women, mothers and dads, to go off to potential
combat in Iraq, has the gall to suggest that we should be cutting their
children's education funds at the same time they are getting on the
airplane to defend our country thousands of miles away. It is hard to
believe that it is even true, but it is true.
Look at the Bush budget. They are cutting the vital Impact Aid
Military Education program at the very time they are asking our sons
and daughters, mothers and dads, to go off and defend our country in
the Middle East and Southwest Asia. In fact, the two school districts
surrounding Fort Hood, the Coppers Cove and Killeen districts around
Fort Hood in my district in central Texas, will lose under the Bush
administration proposal $21 million in impact aid this year because of
the proposed cuts in that program.
What is compassionately conservative about that? What is fair about
that? The truth is, nothing is compassionate about that; nothing is
fair about that.
Mr. Speaker, we ask our servicemen and women to make incredible
sacrifices for our country, and it is immoral for us to be cutting
their children's education funds even as they go to potentially fight
for our country.
I hope the American people will be as outraged about not only the
largest deficit in the history of America proposed in this budget, but
will be just as outraged by the unfairness to our servicemen and women
all across America by cutting their children's education programs while
they are going off to war.
Mr. Speaker, there are many things we could talk about in this
budget, but one of the things I would like to ask the distinguished
ranking member about is, I have heard in recent days from Republican
colleagues that the Bush administration tax cuts, both those already
enacted and those proposed, really are not a significant part of the
reason we now have this year proposed the largest deficit in the
history of America.
I would like to ask my colleague, the gentleman from South Carolina
(Mr. Spratt), if that is true. Have these proposed taxes and enacted
tax cuts really had a minimal effect on the fact we are in such a deep
deficit hole now?
Mr. SPRATT. Mr. Speaker, on the chart I have just displayed it is
clear from the Office of Management and Budget that the real surplus
adjusted for the real economy over the last couple of years is not $5.6
trillion, but $2.4 trillion. Out of that $2.4 trillion in real surplus,
the Bush administration has already cut $1.349 trillion and $42
billion; add those two together and you get easily $1.4 trillion.
Nearly two-thirds of the remaining surplus has been cut, has been
diminished, due to tax cuts already passed now in the face of the fact
that there is no remaining surplus.
After you factor in these tax cuts and factor in the spending
increases, mainly for defense and homeland security, which we all
supported, but nevertheless, his budget left no room for contingencies
like that, when you factor in those additional spending items, the
surplus not only disappears, it goes deep in deficit for as far as the
eye can see.
Mr. EDWARDS. Mr. Speaker, if the gentleman will yield further, I
appreciate the gentleman pointing out those facts. I would also point
out on this chart that the Bush administration's total tax agenda,
including tax cuts already enacted plus proposed tax cuts, total in
impact, if you count that increased debt tax, the interest we have to
pay when we borrow money, it is over $4.3 trillion. Even by Washington,
D.C., standards it seems to me a trillion here and a trillion there
really is a significant amount of money.
I find it astounding that we are cutting taxes for some of the
wealthiest people in America, and at the same time, telling soldiers at
Fort Hood in central Texas, right next to the Crawford ranch, you have
to go off and fight for our country, but by the way, as they are
getting on the plane, give them a note, we are going to cut your
children's education fund.
We hear a lot of talk, and I will finish with this, about values in
Washington, D.C., and family values. But I think we in public office
should be judged not by rhetoric, but by our record and by the
priorities we set in the Federal budget.
There is something wrong with the values of an administration that
would propose cutting impact military education funds not to pay for a
war against Iraq, but to pay for the tax dividend for the other
constituent of mine who said he made $1 million in dividend income last
year, and because this administration does not want him to pay one dime
in taxes, will get a $335,000 tax cut.
Would the gentleman care to comment about the values of those
priorities?
Mr. SPRATT. Mr. Speaker, let me enlarge upon the point the gentleman
is making, and that is, as bad as the Bush administration says, when
pressed, where is your solution, what plan do you have? Cut spending,
cut spending.
In truth, as the gentleman is pointing out with a very specific
example, there are plenty of spending cuts built into this budget
already. One of them is impact aid, which amounts to the Federal
Government saying to military installations, we are not going to pick
up the full impact of the children of military dependents in the public
schools in that particular locality. We are going to let the local
folks pay that and not do what other employers do and continue
contributing some of the costs of it. That is one example.
The gentleman from North Carolina is going to get up and give another
example about the larger education bill that already is cut in this
bill. If you took the whole budget for discretionary spending, the 13
appropriation bills that the gentleman's committee reports and we pass,
which constitutes the discretionary budget, if you take all of
nondefense discretionary spending and cut it all out, it would not
replace the $400 billion deficit in the general fund we expect next
year.

