[Congressional Record Volume 149, Number 45 (Thursday, March 20, 2003)]
[House]
[Pages H2166-H2170]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




        CONCURRENT RESOLUTION ON THE BUDGET FOR FISCAL YEAR 2004

  The Committee resumed its sitting.

                              {time}  1630

  Mr. STARK. Mr. Chairman, I yield 3 minutes to the distinguished 
gentlewoman from New York (Mrs. Maloney), who is fighting Republican 
efforts to cut $13 billion in Medicaid funds from the State of New 
York.
  Mrs. MALONEY. Mr. Chairman, I thank the gentleman from California 
(Mr. Stark) for yielding me the time and for his leadership.
  Today is a solemn day, but as Americans focus on our Armed Forces 
abroad, here at home we face an unprecedented moment in our budget 
history. Never before has Congress tried to pay for a war and at the 
same time pass a massive tax cut. This budget also compromises future 
economic stability because it is so demographically blind.
  If we cannot plan to address the debt now, how are we going to keep 
our promises to the elderly when the baby-boom generation retires? The 
fiscal policies of the President enacted by the Republican Congress 
will impose a massive deficit burden on our children and our 
grandchildren.
  In 2000 we had not only eliminated the deficit, President Bush 
inherited a surplus of over $230 billion a year, but now the projected 
deficit is over $300 billion for this year alone, and at the close of 
fiscal year 2002, the government debt stood at $6.2 trillion.
  The President's own numbers show that were we to enact his programs 
as proposed, we would grow this debt by $2.1 trillion from 2002 to 
2011, and that is before we begin to account for the war. And we know 
that former economic adviser to the President, Lawrence Lindsey, 
estimated the war would cost over $100 billion.
  We have learned that we cannot have guns and butter without 
negatively affecting the economy, yet the Republican budget pushes 
ahead with a massive long-term tax cut before we finance the war.
  At the same time, they grow the deficit, the Republican budget 
manages to cut vital programs, including health care, Medicare, 
Medicaid, housing, school lunches and veterans' benefits. The impact of 
these Federal cuts will be magnified by the States where budgets are 
unbalanced, forcing additional reductions in services and local tax 
increases.
  The Republican budget does absolutely nothing to help the States. The 
Democratic budget does. This irresponsible budget has long-term 
consequences. I disagree with the administration. Deficits do matter. 
Over time, the debt will lower economic growth and increase interest 
rates. The effect will be a hidden tax increase on our constituents in 
the form of higher interest rates on mortgages, credit cards and car 
loans.
  I urge a no vote on the Republican budget and a yes vote on the 
responsible Democratic budget.
  Mr. RYAN of Wisconsin. Mr. Chairman, I yield 2 minutes to 
distinguished gentleman from Florida (Mr. Putnam).
  Mr. PUTNAM. Mr. Chairman, I thank the gentleman for the time.
  Mr. Chairman, we have been through this budget process, and I serve 
on the Committee on the Budget, and we have worked through a very 
deliberative process where there can be legitimate disagreement over 
how we fund these priorities, but the bottom line is this.
  This country has suffered a national emergency through September 11. 
We are engaged in war at this time, and we have come out of a recession 
that has put tremendous pressures on our revenues, but there are some 
in this Chamber who think that Washington should be exempt from belt-
tightening when every school board, every municipality, every State in 
America is going through the same process. Just because we print the 
money does not mean that we should not have to find savings.
  There are people on both sides of the aisle, Mr. Chairman, who want 
to work towards a responsible way to save Social Security, to save 
Medicare. As a young Member of this Congress, I believe we have to 
think beyond the next election and beyond the next budget to do those 
kinds of things, but if we cannot find 1 percent savings, then we will 
never, ever be able to tell the American people that we can take the 
giant leaps to reform those huge programs.
  The gentleman managing the floor for the other side on this debate 
has labeled some of us in this Chamber as henchmen for supporting our 
President's crusade to liberate Iraq. He has accused the President of 
ordering the assassination of Saddam Hussein to cover up for the fact 
that we have yet to find bin Laden, although we have disrupted al 
Qaeda. I resent that, Mr. Speaker, and I think that he should take his 
tongue-in-cheek tirade back to Baghdad where some of his colleagues 
have trod in the past. It is unacceptable when our young men and women 
are at war to have those kinds of character assassinations. To label 
Members of this body as henchmen, to go after the character of our 
President who has led this Nation through so much, goes above and 
beyond legitimate disagreement over the priorities that this budget 
should have, and it is unacceptable, and it should not stand.
  Mr. STARK. Mr. Chairman, I think the previous speaker was a little 
confused.
  Mr. Chairman, I yield 3 minutes to the distinguished gentleman from 
Washington (Mr. McDermott) who has been to Baghdad recently and has 
also served in the military, but also recognizes that the State of 
Washington is going to lose $1.7 billion in Medicaid funds if this 
budget were to pass.
  Mr. McDERMOTT. Mr. Chairman, I thank the gentleman from California 
for yielding me the time.
  When the gentleman from Iowa (Mr. Nussle) heard I was coming over 
here, he said, are you bringing your walnut shells? Are we playing the 
shell game again over here? I said, no, I have got a new thing that 
came from the White House. It is a rubber stamp. It says ``official 
rubber stamp.'' I approve of everything George Bush does.
  Now that is what we have on here on the floor. You are not henchmen. 
You are just a rubber-stamp bunch.
  What is awesome about this day is we are going to war. Maybe that 
message we just got in here was the war message, I do not know, from 
the President, but Iraq is a country where 60 percent of the people get 
their food through the Oil-for-Food Program. We have now told the 
United Nations take their people out, there is no longer any way to 
feed 60 percent of the 24 million people in Iraq.
  They are your responsibility now. You have taken that on by saying, 
we are going to bring you democracy. Democracy is a pretty empty thing 
if you have got an empty stomach. So you are going to have to come up 
with some money to pay for the food program. There is not one thin dime 
in here.
  My colleagues know that the Lord Jesus Christ went up on the Sermon 
on the Mount there, and he gave this sermon and said that you should 
feed the poor. That is in Matthew, Matthew 26, I believe, and my 
colleagues all know that. All good Christians know that. We are all 
Christians in this country, are we not? We ought to have some

