[Congressional Record Volume 149, Number 127 (Tuesday, September 16, 2003)]
[House]
[Pages H8270-H8276]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
THE DEFICIT
The SPEAKER pro tempore (Mr. Kline). Under the Speaker's announced
policy of January 7, 2003, the gentleman from Virginia (Mr. Scott) is
recognized for 60 minutes as the designee of the minority leader.
Mr. SCOTT of Virginia. Mr. Speaker, I want to begin on something we
can all agree on and that is what President Bush said in August at an
August fund-raiser. He said, ``I ran for office to solve problems, not
to pass them on to future Presidents and future generations.''
We can all agree on that, but, unfortunately, the reality is that
instead of paying off the public debt by 2011, as we had projected in
2001, this administration will leave the future generations with a debt
of almost $7 trillion as of 2011.
Now, rather than get into rhetoric and everything, let us just use a
chart so we know exactly what numbers we are talking about. This shows
the deficit year by year from the Johnson administration, Nixon, Ford,
Carter, the deficits that were run up in the Reagan and Bush years, and
also shows the surplus that was generated by the time President Clinton
left office.
Mr. Speaker, in 1993 we passed a budget without any Republican votes.
The Republicans, after those votes were cast, campaigned against that
budget that was passed, and picked up 50 seats in the House and control
of the Senate as a result.
In 1995 after the 1994 election, the Republicans, with control of
Congress, passed a budget with trillions of dollars in tax cuts.
President Clinton vetoed that budget. They threatened to close down the
government. He vetoed the next budget. They closed down the government,
and he vetoed the budget again.
Because he vetoed those budgets, this trend went up until we had a
surplus of almost $100 billion projected for 2001. And that is on
budget. That is without touching the Social Security or Medicare
surplus.
As soon as President Bush came in, he signed the trillion dollar tax
cuts. And, wait a minute, this has $500 billion in deficits. This is
the February
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projection. This has been updated. It is no longer $500 billion. The
latest figure is almost $700 billion in deficit that we will be running
up.
Now, it is important to put $700 billion in perspective because if
you look at the Federal budget and look on the line item revenue,
individual income tax, what we get from the individual income tax in
the Federal budget, it is less than $800 billion. We are running
deficits now of almost $700 billion.
Now, when we run up deficits like this as far as the eye can see, one
can understand how we got from where we were in 2001 to where we are
now. In January 2001, we expected by 2011 to have run up a surplus of
$5.6 trillion, enough to have paid off the national debt. By August of
2001, we had lost over $2 trillion of that surplus, and the surplus was
projected to be $3.4 trillion. Now, most of this is Social Security and
Medicare, because in August of 2001, we had actually spent all of the
cash surplus and most of the Medicare surplus, and were headed into
Social Security by August of 2001, before September 11; by January of
2002, the projected surplus, $1.6 trillion, almost all Social Security
and Medicare surplus, or what was left of it, after we have dipped into
it significantly.
By August of 2002, there is almost no surplus at all, that is, we
have spent the entire Social Security, the entire Medicare surplus for
the entire 10 years. By March of 2003, we are down to an actual deficit
where we have spent all of the Social Security, all of the Medicare,
and then $377 billion. By August of this year, we have gotten into so
much deficit spending that the projected deficit, not surplus, deficit
is over $2 trillion in that same 10-year period.
And what is the solution? The Republican agenda will run this up to
$3.3 trillion unless that agenda is stopped. Mr. Speaker, a $5.6
trillion surplus projected when this administration came in. If their
policies are followed in the next couple of months, $3.3 trillion in
deficit, an almost $9 trillion difference. That $9 trillion, remember,
less than $800 billion a year comes in under individual income tax; $9
trillion is $900 billion a year on average that we have deteriorated in
our budget situation.
Now, as bad as that is, it is actually going to get worse, because
those projections do not include some things that we expect to happen,
like the tax cuts have been sunsetted; the President is expecting us to
remove the sunset so that those tax cuts can continue. Protecting the
middle-class families from the alternative minimum tax, that is the tax
where if you have tax preference, tax cuts for the upper, very high
income, high income, about a couple of percent, about 3 percent of the
public pays the alternative minimum tax. That is, you cannot reduce
your tax that you need to pay but by so much before you have to pay an
alternative minimum tax. The effect of not protecting middle-class
families from this alternative minimum tax will mean that they will
lose the benefit of their child tax credit and many other tax benefits
that they enjoy now. So if we protect them from that, that will cost
even more, going right to the bottom line.
Providing a Medicare prescription drug benefit, all of those numbers,
as bad as they look, do not include the prescription drug benefit that
everybody is promising. It also assumes that we are not going to have
any hurricanes or disasters or floods or earthquakes in the next few
years. So it is going to get worse before it gets better. When we run
up all of those deficits, we run up debt, and we have to pay interest
on that national debt. Here is the interest on the national debt that
we have projected to pay going down towards zero by 2011 or 2013,
because there would be no debt; it would be paid off. Instead, this is
the interest on the national debt that we are projected to pay. And if
we look at the difference between what we have to pay and what we are
going to end up paying, by 2010, that will be $1.6 trillion of
additional interest on the national debt that we are going to have to
spend because we have messed up the budget.