Mr. EDWARDS. Mr. Speaker, that is a good point. If the gentleman will
let me ask one last question, and then I will defer to other members
that want to speak on the largest deficit in the history of America,
there are a lot of Americans that believe that this largest proposed
deficit in America's 200-plus-year history is because, my gosh, we are
going to have to pay for the war against Iraq.
Could the gentleman tell me and the American people factually, is the
$300 billion deficit proposed for this 1 year alone related to that?
Mr. SPRATT. That does not include the war against Iraq. That does not
include the war against terror. The Secretary of Defense told us the
other day, if and when those costs come, we will send up a
supplemental. If you add that to the bottom line, it gets worse.
Mr. EDWARDS. We could have a $400-plus billion deficit. I did
calculate it. I think the maximum Pell Grant for a young, bright high
school senior from a low income family, wanting to improve his or her
life and career with a college education, they get about $4,000 a year.
If you assume 4 percent interest on the

[[Page H377]]

$300 billion deficit this year alone, that means my children's
generation, my little boy's generation, will pay $12 billion a year,
that is B as in boy, $12 billion a year in tax for the rest of their
lives until the day they die simply to pay the interest on this year's
proposed deficit.
That amount of money, if we had a more fiscally prudent budget
without some of these tax cuts that I think are irresponsible, that
would allow us to have 3 million young Americans receive a $4,000 Pell
Grant. Something is wrong with these values and something is wrong with
this budget.
Mr. SPRATT. Let me now yield to the gentleman from North Carolina
(Mr. Etheridge), who used to be the Superintendent of Education in
North Carolina, to further the effects of some of cuts in education in
this budget.
Mr. ETHERIDGE. Mr. Speaker, I thank the gentleman for yielding.
Let me follow up something that my good friend from Texas covered;
whether one agrees with this or not, this is actual fact. Before I was
the State Superintendent of Schools in North Carolina, I chaired the
appropriations committee for the general assembly, and prior to that I
was a county commissioner.
What we are really doing in saying to local governments about pulling
back impact aid, and in many of the cases, in many of the communities,
in Fort Bragg in my district, many of these communities find themselves
dependent on the impact aid. But what happens is they are getting
impact aid because you have a large Federal installation not paying
local property taxes. If you pull that out, in effect you are saying to
the rest of the citizens in that jurisdiction, we are going to raise
your taxes. We are going to say to the county commissioners to raise
them or to the local governments at a time when roughly, what, 70-plus
percent of the States are running huge deficits.
Mr. Speaker, it is incomprehensible that this administration would
place these kinds of burdens on local governments across this country.
And I agree with my friend, the gentleman from Texas (Mr. Edwards), who
said not only Fort Hood, but at Fort Bragg, which is the 9/11 post in
this country, we are going to send you off, but the people that you are
going to leave behind are going to pick up the tab, because those of us
in Washington are not going to do what we need to do, and those of us
left are going to raise your taxes another way.
Let me touch on a couple of other issues when it comes to education.
It bothers me greatly, because if we truly want to turn this around, we
have got to have prudence now in budgeting.
Mr. Speaker, it boggles my mind that we have come through the
deficits of the last 10 years to get to some high ground and a balanced
budget, and we did not learn a thing. We jumped right back in that
briar patch with no end in sight, and we now say deficits are okay.