[[Page H2167]]

money in here figuring out how we are going to pay for those people.
  It is not just the Iraqis that are going to be in trouble. In 
Eritrea, the world food program will be out in 2 months. Burundi has 
enough for another 4 weeks. The beans are gone in Liberia, and by the 
end of May they will have no cereal. There are 1,000 refugees in Guinea 
with nothing after August 10.
  This is a budget where we put 400- and I do not know how many 
billions of dollars into the defense budget, but there is not a thin 
dime in here for the people of Iraq. We are saying, oh, we are bringing 
in democracy, oh, yes. Those people in Afghanistan learned about our 
democracy. The first year we did not authorize anything. Then we 
coughed up $300 million after a while. The U.N. said they needed $10 
billion. We put in $300 million. The next year we are about $270- or 
$290-, and we refused to make any long-term commitments. This is a 
country where we spent $4.5 billion bombing them, and we can only come 
up with $300 million a year to rebuild them. Tell me how the Sermon on 
the Mount figures into that. Do my colleagues think that is what Jesus 
would want us to be doing?
  The fact is that the President of Afghanistan came over here, Karzai. 
He went to the White House very shortly ago, last week or the week 
before, begging for money because he is broke. We gave him $50 million 
in OPEC money, but said, by the way, $35 million has to go to build a 
hotel.
  Mr. RYAN of Wisconsin. Mr. Chairman, I am not sure how to respond to 
all that other than just to say I yield 1 minute to the gentleman from 
Ohio (Mr. Turner).
  Mr. TURNER of Ohio. Mr. Chairman, I want to congratulate the 
gentleman from Iowa (Mr. Nussle) for his leadership. I commend him for 
taking on the task of restraining spending and making certain that we 
move back to fiscal responsibility.
  With the war on terrorism and our struggling economy, our projected 
budget deficits are staggering. Throughout our country, State, local, 
community governments and businesses are cutting their budgets to 
respond to declining revenues. Americans expect us to do the same.
  Only the Federal Government tries to put together a budget where it 
looks to see how much it is going to spend first and then looks to 
revenues, and to some Members of this body the Federal Government can 
never spend enough.
  This budget asked certain Federal agencies to find 1 percent in 
savings in waste, fraud and abuse and efficiencies. It is amazing today 
that we would have a discussion over an argument over 1 penny in a 
dollar. There is not an agency in our government, there is not an 
organization that we have that cannot find 1 percent in waste and 
efficiency even in good times. In the times that we are in, it is 
certainly essential that we put forth the effort.
  Mr. STARK. Mr. Chairman, could I inquire of the Chair how much time 
remains on both sides?
  The CHAIRMAN pro tempore (Mr. Duncan). The gentleman from California 
(Mr. Stark) has 10 minutes remaining. The gentleman from Wisconsin (Mr. 
Ryan) has 17\1/2\ minutes remaining.
  Mr. STARK. Mr. Chairman, could I inquire of the distinguished 
gentleman how many speakers he has?
  Mr. RYAN of Wisconsin. We have enough speakers to fill up the time. 
Would the gentleman like us to catch up?
  Mr. STARK. Sure.
  Mr. RYAN of Wisconsin. Mr. Chairman, I yield 2 minutes to the 
gentleman from Texas (Mr. Hensarling).
  Mr. HENSARLING. Mr. Chairman, I thank the gentleman for yielding me 
the time.
  Mr. Chairman, today I rise in strong support of the majority budget 
resolution. Some critics across the aisle believe that the only answer 
to our Nation's challenges is to take a larger slice of the family 
income pie. This budget works to increase the size of that pie by 
growing the economy.
  At a time of war, it is irresponsible to do anything else, but to get 
economic growth, to get better jobs, to get better wages, to get 
families and small businesses to risk their time and their savings on 
that new software idea, that transmission repair shop, they must have 
tax relief, and they need real and permanent tax relief.
  Our plan does just that. The Democrat plan, more taxes, more waste, 
more fraud, more spending, more big government.
  Mr. Chairman, it is not just faith that we have, but historical 
evidence that tax relief works. When President Reagan lowered tax rates 
in the 1980s, real economic growth averaged 3.2 percent a year, and 
Federal revenues actually increased, increased by 20 percent. President 
Kennedy reduced tax rates in the 1960s, and we experienced several 
years of 5 percent economic growth. The same is true of tax relief in 
the 1920s.
  Some of the colleagues across the aisle criticize this budget because 
they do not believe it grows government fast enough. This budget is 
growing the government by 3 percent, almost twice the rate of 
inflation, but more importantly, it helps American families pay for 
their programs.
  Forty-six million married couples would keep $1,700 more of what they 
earn. That is enough to pay two mortgage payments. That is a housing 
program. Thirty-four million families with children would keep an 
additional $1,500, enough to purchase a personal computer. That is an 
education program. Six million single mothers would keep $541, enough 
to purchase a month of day care. That is a child care program.
  Mr. Chairman, contrary to what our colleagues across the aisle 
believe with their budget, we cannot tax our way into prosperity. We 
cannot spend our way into prosperity. We cannot sue our way into 
prosperity. We can only grow our way into prosperity.
  Mr. RYAN of Wisconsin. Mr. Chairman, I yield 1 minute to the 
gentleman from Maryland (Mr. Gilchrest).
  Mr. GILCHREST. Mr. Chairman, I thank the gentleman for yielding me 
the time.
  I would like to tell my colleagues on actually both sides of the 
aisle that none of us are rubber stamps over here. We are actual human 
beings and Members of Congress. We do not rubber-stamp what the 
President wants or does not want us to do.
  I would also like to say to my colleagues, and, if I may, to the 
people of Iraq, we will stay with you to not only feed you in the 
interim.


                announcement by the chairman pro tempore

  The CHAIRMAN pro tempore. The Chair would remind all Members that 
remarks are to be addressed to the Chair.
  Mr. GILCHREST. Mr. Chairman, to give a man a fish, he eats a day. To 
teach a man how to fish, he will eat for the rest of his life, and the 
oil in Iraq will be used to improve the quality of life for people in 
Iraq.

