[Congressional Record Volume 151, Number 53 (Wednesday, April 27, 2005)]
[House]
[Pages H2638-H2645]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
THE BUDGET
The SPEAKER pro tempore (Mr. Gohmert). Under the Speaker's announced
policy of January 4, 2005, the gentleman from South Carolina (Mr.
Spratt) is recognized for 60 minutes as the designee of the minority
leader.
Mr. SPRATT. Mr. Speaker, more than a month ago, the House and Senate
passed budget resolutions both on a fast track. Our hearings were
minimal, ostensibly to finish up for the Easter break.
But this year's budget has become the classic case of hurry up and
wait. Only yesterday, a month after finishing the budget resolution,
did the House finally appoint conferees, and today we held the first
and only meeting of the conference committee. We held that meeting
amidst reports that agreement on the conference report was almost
already a done deal. So the meeting was a formality, a gesture to lend
some sort of collaboration to the budget process. But there has been no
collaboration, and the budget resolution said to be emerging from
conference does not reflect the resolution that we would pass if we
were full partners in this process.
This year the Federal Government faces a deficit estimated at $427
billion, the third record deficit in a row. With deficits of this size,
$427 billion, rising and never ending, the budget should be used to
make the bottom line better, not worse. But the budget coming out of
this conference does just the opposite. The President's budget, the
House Republican budget, the Senate budget all make the deficit larger,
not smaller.
The House budget makes the deficit $127 billion worse than current
services. The Senate budget, Republican budget, makes the deficit $217
billion worse than current services.
I acknowledge, I will give the Republicans their due, both houses.
They have searched the budget for programs to cut, and they have come
up with some significant cuts. Medicaid, $20 billion; student loans;
pension benefit guarantee premiums; probably the earned income tax
credit, food stamps, maybe veterans benefits.
But these cuts do not go to the bottom line. That is the dirty little
secret. They do not go to the bottom line and diminish the deficit.
What they do, partially at least, is offset their tax cuts because even
though the budget is $427 billion in deficit, Republicans are still
pushing for more tax cuts, knowing full well that it can only make the
bottom line worse, the deficit larger.
I think it is fair to ask can we fund the government if we have
massive deficits and yet keep on cutting taxes? Obviously one way is to
use the payroll taxes in the Social Security surplus to make up for the
income taxes that are lost to tax reduction. And, in fact, that is just
what the Republicans do. They use the payroll taxes that are
accumulated in the Social Security surplus to make up for the income
taxes lost to tax reduction.
As the next chart shows, the chart I have right here shows, they
spend 100 percent of the Social Security Trust Fund surplus not on
benefits but on everything in the Federal budget, 100 percent of it not
just this year, 2005, 2006, but every year in their 5-year budget. I
know that a government bond is placed in the trust fund for every
dollar that is taken out of it, but I also know that President Bush
went to West Virginia a couple of weeks ago and disparaged these bonds
as mere IOUs, just scraps of paper.
Mr. Speaker, I do not believe that Social Security is in what one
would call a crisis, but I do believe the actuaries at Social Security
when they tell us that it may be faced with insolvency as early as
2041, and I believe we should do all that we can, as soon as we can, to
remove that risk. But until we have a solution in place, a grand
solution that returns the program to assured solvency for 75 years,
surely we should do no further harm. Yet in raiding the Social Security
Trust Fund of $160 billion this year and more in subsequent years, the
Republicans' budget does just that, considerable harm. This is not a
step towards making Social Security solvent. It is a long step
backwards.
This budget is also a long step backwards for programs that Americans
depend upon: education, veterans health care, environmental protection,
medical and scientific research, and on and on down the list. On the
discretionary side, the money we are appropriating, 13 bills every
year, the House resolution cuts nondefense discretionary spending,
domestic discretionary spending, by $12 billion in 2006 and by $150
billion over the next 5 years below inflation. The Senate's resolution
is a bit lighter. It cuts spending next year by $6.3 billion and by
$128 billion over the next 5 years.
On the mandatory spending side, which some call the entitlement side,
the House budget resolution directs nine committees to come up with
mandatory spending cuts and reconciliation procedures that will total
$69 billion over 5 years. The Senate, more moderate, calls for $17
billion in reconciled cuts.
These reconciled cuts that our committee issues to different
committees of jurisdiction in the House and Senate do not designate or
specify how they shall be achieved, but the jurisdiction of each
committee suggests exactly what is likely to be cut. The House
resolution, since it is directed to the Committee on Energy and
Commerce, for example, will likely fall on Medicaid; and since it is
directed to the Committee on Agriculture, it will likely fall on food
stamps; and since it is directed to the Committee on Education and the
Workforce, it will likely fall on student loans or other income
security; and since it is directed to the Committee on Veterans'
Affairs, on veterans benefits. It is also directed to the Committee on
Ways and Means. That means it is likely to fall on something we call
the earned income tax credit, which is tax relief for the working poor,
the people who need it the most. Or it could fall on welfare for the
most disabled, those who have nowhere else to turn and rely upon a
program called SSI, Supplemental Security Income.
These cuts are likely as a result of the reconciliation instructions
in the budget resolution, even though the President did not call for
them in his budget resolution and they are not included in the Senate
budget resolution.
The Senate also, enough Senators got their backs up and said the
Medicaid program is too important to people for whom it is health care
of last resort and we simply cannot blindly whack $20 billion or even
$10 billion out of the program. If we want to reform it and
[[Page H2639]]
restructure it and try to achieve some savings, fine, but let us not
have an arbitrary budget savings number that drives reform and
restructuring. So enough Republicans in the Senate voted that the
Medicaid provision calling for cuts in Medicaid was deleted from their
resolution.
And yesterday on the House floor we did exactly the same thing. A
large majority of this institution, Democrats and Republicans, voted
not to have the Medicaid cuts included in the bill. Mark my words,
however, notwithstanding a majority in this House and a majority in the
Senate, those cuts in Medicaid are likely to emerge in the budget
resolution that is likely to come forth tomorrow.