Put another way, these green bars represent the interest on the
national debt that we were going to pay going down towards zero. These
red bars, interest on the national debt that we are going to have to
pay because we have messed up the budget and we have been running up
deficits. This blue bar puts it in perspective. This is the defense
budget. We are going to be spending by 2013 almost as much money in
interest on the national debt as we are going to be paying for national
defense. We get nothing for interest on the national debt. We do not
get a single school book, we do not get a rifle for the military, we
get nothing for interest on the national debt. And instead of zero, we
are going to be spending almost as much on interest on the national
debt as we do for national defense.
Now, to show how the interest on the national debt is affected, right
now, if we take the entire interest on the national debt, divide it by
the population and multiply by 4, we will see that the family of four's
proportional share of interest on the national debt is now about
$4,400. As the interest on the national debt goes up, by 2013, almost
$8,500, a family of four's proportional share of interest on the
national debt.
Now, how did we get there? We got there with tax cuts. And who got
the tax cuts? This is divided up by quintiles, the bottom 20 percent
and what they got out of the tax cuts. The next 20 percent, the middle
20 percent, what they got. The share of the fourth percentile, the top
20 percent, this is what they got. Half of the tax cuts went to the
upper 1 percent.
To put it another way, if you are a millionaire, you got about
$89,000 out of the 2003 tax cut. If you made $500,000 to $1 million,
you get a little less than $20,000, and you can see what you got. Half
the people get less than $100 a year out of the 2003 tax cut.
Now, we were told that we needed to cut taxes to create jobs. The
millionaires got their tax cut; we ran the budget into a deficit in
order to create jobs. And here is the job creation math. Mr. Speaker,
$374 billion in tax cuts through 2003 only, and we are expected, if the
plan works, to create 1.5 million maximum new jobs. That is the
Treasury Department's estimates. We pass all of this stuff, give $374
billion in tax cuts, we can create 1.5 million jobs. That divides out
to almost $250,000 for every job that they are trying to create. Mr.
Speaker, $250,000 they have to work with to create jobs, if it works.
This chart shows the jobs created by administrations going back to
the Truman administration, and it shows that it did not work. This
actually needs to be updated because it says 2.5 million jobs lost. It
is actually closer to 3 million now. If we go back to the Truman
administration, every President is creating jobs. Eisenhower lost
200,000 jobs in his second administration, but he gained 1.9 million in
his first administration. So every President since Truman, more jobs
when they leave office after each administration than when they came
in, except after this administration's budget was adopted.
Now, as we talk about 9-11, let us remember that back to the Truman
administration includes the Korean War, it includes the Vietnam War,
jobs are being created; hostages in Iran, jobs are being created;
Somalia, the entire Cold War, Kosovo, everybody is creating jobs until
this tax plan is adopted.
Now, actually, we should have known, because the Joint Committee on
Taxation evaluated the 2003 tax cut and showed that if you cut those
taxes, now some taxes stimulate the economy better than others. Some
tax cuts stimulate the economy better than others. According to their
analysis, the taxes cut in 2003 would show a short-term spike in jobs;
but depending on which economic model we use, at best, we are going to
end up right back where we started.
{time} 2145
You will probably end up with fewer jobs than you started off with.
This analysis was presented by the Joint Committee on Taxation. It has
a Republican majority. And so we knew when we voted for the 2003 and
2001 tax cuts that we were killing jobs.
Now, when you have all of these deficits and you look at this chart,
and the deficits that are going by, the deficits are the worst that we
have had in American history. Now, there is one thing that the Social
Security crisis is in front of us, and we need to make sure that we
have money for the baby boomers when they retire for Social Security.
Mr. Speaker, I yield to the gentleman from Texas (Mr. Stenholm), who
has
[[Page H8272]]
been a stalwart on fighting for fiscal sanity.
Mr. STENHOLM. Mr. Speaker, I thank the gentleman from Virginia (Mr.
Scott) for yielding to me. I thank him for a very excellent
presentation of the facts.
I know as often we have stood in this floor that I will get calls
from some that have been watching and they will have various different
opinions of what has been said and what the facts are, but let us
relate it to what we are facing tonight, at least many of our fellow
citizens somewhere in the North Carolina area as Hurricane Isabel bears
down on the United States, and we still hope and pray that something
will cause it to veer back out into the ocean. But in the meantime
folks are preparing because they know the devastation that can occur
when a hurricane hits.
In my opinion, we have the makings of the perfect storm in this
country today, 500, now $600 billion deficit as far as the eye can see
and we are ignoring it, $500 billion trade deficit as far as the eye
can see and going up and we are ignoring it.