{time} 2000

They are not okay. Because we are going to double the amount of
interest over the next few years, and my children and grandchildren
will pick up the tab; and that is wrong.
Let us just look at some of the numbers that are proposed in this
budget. These are the consequences of running deficits: cuts in No
Child Left Behind. I supported that legislation because I thought it
was fair and it would make a difference for children, because the
President committed to fund it. And what does he do? He has cut the
funding, and I will have a proposal on that before too long. This
budget proposes cuts of $22.6 billion for programs that are under No
Child Left Behind, which is $9 billion below the amount authorized in
2004, and $199 million below the amount needed to maintain at just the
2002 level.
Now, we have to understand that there are more children coming to
school, there are more children with needs, there is more tutoring that
needs to be done because we are ratcheting up accountability. It is a
program for disaster for the public schools of America; and this
administration, I do believe, knows that, and they ought to know
better.
Mr. SPRATT. Mr. Speaker, what the gentleman is talking about is the
authorization act Mr. Bush signed and signed into law and took credit
for.
Mr. ETHERIDGE. And this body bipartisanly passed it.
Mr. SPRATT. The authorization act calls for $9 billion more in the
fiscal year 2004 than his budget in this year's request.
Mr. ETHERIDGE. That is exactly right. And the schools are depending
on that money, and at a time, as the gentleman knows, when States are
cutting because they do not have the resources, trying to hold up their
end on education; and we are not living up to our bargain. This
administration has not been honest with, I think, our schools and the
American people.
It eliminates 47 education programs in this budget, proposed budget.
Those programs amount to $1.6 billion just in the CR we are now
operating under, on the flat line, $1.6 billion. That is a lot of money
when you get out to a local school building in rural America or
wherever you may be.
Let me just talk about some of the major cuts. The 21st Century
Community Learning Centers, an outstanding program that gives schools
money to do some creative things that make a difference.
Mr. SPRATT. After-school programs, primarily?
Mr. ETHERIDGE. Absolutely.
Mr. SPRATT. Before-school programs.
Mr. ETHERIDGE. Absolutely. We absolutely have to have these if we are
going to tutor youngsters who are behind and need to catch up. Mr.
Speaker, $1.2 billion below the level authorized. Teacher quality
programs, the very thing we have to do if we are going to improve
education in America. We have to improve opportunity for the staff that
are teaching our children. What did we do? What does the President
propose? Mr. Speaker, $3.1 billion, down 5.2 percent from the previous
level. I will just go through the percentages. It is just shameful.
Educational technology. At a time when we are really trying to put
more technology in the schools because we are in a technological world,
and so many schools need the resources, 9.6 percent cut from the
previous level. More children out there, more needs, and we are
cutting.
Impact Aid, we just talked about, 14.2 percent. Vocational education,
26 percent proposed cut; 26 percent.
Mr. Speaker, it reminds me of a story I heard once when I was little.
The guy said he was not going to kill his pig, he would just do a
little bit at a time, and somebody saw a pig running around the yard
with three legs, and he said, I am just eating a little bit at a time.
That is what we are doing to education. We are not going to kill it all
at once; we are just going to kill it a little bit at a time, until it
is so crippled it cannot work. It is absurd.
We need people to work on equipment and machinery. I was at a school
last week; a superintendent came up to me just last night talking about
Impact Aid. He said, if we cut it, our schools are going to be in deep
trouble. This was in Cumberland County. One of the teachers talked
about vocational education. This is where they turn money into
technology for computer labs. I was in a computer lab working with
children.
Funding for the improvement of education, down 91.2 percent. I do not
know why they did not go ahead and get it all.
I mean it just makes no sense. It was a good program, but what they
want to do is just enough out there to make people mad.
Perkins loans, 61 percent proposed cut.
I could go on. I think folks who are watching get the message. It is
one thing to say I am for education; it is one thing to say I want to
help. It is another thing to not follow through and give the resources.
I have talked to more teachers and school folks in the last few weeks.
They really and truly believe, whether it is true or not, that they are
set on a course to fail, because we are giving them all the ingredients
to make the cake and nothing to go in it, but we are expecting them to
come out with a fine baked product.
I would remind all of my colleagues, education is a lifelong process,
and we cannot start and stop it. We have to keep it going. Teachers
understand it; students realize it. It takes resources to get the job
done. I recognize that at the Federal level we only put in about 7 to 9
percent, depending on where we are. Some counties it is more, because a
lot of it is specific to need. Not all of

