[Congressional Record Volume 150, Number 70 (Tuesday, May 18, 2004)]
[House]
[Pages H3162-H3168]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




MOTION TO INSTRUCT CONFEREES ON S. CON. RES. 95, CONCURRENT RESOLUTION 
                   ON THE BUDGET FOR FISCAL YEAR 2005

  Mr. STENHOLM. Mr. Speaker, I offer a motion to instruct.
  The SPEAKER pro tempore (Mr. Bonner). The Clerk will report the 
motion.
  The Clerk read as follows:
       Mr. Stenholm of Texas moves that the managers on the part 
     of the House at the conference on the disagreeing votes of 
     the two Houses on the House amendment to the concurrent 
     resolution S. Con. Res. 95 be instructed, within the scope of 
     the conference, to reject provisions that provide for an 
     increase in the statutory debt limit.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Texas (Mr. Stenholm) and the gentleman from Iowa (Mr. Nussle) each will 
control 30 minutes.
  The Chair recognizes the gentleman from Texas (Mr. Stenholm).
  Mr. STENHOLM. Mr. Speaker, I yield myself such time as I may consume.
  This instruction is pretty simple. The effect of this motion would be 
to call on the House and the Senate to have a full and open debate and 
vote on increasing the debt limit, instead of using the budget 
resolution to avoid a debate on increasing our Nation's debt limit.
  Under House rules, passage of the budget resolution conference report 
would deem that the House had passed separate legislation increasing 
the debt limit upon passage of the budget resolution, without a 
separate vote or opportunity for debate or amendments on the issue. 
Republicans were highly critical of this rule when the House of 
Representatives was under Democratic control and repealed it in 1997, 
but have revised it now that the national debt is growing at a record 
pace.
  As a result of the Hastert rule, passage of the budget resolution 
conference report in the House and Senate would automatically approve a 
$700 billion increase in the debt limit to increase our Nation's debt 
limit to more than $8 trillion, without a separate vote and at least 
discussion, which we at least will have tonight.
  Last year, the Republican leadership slipped through a $984 billion 
increase in the debt limit, the largest increase in the debt limit in 
the history of our country without an up-and-down vote. This came less 
than 8 months after we raised the Federal debt ceiling by a whopping 
$450 billion, and now the House leadership is trying to slip through 
another $700 billion increase in the debt limit without any debate.
  That is wrong. In this, the people's House, the House of 
Representatives, we should be discussing and debating this issue of 
major significance.
  The national debt has increased by $670 billion over the last 12 
months and $1.5 trillion over the last 3 years. The Congressional 
Budget Office projects that the national debt will exceed $10 trillion 
in just over 4 years under our current budget policies, which the 
majority in this body say we will not change.
  Congress should have a full and open debate and vote, up or down, on 
increasing our national debt limit above $8 trillion. It would be 
irresponsible to use parliamentary maneuvers to slip an increase in the 
debt limit into law without addressing the fiscal problems highlighted 
by the need to increase the debt limit.
  If my Republican colleagues honestly believe that tax cuts with 
borrowed money is good economic policy, if my Republican colleagues 
believe that three wars and three tax cuts, soon to be four, is good 
economic policy, then my colleagues should have the courage to stand up 
and vote and tell the American people, We are going to increase our 
credit card limit in order to make room for that economic policy.
  Just like credit card spending limits serve as tools to force 
families to examine their household budgets, the debt limit reminds 
Congress and the President to evaluate and sometimes reevaluate our 
budget policies.
  It has been very frustrating for me, constantly and consistently with 
my majority friends, seeing no willingness to take another look at the 
economic policy we are under. Just borrow the money and keep on 
trucking and explain it away.
  Any farmer or small businessman who needs an extension of their 
credit must work with the bank to reestablish a financial plan in order 
to get approval from the bank. We should be following that principle by 
working on putting our budget back in order before we vote to raise our 
credit limit.
  One of the things Congress should consider as part of the full and 
open debate we are calling for when we increase the debt limit is 
reinstating budget enforcement rules which make it harder to pass 
legislation which puts us further into debt; and tonight, my hat is off 
to our fiscally responsible Senators, the ``fiscal four'' in the other 
body that are holding forth, that are saying to the Senate and to this 
House, who are not listening, we will not vote for a budget that does 
not reinstate pay-as-you-go rules.
  Pay-as-you-go was good in 1990 when I worked with the then-minority 
in passing it. Pay-as-you-go was good in 1997 when the Republicans had 
taken over this body and some of us voted with my colleagues. In fact, 
without us, they could not have passed it. We said pay-as-you-go was a 
good budget enforcement tactic.
  I see the chairman of the Committee on the Budget is here tonight, 
and I will ask him right now, what is it

[[Page H3163]]