The baby boomers are set to begin retiring in 2011, and everyone
admits that that will put one of the biggest strains on the economy of
the United States in our history. The gentleman's chart shows it today
and no one argues with that, no one. From the AARP up and down all
admit we have got a problem. And what have we done about that problem?
Zero. Talk about it. But nothing. The makings of the perfect storm. And
every time I make this speech somebody will say, and I have heard this
said, people will stand up and say if only Congress would control
spending.
Well, the first thing I like to do is remind the American people that
my friends on the other side of the aisle have been in charge for the
last 8 years. I make no bones about it. I opposed this administration's
economic game plan when they put it in place in 2001. I stood on the
floor, I stood with the gentleman from Virginia (Mr. Scott) standing,
looked at my friends on the other side and say, I hope you are right. I
hope I am wrong. But I do not believe it has a chance of working. And
in 2002 we said the same thing. In 2003 we say the same thing. But have
we had a change in the economic direction for this country? No. The
hole gets deeper and what do we do? We take another shovel and start
digging. That makes no sense.
Let me put it in proper perspective. Those who say if only we would
control spending, let me give another fact, if we take defense,
military construction off-budget, which we are, exempt from cuts,
because we cannot cut in those areas when we are at war on three
fronts, and we will not cut, and we should not cut. We have got young
men and women's lives at stake tonight and, therefore, we do not wish
to jeopardize them further. Interest on the national debt, we cannot
cut that.
The gentleman's chart shows the debt tax that is going up as the
interest rates continue to spiral. We cannot cut the interest. So if
you take defense and interest off-budget or off-cut it, we can cut 100
percent of the other 11 appropriations bills, 100 percent, not waste,
fraud and abuse, not 1 percent here, cut it all out, zero for the rest
of the government, and we would still run $160 billion deficit next
year.
Now, that is the truth. That is how deeply we have dug the ditch for
the American economy. Now, if it were working, as the gentleman shows
the jobs charts, we have lost 2.7 million jobs. Nothing is working
according to plan, and yet we have those who absolutely refuse to even
consider changing the plan. In fact, they will stand on this floor and
argue over the next several weeks, as they have for the last several
weeks, that we just got to do more of it.
The makings of the perfect storm. Anybody that ignores the power of a
hurricane, anybody that ignores the power of the perfect storm of $500
billion deficit, this next year I will predict based on the
administration's own numbers, the deficit for this country will be
closer to $1 trillion than it will $500 billion, and nobody cares.
Nobody cares that is in charge. It is just more of the same.
I am worried about that. I wish some others would get worried about
that. I thank the gentleman for taking the time tonight. I appreciate
the opportunity to share in it. And I hope that this chart that the
gentleman has right behind him tonight, I hope people will take a look
at that because we can talk about the fiscal deficit, we can talk about
the trade deficit, and they are all real. This one is too. And our
grandchildren will not hold us in very high stead because this Congress
and this administration have refused to address the very real problem
that is facing us. Instead, we keep on with some of the economic bunk
that I saw in the Washington Post by the fellow that is running,
running the economic policy for this country, Mr. Grover Norquist, the
expert, it is his plan and he wants more of it.
Mr. Speaker, I thank the gentleman for yielding to me.
Mr. SCOTT of Virginia. Mr. Speaker, I thank the gentleman from Texas
(Mr. Stenholm). This is the chart he was referring to. We are enjoying
surpluses in Social Security and Medicare, $165 billion projected next
year in surpluses. But by 2017, 2018, that surplus is going to end. The
baby boomers are going to retire, and instead of enjoying a big fat
surplus, in a few years, just a couple of decades, we will have $300
billion deficit in the Social Security Trust Fund. We will be having to
pay out $300 billion more than we are bringing in.
Mr. STENHOLM. Mr. Speaker, remember in the last couple of years how
many times we have stood on this floor and voted to put those numbers
in a lock box, and that was laughed at. But if we would have just done
it, and we did for a couple of years, but we need to be doing it today
because those are obligated funds, those are obligated to the retirees
beginning in 2011, our military retirees, our civil service retirees,
this is money that is obligated that we are again spending on current
operating expenses. And it was a valid criticism and it is still an
accurate statement when our friends on the other side of the aisle will
stand up and say, well, you Democrats did it for 40 years. Well, that
may be true but that is not a reason for us to continue to do it,
because 2011 is a lot closer today than it was 40 years ago, and that
is the problem we face.
Mr. SCOTT of Virginia. Mr. Speaker, I would want to point out as
challenging as this chart looks, we are running up a little surplus,
but we will shortly be into great deficit. And to put some of these
other numbers into perspective, as we indicated, in 2001 we passed a
tax cut that the top 1 percent got half of the value of that tax cut.
Instead of giving the top 1 percent a tax cut, if we had directed that
income flow into the Social Security Trust Fund, just what the top 1
percent got, not what everybody else got, we would have had enough
money to pay Social Security benefits without reducing benefits at all
for 75 years, or the top 1 percent can get a tax cut.