                              {time}  1645

  Mr. Chairman, this has been one of the best, well-planned operations 
in the history of the world. It has been open for debate for months and 
months and months; and, yes, we support our troops in Iraq. The United 
States Government's major role is to defend this country, but also to 
ensure that those in need are taken care of: those that are hungry, the 
sick, the infirm, the homeless, and the children. And what is the 
government's role as far as the economy is concerned? The government's 
role as far as the economy is to create a structure that stimulates 
economic productivity in the private sector. Support the resolution.
  Mr. STARK. Mr. Chairman, I yield 3 minutes to the gentleman from 
Texas (Mr. Doggett).
  Mr. DOGGETT. Mr. Chairman, if the enemies of America had a plan to 
slowly undermine our country and sap our economic vitality, I think it 
might look a lot like the plan that underlies this resolution. With 
bombs dropping, missiles flying, and America's brave sons and daughters 
in the desert preparing to march against the tyrant, Saddam Hussein, 
the Republican leadership buries its head in the sand, offering a 
budget that does not even include the costs of this war or the 
rebuilding and occupation, which may go on for decades, in a land as 
volatile as the oil beneath it.
  I spent more on a cup of coffee this morning than the Republicans 
have included in this budget for the war--a war that every American is 
watching and praying about and that is unfolding as we speak.

[[Page H2168]]