These budget policies continue the course that was set when President
Bush came to office. At that time the budget was in surplus by $5.6
trillion dollars over 10 years. Democrats warned then and there on the
House floor and in committee that these were paper projections, they
could disappear in the blink of an economist's eye, and we said let us
seize this opportunity. Having years and years of deficits, now that we
have a surplus or what appeared to be a huge surplus, we said let us
pay down some of our long-term liabilities like Social Security and
build up the Social Security program.
President Bush decided to take a different tact. It is true,
terrorists, recession, and war have all taken a toll on the budget. But
the Bush administration has adopted the attitude that we can have guns,
butter, and tax cuts too, and never mind the deficits. As a result, the
budget has moved from record surpluses to record deficits, as this next
chart shows.
The President's 2006 budget, the budget for next year, like the House
budget, like the Senate budget, claims to cut these deficits in half
over 5 years. That is the claim we hear repeated frequently. They imply
that in another 5 years, the budget would be brought back to balance.
Give us 10 years, we will get the job done. But their budgets give us
no figures at all, nothing after the first 5 years, and by running
their numbers out only 5 years instead of 10, they avoid recognizing
the impact that 90 percent of the President's remaining tax cut agenda
is going to have on deficits. They will add $2 trillion if passed, if
implemented, $2 trillion to the deficits in those outyears from 2011 to
2015 if we include a fix to the alternative minimum tax.
{time} 2230
CBO, our Congressional Budget Office, our budget shop, which is
neutral and nonpartisan, has given us a 10-year estimate, something the
Republicans have not supplied us in the House nor Senate, a 10-year
estimate, at least with the President's budget, and they estimate that
there is no progress whatsoever on the deficit. In fact, CBO estimates
deficits totaling $2.6 trillion over the next 10 years if we implement,
if we follow the recommendations and the requests in the President's
budget. $2.6 trillion in additional debt.
As bad as this may appear, the realistic numbers are even worse,
because CBO is simply taking what the President has requested and
extended it forward over 10 years. If we add what the President has
omitted, the numbers are far, far worse.
The President has omitted the cost of Social Security privatization,
even though he is pushing hard for it and acknowledges that the cost
will be $754 billion between 200 and 2015. He omits the cost of fixing
the Alternative Minimum Tax, which CBO says is $642 billion over 10
years, even though everybody knows it is a political inevitability. And
he omits any costs for our deployments in Iraq and Afghanistan after
2005. Nothing for 2006. Everybody knows we will still have troops in
substantial numbers there. CBO suggests that the cost over the next 10
years could easily amount up to $384 billion. Not a dime of that is in
the President's budget.
When these costs are included, the budget outlook, as the next chart
shows, is much, much bleaker. Annual deficits never fall below $362
billion. The heck with this talk of cutting them in half. They never
fall below $362 billion, and they eventually rise at the end of this
time period to $621 billion in 2015. That is a CBO number, which we
have adjusted.
We do not have a 10-year projection of the House or Senate budget,
but both are broadly similar to the President's budget, and that means
that these estimates are roughly the same, basically in the same
ballpark.
They say that the past is prologue, and we should not forget in that
sense the impact of Bush budget in the first term between 2002 and
2005. To accommodate the Bush budgets between 2002 and 2005, we in the
Congress, Republicans in Congress, on three different occasions have
had to raise the debt ceiling, the legal ceiling to which we can borrow
in the United States, first by $450 billion, then by $984 billion, then
by $800 billion, by a total of 2.234 trillion in a period of 4 years.
In the House when we considered the budget, Democrats offered a
better plan. We offered a better plan to reduce the deficit and
eventually, believe it or not, to balance the budget again in the year
2012. The numbers added up. The Republican budget never achieved
balance.
A real bipartisan conference, not like the one we had today, a real
bipartisan conference, with everyone at the table and everything on the
table, would give us a chance to consider a conference report like the
budget resolution that we offered the floor which put the budget back
in balance and actually achieved balance in the year 2012.
Unfortunately, such a conference and such an outcome will not occur.
Unlike last year, there probably will be a Republican budget this
year, but there be no plan, no prospect, for reducing the deficit.
I yield to the gentleman from Tennessee.
Mr. COOPER. Mr. Speaker, I appreciate the gentleman yielding. I would
like to ask a question on this, because I think it is a very
significant chart the gentleman is pointing out.
It is my understanding it took the first 204 years of American
history to run up $1 trillion in debt, and that chart seems to
demonstrate, what, that in just 2 or 3 years--
Mr. SPRATT. Every 18 months we are adding $1 trillion to the national
debt, to the statutory debt to the United States. Nobody in his right
mind thinks this is something that can be sustained.
Mr. COOPER. So to put the cookies on a low shelf, it took the first
204 years to do $1 trillion worth of damage to our Nation, and now the
Republican majority is doing that every 18 months?
Mr. SPRATT. Roughly that. Even the CBO tells us that another
substantial increase in the debt ceiling will be necessary by at least
January or February of next year.
Mr. COOPER. If the gentleman will yield further, this is probably
hard for the folks back home to understand, and I know it is hard for
many Members here to understand, but this news simply has not gotten
out to the American people. It is my understanding that, what, votes on
raising the debt ceiling anymore do not happen?
Mr. SPRATT. This is past history. What I was giving you is a
projection. You can look at the last three increases over the last 4
years, and the bottom line is $2.234 trillion. As Yogi Berra liked to
say, you can look it up. It is a matter of record.
Mr. COOPER. Numbers do not lie. I appreciate the gentleman yielding.
So the total national debt now is about $7.7 trillion.
Mr. SPRATT. That is correct.
Mr. COOPER. We pay the interest on that debt largely to foreign
nations now, right? More and more foreign nations are lending us this
money, so we are owing more and more money to foreign nations, is that
correct?
Mr. SPRATT. Reclaiming my time, that is correct.
Mr. COOPER. Mr. Speaker, if the gentleman will continue to yield,
Japan, China, Europe, nations like that, we will have to write checks
to for many, many years in order to service the interest.