Guess what the majority in Congress voted for? They voted to leave
this problem for another day and voted for a tax cut for the upper 1
percent. Those are the kinds of decisions that are being made and the
kind of decisions that have to be changed.
Mr. Speaker, that is why I am delighted to recognize our friend from
Hawaii who has been a stalwart new Member coming in fighting for budget
sanity, the gentleman from Hawaii (Mr. Case).
Mr. CASE. Mr. Speaker, I thank my colleague for giving me some time
to talk tonight.
Mr. Speaker, I have been privileged to serve in this great House for
about 10 months now and I am thankful that as each day passes that is
one day more of experience that I have under my belt to serve my
constituents and to listen to people that have been through this for so
many years such as the gentleman from Texas (Mr. Stenholm), the
gentleman from Virginia (Mr. Scott) and so many others.
But I have to state that the more time that goes by in terms of my
service in Congress, the more I live in fear that in each one of those
days I am taken a little bit farther away from what the person in my
district thinks. When people sit around their kitchen table at night,
not when they sit here in this Chamber among all of us in this closed
atmosphere, but when they are back in my district of Hawaii, when they
are back in Honoka'a and Ele'ele and Kahului, and when they look over
those 5,000 miles of what is happening here in Washington, D.C. what do
they
[[Page H8273]]
think? And I live in fear that I am falling out of touch with them the
more time that I spend here. And that is really how I feel right now as
I listen to this debate. Because I came into this Congress 10 months
ago thinking, perhaps naively, that there were certain truths that our
Federal Government played by, certain truths about how we handle the
people's money, not just today but down the road. I thought we cared
about decisions that had an impact, not just now, but down the road. I
thought that despite great debate in this Chamber, we actually did care
about being good stewards of the people's money. I thought we were all
in this together, all of us, all of America, all trying to do the right
thing.
It did not occur to me that we were here just to do the bidding of
some. And now as I have listened to my colleagues talk about taxes and
the Federal budget and the deficit for these 10 months, colleagues on
all sides of the aisle, people in the administration, great thinkers, I
see indisputable evidence that what was once on the way to being a
surplus is now a deficit this year in excess of $500 billion, including
the Social Security surplus. We applied that $200 billion already.
Now, I see public debt climbing through the roof, 3.6 and rising. And
as I come to the very slow realization that there is no way whatsoever
under this approach that we will be able to meet those obligations to
Social Security and Medicare when my generation needs it, I have to ask
myself what is going on here? What is really going on? How do I explain
this? How do I go back into Hawaii and say to them this is what is
going on.
I can take disagreement, I can take policy disagreements as long as I
know and understand it. I can go back and say, well, there is a dispute
between us in Congress and they think this and we think that and this
is why. And I can certainly go back and say this is the issue. We all
agree and this is why. But this is the worst situation of all, not
understanding why something is being pursued.
A few months after we passed hundreds of millions of dollars of tax
cuts, we get an obviously underestimated second bill for Iraq and
Afghanistan, and there is no adjustment necessary from the
administration's perspective, $87 billion on top of $60 billion just a
few months ago. But we do not have to adjust our policy on tax cuts. In
fact, we want to add more.
The same week we get the bill I read, I hear that all of the sudden
we have worked out another deal. This time we are going to cut
corporate taxes for corporations that do their work overseas, overseas
corporations. What is going on here?
{time} 2200
I have been wracking my brain for the possibilities. I have heard
that these tax cuts will regenerate the economy, and I think tax cuts
can regenerate the economy under some degree if targeted, but across-
the-board deep tax cuts that deny us the basic ability to fund the core
functions of government upon which an economy is based, do not help
economies.
I have heard the economy is picking up. I have heard in a couple of
days we are all going to be told good news, the economy is picking up.
Guess what? That is already in these figures. We have already assumed 3
percent growth, and by the way, what economy would not pick up if you
gave it a steroid infusion of hundreds of millions of dollars in
government spending on war and domestically and in tax cuts? The
question is not what is going to happen to the economy next week, the
question is what is going to happen to the economy down the road when
we most need it to balance the books on this terrible deficit?
I have heard we have to reduce government. Of course, we have to
reduce government, but by the way, this budget assumes a certain
restriction on government. We are already putting it in, and to reduce
government to the degree that would be necessary to balance the budget,
under this scenario, would mean essentially wiping out all Federal
spending other than military, defense-related, and I have heard the
deficits do not matter. They are here to stay, let us just get used to
them. Does anybody really believe that? People sitting around that
kitchen table sure do not believe it, and I do not believe it.
So what is going on here? Why are we doing what we are doing? I am
forced to conclude what I do not want to. This is not subject to
explanation anywhere in the realm of reasoned thought. There is no
reasonable explanation for this policy, and we have got to cross a
bridge. There is no reasoned explanation. We expect Congress to be
reasoned. This is not reasonable. This is haphazard. This is reckless.
This is not about fiscal responsibility. It is not about economic
theory, and it is not about taking care of the next generation. This is
about helping part of our country now and the heck with the rest of us
and the heck with the future.