[[Page H378]]

this is specific to need, because No Child Left Behind is need-based
and categorical. But without it, we are really saying, we really did
not mean it. We really did not mean it.
That was a great plan, we got a lot of good press on it, we have had
our press clippings, we have been around the country, and now we are
going to move on to something else. That is not education. That is not
about building the future of America, and this administration knows
better. I am going to be on the floor in the well of this House every
day, every week; and we are going to keep reminding them. We have to do
the funding because if we do not, we will not have a future. We cannot
keep running deficits because huge deficits have consequences; and the
consequences are, we run up the debt, we have huge interest payments,
and it squeezes out domestic programs, and children pay a heavy price,
and we rob our future so a few people can look good now.
Mr. SPRATT. Mr. Speaker, the gentleman's point, and the point of the
gentleman before him, was that even in this budget with big deficits,
$400 billion and more every year for the next 5 years, $2.1 trillion in
the general fund, additional deficits, additional debt; even with those
bottom lines, we have these significant cuts already made in this
budget, and we are still running almost a half a trillion dollars in
the red every year.
Mr. ETHERIDGE. Sure, and the gentleman's point is it will get worse.
Mr. SPRATT. Mr. Speaker, to further explain and clarify other things
that are buried in this budget is the gentleman from Virginia (Mr.
Scott), to whom I now yield.
Mr. SCOTT. Mr. Speaker, I thank the gentleman for giving me the
opportunity to again show this chart which shows over the years the
spending of the Federal Government.
Now, a picture is worth a thousand words. We see under the Johnson,
Nixon, Ford, Carter administration in yellow where the deficit was; we
see what happened to the deficit during the Reagan and Bush years; and
we see when Bill Clinton came in office under Democratic leadership, we
passed a budget that reduced the deficit. Now, when this vote was taken
in 1993, not a single Republican supported that budget. And right after
that happened, we reduced the deficit. Slowly but surely each year the
deficit became less and less and less until we started running a
surplus. When President Bush came in, we reversed course. We cannot
produce charts like this by accident.
Now, we have been asked, where is your plan? There is our plan. When
the Democrats controlled the budget, that is, when the Democrats
controlled the House in 1993 and the Senate in 1993 and the President,
we passed the budget. In these years, President Clinton vetoed many
Republican budgets. They tried to close the government down, he vetoed
the budget anyway, because they were fiscally irresponsible. So
President Clinton was the controlling force of the budget during his
administration and produced those years. The budget introduced by
President Bush was passed when he came in office, and this is what
happened. We wonder what the plan is for the future.
As it has been mentioned, when he came in office, in 2000, there was
a surplus. September 11 happened with only 3 weeks left in the fiscal
year, so this was going to happen anyway, that is, spending virtually
all of Medicare. The following year we spent all of the Medicare
surplus, all of the Social Security surplus, and then $160 billion
more. In 2003, almost $300 billion, after we spent all of Social
Security and Medicare; and if we adopt the policies of the
administration, we are going to be spending all of Social Security and
Medicare for years to come.
Now, what kinds of tax cuts are we recommending now? I mean, we do
not produce numbers like this by accident.
We have tax cuts like the repeal of the taxes on estates over $2
million. A husband and wife, $2 million tax-free going to the next
generation. $2 million. Then we start taxing after that. So when we
talk about repealing the estate tax, we are talking about repealing the
tax on dead multimillionaires. That is what we are talking about. When
we add to that the idea that they want to stop taxing dividends, we
have a bizarre vision for America where people can inherit great
wealth, invest it in stocks, live off the dividends tax-free, no tax on
the estate, on the inheritance, no tax on the dividends. When we add to
that some other provisions in this budget where we protect capital from
taxes, we know what Leona Helmsley was talking about when she said,
only little people pay taxes, because those with great wealth can
shelter that wealth with no estate tax, no tax on dividends, and the
other little provisions in the bill where capital is not taxed, only
little people will pay taxes. Every time we cut another tax, it is down
here. We have already gone through the surplus and Social Security and
Medicare.
Now, what is the impact of this? When we started, the projection was
that the entire national debt would be paid, held by the public, we
would have paid off all of that by 2008, and going into pay-off of all
of the debt on the trust funds by 2011, 2013. We would be debt-free.
Instead, we are on this line: more and more debt.
Now, we cannot run up debt without consequences. What is the first
consequence? The debt tax. This is what the family of four pays every
year in interest on the national debt. As we run up more debt, we have
to pay more debt tax, more interest on the national debt. It is around
$4,500 for a family of four now; and because we are running up the
debt, by 2008, almost $6,500 every year, a family of four will have to
pay just on the debt.