  Of course, the last Republican to estimate the cost of war, the 
President's top economic adviser, Lawrence Lindsey, was fired for his 
efforts, even though he gave a low-ball figure of a mere $200 billion. 
This represents part of a deliberate strategy by this Administration to 
hide from the American people the true cost in blood, money, and 
insecurity of its reckless, new, preemptive-strike policy.
  The deliberate choice to ignore the war in this budget is similar to 
the President's decision to ignore the last war in the budget he just 
proposed to us. He forgot to include any money for Afghanistan this 
year, absolutely nothing. Yesterday's priority and headlines, are 
today's forgotten footnotes.
  It is not that the Republican leadership is intentionally harming our 
people. It is just that they are so blinded by their rigid ideology and 
lack of new ideas that all they can offer our people in this hour of 
need is more tax breaks for the few. How else can we explain the recent 
declaration of the Republican leader, the gentleman from Texas (Mr. 
DeLay), that ``nothing is more important in the face of war than 
cutting taxes.''
  Today with so many staring death right in the face, is there really 
nothing more important than cutting taxes?
  While our Defense Secretary may deride our traditional allies as 
``old Europe,'' some of us yearn for the old America, an America that 
when it confronted war understood the importance of shared sacrifice 
from all of our people, that did not say to some, go risk your life in 
defense of our country, and to the rest, you risk having to get a 
bigger pocketbook for more tax breaks; an America that did not say, we 
will borrow all of the money from those who pour in their Social 
Security and Medicare tax dollars, we will borrow from them in order to 
grant tax breaks to a few.
  This is a Republican leadership that is AWOL on observing the duty to 
pay for America's needs. It is our children who will suffer from it.
  Mr. RYAN of Wisconsin. Mr. Chairman, I yield 1 minute to the 
gentleman from Indiana (Mr. Chocola).
  Mr. CHOCOLA. Mr. Chairman, today of all days, there is no greater 
priority than protecting Americans, supporting our troops, and 
supporting our Commander in Chief. In the face of unprecedented threats 
to our domestic and international security, this wartime budget ensures 
that we can win the war on terrorism, and at the same time it protects 
our homeland from future challenges by providing for the new Department 
of Homeland Security.
  It also strengthens our economic security. By leaving more money in 
the hands of the people who earn it, we encourage Americans to invest 
in their families and communities, to create jobs and grow the economy.
  Finally, this budget also continues our commitment to our seniors by 
providing for a prescription drug benefit.
  Mr. Chairman, this resolution will defend our Nation. It will grow 
our economy. It will protect our seniors, and it will place our 
Nation's budget back on the path of balance. I urge this House to pass 
this budget resolution.
  Mr. STARK. Mr. Chairman, I yield 2\1/2\ minutes to the gentleman from 
North Dakota (Mr. Pomeroy).
  Mr. POMEROY. Mr. Chairman, I find it very surprising that the leaders 
of the House would schedule this important national debate today during 
the first 24 hours of the Nation's war against Iraq. We should be 
standing in respectful solidarity with the brave men and women carrying 
out this very difficult and dangerous assignment in Iraq.
  Yet the budget before us presents two features that leap out as 
nothing less than bizarre given the military action under way. First, 
nowhere in the budget is there any cost provided for the waging of this 
war or the U.S. taxpayer dollars that will be spent in Iraq when we 
have prevailed, spent to safeguard the democratic transformation of 
Iraq, spent to safeguard the welfare of the Iraqi people. What will it 
cost? $100 billion, $110 billion, $120 billion. Nobody knows. We cannot 
know on the first day of military action, but we all know it is not 
going to be cheap. It will cost, and it will cost a lot. Yet the budget 
plan before us which runs deficits for the next 10 years does not 