It reminds me, just in conclusion, somehow I was thinking about this
steroids thing, and I was remembering that back in the 1960s, when the
Olympic movement suffered from an incredible abuse of substances and
people would inject themselves with all kinds of stuff, and they knew
at the time that by injecting themselves with these steroids and other
substances they knew two things. They knew, number one, it would
enhance their performance for the next 1 or 2 years, and they knew that
down the road it would harm them and they would die early from these
steroids, and some did it and some did not, and why did those people
that do it do it? Because they wanted the gold medal next year, and
they did not care and that is how I feel. That is what I think we are
doing right now. Some people here just want to get through one next
year, and they do not care what happens down the road, and that is
wrong.
We are all responsible. We can sit here and talk about partisan
politics. We can talk about Republicans versus Dems. We can talk about
executive versus legislative branch. We can talk about the States, the
local counties, and by the way, I think that is a useful exercise
because I have heard some State Governors and some local executives who
want to defend these policies say, hey, this will help, and by the way,
they turn around the next day and criticize the fact that we do not
have enough Federal moneys. They are at a loss to figure out how they
are going to balance their State budget, and they say, well, everything
is okay and then they turn around and say on the other hand, it is not
okay, we need your help.
We cannot have it both ways, and I am telling people out there, this
problem is all of ours. We cannot do this alone. We have sat here on
this floor saying all of this for months now, and the Representative
from Texas asked who is listening. I think people are listening, but it
is going to take more than listening. It is going to take the people of
this country saying this is wrong. It is going to take the people of
this country saying, yes, we know, we cannot have it all.
I wish our President would say one thing to me: We need another $87
billion to get ourselves through the next couple of months in Iraq. We
are in a pickle. We have got to get out of that pickle. I need your
help but we all have to kick in. We cannot afford this next round of
tax cuts. We have got to be able to provide for our foreign policy
right now. We cannot have it both ways.
I would believe him and I would support him, but I cannot buy the
current approach of this administration, designed only to get through
another 15 short months, through one more election. That is wrong.
People need to wake up and start speaking out against it.
I thank the gentleman for yielding and appreciate his time.
Mr. SCOTT of Virginia. Mr. Speaker, I would like to ask a question
since the gentleman brought up the issue of the $87 billion for Iraq. I
remember back in the Persian Gulf War where the total cost of the war
was about $60 billion, but because we had international cooperation, we
only had to spend less than $10 billion, $7.4 billion out of that.
We have already had one supplemental already that was supposed to
cover the cost of the war. Now, we are coming back with $87 billion. If
we had had the international cooperation, instead of 87 would we not be
talking closer to 10, and that is a direct result of this foreign
policy?
Mr. CASE. There is no question about it. Certainly, when we did these
budget assumptions just some short months ago, when the administration
[[Page H8274]]
said that the cost would be $60 billion, maybe a little bit more, the
assumption was international cooperation. The assumption was
contribution, military assistance, international monetary policy, all
of those aspects. Those assumptions were shaky. Those assumptions are
part of this $87 billion today and the $87 billion is too low, and the
$87 billion is not in these figures that we are talking about. We are
assuming more for the $87 billion. We are not even factoring in what
might come in the future. This is all part of one ball of wax.
When you run a family budget, you do not take the lowest estimate.
When I project my expenses in my family, yeah, there is a temptation,
sure, there is a tremendous temptation to take the lowest possible
estimate. We all know that that is not responsible. You take a
responsible estimate, you add yourselves a little safety factor, and
then you go on into the future feeling that you have at least covered
reasonable exigencies.
We are not doing that in this budget. We are not doing it, and yet we
are still in trouble. That is the dilemma here. We cannot have it both
ways. We all know it. We just have to wake up to it.
Mr. SCOTT of Virginia. Mr. Speaker, I thank the gentleman for
fighting for fiscal sanity.
At this point, I would yield to the gentleman from North Carolina
(Mr. Price) who has been a stalwart, helping other Members every
Wednesday morning, helps us with the seminar on budgeting and other
important issues. The gentleman from North Carolina has been working
diligently on fiscal sanity, helping us to learn about the budget,
bringing in speakers from the outside and I am delight to yield to the
gentleman from North Carolina (Mr. Price).
Mr. PRICE of North Carolina. Mr. Speaker, I want to thank our
colleague from Virginia for taking out this special order and for
focusing attention again this evening, as he has so often in the past,
on our country's economy and our fiscal meltdown which so threatens
that economy in the future.
I also want to commend the gentleman from Hawaii, who talked very
persuasively about the need to wake up and to speak out and to confront
the situation that we face.
I am sure that I am not alone in the experience I had during the
August work period in the town meetings I held in my District, and
these meetings were held in some blue collar areas. They were held in
some upscale, very affluent suburbs. They were held all over the 4th
District of North Carolina, and I was struck at every one of those
meetings, it was the economy that was the number one item on people's
minds, and so many of those people were unemployed, and they often had
very good training but they talked about having 100 or 200 people
applying for every job they went after, and they talked about friends
and family members and neighbors who are nearing desperation as they
seek for work in this economy.