about today that is different from 1997? Why does my colleague believe 
that putting some little persuasion into this body to, in fact, be a 
little bit more restrained on our fiscal policy, rather than just 
borrowing and spending at the rate we are going, what is it that has 
changed?
  Again, my hat is off to our friends in the Senate, the courageous 
four, Senator Snowe, Senator Collins, Senator McCain and Senator 
Nelson. This is one House Member that appreciates them continuing to 
hold out for fiscal responsibility.
  They were agreed to by a majority of this House in 1997, but for some 
strange reason, the leadership in this House today says, what we did in 
1997 does not count. It is what we are doing today that counts.
  But we hope they hold forth, and I appreciate very much the 
opportunity to at least discuss tonight and not trying to hide it in 
some budget resolution that we are going to increase our debt ceiling 
to $8 trillion, almost $100 billion. And we are going to hide it 
instead of discussing it and debating it, but we will tonight, we will 
discuss and debate it.
  Mr. Speaker, I reserve the balance of my time.
  Mr. NUSSLE. Mr. Speaker, I rise in opposition to the motion to 
instruct, and I yield myself as much time as I may consume.
  Mr. Speaker, let me, through the Speaker, make it very clear to the 
people who are watching around the United States and around the world 
that maintaining the credit of the United States is one of the most 
important leadership and governing principles that must be adhered to.
  I certainly understand why there will be Members who come to the 
floor who want to shake the markets, who want to suggest to people that 
maybe our credit is not good, who want to talk down the economy, want 
to provide some fear in the marketplace about what exactly will happen 
to our debt, but I just want to make it very clear that that will not 
be the principle of the governing party and the majority. There has 
never been a doubt that the United States will pay its debts when they 
are due. We have never defaulted on our loans, regardless of who was 
the party in control.
  As a result, our creditworthiness is second to none. We have a very 
low borrowing cost, and as a result, we waste very little tax dollars 
on interest now, particularly compared to historic highs.
  Without increasing the debt limit in a timely manner, the Department 
of Treasury would have to jump through a myriad of hoops to reallocate 
funds to ensure debts are paid. This is a completely unnecessary and 
ridiculous waste of their resources, and it is an unnecessary signal to 
the markets.
  So there will be people who come to the floor, and they unfortunately 
did it all day today. I heard friends of mine from the other side who 
came to the floor today with hope in their voice that the economy was 
going to get worse, that the marketplace was going to be shaken, that 
there was going to be negativity out there about the economy. They may 
want to talk it down. They may want to try and scare people about the 
future, but as I say and make it clear, our country has never 
defaulted. We will not at this time.
  No one is trying to hide anything. I mean, my gosh, it is 8 o'clock 
on the East Coast. My constituents are watching, 7 o'clock in Iowa and 
in Texas. I believe that makes it Mountain Time; it is 6 o'clock, and 5 
o'clock in California. No one is hiding. We are all here talking about 
the debt. So no one is hiding.
  The Gephardt rule, as it is called, kind of an interesting name, does 
not hide anything. It makes it very clear that when we pass a budget, 
we extend the debt in order to cover that fiscal policy; and I want to 
make that sure to our marketplace and to the people that are watching. 
Our credit is secure; The full faith and credit of the United States is 
secure.
  So while tonight, for approximately an hour, we will hear negativity, 
we will hear talking down the economy, we will hear hoping that things 
get worse, let me just suggest to my colleagues that things are 
actually getting a little better, and that is good news.
  We are better off than we were 4 years ago. That will continue as we 
continue to climb out of the Clinton recession that was inherited in 
the year 2000.
  We did exactly the right thing at the right time to get the economy 
back on its feet, and we have seen the strongest growth in our economy 
over 20 years as a result. People are going back to work. There are now 
more people working in our country than at any time in American 
history.
  Sure, more people need to go back to work. Sure, we want to create 
more jobs. Yes, we want more entrepreneurs, but please do not allow 
those who are talking down the economy, wringing their hands, hoping 
people will be negative, we believe, toward the future, for probably 
some political purpose.
  Do not allow that to shake your confidence in the United States, 
because what we are doing here is far more important than the 
unfortunate politics that seem to be taking over the floor these days 
as we move closer and closer to November.
  So maintaining our credit has always been first and foremost for a 
fiscal policy, and we will do that again as a governing majority.
  Mr. Speaker, I reserve the balance of my time.
  Mr. STENHOLM. Mr. Speaker, I yield myself, again, such time as I may 
consume.
  I am very disappointed in my friend from Iowa for once again taking 
the political line. I was not talking down the economy of the United 
States. Nothing that I said had anything to do with what my colleague 
just said.
  All we are saying is, we ought to have a legitimate discussion as to 
the effect of the economic policies that we are, in fact, enforcing 
with the gentleman's vote time after time after time.
  I am not here tonight to talk down anything. I hope the economy booms 
as a result of my colleague's policy, and we are seeing signs that it 
is making progress. That is good and I rejoice in that.
  All we are suggesting, though, is, and if my colleague would agree 
and join with me in putting PAYGO back as he did in 1997, we could have 
a budget agreement, bipartisanly supported at the drop of hat. But for 
some strange reason, the majority is saying no, we will not do it, even 
less than what we did in 1997 in putting in some enforcement.

                              {time}  2000

  Because you blindly believe that we can fight three wars and have a 
tax cut a week and that somehow, some way, we are going to be able to 
borrow this money into infinity. I respect your right to believe that. 
I do not. I do not.
  And I believe very strongly we should put some rules back that we 
used to have bipartisan support on, and which the chairman, the 
gentleman from Iowa (Mr. Nussle), and I used to vote together on but 
tonight we seem to be apart on. That is what is puzzling to me.
  Mr. Speaker, I yield such time as he may consume to the gentleman 
from Tennessee (Mr. Tanner).
  Mr. TANNER. Mr. Speaker, I thank the gentleman for yielding me this 
time.
  As I said last week, when we were debating yet another unpaid-for 
bill here on the floor, I do not believe the people of this country 
realize just how bad things are financially. My friend from Iowa said 
things are getting better. The governing majority here in the House 
took credit for balancing the budget when President Clinton was in the 
White House, and since the time that President Bush took the oath of 
office, they have set out on a fiscal plan that has so far borrowed 
$1.1 billion a day every day that we have had a one-party government in 
this country. With this debt increase, that figure is going to move to 
$1.7 billion a day.
  So far this fiscal year, the government, the governing majority here, 
has borrowed and we have paid interest on, or so far this year we have 
paid interest of $100 billion in the 7 months of this fiscal year. That 
is $14 billion a month, $475 million a day, and $20 million an hour. We 
will have paid interest, by the time this debate is over, of $20 
million. We, me, them, him, our children, our grandchildren are paying 
$330,000 a minute in interest just now. Right now, since I started 
talking, we have been writing checks of almost