Mr. SPRATT. This chart shows the percentages of our debt that are
held by foreigners. As you can see, they have steadily increased to the
point where in 2004 the share of foreign-owned debt rose to 44 percent.
One of the reasons that it is difficult to get this message across to
the American people is that they are not really feeling the effects of
it, since foreigners are buying for now a lot of our debt. But when and
if they cease buying it in
[[Page H2640]]
huge quantities as they have been, we have got a problem.
Mr. COOPER. So almost half the mortgage on America is owned by
foreigners, and they have been kind to lend us that money, but they
could change their minds and stop lending us money at almost any time?
Because we sell Treasury bonds, notes, other papers, every day in the
market.
Mr. SPRATT. Reclaiming my time, in the meantime, they are
accumulating claims against the United States that could some day be
called.
Mr. COOPER. What happens if we cannot pay the debt?
Mr. SPRATT. Well, we have to probably inflate our currency. But let
us not get into that. We are still not in that bad of shape, and I do
not want to get into dire predictions. But we are forewarned. We all
know there are limits to which anyone can go, governments, individuals,
households, companies, corporations, there are limits to which you can
go in borrowing money. It is a function of what your income is, and we
are beginning to approach those limits.
Mr. COOPER. Mr. Speaker, the gentleman mentioned we certainly do not
want to inflate the currency, but the dollar today is weaker than it
has been in some time, the dollar vis-a-vis foreign currencies. If an
American travels abroad and pays in dollars, you discover today it buys
very little under Bush administration policies. A few years ago it used
to buy a whole lot more. That is a sign of a weak dollar that we are
already facing today because of our dependence on foreign borrowing.
Mr. Speaker, I appreciate the gentleman yielding. I did not mean to
distract from your presentation.
Mr. SPRATT. Mr. Speaker, I yield to the gentlewoman from Nevada (Ms.
Berkley). I traveled to Las Vegas to spend the day with the gentlewoman
from Nevada (Ms. Berkley) a couple of weeks ago, and we went all over
the City of Las Vegas, from three different editorial boards, to
television, to a town meeting, and we found people there very much
concerned about Social Security and about the shape of the budget.
Ms. BERKLEY. Mr. Speaker, I thank the gentleman from South Carolina
for yielding. I so enjoyed the gentleman in Las Vegas and so did all of
my constituents, because he was able to bring home to them and
articulate to them exactly what the issues are when it comes to the
budget and how it is going to affect them in a very adverse way.
I am here tonight to talk about why I am going to be voting against
this Republican budget that is going to be on the floor probably
tomorrow. But before I do, I have to comment on the last hour, because
I had the opportunity since I was sitting here to hear some of the
rhetoric from the other side when they were talking about Social
Security and a bipartisan meeting with AARP that the Democrats were
supposedly boycotting.
I think it is very important for people that are listening to know,
at least from this Democratic Member of Congress, that until I heard
that, I had never heard of such a meeting. I am married to a
Republican. We practice bipartisanship in our home every single day.
And I think if the Republicans were truly serious about working in a
bipartisan fashion with the Democrats to craft solutions to the very
serious problems that we have, we not only would sit down and talk
about Social Security, not the privatization of Social Security, which
we all know will do absolutely nothing to make this system solvent, but
talk about the more immediate and pressing crises of Medicare and the
health care system in this country. If you have tried to access the
health care system in this country, you would know without me having to
tell you that we do have a crisis.
So instead of creating a crisis and screaming about the partisan
nature of the House of Representatives, maybe if they truly wanted to
solve some of the solutions to make life easier for average American
people, we would be sitting down at a table now, instead of the
gentleman and I sitting here talking to each other. But we can talk
about that some other time. I was just so taken aback by the attack
that I felt I had to respond to it.
Mr. Speaker, I am going to be voting against this budget proposal
that the Republicans have set forth, and it is very important that my
constituents know why.
This is a very fiscally irresponsible budget. It is going to
devastate numerous programs that many low and middle-income Americans
depend on. I know they do in my congressional district.
Day after day we hear the President and congressional Republicans
talking about fiscal responsibility and providing opportunities for
lower and middle-income families in this country. But the priorities
outlined in this budget tell an entirely different story. This is the
perfect example of Republican rhetoric not matching the reality on the
ground.
The Republican budget hides costs. We all know that. The gentleman
spoke of some of the hidden costs. It threatens to put key programs
like veterans health care, education funding and Medicaid on the
chopping block.
The Republicans talk about keeping our promises to our veterans. I
sit on the Committee on Veterans Affairs, and I have the fastest
growing veterans population in the United States of America in Southern
Nevada. The issues that affect our veterans are very important to me,
and particularly health care, because my veterans do not get the health
care that they deserve.
The Republican budget does not include enough money for veterans
programs to keep pace with inflation over the next 5 years. To me this
is an outrage. It is never acceptable to cut veterans benefits at any
time, but it is especially not appropriate at a time when our country
is depending more and more on the strength and morale of our Armed
Forces in Iraq, Afghanistan, Kosovo and South Korea. We are stretched
very thin.
These soldiers are going to be coming home to this country. They are
going to be veterans and they are going to be expect the health care
that this Nation has promised our soldiers when they become veterans,
and I am afraid this budget is way short of providing the needs of our
veterans, particularly not only health care needs, but mental health
care, and that is going to be a major problem with our troops coming
home from Iraq, a serious, serious problem.
I am not going to vote for any budget that threatens key programs,
including health care benefits for the more than 160,000 veterans that
live in my community. These men and women have served our country with
dignity and valor, and I refuse to support a budget that shortchanges
programs that are vitally important to them.
The Republican budget also fails students and their families in
Nevada and across the country. It not only will not support current
education programs and services over the next 5 years, but, again,
since I have got the fastest growing student population in the United
States, a budget that is even neutral and does not cut programs,
although this one does, hurts my district disproportionately, because
while our student population is growing, if education funding is going
down, we take the biggest hit in the country.
Education should be one of the highest priorities in any budget. Our
schools and our teachers and our students already feel the squeeze by
budget cuts. To further cut funding is unfathomable to me.