They ask why are we not doing more to turn this economy around? Is
that not why we count on government to have a sound fiscal policy and
to intervene when the economy needs a boost?
I said to my constituents, I don't have a single, simple answer to
the economy's challenges, but I do know that this economy is in
trouble, and I also know that we could be and should be doing a great
deal more than we are doing to get this economy turned around.
Mr. SCOTT of Virginia. I would ask the gentleman if he noticed that
there is a problem, is the gentleman concerned that this administration
does not even recognize that there is a problem?
Mr. PRICE of North Carolina. Mr. Speaker, I am quite concerned that
the administration does not recognize the problem, but when we look at
the administration's record, we would think the economy would be agenda
item number one with them as well.
The private sector has shed 3.3 million jobs since January 2001 when
President Bush took office. That is the worst record for any President
since the Great Depression. Our long-term unemployment has
almost tripled in this country. Real GDP growth, the growth of the
economy has averaged 1.6 percent. That is the worst performance since
World War II. Real business investment has fallen 10 percent since the
President was inaugurated. That is the worst economic record for any
President since World War II. Our trade gap has increased to almost
$100 billion. Do we need anymore indications that this economy is in
trouble?
We are also running record deficits. The gentleman from Virginia and
others tonight have talked in alarming terms, properly alarming terms,
about the fiscal reversal we have suffered with a $5.6 trillion surplus
in view when the President took office, now going way over $2 trillion
in further debt. That is an almost $9 trillion reversal now, the
largest in our country's history.
We might ask ourself is there any justification for the kind of
deficits that we are running, and I think the answer is no, but we
could at least take some comfort if we thought that we were getting
some economic stimulus for all that deficit spending and for those huge
deficits and the mounting debt, and yet who can say that this medicine
is working. In fact, the evidence is pretty clear that it is not
working.
In fact, the President has picked some of the measures that are least
likely to stimulate the economy, such as the tax cut on dividends, for
example. That produces a grand total of 11 cents for every dollar in
lost revenue in terms of economic stimulus, and he has turned his back
on some of the most effective measures such as the kind of extension of
unemployment benefits that we have typically done in situations like
this. This gives us $1.76 for every dollar we spend in terms of
economic stimulus, and yet he turns his back on that. He champions
these upper-bracket tax cuts. Yet all the analyses show that is one of
the poorest ways to stimulate the economy. So we have the worst of both
worlds.
Mr. SCOTT of Virginia. Mr. Speaker, by that the gentleman means for
every dollar in lost revenue, what effect does that have on the GDP,
and whether or not you actually stimulated the economy, and what did
you say for, if you extend unemployment compensation, for those that
lost their jobs, as we usually do in a recession, end of 26 weeks, we
extend it another 13 weeks just routinely, how much of a stimulus is
that to the economy?
Mr. PRICE of North Carolina. The figure I recall is about $1.76. That
is because people who are in those straits are trying to support their
families and tide themselves over until they can get work. So they are
going to turn around and spend that money immediately.
Mr. SCOTT of Virginia. For every dollar in lost revenue, you
stimulate the economy about a dollar seventy?
Mr. PRICE of North Carolina. That is right.
Mr. SCOTT of Virginia. Mr. Speaker, what did you say about
stimulating the economy by reducing the tax on dividends?
Mr. PRICE of North Carolina. Eleven cents. Eleven cents. That is the
stimulus you get for every dollar of lost revenue.
So there must be some other reason, do you not think, for that tax
cut on dividends and for those tax cuts on the wealthiest people in
this country. For people making over $1 million, tax cuts that average
about $88,000 a year, and yet that money is largely not going to be
used as an economic stimulus.
Mr. SCOTT of Virginia. When you fund the tax cuts with borrowed
money, you have to pay interest on the national debt which is a drag to
the economy.
Mr. PRICE of North Carolina. Absolutely. That is money down a rat
hole as the gentleman very convincingly, maybe did not use quite those
elegant terms, but that is what the gentleman said earlier. That is
money anybody in this body could think of better public and private
uses for than simply interest on the national debt.
So the economy is in sad shape, and we are getting the worst of both
worlds. We are not getting an economic stimulus that is anything like
what we should be getting, and yet we are over the cliff fiscally. We
are undergoing a fiscal reversal that will take us and our children
decades to grow out of.
The unemployment numbers are graphically demonstrated here. The
unemployment rate now from a very, very low figure in early 2001, now
up in the range of 6 percent, hovering here
[[Page H8275]]
for months now, and there are a few scattered economic indicators that
are looking somewhat better, but the term ``jobless recovery'' has
entered the lexicon because there certainly are not many jobs being
produced.