[[Page H3164]]

$330,000, or $5,500 a second. The United States Treasury each day 
prints currency with a total face value of about $696 million. At that 
rate it would take 10,201 days, or 28 years, just to print enough money 
to pay off the national debt.
  The gentleman was talking about the United States' full faith and 
credit. That is true. And I, to my knowledge, have, although 
protesting, have voted for this country not to renege on its credit. 
That would be a worldwide financial catastrophe. But we cannot continue 
on the path we are going. Most economists now say that we are in a 
structural deficit. This has nothing to do with recession. That is a 
cyclical deficit, and one that gets one by when things go bad. We are 
now in a structural deficit.
  The reason we are in a structural deficit is because we have simply 
done this: we have cut revenue, increased spending, albeit most of it 
necessary, and borrowed it all. If it were not for the fact that this 
is a structural deficit, one might make an argument that this is good 
economic policy. But if one believes, as most reputable economists do, 
that we are in a situation that we are going to borrow into perpetuity, 
as a famous economist, Herbert Stein, said, ``What can't go on forever 
won't.''
  There will be a day, and I do not know who the poor souls will be 
that will have to face it, but there will come a day when we cannot 
continue to borrow money because people will not buy our paper when 
they do not have the confidence in our economy and do not have the 
confidence in this Nation to make good on their borrowings.
  Last year, we borrowed $370 billion. That was the deficit. This year, 
it is expected to be $500 billion. Nobody in this country has been 
asked to do anything in order to address this issue except the men and 
women in uniform who we sent overseas to fight for us. And what we are 
doing here in Congress is borrowing all the money and giving them the 
bill for it, plus interest. Now, if that is good financial policy, 
well, I have a different view.
  If it was only borrowing money that we owed to each other, one, 
again, might make an argument that this is a matter of bookkeeping, but 
that is not the case. I just have the most recent figures about how 
much of our national deficit, how much of our borrowings are being 
financed by foreign interests. The Japanese, just last month, increased 
their holdings of our paper by $32 billion. Said another way, we 
borrowed $32 billion from the Japanese last month to finance this 
deficit that these young people are going to have to pay, and they are 
going to have to pay it with interest. The Japanese now own over $639 
billion worth of our paper.
  The United Kingdom increased their holding of our debt by some $16 
billion just in 1 month. Mainland China increased their holding of our 
paper by $4 billion. They now own almost $150 billion. And you put that 
with Hong Kong, another 60, they own over $200 billion.
  This list, Mr. Speaker, is mammoth. It goes on and on. We are putting 
this country in hock to the rest of the world by allowing these 
deficits to continue to run amuck.
  I contend that this is a national security issue, and the reason I 
say that is because of something my grandfather told me many years ago 
when he was in the banking business. He said it is easier to foreclose 
on a man's house than it is to shoot your way in the front door.
  We do not have to worry as much as we did because we have spent a lot 
of money in a bipartisan manner on our national defense. But we have to 
worry about our financial future, I contend, because with 
this unbelievable increase in the holdings of our debt by foreign 
countries, now 37 percent of the full $1 trillion or so that we owe, 
foreign interests own 37 percent of that. Of the $1.7 trillion that is 
owned by foreigners, central banks, that is governments and other 
public entities abroad, hold almost $1 trillion of that.

  Now, there will come a day, and again I hate to talk about this but 
this is a national security matter, there will come a day when they do 
not see things as we do in the world, and there will come a day when 
they will either threaten to call their note when it comes due and 
insist on payment of this principal amount or threaten to dump it on 
the market. In either case, we are faced with severe consequences as a 
Nation.
  I contend that if this keeps going like it is going, that there will 
be a time in the near future, not the long-term future, that we will be 
unable to act in the best interest of this country if we are so 
beholding to a foreign government, be it an Asian government or the 
OPEC countries. OPEC, for example, owns $45 billion worth of our debt. 
If they insisted on being paid when their notes come due, we would have 
to borrow that. And in order to borrow that, we will have to pay more 
and more interest as we continue to put the financial balance sheet of 
this country in less and less of a favorable light in the international 
financial community.
  I was reading the London Financial Times the other day about it, and 
the people in Europe are very concerned about what we are doing in 
America. They are concerned because they know that we, as the leading 
economic power in the world, or were, that we cannot continue on this 
course. And this business of deeming the debt increase by a budget 
resolution is really a sleight of hand. It is a way for us to avoid 
facing up to the fact that we are continuing to go in debt, we are 
continuing to borrow money that we do not have, and that we do not have 
the intestinal fortitude to either raise money by asking people to pay 
taxes or cut spending. One has to do one or the other.
  What my friend from Texas was talking about with regard to PAYGO is 
nothing more than saying, look, if you are going to spend money or 
reduce revenue, find some way to offset it. It is as simple as that. 
And all of us who have budgets in our family households know that when 
we get either a pay cut or our expenses are outrunning what our income 
is, we have to do one or the other. We have to get either more income 
or we have to cut our expenses, wherever we may find a place to cut 
them. This Congress is not facing that.
  This Congress is not leveling with the American people to the extent 
that I believe is just not only good public policy but is the moral 
thing to do, and that is to tell people we cannot continue to borrow 
money in the name of the American people and borrow it not only from 
ourselves but now from foreign governments. That is a recipe for 
disaster. There is going to be a financial Armageddon if we do not 
figure out a better way to do things around here than to deem the debt 
ceiling raised by some budget resolution.
  Nobody is talking about the economy. I am with the gentleman from 
Texas (Mr. Stenholm). I hope our economy booms. But most reputable 
economists now say that we are borrowing money so fast, with this 
underlying debt that is so huge, that no matter what we do the economy 
cannot catch up to the amount of debt that we are piling on it. Said 
another way, our debt acceleration curve is going up faster than the 
economy can expand to catch it.
  That is not a hard concept to figure. And once one gets that in one's 
mind, one realizes very quickly that if we were in an airplane, we 
would be in a death spiral. We have to do something different, or we 
are going to hit the ground. This is nothing more than common sense, 
and I just wish that the chairman of the Committee on the Budget would 
join us and say forthrightly to his colleagues and to anyone who will 
listen that we cannot continue down this path that is only going to get 
worse with the baby boomers coming on and with the things we know we 
have to face with regard to national defense and the war in 
Afghanistan, the war in Iraq, and the war on terrorism.
  We simply cannot continue to borrow like we have been borrowing. This 
$1.1 billion a day every day is going to go, if this passes, to $1.7 
billion a day, in the last 4 years. Look, let me just say that in July 
of 2002, the debt ceiling in this country was raised some $400-plus 
billion. We ran through that in less than 1 year. On Memorial Day 
weekend last year, 2003, we raised the debt ceiling $980 billion. It is 
estimated that we will hit that ceiling sometime in August or the 
September time frame.
  Now, when one is borrowing $1 trillion in a little over a year, that 
is an unsustainable financial course for this country. Our economy is 
not infinite. Our economy can only stand so much debt, just like my 
household can only stand so much debt for my house or my cars or for 
whatever I choose to buy.