reserve a penny for these costs.
  The second aspect of this budget is even worse in light of the 
mission under way in Iraq. $28 billion is cut over the next 10 years 
from the budget of veterans affairs. The ultimate impact will be reduce 
veterans health care services, force cuts in disability benefits for 
those permanently disabled while serving our Nation's military. Today 
we have young men and women with their lives on the line. It is wrong, 
absolutely wrong to cut the health benefits and the disability benefits 
of those that have served our Nation in the military.
  Later today this House is going to consider a resolution of words 
supporting our troops. Support of words will not provide the health 
care our veterans need, fund the disability checks of those forced to 
live with the wounds of battle. Resolutions of support offered while 
imposing cutbacks in veterans benefits and disability benefits ring 
hollow, indeed, and, in fact, represent the most hypocritical act I 
have seen while serving in this Congress. Our Nation's troops deserve 
so much better. Reject those veterans cuts; reject this budget.
  Mr. RYAN of Wisconsin. Mr. Chairman, I yield myself such time as I 
may consume.
  Mr. Chairman, I would like to point out, the veterans budget 
increases in this budget. The discretionary budget increases by 6 
percent; the mandatory budget increases by 7 percent. We increase 
veterans spending in this budget.
  Mr. Chairman, I yield 2 minutes to the gentlewoman from Tennessee 
(Mrs. Blackburn).
  Mrs. BLACKBURN. Mr. Chairman, the gentleman from Washington (Mr. 
McDermott) mentioned Jesus Christ in this budget, and I kind of think 
Jesus Christ would have liked it. In our house we always had a saying, 
if 10 percent was good enough for God, 10 percent ought to be good 
enough for the budget; and this budget is going to save millions of 
Americans billions of dollars over the next 10 years because it puts in 
place a new, lower 10 percent rate, and that is a good thing when we 
leave money in the pockets of American taxpayers.
  Mr. Chairman, I rise to support this budget and am pleased that it 
includes funding for tax relief by the President. Implementation of the 
President's economic growth package would create thousands of jobs and 
reduce taxes for 1.7 million Tennessee taxpayers, many of who are 
family and small business owners. Indeed, it is important to note 
without enacting this package, an additional 1.4 million taxpayers will 
have to pay the alternative minimum tax. This tax was originally 
enacted in the 1960s to preserve fairness in the code; but over the 
last 10 years, this tax has started to affect many middle-class 
families. Over the next 10 years, these families would have to pay more 
than $37 billion in extra taxes. I am sure they will not think that is 
fair, and I am sure they will not be happy with the other side of the 
aisle who are blocking reform because they do not think we can save 
even a penny on a dollar of waste, fraud, and abuse in this budget.
  The President's growth package raises the exemption level of the AMT 
to save these taxpayers from these additional costs. Mr. Chairman, I 
know this House wants to provide tax relief to the families of America, 
especially in this time of economic uncertainty.
  Mr. STARK. Mr. Chairman, I yield 1 minute to the gentlewoman from the 
District of Columbia (Ms. Norton).
  Ms. NORTON. Mr. Chairman, the President and the majority have put us 
on a budgetary equivalent of automatic pilot. No matter what the Nation 
faces in emergencies, wars and ups and downs of the economic cycle, 
only tax cuts for the rich remain stable.
  Denials and delusions have taken over the majority. They now tell us 
that the Bush tax cuts are the only thing that saved us from a worst 
economy. That must be magic then, because the tax cuts have not gone 
into effect, only the rebate has and that ought to be called the 
Democratic tax cut.
  This budget cheats each and every other American except wealthy 
Americans. The only people who have sacrificed for this country since 
September 10, 2001, were those who died in New York and the Pentagon 
and those who are now serving as Reservists abroad.