The Republican budget cuts child nutrition programs. If you are a kid
and you are not getting breakfast at home and you are going to school
on an empty stomach, how are you going to learn? How are you going to
concentrate on your studies when your tummy is growling? This cuts
student nutrition programs.
It cuts student loans. I come from a family where my dad was a waiter
when I was growing up. I depended on those student loans to get an
education. That is how I went through college and how I went through
law school. It took me many years to pay back those students loans, but
without them I guarantee you I would not be standing here on the floor
of the House tonight.
Vocational grants, so important for those students that do not go to
college, who would rather go get a vocational education, which is also
important for our economy in this country, those programs are getting
decimated.
[[Page H2641]]
Also disability and pension programs. What type of Nation that prides
itself on caring for its fellow citizens is going to cut pension and
disability programs? But this Republican budget does exactly that.
Student loans. Let me get back to that, because I know firsthand how
important they are.
{time} 2245
They are vitally important to families in southern Nevada and across
this country. Low and middle-income families in my district are not
going to be able to send their kids to college without student loans.
People think of Las Vegas and they see the fancy hotels and the wild
night life, and we do have the glitz and the glamour in Las Vegas, but
Las Vegas is populated by middle income people that are working in
those hotels and trying to put a roof over their family's heads, food
on their tables, clothes on their backs, and their children through
college. They are entitled to have these student loans so that they can
make sure that their children enjoy the American dream.
I am astounded that that is an area that this administration and this
Republican budget is cutting.
Straining student loan programs will reverse the progress this
country has achieved by sending millions of students just like me to
college who otherwise could not afford it. This is unacceptable, must
be stopped, and the American public should be rising up and complaining
to the Republican Members of this House, telling them that this is
unacceptable to them, because it hurts, and it is very painful.
The Senate restored funding for medicaid in its budget and, last
night, the House the Representatives voted to instruct budget conferees
to protect medicaid funding from the drastic cuts outlined in the
President's budget. I hope that the House and Senate conferees do the
right thing and leave the medicaid funding alone.
Medicaid provides crucial health services to approximately 159,000
people in my home State of Nevada. Any cuts to medicaid funding will
make it much harder for low-income pregnant women, seniors, children,
disabled, and families in Nevada and throughout the United States to
get the health care they need.
I cannot stress enough how important medicaid is to the State of
Nevada. Nevada's hospitals, nursing homes, community health centers
depend on this funding. Medicaid pays for 65 percent of Nevada's
certified nursing home residents. What are these seniors going to do if
we lose this funding? It is going to be devastating for them. Are they
going to be thrown out on the streets where they are going to die in
the gutter? This medicaid funding must be restored, and it must be
restored to the appropriate levels to take care of the people of this
country.
I am going to vote against this conference report, because it fails
to prioritize veterans, students, low-income and middle-income
families. I want to remind my colleagues and the chairman that not too
long ago, the Democrats offered a budget alternative that every
Republican in the House voted against. And in light of the attacks that
I just heard before we got up to speak about the partisan nature of the
Democratic Party, I mean I find it a little shocking that not one
Republican would cross the aisle and support the democratic budget
proposal, because in that proposal, the Democrats not only talked the
talk, but we walked the walk. Democrats provided an alternative that
was fiscally responsible, would balance the budget by 2012, would
reduce the deficit, and provide opportunities to all Americans that the
Republicans only talk about. But if their budget is any indication of
what they care about and what they are going to act upon, well, I am
afraid it is a little light on helping their fellow man and taking care
of the fiscal health of this country.
So I thank the gentleman very much for his leadership on this. There
is nobody that presents our side of the argument better than the
gentleman from South Carolina (Mr. Spratt), and I thank the gentleman
for letting me be a part of this discussion tonight.
Mr. SPRATT. Mr. Speaker, I thank the gentlewoman for a very effective
presentation.
I yield to the gentleman from Portland, Maine (Mr. Allen), a former
mayor who understands what Federal grants and aids and other projects
mean to cities and small towns all over this country.
Mr. ALLEN. Mr. Speaker, I thank the gentleman for yielding. It is
true at the local level you learn in a very short time the importance
of a partnership between the Federal Government and the States and
local governments. Clearly, it has been forgotten here.
I do want to thank the gentleman for the knowledge that he brings to
this particular debate, the information he brings. I mean, the
gentleman knows more, in my opinion, about this budget than anyone else
in the Congress.
At some level, it seems to me, this should not be that hard, because
the Federal budget should, number one, be designed to create a stronger
and more competitive economy. I mean, after all, what we want for
people in this country is to have opportunity, we want them to be able
to get a good education, to get a job and be successful in competing,
because we are all competing in one way or another in a global economy.
We know that the Chinese economy is growing very rapidly, that India
has very strong schools these days, particularly in engineering, and so
we need the best educated, best trained work force we can have.
Now, if we look at this budget, we are not going to get the best
educated, best trained work force out of what the Republicans are
trying to do to this country. As the gentlewoman from Nevada was
saying, there are so many programs, adult education, job training
programs, technical education that are being reduced, being reduced,
simply to pay for tax cuts for the richest people in the country. So
how do we build a stronger, more competitive economy when we are
reducing the ability of people to get the education and training they
need; when we are turning around and passing a resolution, as we did
today, a resolution that said, we are for a small business Bill of
Rights, and then reducing funds to the Small Business Administration to
make it harder for entrepreneurs in this country to get the financing
they need, the technical assistance they need to get a business off the
ground. It takes your breath away.
Mr. SPRATT. Mr. Speaker, that is the point I was trying to make at
the opening. While these cuts may seem to be necessary to deal with the
deficit, in truth, the deficits and their budget resolution are bigger
than they would be under current surpluses. What they really do, to
some extent, is use these entitlement cuts and discretionary spending
cuts to offset the tax cuts so they will not grossly enlarge the bottom
line. But they still have a huge deficit that is bigger than would
otherwise be the case, because they are, notwithstanding these
deficits, are making more and more tax cuts.