[[Page H3165]]

And once we get past a certain point, we are unable, credit card debt, 
whatever, we are unable to do anything more than the minimum.
  When we reach that point, and any of these foreign interests call on 
us for payment, then we are going to have to go to the world community 
and refinance it. And when we do, it is going to be a financial 
calamity for this country and for all of us who live in it.

                              {time}  2015

  That is why we are here tonight, not because of any politics. I was 
talking about this, as was the gentleman from Texas (Mr. Stenholm), 
when the Democrats had the House and Senate, when the Democrats had the 
White House; it does not matter. There is only one financial balance 
sheet in this country, and that financial balance sheet is hemorrhaging 
every day over a billion dollars, and somebody has to face up to it. 
The fact of the matter is that this is a one-government town, and if 
they do not face up to it, it will not be addressed. Every day that 
goes by, it only gets worse, not better.
  If we do this, we are going to go from an average borrowing of $1.1 
billion a day since 2001 to an average borrowing of $1.7 billion a day. 
The interest we are paying is going to consume all of the available 
revenue coming in, so there will not be moneys available for health 
care in this country, there will not be moneys available for an 
investment in human capital called education, there will not be moneys 
available for anything except writing interest checks to people all 
over the world.
  That is really a tragedy for this country, if it comes to that.
  I would just plead tonight that using this budget, and I know it has 
been done before, but using that to raise the debt ceiling without an 
honest debate on our economic policy with respect to revenue and 
expenditures of the Federal Government is really a dodge. I do not 
think that is something we ought to be doing, I do not think, 
certainly, in the short term and, God forbid, the long-term interests 
of our country.
  Mr. NUSSLE. Mr. Speaker, I yield myself such time as I may consume.
  I just ask the question: What is your solution?
  It is an interesting speech. So does that mean we do not increase the 
debt limit? I understand that the other side does not want me to 
comment on the fact that someone is talking down the economy or talking 
about fiscal calamity or things like that to scare the marketplace, but 
the gentleman said all those things. I assume the gentleman means, do 
not pass a debt limit, or maybe the gentleman has another solution.
  Mr. TANNER. Mr. Speaker, will the gentleman yield?
  Mr. NUSSLE. I yield to the gentleman from Tennessee.
  Mr. TANNER. No, Mr. Speaker, I did not say, do not pass a debt limit. 
I said it would be a financial calamity if we did not.
  Mr. NUSSLE. I would continue to yield to the gentleman if he has a 
solution as to what we should do.
  Mr. TANNER. We had a Blue Dog budget.
  Mr. NUSSLE. Mr. Speaker, reclaiming my time, so the Blue Dog budget 
is your solution?
  Mr. TANNER. It is one of them. It is not ``the'' solution. There is 
not ``a'' solution tonight that we can do. But I can say this: What we 
are doing is unsustainable financially.
  It does not do any good to question me. I do not have any votes. When 
the gentleman talks about spending, the Democrats have not spent any 
money in this place for 10 years because we do not have any votes.
  Mr. NUSSLE. Mr. Speaker, reclaiming my time, and to correct the 
record, I would just get the Congressional Record out and show all of 
the votes and show the bipartisan support for a number of spending 
bills over the last 10 years, huge bipartisan support for all 13 
appropriations bills, for the emergency supplementals, for the war with 
Iraq, to support our troops, which press release after press release 
after press release goes out claiming credit for the spending on the 
other side.
  My guess is even the gentleman from Tennessee (Mr. Tanner) probably 
has put out one or two of those press releases, as most Members do.
  Having said that, this is not the same as a family budget during 
periods of relative calm where dad and mom are working and there is no 
particular problem within the family. What we have here is a situation 
where the roof collapsed and where dad lost his job, and what you are 
telling that family is they cannot go borrow money?
  Everybody knows in an emergency situation like that, when a family 
faces that kind of financial difficulty, one of their options has to be 
to be able to go borrow money.
  Let us review the bidding here. We had a balanced budget on September 
10, 2001. Remember those good old days. We had a balanced budget. 
Everybody took credit for it. Trust me, it was not just the Republican 
side of the aisle that took credit for it. I remember all sorts of 
credit that was being taken.
  But what did that balanced budget get us? Did it protect our country 
that day? Did it keep us out of a recession? Did it make sure that we 
had good intelligence about what was coming the very next day? No, it 
did not. We had a deficit for our defense, we had a deficit for our 
intelligence, we had a deficit in homeland security, we had a deficit 
for growth in our economy. And, yes, we had a balanced budget, but we 
were running deficits all across the board in a number of areas. That 
was the legacy that Bill Clinton, the President, left us after he left 
office. That was the legacy of deficits even though, yes, the books 
balanced.
  Well, the Soviet Union had a balanced budget, and it did not mean 
they were doing very well with regard to their future.
  A balanced budget is an important indicator, and it is one that the 
gentleman and I support, but it is not the only indicator, particularly 
when we know within 24 hours of celebrating a balanced budget on 
September 10, we were hit with one of the worst attacks this country 
has ever seen, and where that was a gut punch to the economy that took 
us just till now to recover, and we are still recovering and hope to 
continue to recover.
  That is the exact wrong time to ask those people who are working hard 
for more tax money. Instead, it is time to limit spending, which is 
exactly what our budget did. Unfortunately, the other side, in a number 
of budgets, offered a different approach. Most of them offered spending 
increases. Yours did not, but all of them offered major tax increases 
at a time that we felt was not the right time for our economic 
situation.
  It was not the time to ask those families, those small businesses, 
those parents with children, those married couples, to dig deeper in 
their pockets, but rather we should find the fortitude here to freeze 
the budget; and that is exactly what we are going to propose in the 
budget as it comes to the floor. We believe that it takes more than 
just rhetoric to solve this problem.
  I understand the other side of the aisle has the right to come to the 
floor and to offer motions to instruct. But again the solution is not 
found within this motion. The solution is found within a budget that 
gets majority support and actually does the job of controlling 
spending, growing the economy, and protecting our country. That is the 
reason we have chosen the budget that we have; and we believe, as a 
result, we will get back on good footing and get back to a balanced 
budget in near time.
  Mr. STENHOLM. Mr. Speaker, I yield 1 minute to the gentleman from 
Tennessee (Mr. Tanner) for purposes of a response.
  Mr. TANNER. Mr. Speaker, maybe I did not make myself clear. What the 
gentleman from Iowa (Mr. Nussle) is talking about is a situational 
budget deficit. What most economists are saying now is we are in a 
structural deficit. That is a huge difference.
  If the roof falls in, sure you have to borrow money, but that is a 
temporary thing. We are not in a temporary deficit situation. We are in 
a perpetual deficit situation, a structural deficit situation.
  I might tell the gentleman, after September 11, there has not been 
one single adjustment, as far as I know, in your economic game plan 
that you put in place in April of 2001. In fact, you made it worse. You 
started in April 2001, because we had a surplus, with, Let us give the 
people their money back. That was fine, except it was all based on a 
projection of surplus, and the money was not yet here. And you have not 
changed anything.
  Circumstances have changed dramatically. We are spending money now