[[Page H2169]]

  Mr. Chairman, we have to show that we can do more than what this 
administration has done for the last 2 years, which is to give us 2.5 
million jobs lost. We must not approve a budget where the only sacred 
cows are not citizens, seniors or children, but tax cuts for the 
wealthy. Vote for the Democratic alternative.
  Mr. RYAN of Wisconsin. Mr. Chairman, I yield myself such time as I 
may consume.
  Mr. Chairman, the purpose of this hour of debate is dedicated to the 
Joint Economic Committee to talk about the economy, so I would like to 
spend a few moments to do just that.
  Our economy is in trouble. Just in the last month of February, we 
lost 308,000 jobs. That is one of the sharpest drops in recent history. 
The unemployment rate at this time stands at 5.8 percent. While this is 
relatively low by historical standards, it is high by recent history. 
Unemployment was only 4 percent as recently as the year 2000.

                              {time}  1700

  Mr. Chairman, there are three parts of our economy by definition, 
consumption, investment and government spending. Consumption is 
relatively high in this country: retail sales, new refinancings on 
homes, car purchasing. It is why our economy grew at 2.75 percentage 
points last year. Government spending, even though you would not hear 
it from the other side, is at an all-time high. Investment on the other 
hand, Mr. Chairman, has declined in this economy. In fact, investment 
spending in this economy has declined for eight consecutive quarters, 
for 2 years.
  What are we going to do about it? That is an important question, and 
that is a question that is addressed and answered in this budget.
  Mr. Chairman, there are two schools of thought here in Washington. 
One school of thought we are seeing on the other side of the aisle is 
that we just need to spend more money, and that way we will grow the 
economy. Let me review that for a moment here with this chart, and let 
me explain why more government spending does not create jobs.
  Number one, to spend a dollar the government first must tax or borrow 
that dollar from an individual or business. Second, that individual or 
business now has 1 less dollar to spend or invest. Third, the 
government then spends that dollar. But, fourth, there is no net effect 
in economic activity. Government spending goes up by a buck, personal 
private spending goes down by a buck.
  What is the alternative vision to that, Mr. Chairman? The alternative 
vision is to create jobs and promote economic growth by reducing taxes. 
How does that happen? How does this work? Number one, the higher taxes 
are, the less incentive there is to work or invest. It is an economic 
principle that economists from the left and the right agree upon. For 
example, an individual will invest more money when their after-tax 
income on each dollar invested is 80 cents than they would likely 
invest if their after-tax income is 50 cents. Put another way, if half 
of your money goes to taxes, you have less of an incentive to work and 
invest. If more of your money goes into your own pocket, you have a 
higher incentive effect to work and invest. More investment means more 
capital to expand, create businesses and to grow jobs. So new and 
expanded businesses means new jobs. That is why the net effect of 
reducing taxes in this budget will create jobs.
  What kind of tax cuts are we talking about? How many new jobs are we 
looking at? To give you a quick preview of what Americans are looking 
at in the President's economic growth package, in the economic growth 
package that is accommodated in this budget, it is basically this. 
Under the President's proposal to speed up tax relief, 92 million 
American taxpayers would receive, on average, tax cuts of over $1,000 
in this year alone. Forty-six million married couples would receive an 
average tax cut of $1,716. Thirty-four million families with children 
would benefit from an average tax cut of $1,473. Six million single 
women with children would receive an average tax cut of $541. Thirteen 
million elderly taxpayers would receive an average tax cut of $1,384. 
Twenty-three million small business owners would receive tax cuts 
averaging $2,042. For example, a typical family of four with two income 
earners earning a combined $39,000 in income would receive a total of 
$1,100 in tax relief and would wipe out their Federal tax liability.
  Mr. Chairman, how many jobs is this going to create? This is 
something that has been a topic of discussion for quite a while this 
year, and there are a lot of estimates on this point. According to 
conservative estimates by the Council of Economic Advisers, this plan 
will generate 2.1 million jobs over the next 3 years. According to 
other estimates, like the Business Roundtable, they put that figure at 
about 3 million new jobs at the end of the year. Macroeconomic Policy 
Advisers from St. Louis estimates that this economic growth package 
would increase new jobs, create brand new jobs, to the tune of 2 
million new jobs by the end of 2004.
  This is what it is all about, Mr. Chairman. The reason we went into 
deficit is because people went from working and paying taxes to getting 
laid off and collecting unemployment. Sixty-eight percent of the loss 
of the surplus that occurred last year alone occurred because of this. 
We realize more spending is necessary to fight the war on terrorism, to 
win the war in Iraq, but we also realize that if we can get people back 
to work, the most moral economic policy is getting a person a job. It 
is becoming good economic policy, it is good fiscal policy, because if 
a person has a job, they are paying taxes, and they are bringing more 
money to the Federal Government.
  An issue that often comes around when we are talking about the tax 
bill is dividends. I would like to shed some light on why we are trying 
to repeal the double taxation of dividends. It is no secret if you go 
around this country and talk to manufacturers, talk to farmers, talk to 
small business men and women, that we are in global competition, that 
we are under pressure from trade from China, from Mexico, from other 
areas. One area where our Nation is so uncompetitive is in the area of 
taxes. When you take a look at how dividends are taxed, it is done 
basically like this. First a company makes money, and then it pays 
taxes on that money. Then if it wants to share its earnings with its 
owners, its shareholders, it passes that on to its shareholders in the 
form of a dividend. But in this country, that dividend gets taxed 
again. And so we have double taxation on dividends, which actually 
looks at about 60 to 70 percent of every dollar moving through our 
economy.