Mr. ALLEN. Mr. Speaker, just quickly, the thing that strikes me, that
is astonishing to me is the median household income in this country is
something like $48,000, $49,000. Half of the households, or less than
half of the households earn more. We have a deficit of roughly $427
billion projected for this year. That is more than $1 billion a day
that we are borrowing, a lot of it from Chinese and Japanese banks.
Yet, $89 billion will be enjoyed by households earning over $350,000
this year, next year, the year after that, the year after that; $89
billion that they did not have in the prosperous 1990s because of the
tax cuts that the Republicans passed for the wealthiest people in the
country, and they are going to do anything to protect those tax cuts.
So what they are doing is they are cutting aid for small businesses,
they are cutting vocational education, they reduce funding for adult
education, they reduce funding for the Small Business Administration to
protect tax cuts for the wealthiest people in the country. It is hard
to see how that will provide a stronger and more competitive economy,
and it certainly will not provide broader prosperity because that, in
my view, is the second goal we ought to have here. We ought to be
trying to make sure that opportunity in this country; the chance, if
you work hard and play by the rules, to have a reasonable opportunity
for a reasonable level of prosperity. That is missing in this budget.
The middle class in this budget takes it on the chin. This is no
budget for middle class Americans.
[[Page H2642]]
Mr. SPRATT. Mr. Speaker, I yield to the gentleman from North Carolina
(Mr. Price).
Mr. PRICE of North Carolina. Mr. Speaker, I thank the gentleman for
yielding. I have been listening, listening over in my office initially
and now here on the Floor to the discussion, and it strikes me that
what the Republicans have given us is a worst-of-both-worlds budget.
The Ranking Member on the Committee on the Budget has described to us
very convincingly how this budget takes us over the cliff fiscally.
There is no question. We are looking at $400 billion, $500 billion
deficits as far as the eye can see; just unprecedented deficits and
debt piling up on this country.
One would like to think that if we are incurring that kind of
deficit, we are at least getting some bang for the buck, right? We
would like to think that we are getting adequate funding for domestic
needs, for example. We would like to think that the economy is getting
some juice, some stimulus. Yet, we are not getting that, either. We are
getting the worst of both worlds. We are going over the cliff fiscally,
yet we are not addressing these priorities.
Mr. Speaker, the political premise seems to be, and the gentleman
from Maine was getting at this; the political premise seems to be that
we are going broke in this country because we are doing too much for
education, or because we are building too many highways, or because we
are doing too much cancer research, or because too many loans are
available to small businesses. I think that is irresponsible, and
``irresponsible'' is a kind word for that kind of political pitch, that
we are getting from our Republican friends these days.
The fact is that these domestic expenditures account for very little
in the way of our budget difficulties, yet they are being required to
bear the brunt of the administration's budget policies. If it is not
domestic discretionary expenditures, what is it? I would like to ask
the gentleman.
Mr. SPRATT. Mr. Speaker, we have a chart to prove that point. I need
to get it up here. We have a chart that shows how over the last 4
fiscal years, the increases in discretionary spending and, once again,
that is the money we appropriate in 13 different bills each year. We
call it discretionary because each year we decide how to spend it, it
is defense, it is national parks; if we look at those accounts in
discretionary spending, we will find that 90 to 95 percent of the
increases in discretionary spending over and above current services,
just running in place, are attributable to 3 different factors.
Here we go. Here is the chart. Defense, Homeland Security, and the
response to 9/11. Those three factors account for 90 to 95 percent of
the growth in discretionary spending. Now, the President says we are
spending out of control but, in truth, the House is controlled by
Republicans, the Senate is controlled by Republicans, the White House
is controlled by Republicans. It is a self indictment, if anything.
But here is the actual truth: discretionary spending is going up, but
it is going up in accounts and for reasons the President has requested
and sought money for, and we have given it to him. Having put an Army
in the field in Iraq, we are going to support them and see them
through, we hope to a successful conclusion. But this is policy that he
has originated and we have supported in one way or another and now
support, and this accounts for the main increase in spending.
So number one, it is spending he has initiated; number two, it is not
likely to fall off substantially to abate by any significant amount in
the near future. That is a fact we have to live up to, a fiscal fact we
have to live up to. But the administration is in a state of fiscal
denial. They will not acknowledge that this is a fact, and that the
remaining wedge out of the budget for discretionary spending, domestic,
nondefense discretionary spending constitutes maybe $380, $390 billion.
You cannot squeeze enough out of that sector to begin to wipe out a
$427 billion deficit.
Mr. PRICE of North Carolina. Mr. Speaker, if the gentleman will
yield, we are stuck here in the Congress not able to pass a
transportation bill. Our communities are crying out for highway
maintenance, for modernizing our highway system, for bringing transit
on line. The administration has stood in the way of a congressional
accommodation on a transportation bill that would invest in our future.
Is highway spending part of that equation?
Mr. SPRATT. Ironically, there is about $20 billion there for roads,
bridges, oil wells and other infrastructure in Iraq.
Mr. PRICE of North Carolina. Yes, in Iraq, but not in this country.
We are not going broke because we are building too many highways in
this country or doing too much in the way of infrastructure
development. In fact, it is very, very foolish to cut back on those
things in the name of fiscal balance when the problem in truth lies
elsewhere.
Well, if the gentleman will go further, what is the tax side of this
equation?
Mr. SPRATT. Well, as I acknowledged, terrorists and war and recession
have all taken a toll on the budget. But the President has basically
taken the attitude that we can have guns, butter, and tax cuts too, and
never mind the deficits. The tax cuts keep coming every year. The
President has an unfinished tax agenda of at least 1 trillion 400
billion, and that does not include everything, because he does not put
on his agenda anything, anything to fix the alternative minimum tax. I
paid it this year, I paid it last year, more and more Americans are
going to be paying the AMT until it rises, Treasury tells us, to 30
million tax filers in the year 2010, not far away.
The political truth of the matter is, we will have to do something
about that. That means that the President's tax agenda, tax cut agenda
calls for another $2 trillion beginning in 2011. They conveniently stop
their budget projections in 2010, so we miss the outyears, but here is
what happens in the outyears when you add AMT to the President's other
requests, principally to make permanent the tax cuts adopted in 01, 02
and 03. This is what happens to the baseline projections of the
deficit; it gets worse and worse and worse. There is no end in sight,
and it is aggravated by this fact, the tax cut agenda.