[[Page H3166]]

that we had no idea we were going to have to spend on September 10, but 
we have to spend it now because circumstances are changed. What you are 
talking about is, you have not changed your economic plan to adjust to 
a change of circumstances, and God knows, there was one.
  We are saying we need to adjust our game plan to circumstances that 
have changed dramatically since September 10.
  Mr. NUSSLE. Mr. Speaker, I yield myself 30 seconds to respond to the 
gentleman.
  I would say, yes, we did adjust our plan and the gentleman voted for 
it. We had a stimulus plan in 2002 that was bipartisan that the 
gentleman joined in. We did adjust in order to not only deal with 
September 11, but to deal with the economic gut punch that the already 
inherited recession that we received took as a result of the downturn 
in the economy caused by September 11.
  There have been adjustments in the game plan throughout these 
budgets, and the gentleman has supported some of those.
  Mr. Speaker, I yield 8 minutes to the gentleman from Ohio (Mr. 
Portman).
  Mr. PORTMAN. Mr. Speaker, I thank the gentleman for yielding me this 
time.
  I would say to the gentleman from Tennessee (Mr. Tanner), I 
appreciate the fact that over the years the gentleman has been willing 
to stand in this well and support fiscal discipline in the area of 
spending restraint; and you have done it frankly against your own 
party's wishes many times.
  The difference that I have with the presentation, at least of the 
Blue Dog budget this year and I think what you are saying ought to be 
our economic plan, is that we believe that tax cuts, the right tax 
cuts, lead to economic growth. The fiscal condition you talk about, 
either the short-term budget deficit or the long-term structural 
deficit, can be handled by only one thing, and that is restraining 
spending and growing the economy through smart policy.
  That is why we are for tax relief. Since the gentleman from Iowa (Mr. 
Nussle), chairman of the Committee on the Budget, has put together some 
incredible charts that have not been used yet tonight, I would like to 
go through the charts and talk about how we differ on this.
  Again, to give you credit for being able in the past to stand up 
against your own party on spending, to be able to talk about fiscal 
discipline in those ways, but to focus on the fact that after September 
11, and indeed as you say before September 11, we were focused not just 
on spending, but on growing the economy and being sure that we had the 
opportunity out there to increase revenues and give people that slice 
of the American dream which we are now seeing.
  The first slide has to do with how we got into the deficits in the 
first place. Tonight and through the process here, and I would say to 
the gentleman from Texas (Mr. Stenholm) and the gentleman from 
Tennessee (Mr. Tanner), we have had this debate for the last 6 months. 
We have had it over the economic policy in the context of the budget. 
We had it in the committee, on the floor, but I have heard time and 
time again, and again tonight, if we did not have those tax cuts, we 
would not have these deficits. Here are the numbers.
  The reason we got into a deficit was twofold. One, as the chairman of 
the Committee on the Budget said, we had a poor economy. President Bush 
inherited that economy. The economy started to weaken back to 2000, and 
in March 2001, we went into a recession, technically into a recession. 
The shallowest recession we have had in our Nation's history, we 
believe, and I think that is because of the tax relief we put through 
in 2001, but the fact is that the economy was spiraling into a 
recession.
  The weak economy in 2002 and 2003 was 68 percent and 50 percent of 
our deficit. Right there is the single biggest reason.
  The second reason, the second biggest reason was spending. As the 
gentleman from Tennessee (Mr. Tanner) say earlier, we had some spending 
needs including, as he said, increases in our defense spending, which 
he supported; including being able to respond to the terrorist threat 
here at home, homeland security spending; and including just responding 
to September 11. Over $100 billion alone was in responding to September 