What I heard at my district at every meeting I had in August was that
this is not just an abstract economist estimate. This is something that
is affecting the real lives of real people. They are nearing
desperation, and this actually underestimates the problem because there
are many, many people who have good training, good experience, and yet
they are taking lower-end jobs now that really cut their standard of
living. So it is a tremendous challenge for our country, and one that I
believe this administration barely senses.
{time} 2215
Mr. HOLT. Mr. Speaker, as the gentleman points out, economists are
trying to pull this apart to understand how this perfect storm
occurred. This will be the subject of economic studies for years to
come, but one thing that is already apparent and will be apparent is
this is not something that just happened to America; this was something
that was created. It was created by the budget resolutions of 2001 and
2002 and 2003 and the appropriations and the tax bills that fulfilled
those budget resolutions.
Mr. PRICE of North Carolina. The gentleman is absolutely correct. We
have had an economic downturn that was more severe than expected, and
9-11 and homeland security expenses and expenses associated with the
war on terrorism. Those demands needed to be met, and they will
continue to be met. But the large tax cuts aimed mainly at the upper-
bracket taxpayers, I think that counts as self-inflicted damage. It was
justified 2 years ago because we had surplus money, supposedly, and now
it is being repackaged as a stimulus even though it has very little
stimulative effect. It mocks the idea of self-sacrifice, and that is
the centerpiece of this President's economic policy.
Mr. EMANUEL. Mr. Speaker, I think the deficit has now become the
centerpiece of his economic policy.
If we look at the administration's projection over the next 6 and 7
years, on the deficit going out to the year 2011, they actually borrow
money every year consistently regardless of how big or how small the
deficit will be from the Social Security surplus. Every year that is
done. To mask the size of the deficit, they must borrow from the Social
Security trust fund.
Mr. SCOTT of Virginia. They borrow the Social Security surplus and
the Medicare surplus. And depending on which projections are used, they
are spending substantially more money than that every year, creating
huge deficits and a $9 trillion turnaround, paying off the entire
national deficit, to massive deficits and new debt and new interest on
the national debt for years to come.
Mr. EMANUEL. And the irony is as these deficits mount, tuition costs
are rising 11 to 15 percent annually, and the ability of college
assistance like the Pell grants, which once represented two-thirds of
college cost, today represents less than a third with no ability to
increase that. Health care inflation is running at an average of 15 to
25 percent, and there are no resources to deal with the two most
important factors driving health care costs up, that is, we now have a
record uninsured of 45 million, and we have prescription drug costs
running 15 to 70 percent increases. Those are contributing factors to
the increase in health care inflation. Those two factors in my view are
creating tremendous pressure on the middle class of this country. We do
not have the resources or the means nor a plan to deal with them. The
deficit will tie our hands and tie the Nation's ability to address the
very things that are squeezing on the middle class family's budget.
Mr. HOLT. Mr. Speaker, the deficit ties our hands not in some
theoretical way. This is very real money borrowed, mostly borrowed from
other countries, from other governments and individuals overseas.
I was talking with someone from my district who was proudly telling
me about how much money he is saving for his children's college
education. But what he was not thinking about was how quickly his share
of the national debt was growing. In fact, it turns out it is growing
faster than what he is saving for his children's college education. So
in a very real sense, these self-inflicted wounds, as you described the
budget policies of the past 3 years, are taking this family's college
savings away from them.
Mr. EMANUEL. Mr. Speaker, to add to that point, we have 45 million
uninsured folks in this country with no health insurance. The bulk of
them work. We have a pension crisis and retirement plan crisis where
there are $330 billion in arrears in private retirement plans. We have
college education where families face a choice, take a second mortgage
on their home, or the child is guaranteed to graduate $30,000 to
$40,000 in the hole because they borrowed to go to college. And then we
have the Nation's deficit on top of that which ties our hands and our
ability to meet the needs of middle class families, whether their
parents are retiring, health care needs to their own families and
children, as well as the education of their children.
I believe that the deficit if we look at how it grows over a period
of time is actually a ticking time bomb underneath Social Security and
Medicare. In the immediate time, we are not able to afford the basic
services and needs that our government provides in helping families
meet the dreams that they have for their children, providing health
care and education so they too can do what their parents have done and
build a better future for their children.
So the deficit, although sometimes we want to ridicule it and people
call it an abstract thing, people understand the consequences of the
deficit as they try to do what they try to do for their own family and
children. They cannot afford their health care and college education;
and they are scared out of their wits when they come to retire, neither
Social Security nor the plan they thought they had through their
employer will be there. I think people understand that the deficit is
in fact damaging the ability of both their government today and their
own plans for tomorrow to be met.
Mr. PRICE of North Carolina. And people certainly understand when the
claim is made that the deficit spending is for economic recovery. They
are very quick to see the hollowness of that promise because it clearly
is not having that effect. In fact, it is deepening our problems. It
has an impact on long-term interest rates.