{time} 2300
Mr. PRICE of North Carolina. Does the gentleman yield?
I spoke to the Raleigh Kiwanis Club just as tax filing deadline
approached a couple of weeks ago and said something about the
alternative minimum tax, that if the Members in this room have not
figured that alternative minimum tax, you had better do it because I,
for one, and sounds like the gentleman from South Carolina (Mr. Spratt)
had the same experience, I found just exactly how this is biting, and
there were many heads nodding in that room. This alternative minimum
tax is reaching deep into the middle class. And as the gentleman says,
the President's budget takes no account of the need to fix that.
Mr. ALLEN. If the gentleman would yield, you know, I find a couple of
things astonishing here. One is the Office of Management and Budget
used to do 10-year projections of the budget. But they do not anymore.
They just do 5 years under the Bush administration because from year 6
to year 10 is such a horrifying picture, they do not want the American
people to know how bad it is. And you do not have to take it from us,
from Democrats.
Before the 2003 tax cuts were passed, Paul O'Neill, George Bush's
Secretary of the Treasury, said if you pass these 2003 tax cuts, if you
do that, you will not be able to do anything else that you want to do.
And he was right. He was absolutely right. Because this year, as a
percentage of total economic activity, tax revenues to the United
States of America are at the lowest level since 1959, before Medicaid,
before Medicare. We are trying to run a 21st-century government on
revenues that are, you know, really, as a percentage of the economy,
1950s revenues. And it is all because Republicans have, at least they
say, they think if you cut taxes, revenues to the government increase.
That is what the gentleman from Texas (Mr. DeLay) has stood up and
said. The CBO disagrees and the real world does not work that way
because every time they do a big tax cut, revenues decrease. We have
got an administration that is the most fiscally irresponsible
administration in the last hundred years at least, maybe forever,
because they have turned the deficit,
[[Page H2643]]
turned a surplus generated during the Clinton administration into huge
deficits that go on and on.
And I just think in terms of what happens to our children, because
part of this deficit, part of this budget ought to be to prepare a
better future for our children. That is what all Americans want. And we
are simply piling debt on the backs of our children and grandchildren.
We are spoiling their chances for a good life. And frankly, the people
who are doing it have to know it.
Mr. SCOTT of Virginia. Will the gentleman yield?
Mr. SPRATT. I yield to the gentleman from Virginia (Mr. Scott).
Mr. SCOTT of Virginia. I just want to follow up on this briefly
because we talked about fiscal responsibility and irresponsibility. And
we have seen this chart. In 1993 we passed budgets that were very
controversial. But they had the effect of eliminating the deficit and
sending it up into surplus. And these were controversial, and those
votes were used against the Democrats.
Right after these votes were cast, when we eliminated the trend line
going down into further and further deficit and started going up, we
had PAYGO in effect, where if you had a tax cut, you had to pay for the
tax cut. If you had a spending increase, you had to pay for it with
either more taxes or less spending somewhere else. You just could not
spend without paying for it. You could not cut taxes without paying for
it. And we ended up in a surplus at the end of 2000. We let PAYGO
expire so you could pass massive tax cuts and increase spending all you
wanted without paying for it. And that kind of fiscal irresponsibility
puts us down here to $427 billion in the hole.
Now, it is going to get worse before it gets better. The President
suggests in the rhetoric that he is going to cut the deficit in half in
5 years, which is actually somewhat modest. That means he is only going
to clean up half the mess he caused. He is not even going to clean up
just half. He is going to promise to clean up half.
But this green line down here shows if you actually include what we
know must be included, there is no way you are going to even come
close. It is just going to get worse and worse.
This blue line is an interesting line because this is the budget
projection. All the surpluses of 300 billion-plus was the projection
made in 2002, which is an interesting year, because it is after 2001.
After 9/11 we still thought we could have surpluses, but we continued
to cut taxes, we continued to increase spending without any limit.
Now, we have heard about the priorities that we are going to be
missing. We have heard about education. We have heard about health
care. We have heard about all of the things we cannot do. One of the
things we cannot do, I live in Newport News, Virginia. We build
aircraft carriers. Because of the budget crunch, they are talking about
reducing the number of aircraft carriers.
We have a NASA research facility near my district, aeronautics
research. We are scrambling to try to find a couple $100 million so
that NASA Langley can have a few million dollars to continue the
research that we are doing. We are having trouble finding that money.
We hope we can find it.
But just last week, we passed another tax cut. When fully phased in,
it would be another $70 billion a year. Without paying for it. Just
passed it.
One priority we have, all of us here, Social Security. If you look at
all of the tax cuts, you know, where are we going to find the money for
Social Security to keep the plan we have got now, all of the tax cuts
under this administration passed, and if we make them permanent, $14
trillion. Social Security only has a 3.7 to $4 trillion shortfall. If
you add on Medicare, you could have solved both of those, or you can
have tax cuts. And to add insult to injury, make the tax
cuts permanent. That is over $11 trillion in present value cost. Social
Security, 3.7. Make the tax cuts permanent for the top 1 percent, those
making more than $350,000 a year. That is almost enough in itself to
solve the Social Security problem that we have.
Matter of priorities. Are we going to give tax cuts to the top 1
percent, or are we going to save Social Security for everybody? Well,
we are going to be voting on that. We have already passed estate tax
repeal. We have got others. I believe that we ought to save Social
Security first. If you are going to have an $11 trillion tax cut plan
on the table, well, let us just take the first 4 trillion and solve
Social Security. Then maybe we can only cut taxes $7 trillion. But we
would have saved Social Security. Let us save Social Security first. We
have got a good plan. All of the benefits being promised we cannot pay
right now. We are 4 trillion short. It is actually better than the
President's plan because his plan goes broke quicker and cuts benefits
in the process. So that ought to be a nonstarter.