11, although that pales in comparison to loss of capital gains revenue 
and income tax revenue because of the worsening economy.
  So what do we do in response to that? We put tax cuts in place in 
2001 and 2002 and 2003. To say we did not change our economic game 
plan, my gosh, in 2002 we specifically put a stimulus package together 
because of the weakening economy that was further hit by September 11, 
and in 2003 did the same thing. Again, tax cuts did not cause the 
deficit, tax cuts grew the economy.
  This is another way to look at an earlier chart showing with a 
combination of the weaker economy and spending increases, we got 
ourselves into a deficit situation.
  On the spending side, we have to recognize again, as some of my Blue 
Dog friends have recognized through the years, that if we do not get 
control of spending, we are never going to get out of these deficits 
and into a strong financial situation because we will continue to spend 
and spend and spend.
  This chart shows between 1990 and 1996, we actually had some 
improvements in terms of the spending picture, but look at 2003, up and 
up and up. Noninterest outlays increased 3.6 percent faster than 
inflation each year since 1997. Again, some of spending was necessary 
and the roof did cave in and we had to fix the roof. Frankly, we had to 
pick up, as the chairman said, a defense deficit. In other words we had 
not invested in our defense as we should have over the previous 8 
years, and we had to do that, as well as responding to the war on 
terrorism.

                              {time}  2030

  Another part of spending in terms of the long-term structural deficit 
of course and the concerns that have been talked about tonight is on 
the mandatory side, the so-called entitlement spending, a bigger and 
bigger part of our budget. And the reason we put in our budget the 
PAYGO provision, yes, pay-as-you-go provision, on mandatory spending 
and entitlement spending is if we do not do that, we will never be able 
to get our spending under control. It has averaged 5.4 percent each 
year despite declines in net interest costs. So interest costs have 
gone down, and yet our entitlement spending has gone up and up.
  So back to the tax cuts and why we did them. Here is an analysis that 
I find really interesting. We had job loss over the last few years. If 
we had not put the tax cuts in place, this is what would have happened: 
two million additional jobs would have been lost over the last 3 years.
  Finally, what have the tax cuts resulted in? Only the best economy in 
20 years. I mean, we are pulling ourselves out of the deficit because 
the economy is growing. This year, as a percentage of our economy, our 
deficit will be 4.2 percent. The year I ran for Congress, 1992, it was 
4.7 percent; 4.2 percent is nothing to be proud of, but it has been 
worse. In fact, in 1983 it was 6 percent. And it is the percentage of 
our GDP, all the economists agree, which is the appropriate measurement 
of our deficit and its impact on our economy.
  But here is what is interesting. If the Members will look at our 
budget, because we restrain spending, because we put the tax cuts in 
place that are causing this growth, that will go down to 3.1 percent, 
2.1 percent, 1.8 percent, 1.7 percent, and 1.6 percent over the next 5 
and 6 years.
  That is the point. We are doing the right thing. The economic policy 
is working. Faster economic growth than we have had in 20 years, over 1 
million new jobs added in the last 8 months. Last month alone 288,000 
new jobs were added to our economy; the month previous, over 300,000 
new jobs. We are not only turning the economy around in terms of higher 
productivity, keeping interest rates in check, low inflation, but we 
are actually adding jobs with higher productivity.
  We are the envy of every industrialized economy in the world. We have 
the best economy in the world of any of the industrialized countries. 
This notion that Japan or other countries will not believe in the U.S. 
economy, my gosh, we have turned the corner. And at this point, as we 
are getting jobs back, as we are getting the economy on

[[Page H3167]]