We do not get anything for that. That has already been spent.
Now, when we look at how the debt tax is exploding and the burden on
the Federal Government on just interest on the national debt is
exploding, we have an interesting phenomenon that we have to deal with,
and that is Social Security. We are running a surplus in Social
Security now. By 2037, we will be running a huge deficit. We need to be
piling up resources, reserves so that as the baby boomers retire and
the expense of Social Security gets less and less, we have some way to
pay it. No, instead, we are running up massive debts when we have the
surplus.
What is the plan to pay Social Security later on? I would suggest
that they have no intention of paying Social Security.
Mr. SPRATT. Mr. Speaker, if the gentleman will yield, let me just
clarify the chart the gentleman has, which is very graphic. The blue
bar charts, the blue bars above the horizontal axis show the surplus
that is accumulating in Social Security, for now.

{time} 2015

But it is for a limited period of time, intended to be used for
parents, for the retirement of the baby boomers. The red bars that get
deeper and deeper as you approach 2037 show the net cash outflow in the
Social Security trust fund beginning in about 2017, which is not that
far away, 13, 14 years from now.
Mr. SCOTT of Virginia. When we consider that we are spending the
entire surplus, to continue spending at that rate, we will not have
that surplus in 2017. So we are going to have to figure out, have some
plan to figure out how to pay that. Are we going to raise taxes? Are we
going to cut spending? The gentleman has already indicated that we
could eliminate the entire Federal budget that is nondefense,
discretionary spending, we can eliminate the entire budget, that is, no
roads, no education, NASA, everything, State Department, foreign aid.
Get rid of all of it. Not cut it, eliminate it, and not be able to
cover the on-budget deficit that we are running up now.
So where are we going to get it? Are they going to raise taxes in
2017? And then not only do they not have the cushion, since we do not
have the reserve, we are spending it; how will we come up with this
money? Frankly, I do not think they will come up with the money. They
will just repeal Social Security. And if that is not the plan, they
ought to have some way of explaining how they will pay Social Security
in the future.
The President, in one of his addresses to Congress, said he intended
to maintain Social Security for those retiring and those close to
retirement, which suggests to me that these people down here will not
have any Social Security. If they have no coherent plan, they ought to
admit that they will eliminate Social Security. And if they intend to
pay Social Security, they ought to have some coherent plan to

[[Page H379]]