But we have priorities and because of our fiscal irresponsibility, we
cannot meet those priorities. If we go back to the fiscal
responsibility we had from 1993 to 2000, you had to pay for your new
initiatives. You could not just pass a tax cut, and where a President
would veto bills that were fiscally irresponsible, even if he had to
shut down the government. In 1995 we shut down the government rather
than President Clinton signing those bills that would have put us back
in the ditch where we were. Now, that is the kind of leadership we need
now. We do not have it.
And if the gentleman looks at the chart right beside him, where you
pass these tax cuts that look a little modest for the next couple of
years, but when you reveal the full 10-year and the next 10-year cost,
you know they are fiscally irresponsible. We cannot afford them, and
that is why Social Security is in jeopardy today.
Mr. SPRATT. I yield to the gentleman from Tennessee (Mr. Cooper), who
I believe has a question he wants to put forth.
Mr. COOPER. I think it is important to return to the fact that we are
going to be voting tomorrow on the budget for the United States of
America, and it is a budget that no one has seen yet. They only
appointed the conferees yesterday.
Mr. SPRATT. $2.6 trillion budget, which no one has seen.
Mr. COOPER. $2.6 trillion, covering all of the priorities of this
great Nation, the fact that we are at war, Social Security and
Medicare, all domestic spending, cancer research, CDBG grants,
everything is rolled up into it and no one has seen it.
Now, last year we did not have a budget at all, so maybe the prospect
of voting on a budget this year is a good one. But from all that we do
know of the budget, and we will probably vote on it apparently about
2:00 tomorrow afternoon, it will be crammed down our throats with no
one having seen the text of it. And the New York Times and responsible
publications like that are saying it is really the worst of both
worlds. It is going to help the people who need it the least and hurt
the people who need it the most. It is going to hurt poor people. It is
going to hurt middle-class people. It is going to hurt small
businesses. It is going to hurt our schools, and that is irresponsible
budgeting.
Mr. SCOTT of Virginia. Will the gentleman yield?
Mr. COOPER. I would be delighted to yield to the gentleman.
Mr. SCOTT of Virginia. When the budget left the House, what did it do
to things likes Medicaid?
Mr. COOPER. I believe they recommended a $60 billion cut in Medicaid.
Mr. SCOTT of Virginia. Did they direct the Education and Workforce
Committee to cut mandatory spending?
Mr. COOPER. Well, unbelievable cuts are in this and unbelievable aid
to countries like Iraq. It is really a crazy set of priorities and
unbelievable tax cuts.
Mr. SCOTT of Virginia. And if you cut mandatory spending and the
education budget, the only thing you have for school lunches and
student loans, that is the only thing you can cut under that program.
{time} 2310
Mr. COOPER. One thing we know will go up is interest expense on the
national debt because the deficits are the largest in American history.
It is getting harder and harder to blame 9/11 for that because they
have produced the largest deficits in American history year after year
after year, as this chart shows right here. As the gentleman
illustrated earlier, the sea of red ink is continuing; deficits, the
largest in
[[Page H2644]]
American history, as far as anyone can see.
Mr. SCOTT of Virginia. The gentleman mentioned 9/11. It seems to me
that it is fair to have been surprised in September of 2001 or maybe
later that you suffered 9/11. Does the gentleman find it surprising
that people still appear to be surprised that 9/11 happened here, 4
years later, that we are budgeting as if it did not happen? And
surprise, after you pass the budget, oh, we forgot about 9/11?
Mr. COOPER. All the experts, including Chairman Greenspan of the
Federal Reserve, say right now under these Republican budgets we are
clearly on an unsustainable path, a literal road to ruin for our
Nation. And the head of the GAO, the Government Accountability Office,
David Walker, has said the same thing. In fact, he pointed out that
2004 was the worst year in American fiscal history, the worst year in
our entire Nation's fiscal history because we are piling up deficits in
such an irresponsible fashion. It is time for that to stop, but the
situation will not be helped tomorrow when they cram down a budget on
us that literally no one has seen. But if it resembles the House
Republican budget or the Senate Republican budget, it is likely to be
bad news for the American people.
Mr. SCOTT of Virginia. Let me ask one more question. The gentlemen
mentions interest on the national debt. I remember in 2001 when this
administration came in, when Chairman Greenspan was testifying, the
questions he had to answer were along the lines of should we pay off
the whole national debt or should we pay off just the short-term debt
or the long-term debt? What will happen to the interest rates when you
pay off the national debt?
Were the projections not at the beginning of 2001 when this
administration came in that we could pay all the debt held by the
public, we could pay it off by 2008, and by 2013, 2015, we could have
put all the money back into the trust funds that we borrowed from like
Social Security?
Mr. COOPER. The gentleman makes a great point because we have gone
from the prospect of being a debt-free Nation to being one of the most
indebted nations in the world.
In fact, there is a tragic tipping point that will occur in the last
year of the Bush administration, because in that year, and this is
according to the House Republican budget, we will actually be spending
more on interest payments to our creditors than we spend on all regular
domestic government in America. So in a sense it will be a better deal
to be a bond holder of this country, even a foreign bond holder, than
to be a citizen of this country. And that is the classic result of
budget mismanagement which we are seeing year in and year out under
this administration.
Mr. SPRATT. The gentleman mentioned what they told us about repayment
of the debt. If the gentleman recalls, they said if you pass our
budget, including these tax cuts, $1.5 trillion, $1.6 trillion in tax
cuts, with interest even more, we will not be back until 2008, if you
implement our budget, to ask you for an increase in the debt ceiling.
We will not need to come back because we will have ample room beneath
that ceiling.
In the Clinton administration the last 3 years we paid off over $300
billion of national debt. That is the first time that has happened for
a long time. So they said that trend is going to extend and we will not
need to come back and ask for an increase in the debt ceiling in 2008.
History shows in 2002 they were back, hat in hand, saying we need $450
billion. The next year, 2003, they needed 984.