track, as we have turned the corner, to increase taxes would be exactly 
the wrong thing to do.
  And, again, this is where we disagree. We do not disagree on the need 
to restrain spending, but we do disagree on the impact of tax relief 
and the need to grow the economy rather than put new taxes in place, 
which will hurt exactly what we are trying to do, which is to get the 
economy moving, get jobs back, and begin to increase those revenues.
  Those income tax revenues, capital gains revenues are going up. Guess 
what, the Congressional Budget Office has already told us they will be 
up, they think, 30 or $40 billion this year alone, and that is just 
after a month or two.
  I guess the final thing I will say is that I am glad we are having 
this debate tonight, and it is about economic policy, and it is in the 
context of whether we raise the debt limit or not. And as the gentleman 
said, we need to raise the debt limit. We do not want to have the 
credit of the United States be questioned. And we will. We will do the 
right thing. But in doing so, we also have to recognize that the 
economic picture is brighter. We have turned the corner. We are doing 
better. We have made strides in this budget in terms of keeping the 
spending under control. Basically flat spending in domestic 
discretionary spending except for homeland security and defense. 
Everything else is pretty much flat. The tax relief is working to grow 
the economy. That is the combination that we know works. That is time-
honored. Historically that is how we have been able to get out of our 
deficits. That is how we deal with the long-term structural deficit the 
gentleman talked about earlier.
  And I applaud the chairman for being here tonight to talk about that 
economic policy, and I applaud the gentleman for raising his motion 
tonight.
  Mr. NUSSLE. Mr. Speaker, I yield myself such time as I may consume.
  Let me just say to the gentleman from Texas, and we have, as the 
gentleman from Ohio said, been on the same side of the issues over the 
years often, thankfully more often than it appears sometimes we have 
been against each other of late. And I am not sure it is necessarily 
against each other as much as it is a difference of opinion, 
particularly with regard to the benefit of taxes at this point in time 
in our economic situation.
  And I want to provide some information at this point. We really do 
believe that the tax relief that we have passed is beginning to work, 
and certainly it is in combination with a good fiscal policy, with a 
good Fed policy, low interest rates, a number of things that are 
helping us. But let me just go through these.
  I think it is important to understand that the tax cuts are working. 
They are working. Allowing people to keep their money and to spend that 
money on their own behalf we believe is a much wiser way of proceeding 
than to take that money to spend it in Washington, and the result of 
that we believe are some of these numbers: real gross domestic product 
growth is at its highest pace in 20 years, 20 years since we have seen 
this high a growth in the gross domestic product. Over the last 6 
months of 2000, real GDP growth was at a rate less than 1 percent. So 
that is why we talk about the fact that we had a growth deficit. The 
economy was not growing. We had to get that moving. Even before 
September 11, we recognized that. And after September 11, we made 
adjustments because we knew the gut punch the economy took was 
something that no one was prepared for and we had to make fiscal 
adjustments, which we did and even received bipartisan support for.
  Net household income reached a record high at the end of 2003, which 
was $2.5 trillion higher than at the end of 2000. Housing markets are 
the strongest in 20 years. The unemployment rate is now falling down .7 
percentage points from June of last year to April of this year. In 
contrast, 4 years ago, January 2000 to 2001, the unemployment rate rose 
during that period of time by three-tenths of a percentage point. 
Payroll unemployment is growing strongly now, over 1.1 million jobs 
just over the last 8 months, up by 867,000 over the first 4 months of 
this year. And as I said, we have the most people working in this 
country that we have ever had in our history.
  Manufacturing jobs are increasing. Manufacturing industrial 
production is growing strongly. Real disposable income. Unemployment 
insurance claims are falling. All of the signals are there to suggest 
that not only is the tax relief package working, that Americans are 
going back to work, that their economy that they have to deal with 
around their kitchen table is finally working, and when their budgets 
work, when their economies work, when their families are prosperous, 
when they are working, when they are making an income, when they are 
paying taxes as a result of that growth in their income and having a 
job, it impacts the receipts that are coming in here. And we know that 
that is happening because we have already heard Treasury suggest that 
the receipts that are coming in are making our fiscal situation much 
better.
  Will that in and of itself be enough? No. We are not betting that 
growth alone will balance the budget. No one is ever suggesting that, 
and that is why we believe we have to protect the country. That is 
going to cost money. And, thankfully, I believe we stand in a 
bipartisan support most of the time for those kinds of prospects and 
projects in homeland security and national defense. But it also means 
holding the line in those other areas; and that is why, as the 
gentleman from Ohio said, we do believe in pay-as-you-go, particularly 
for those new entitlements, particularly for those automatic spending 
programs that have not had the kind of oversight that they have needed 
over the years.
  Our budget is going to provide that. We are not only going to do this 
without a tax increase, but we are going to start to go through and 
weed the garden, looking for waste, fraud, and abuse in those areas of 
mandatory spending. We are going to go through and look for ways for us 
to cut out wasteful programs within our appropriation accounts and 
freeze those nondefense and nonhomeland security accounts. We are going 
to do the tough work that that requires.
  We hope that Members on the other side will join us; but my guess, 
different than the chorus that we have heard tonight, which I commend 
my friend from Texas for bringing to our attention, but different than 
the chorus we are hearing tonight, which is concern about that 
spending; it will be different. My guess is most of the amendments that 
we hear about during the appropriation season coming up in June and 
July will be about increasing spending. My guess is that we will hear 
about the fact that children are not getting enough money and that 
seniors are not getting enough money and that States are not getting 
enough money and that health programs are not getting enough money. My 
guess is that that is the chorus that we will hear. It will be the 
unfortunate and consistent wringing of hands that Washington is not 
spending enough money.
  And when we see more discipline from both sides, but particularly 
from my friends on the other side, with all my friends, not just the 
gentleman from Texas, who usually joins us with that kind of fiscal 
restraint, but when I see that kind of restraint from all my friends on 
the other side of the aisle, it will be easier for us to come to 
bipartisan agreement with regard to the budget. If all we ever hang our 
hats on do not allow the tax cuts to be made permanent, do not allow 
for the predictability of these tax relief packages, do not allow this 
fiscal policy to work, do not allow for these jobs to be created, then 
I think it is going to be much more difficult for the two sides to come 
together and to come to an agreement. And with that we will have to 
have a vote. We will have to have a budget. The majority will rule. 
Sometimes we will win; sometimes we will not. But right now we have the 
votes, we believe, in order to continue to steer a course back toward a 
balanced budget, but to do it in a way that respects the need to 
protect our country, to make sure that we are able to prosecute 
successfully the wars that we are involved in, to make sure that we can 
get our economy back on its feet and growing again, and that we can 
create opportunities far into the future for our kids and our 
grandkids. Those are things that we hope to be able to accomplish in 
this budget.