show how they are going to do it. All they are doing now is running up
debt. We cannot continue to do that. A family of four is already up to
$6,500 interest on the national debt. It is getting worse before it
gets better.
How are they going to pay Social Security? I think they have a
stealth plan to eliminate Social Security when the burden becomes too
deep. They have got all these retirement plans so that all those who
are privileged to have inherited wealth, they will be all right. But
the vast majority of Americans with no pension plan will be back where
they were before Social Security was there.
We need answers. They are not delivering answers. They are not making
any tough choices like we made in 1993, tough choices that converted
deficits into surpluses. They are not making any tough choices. All the
easy choices. Anybody who wants a tax cut gets one. Anybody who wants
some spending gets spending, unless it is education or something
important. You do not get those. How are they going to pay this?
So I think they need to come forward and explain how they will do
this without eliminating Social Security. And if you listen to their
remarks talking about personal responsibility, you assume that sooner
or later your retirement will be your personal responsibility. There
will not be any Social Security to keep you out of poverty.
Mr. SPRATT. I thank the gentleman from Virginia (Mr. Scott).
Now I yield to the gentleman from Tennessee (Mr. Cooper) who was here
from 1983 until 1994 when he ran for Senate from Tennessee. But before
leaving the House of Representatives he cast one of the hard votes that
a number of us mustered the courage to pass and that was a vote for the
Clinton budget in 1993, which laid the foundation for a decade of
fiscal progress during the 1990s, a period when the bottom line of the
budget got better and better and better every year until finally, in
1998-1999 we were in surplus for the first time in 30 years.
Mr. COOPER. Mr. Speaker, I thank my good friend, the gentleman from
South Carolina (Mr. Spratt). I appreciate your leadership on these
vitally important issues. I think many patriotic Americans wonder what
those moments are in American history when we really do reach a turning
point; and to be honest with you, in all the congressional debates
there are very few real turning points. But I would like to suggest, as
the gentleman has already suggested, 1993 was a turning point when this
Nation literally reversed its fiscal policy and finally set our Nation
on track towards reaching surpluses which many Americans had given up
on ever seeing again.
And I would like to suggest that this year, 2003, is another such
turning point, as we dig deeper into the hole of deficits and plunge
future generations into what is likely to be a permanent and
unresolvable debt load.
Our friend, the gentleman from Virginia (Mr. Scott of Virginia), has
already pointed out this chart, and I would like to suggest that this
should be on everyone's screen saver, on every computer in America as
we put the deficit in perspective.
They were relatively inconsequential in the Carter years, the Nixon/
Ford years. But then with President Reagan we plunged into a sea of red
ink which many Americans thought was irreversible. Then in the crucial
budget vote in 1993, suddenly we got an upturn, even developing a
surplus.
But then again, another pivot point in American history under George
W. Bush and his budgets, we are reaching even graver levels of deficit
and debt.
I think the gentleman will recognize that many of our constituents
just have an instinctive feeling that, well, the President is a
Republican and, therefore, he is conservative and, therefore, his
budget must be conservative.
Mr. Speaker, does the gentleman from South Carolina think that
deficits of this magnitude are conservative?
Mr. SPRATT. Absolutely not.
Mr. COOPER. As I recall, the gentleman has already said these are
about to be the largest deficits in history. Is that conservative?
Mr. SPRATT. We warned that this would happen, but we did not see,
even in our admonitions, the severity of the problem we have before us
now.
Mr. COOPER. As I recall, the gentleman has said that the deficit for
fiscal year 2004 is supposed to be about $300 billion, not counting the
war in Iraq, not counting the war in Afghanistan, not counting the war
on terrorism, not counting other important problems that need to be
solved in our Nation. So the deficit may well be $400 or even $500
billion.
A temporary deficit is one thing. As we know, sometimes a deficit is
appropriate to stimulate the economy, but what we are talking about are
permanent structural deficits in our economy.
Mr. SPRATT. If the gentleman will yield, the gentleman was in the
investment banking business for a period. He knows the name Goldman
Sachs. And I understand one of their economists today said they predict
that the unified deficit for this year will be in the $400 billion
range. That means that is after netting out, backing out the Social
Security surplus. The unified deficit, by their projection, will be in
the $400 billion range this year.
That is depressing enough, but the problem is those deficits continue
on and on and on without any abatement.
Mr. COOPER. The gentleman is so correct. And a huge deficit like that
hurts our economy. It creates higher interest rates. It hurts the
employment statistics. And as I think most of the world knows, under
the Clinton years we had the most robust economy in the history of this
Nation or the history of the world. Surpluses helped us. Fiscal
discipline helped us. That is important for us to realize now as we are
returning to the era of massive budget deficits.
The gentleman from South Carolina (Mr. Spratt) has displayed great
leadership, but I worry so many folks back home find these numbers too
large to be comprehended. They are confused. They are over-burdened in
their daily lives. They are worried about the war. They are worried
about unemployment. They do not know really how to grapple with numbers
of this magnitude. But this chart shows it better than anything else,
this sea of red ink that we are passing on to the next generation.
President Bush mentioned in his State of the Union that each
Congress, each President should take care of its own problems, but this
budget is not doing that.
Mr. SCOTT of Virginia. Mr. Speaker, does the gentleman from Tennessee
(Mr. Cooper) remember the vote in 1993?
Mr. COOPER. Mr. Speaker, I do. It was a very close vote. As I recall,
it was by a one-vote margin the Clinton budget was passed.
Mr. SCOTT of Virginia. Mr. Speaker, does the gentleman remember how
many Republicans voted for that budget?
Mr. COOPER. Mr. Speaker, as I remember, zero. In fact, they
excoriated the President's budget saying that it would lead to
depression and other crises in the economy.
Mr. SCOTT of Virginia. And we made those tough choices without any
Republican help, House or Senate.
And does the gentleman remember what they did in the next election?
When they demagogued that vote, said we made the tough choices,
criticized those choices, and they won 50 seats in the next election.
Mr. COOPER. Mr. Speaker, many Members were defeated for having done
the courageous thing, for having been a profile in courage.
Mr. SCOTT of Virginia. Mr. Speaker, now we turn over a surplus to
President Bush and he has made no tough choices. He has cut taxes and
increased spending. Have they recommended any tough choices?
Mr. COOPER. Mr. Speaker, they are few and far between in this budget.
It is a massive document of some 20,000 pages, I suppose. It contains
many crippling cuts to our programs. Our colleague from North Carolina
mentioned several of them in the education area. There are so many
features that I hope the public will be aware of and we will try to
bring out in the debate.
One feature that is particularly concerning to me is an
unconstitutional provision that is in the President's budget. It is
little known. It is on page 318 of the analytical prospectus of the
second or third volume of the budget. It actually says, if Congress has
not completed its business by October 1 of