Mr. EMANUEL. Mr. Speaker, in 2\1/2\ years, we have added $2.5
trillion to the Nation's debt and 2.5 million Americans have lost their
jobs. As Ronald Reagan used to say, facts are a stubborn thing, quoting
former President John Adams. In the short order of 2\1/2\ years, 2.5
million Americans have lost their jobs, 45 million Americans are
without health insurance. $1 trillion worth of corporate assets have
been foreclosed on, and 2 million Americans have come out of the middle
class to poverty, and we have added $2.5 trillion to the Nation's
deficit. A record like that is starting to give mismanagement a bad
name.
Mr. HOLT. Mr. Speaker, a newspaper article put this in perspective
for me. The writer pointed out when the President went before the
American public a week ago to say that he would be asking for $87
billion this year to pay for rebuilding Iraq and Afghanistan, and that
would require some sacrifice, the writer pointed out that those who are
being asked to make the sacrifice did not hear the President because
they had already been put to bed by their parents. It is those children
who will bear that burden, who will be asked to make that sacrifice and
not just for rebuilding Iraq and Afghanistan; it is for this multi-
trillion tax cut to one segment of our society.
Mr. EMANUEL. It is interesting that the President's request for
rebuilding Iraq has a $2 billion request for Iraq's electric grid, and
it was America with the blackout. In our energy bill, we say we do not
have the money to invest in our own electric grid.
Mr. PRICE of North Carolina. Mr. Speaker, this did not have to be.
There are historical examples of other kinds of leadership. This chart
indicates where we have been with the deficit and for a brief couple of
years the surplus in this country as a result of some courageous
decisions that were taken
[[Page H8276]]
in this body and by the first President Bush who displayed leadership
qualities which unfortunately seem to be missing at the White House
right now.
There was a budget agreement in 1990 concluded on bipartisan terms,
and then a budget passed entirely with Democratic votes in 1993; the
economy responded positively to that discipline and it thrived in the
1990s, and we got out of deficit spending and ran $400 billion in
surpluses and paid off a chunk of that national debt. Just think what
would be the case if we could have continued on that path.
Mr. SCOTT of Virginia. Mr. Speaker, the projection was by 2011 and
2013, we would have paid off the entire national debt and had no
interest on the national debt to pay year after year.
Mr. HOLT. I seem to recall standing here on the floor with the
gentleman from Virginia (Mr. Scott) and the gentleman from North
Carolina (Mr. Price) 3 years ago saying that the majority should not be
so quick to spend this surplus. They began salivating at the sight of
this projected surplus. I recall my friends here saying number one, it
is projected; number two, things happen. We should not spend it all
down. We should not give it all back in tax cuts; there might be some
unforeseen events. Well, indeed there were. It happened on September
11; it happened with a stock market bubble popping. We were caught
unprepared because the budget allowed absolutely no leeway. It was
built on the most optimistic of circumstances and predictions, as well
as, I would say, the greediest of ingredients.
Mr. PRICE of North Carolina. Just to add to the gentleman's thought,
we got off of a disciplined path toward debt reduction. Whatever else
we did in the way of new investments or tax cuts, we certainly should
have reserved a certain amount of that anticipated revenue to protect
Social Security in the future and to protect ourselves against exactly
the kind of eventuality we are now facing.
I thank the gentleman from Virginia (Mr. Scott) for a helpful
discussion. As we face this $87 billion supplemental appropriations
request, of course, we will do the right thing by our troops in Iraq
and Afghanistan and meet our international obligations, but we will and
we should ask some tough questions of this administration for an
accounting of where we have been thus far and where we are going, and
above all, how we are going to pay for this and how this fits in with
the overall fiscal health of the country we love.
Mr. HOLT. The gentleman from Hawaii (Mr. Case) said it very well, it
would be easier for us to deal with this with the $87 billion, with all
of the economic problems facing us, if the leadership here and the
leadership down the avenue would level with the American people about
how this happened. I think that is what the American people ask, is
that their leaders level with them and not just go on as we go further
into debt have the leadership say and now we need tax cuts more than
ever. I thank the gentleman from Virginia (Mr. Scott) for this very
useful discussion.
Mr. SCOTT of Virginia. Mr. Speaker, I want to end with this chart
that reminds people of the hole that we have dug ourselves into. And
when people ask what is the Democratic plan, I just point to the green
because that was done without any Republican assistance, and here we
are right now. As we look at how dire this situation is, we have to
look forward to the Social Security situation where we will not enjoy a
nice surplus year after year. We are going to have a challenge of
deficits in the Social Security plan that we could have covered with
just what the 1 percent got in the 2001, not the 2003, not what
everybody got, but the top 1 percent got in 2001 would have been more
than enough to cover all of this deficit. But we have a challenge with
Social Security, and we are going in the wrong direction. I thank all
Members that participated tonight because we have to remind people how
bad a situation it is.
{time} 2230
We can change directions as we did in 1993 and go back to fiscal
sanity, go back and do a surplus, pay off the national debt, or we can
continue in the direction we are going now. We will make those
decisions in the upcoming weeks. I thank the gentlemen for
participating.
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