  The interesting thing I would just say in closing is that the Blue 
Dog

[[Page H3168]]

budget that the gentleman from Tennessee is advocating raises the debt 
ceiling. It is kind of interesting that it is not without its flaws. It 
raises the debt ceiling. In fact, over the period of time of the 
budget, almost as much, not quite as much, but almost as much as the 
budget that we will be presenting here on the floor hopefully by the 
end of this week, the interesting thing about it is that the debt 
ceiling will go up under the exact budget that the gentleman from 
Tennessee was advocating.
  I respect the fact that the budget came forward, but it is one thing 
to say that our budget will require the debt ceiling to be increased. 
It is another thing to look inward and to say, guess what, we are doing 
the exact same thing. And why? Because the choices are pretty tough at 
this particular time. We have got to make sure that we fund our defense 
and homeland security. We have to make sure that we fund those 
important programs such as making sure that our seniors have a 
prescription drug benefit. And we have to make sure that at that same 
time we are able to keep the economy growing and providing 
opportunities for the future. If we assume those few things, there are 
very few choices left except to raise taxes; and as I say, that is 
where there is a departure on both sides.
  We will not raise taxes. That is not what we are going to do in this 
budget. That is not what we are advocating at this time in our economic 
history. And that is the reason that we oppose this particular motion 
to instruct. We believe that we should manage our economy, which 
includes our debt ceiling, in a responsible way. And we believe our 
budget does that.
  Mr. Speaker, I yield back the balance of my time.
  Mr. STENHOLM. Mr. Speaker, I yield myself the balance of my time.
  I think it is important, in light of the chairman's closing comments, 
to restate that I will vote to increase the debt ceiling because to do 
otherwise would be irresponsible. But I think it is critical for us to 
seriously consider changing a little bit the game plan that we are 
under and that is reinstate pay-as-you-go. The chairman and the 
gentleman from Ohio made eloquent defenses of their economic game plan, 
and that is all past. I am worried about today forward. We keep talking 
about everything we have done in the past. We keep talking about 9-11-
01. And, yes, this country was thrown into a crisis and, yes, we had to 
make some additional investments, all of which are very true. But what 
about today forward? Why continue blindly because of a philosophical 
belief that the perfect plan that we put into effect 3 years ago, 2 
years ago, 1 year ago is still good, when, in spite of the gentlemen's 
eloquent arguments, the structural deficit of this country is a major 
problem that will not be cured by growth, will not, based on an 
overwhelming consensus of economists?

                              {time}  2045

  Mr. Speaker, the gentleman tonight has made an eloquent argument for 
his philosophy. But it is interesting when you look at the last 44 
years, under Democrats, the economy grew 5.7 percent faster than debt. 
For 24 years of Republican leadership, the debt grew 6.8 percent faster 
than the economy. And when we look at the current 4 years, the debt is 
going to increase 10 percent greater than the economy.
  Yes, we rejoice at the good things that are happening in jobs, and we 
hope they continue. But should we get that kind of economic recovery by 
borrowing $2.3 trillion on the future of this country?
  The gentleman continues to want to talk about tax cuts, and the Blue 
Dog budget supported tax cuts for purposes of getting the economy going 
again. But we also believe in pay-as-you-go.
  We are fighting three wars. I would defy anyone in this body to find 
any time in the history of our country in which we have fought a war by 
cutting the amount of revenue available to fight the war. With all due 
respect, that does not make sense to me, and I believe, as the 
gentleman from Tennessee said, that is morally wrong. That is not a 
philosophical difference. That is not something we come out here and 
vote about. That is passing on a debt to our children and grandchildren 
that we should not be doing today.
  Now, I appreciate the opportunity tonight to debate, and all we are 
saying is, we should have a vote on it. I will vote to increase the 
debt ceiling. I will vote for it tomorrow, provided we put pay-as-you-
go back into place so that it forces this body to make tough decisions 
on spending and on revenues.
  The gentleman from Iowa voted with us in 1997 when we had a tougher 
pay-as-you-go rule. We said we would sequester if the revenue did not 
magically appear. I do not want to get into these chart arguments, but 
revenue has collapsed under the economic program the gentleman is 
defending here tonight. It has collapsed. We have less revenue to spend 
and we are fighting a war.
  So what are we doing? We are borrowing on our children's future.
  Let me remind everyone, the baby boomers are about to begin retiring, 
and I suspect that the people of America pretty soon are going to be 
wondering, what the heck are we doing here having the philosophical 
arguments we are talking about tonight and ignoring the pressure on the 
economy of the United States that is going to occur when the baby 
boomers begin to retire in 2011?
  The largest single economic pressure on this country is going to 
occur, and all we are doing tonight is digging the hole deeper and 
deeper and deeper, and it is structurally going down. No matter how 
eloquently my friends on the other side come on the floor and talk 
about it, the deficits are going to continue to go up, because the 
economic game plan we are under cannot work.
  Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore (Mr. Kline). All time for debate has expired.
  Without objection, the previous question is ordered.
  There was no objection.
  The SPEAKER pro tempore. The question is on the motion to instruct 
offered by the gentleman from Texas (Mr. Stenholm).
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  Mr. NUSSLE. Mr. Speaker, I object to the vote on the ground that a 
quorum is not present and make the point of order that a quorum is not 
present.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further 
proceedings on this question will be postponed.
  The point of no quorum is considered withdrawn.

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