[[Page H380]]

this year, the budget will automatically revert to the President's
budget; whereas, the Constitution of the United States gives that power
exclusively to the Congress of the United States, not to the White
House.
And that allows this administration, with a handful of Senators, to
clog up the budget process, and then automatically, without a single
vote taken by this body, turn over the budget to this administration.
That is one of the most radical proposals I have ever heard mentioned
in public policy debates. And yet it is in this President's budget.
That is why I asked, as I mentioned to the gentleman from South
Carolina earlier, this is not a conservative budget. There is a radical
budget. This is an irresponsible budget that is leading our Nation
perhaps on the road to ruin. No American wants to see that.

It is the responsibility of a two-party system to point out problems.
And certainly Democratic budgets in the past have sometimes not been
perfect, but we can be proud of this record of actually achieving a
budget surplus for the first time in American history, I think, since
before the Depression, 3 straight years of surplus were achieved. And
that is an important record of achievement that we need to continue,
not a road with this massive flood of red ink.
Mr. SPRATT. Mr. Speaker, the point I was making at the outset is, 2
years ago OMB projected a surplus of $5.6 trillion. The Bush
administration then enacted a massive tax cut taking advantage of that
big surplus. They now acknowledge that they overstated, miscalculated
by some $3.2 trillion. It really was not $5.6 trillion in surplus. It
was more like $2.4 trillion in surplus.
The problem is that tax cuts have largely already committed that
amount of money. As we begin this fiscal year, instead of having a
cushion fund, a huge surplus of $5.6 trillion, we are in the red. We
have fully dissipated that surplus and we are in the red $129 billion.
But they, knowing that, proposed additional tax cuts and additional
measures that would drive us deeper in the red over the next 5 years to
the tune of $2.1 trillion which is intentional. You could at least
excuse what happened before as negligent miscalculation. I do not. I
think they should have seen the storm clouds gathering over the economy
and understand that the surplus was overstated; but chalk it up to
negligence. This is willful, wanton, and intentional.
Mr. SCOTT of Virginia. Mr. Speaker, when the gentleman talks about
the calculation being a miscalculation, is some of the calculation not
a recalculation based on how poorly the economy was doing after the
President's budget was adopted?
Mr. SPRATT. Mr. Speaker, there is no question about it. A lot of the
economic effect was already in place before 9/11. That is a key point
to understand.
Mr. SCOTT of Virginia. Mr. Speaker, after the President's budget was
adopted, the economy kept going down and down. And so some of this
recalculation is an acknowledgment that the President's budget had
caused the economy to tank, and they had to recalculate it based on the
new numbers.
When President Clinton's budget was adopted, they always
underestimated the effect because that budget was improving the economy
and every year the economy was doing even better than expected. The
stock market was improving; unemployment was going down.
When this President's budget was adopted, things just kept getting
worse. And they had to recalculate it based on that new forecast. So it
is all not just technical miscalculations. Some of it, a lot of it, is
recalculation based on how poorly the economy was doing.
Mr. SPRATT. Furthermore, we now know that the surplus is gone, per
OMB. They have acknowledged it. CBO, the Congressional Budget Office,
says the same thing. That ought to be an alarm sound calling for us to
begin developing plans like the plan we developed with the President's
father in 1990, the Budget Summit Agreement, the Clinton budget in
1993, the Balanced Budget Agreement of 1997. Three times in the 1990s
we did extra-special exercises on the budget that ratcheted down and
helped put us in a surplus for the first time in a generation.