  To put it another way, Mr. Chairman, we tax dividend income higher 
than any other industrialized country in the world except for Japan. 
Looking at this chart here, which shows us basically a list of all the 
industrialized countries in the world, the United States of America 
taxes dividend income more than any other country except for Japan. I 
would not want to be Japan because they are entering their second 
decade of recession right now.
  What is accomplished by repealing the double taxation on dividends? 
Who benefits? This is a discussion that we have heard a lot. Mostly who 
benefits by repealing the double taxation on dividends are senior 
citizens. Half of all Americans who receive dividend income are senior 
citizens, and half of all seniors in America receive dividends. But 
more than just that. The people who own stocks, half of all households 
in America own shares in the stock market. People who have pension 
plans, people who have 401(k) plans, people who have IRAs will benefit 
from this because by repealing the double tax on dividends, you are 
increasing the after-tax rate of return on investment. What that means 
is you are increasing the value of all equities in the stock market. 
This is why economists from all over the spectrum, liberal and 
conservative, are telling us that if we repeal the double tax on 
dividends, we will increase the value of the stock market by anywhere 
from 7 to 20 percent. Imagine that, a 20 percent increase in the value 
of stock markets.
  Mr. Chairman, we all heard the stories about seniors who have seen 
their savings portfolio wiped out by the losses in the stock market 
that have occurred over the last year or two. We have seen the stories 
where pensioners, where people getting close to retirement have seen 
their retirement go away to the point they have to go back to work or 
work longer than they had

[[Page H2170]]