{time} 2030

This budget acknowledging the problems it has got now and in the
foreseeable future does nothing. The most that they offer is a new
disdain for deficits. They basically say deficits do not matter, a
trillion here, a trillion there; it is no big deal.
Mr. SCOTT of Virginia. Mr. Speaker, will the gentleman yield?
Mr. SPRATT. I do.
Mr. SCOTT of Virginia. Does the gentleman know who said the budget
deficit is a stealth tax that pushes up interest rates and costs the
typical family $36,000 on an average home mortgage, $1,400 on an
ordinary student loan and $700 on a car loan?
Mr. SPRATT. That is Senator Dole, I think. The point we are trying to
make now is that we may have a tax cut today, but if it ends up causing
the government to incur more debt, the debt has to be paid. It has to
be serviced. Interest on it has to be paid; and eventually, the people
that pay taxes will have to service that debt, and there is a debt tax,
a stealth tax that will come due, not in the near term, but whenever we
do not have a surplus to charge it to anymore, and we do not, then what
we do is charge it to the next generation, and that means our children
and grandchildren.
So we can have it all in this budget. They pay the tax. They pay the
bill, the debt tax.
Mr. COOPER. Mr. Speaker, if the gentleman would yield, the gentleman
is so correct. He made an extremely important point a moment ago. So
many people in the other party feel that deficits do not matter,
deficits do not matter; and I think that philosophy is not only wrong,
it could lead our Nation into serious economic trouble for decades to
come.
I would like to suggest to the gentleman, I even heard some of my
colleagues across the aisle say that deficits are a good thing. There
is an article today in the New York Times quoting a leader in the other
party saying that a deficit is a good thing because they shrink the
size of government; and I would suggest that sort of philosophy is not
only not conservative, it is one of the most radical approaches to
government that I have ever heard of, to pretend that red ink of this
volume and dimension does not matter and that it could actually be a
good thing.
Mr. SCOTT of Virginia. The gentleman indicated that deficits reduce
the size of government. Is this budget coming in not presented to us
larger than the one before? So it does not reduce the size of
government. When we cut all these taxes and reduce revenue, we are not
reducing the size of government. We are just running up debt on which
we have to pay interest.
Mr. COOPER. As the gentleman from Virginia so wisely pointed out,
that puts a debt tax, an unrepealable tax on future generations for all
time in the amount of $12 billion forever just due to the debt we are
running up this year. That is an irresponsible fiscal policy. That is a
radical fiscal policy. It is not a conservative fiscal policy.
I think that is what so many of our constituents back home are
failing to realize because these numbers are so large, the problems
seem so vast, they are preoccupied with the war and with their own
personal situation, that when they are presented with a multitrillion
dollar budget, it is hard to take it seriously, when, in fact, we are
reaching a turning point in American history, and we do need to take
action, we need to bring these problems to the American people's
attention so that they can respond and call for fiscal responsibility
and fiscal sanity because we are not seeing enough of that today in
Washington, D.C.
I would like to commend the gentleman from South Carolina and the
gentleman from Virginia for their comments.
Mr. SPRATT. Let me wrap up and let us bring it to a conclusion
because the gentleman has been in investment banking for the last 6 or
7 years, and the gentleman knows that traditional economic theory for
as long as we have known anything about it has held that deficits have
the same effect that any supply and demand function has. The government
goes into the capital markets. In addition to private borrowers, it
elbows out the private borrowers. It runs up interest rates, and high
interest rates stifle growth in the long run.
So we may get a little bit of kick right now out of running a
deficit, but

[[Page H381]]

in the long run we have got the debt to pay; it is a fiscal drag on the
economy.
Secondly, it is a form of dissaving. When the government borrows the
money it is just like an individual borrowing money. He is dissaving
rather than actually saving and that takes away from the savings pool
that we have got for capital formation and building the productive
assets of this country, and over the long run it means we are not as
productive as we otherwise would be.
Then, finally, there is a moral aspect, which I just mentioned. When
we charge our excesses to the deficit, we are charging it to the next
generation, namely, our children and grandchildren. No way around it.
Everybody's recognized that moral aspect in the past. This is an
intergenerational thing. They will not only have to pay our Social
Security deficit and Medicare deficit, they will also have to pick up
the accumulated debts, the other things that we chose not to pay in our
time because of this budget.
Mr. COOPER. The gentleman is an excellent economist, and another
great economist is our own Federal Reserve chairman, Alan Greenspan,
who said, History suggests that an abandonment of fiscal discipline
will eventually push up interest rates, so deficits do matter, crowd
out capital spending, lower productivity growth, and force harder
choices on us in the future.
We should be listening to Alan Greenspan. We should be listening to
the gentleman from South Carolina and the gentleman from Virginia
because deficits do matter. They are hurting this economy, and we need
to return to the fiscal discipline that we saw in the previous
administration and live within our means because our Nation is
embarking on long-term structural deficits today that we may never be
able to erase.
Mr. SPRATT. Mr. Speaker, on that point we conclude. I thank the
gentlemen for participating.

____________________