planned. If we can do something that would actually improve the value 
of people's pension funds, IRAs, the stock market, that would be a good 
thing, I would think.
  And so, Mr. Chairman, that is why it is important to do this kind of 
economic policy. If we repeal the double tax on dividends, not only 
will we help senior citizens, not only will we help revive the stock 
market, not only will we help get people their jobs back and grow the 
economy, but we will also help restore good corporate governance to our 
Nation's corporations.
  One of the reasons why the stock market declined so much in this past 
year is because of all that corporate malfeasance that occurred. One of 
the reasons why we have bad decisionmaking in America's boardrooms is 
because in our Tax Code is an incentive to actually grow your 
corporation through borrowing, through debt financing, rather than 
honestly through equity growth. What I mean when I say that is we give 
companies a tax break if they borrow and borrow and borrow to grow 
their companies. And when we go into tough times, like a recession, 
what happens is these companies go bankrupt. That is one of the reasons 
why WorldCom, Global Crossing and all of these companies went bankrupt. 
But if we give companies an incentive to share the wealth with their 
shareholders, to grow their companies honestly through equity, we can 
strike a blow for good corporate governance.
  For many reasons, this is why this economic growth plan makes sense. 
The most important reason, Mr. Chairman, why we are trying to pass this 
budget is, number one, protect our priorities, win the war on 
terrorism, win the war in Iraq, and get people their jobs back. The 
best way to get this economy growing is to let people keep more of what 
they earn and allow businesses to keep more of what they make.
  One of the other great provisions in this tax bill is the fact that 
we lower the small business tax rate down to the level of large 
corporations. What we do not see that is being offered later in the 
budgets that are the alternative budgets, the Blue Dog budget, the 
Spratt budget, is that they raise taxes. They actually raise taxes on 
small businesses. What we are doing here is recognizing the fact that 
today, this very day, we are taxing small businesses at a higher tax 
rate than we tax large corporations in America. And so what we are 
simply trying to do is lower the tax rates on small businesses, not 
below the tax rate that large corporations pay, but down to the tax 
rate that large corporations pay.
  I urge a ``yes'' vote on this budget, Mr. Chairman.
  Mr. Chairman, I yield back the balance of my time.
  Mr. STARK. Mr. Chairman, I am delighted to yield 2 minutes to the 
distinguished gentleman from Michigan (Mr. Levin), who understands that 
Michigan is going to lose almost $3 billion in funds for SCHIP and 
Medicaid under the Republican budget.
  (Mr. LEVIN asked and was given permission to revise and extend his 
remarks.)
  Mr. LEVIN. Mr. Chairman, we have heard the siren song again, but let 
us look at the facts. First of all, as to veterans, this is undeniable, 
and I want to read it: The reconciliation instructions in the 
Republican plan require $14.6 billion in unspecified reductions in 
veterans' benefits. This $14.6 billion cut represents a cut of 3.8 
percent in mandatory spending below the levels in current law, and we 
are doing this on this day.
  Secondly, as to the income figures, for families with incomes below 
$75,000, they are not going to receive this big boon as stated in terms 
of the dividend tax cut. They will receive an average tax benefit of 
$42. And for the families that are in the middle 20 percent, the 
average is not in the thousands under the tax cut of the Republicans, 
but only $246.
  So what has happened here? A party that once said they had the mantle 
of fiscal responsibility, they are sacrificing that on the altar of 
irresponsible tax cuts; deficits not as far as the eye can see, but 
further than the eye can see. In the long run, all will be hurt except 
the very wealthy as interest rates go up, and, therefore, it impacts on 
our houses and our cars and everything we buy; in the short run, kids 
and their education, veterans, as I mentioned, people who need health 
care, and all of us who need homeland security.
  This is an irresponsible budget and digs a deeper and deeper hole of 
deficits. We have some sound alternatives. Let us vote for them.
  The CHAIRMAN pro tempore (Mr. Duncan). The gentleman from California 
(Mr. Stark) has 1\1/2\ minutes remaining.
  Mr. STARK. Mr. Chairman, before I yield a final minute to the ranking 
member of the Committee on the Budget, I would like to use part of my 
30 seconds to just suggest to the Chair and thank him for his kind and 
considerate presiding this afternoon. I know that could only come from 
a gentleman with whom I served, John Duncan, Sr., for many years the 
ranking member of the Committee on Ways and Means. I always say that 
fruit does not fall very far from the tree. Thank you, Mr. Chairman.
  I am going to leave it to the gentleman from South Carolina (Mr. 
Spratt) with the remaining time to discuss again the tax cut. It is too 
bad we do not talk more about 42 million uninsured Americans and 
children without education and the things that are being buried by this 
recent war talk.
  Mr. Chairman, I yield the balance of my time to the gentleman from 
South Carolina (Mr. Spratt).
  The CHAIRMAN pro tempore. The gentleman from South Carolina (Mr. 
Spratt) is recognized for 1 minute.
  (Mr. SPRATT asked and was given permission to revise and extend his 
remarks.)
  Mr. SPRATT. Mr. Chairman, quickly let me commend to the gentleman's 
reading an excellent piece of work done by the Joint Economic Committee 
staff called an Economic Policy Brief, and in particular to page 8, 
because if you will turn here, we will see that the JEC staff have run 
these same numbers through several established mathematical economic 
models, including two that are used prominently by the White House.
  According to these models, the Democratic alternative will add 1.6 
percentage points to GDP growth in 2003. The Bush alternative, at six 
times the cost, would yield 1.1 percent growth.
  Our proposal would yield or generate 1,122,000 jobs. Theirs, at six 
times the cost, would generate 600,000 jobs.
  If you go down to economy.com, you will find the same results. Our 
proposal generates, according to their model, 1,150,000 jobs for a $138 
billion impact this year; theirs, for $726 billion, generates 640,000 
jobs.