As the gentleman from Tennessee (Mr. Cooper) pointed out, that was
equal to the entire debt of the United States in 1980. And then only 16
months later, they were back asking for another $800 billion which was
provided in November of last year; and as a consequence, the total
increase in the debt ceiling of the United States to accommodate the
Bush budget from 2001 through 2005 is $2 trillion 234 billion. That is
simple arithmetic, back-of-the-envelope analysis, but it is truly
astounding to me, given the fact that they told us we would not need to
raise the debt ceiling until 2008.
Mr. COOPER. The gentleman mentioned earlier that in early 2006 they
will be asking for another increase in the debt ceiling, perhaps even
2005.
Mr. SPRATT. That is correct. This time next year they will need
another increase, probably in the range of $800 billion.
Mr. SCOTT of Virginia. Would the gentleman remind us what the 10-year
surplus was projected to be at the beginning of this administration?
Mr. SPRATT. $5.6 trillion.
Mr. SCOTT of Virginia. For those same 10 years, what is the projected
surplus to be now?
Mr. SPRATT. It is more like $3.3 trillion deficit. We have had a
swing in the wrong direction of nearly $9 trillion.
Mr. SCOTT of Virginia. Mr. Speaker, I would ask if the entire take of
the individual income tax, is that not about $800 billion?
Mr. SPRATT. That is correct.
Mr. SCOTT of Virginia. And we have an average of $900 billion
overspending from what was projected every year for the 10-year period?
Mr. SPRATT. Yes. It is a serious problem. It is a result of policies.
It did not just fall off out of the sky. It is not terrorism
necessarily. It is not war, even. It is the fiscal policies of this
administration.
Now, one thing we did, as the gentleman will recall, in 2001 we did
not do it, I did not vote for that budget; but in the Senate in
particular, they said these tax cuts will have to sunset at the end of
2010 because, one reason, there may not be the surplus that we think
there will be. This is a blue-sky estimate. It may not obtain it. If it
does not, we do not want to be committed to these tax cuts only to find
out that the surplus that they are predicated upon does not actually
happen. And so they were all made to expire or terminate by December
31, 2010.
Now, we know that the surplus projection was wrong, grossly off,
vastly overstated. And we have huge deficits in the place of huge
surpluses now. But the administration is still pushing the same fiscal
policy, asking, insisting, scheduling these tax cuts to be extended,
all of them, almost all of them, after the year 2010, even though they
can only do one thing at that point in time and that is go directly to
the bottom line and vastly, hugely, expand the deficit of the United
States.
Mr. SCOTT of Virginia. Does the gentleman have a chart that shows
what the surpluses were supposed to be and what the annual deficits
look like?
Mr. SPRATT. Here is one good chart that does just that. The gentleman
can see it better than I can from his vantage point. We can see what
they projected.
In the year 2002 they projected a surplus of $313 billion. That was
with the implementation of their policies. It turned out to be a
deficit of $158 billion. In the year 2003 they projected $359 billion.
At least that was the January 2001 projection. I beg your pardon. That
was without policy. That was the projection before Bush policy. A $359
billion surplus turned into a $377 billion deficit with Bush policies.
Mr. SCOTT of Virginia. Now, Mr. Speaker, could the gentleman show me
where Social Security and Medicare present surpluses are on that chart?
Mr. SPRATT. Most of the numbers that we have quoted, as the gentleman
well knows, are net of the Social Security surpluses.
Mr. SCOTT of Virginia. So that means we spend the Social Security
plus, and then spend even more than that after we have spent the
surplus?
Mr. SPRATT. That is correct. We had a deficit last year of $412
billion. But that was after deducting $150, $160 billion surplus in
Social Security. If that Social Security surplus had not been offset,
there was a deficit in the general account of the Federal budget equal
to nearly 600.
Mr. SCOTT of Virginia. In the final years of the Clinton
administration we had the Social Security and Medicare surplus and we
were talking about a lockbox where that would be put to save Social
Security and Medicare without spending it; is that right?
Mr. SPRATT. That is correct.
Mr. ALLEN. If I could just jump in here, I wanted to come to a
conclusion about what this means, these huge deficits, these
unprecedented deficits, the highest deficits in American history. They
mean higher interest rates in the long run, higher interest rates than
we would have otherwise.
Mr. COOPER. On car loans.
[[Page H2645]]
Mr. ALLEN. On car loans and home mortgages and on business loans.
That is number one. And because it means higher interest rates in the
long run, it means slower economic growth, slower economic growth than
we would have with more responsible policies. What does slower economic
growth yield? Fewer jobs. Fewer jobs for the American people.
{time} 2320
So we have higher interest rates, slower economic growth, fewer jobs.
It is hard to believe the people who care about America would do what
the Republican majority is doing to the American people through these
budgets. They have fed the wealthiest people with tax cuts, the largest
tax cuts in American history, and they are taking from the middle class
opportunities for education and job training and advancement that ought
to be part of what this country means.
I think it is embarrassing, it is a shameful activity, and it clearly
is the worst fiscal irresponsibility that I can remember in the last
100 years.
Mr. SPRATT. Mr. Speaker, the gentleman has just examined one of the
reasons that this deficit, these deficits which are structural deficits
built into the budget, not cyclical and resulting from the economy, but
structural, will not go away of their own accord, will not self-resolve
but will be with us on and on and on until we take significant action.
The sad part about it is the budget resolution that comes to the
floor tomorrow will not take significant action. We will have a budget
that appears, but we will not have a plan to reduce the deficit, and we
will not have any prospect of reducing the deficit, not under this
budget. We will just kick the can down the road and leave it to the
next Congress.
I thank all of the gentleman here for participating tonight.
SPECIAL ORDERS GRANTED
By unanimous consent, permission to address the House, following the
legislative program and any special orders heretofore entered, was
granted to:
(The following Members (at the request of Ms. Woolsey) to revise and
extend their remarks and include extraneous material:)
Mrs. McCarthy, for 5 minutes, today.
Mr. Gutierrez, for 5 minutes, today.
Mr. Brown of Ohio, for 5 minutes, today.
Ms. Woolsey, for 5 minutes, today.
Mr. George Miller of California, for 5 minutes, today.
Mr. Pallone, for 5 minutes, today.
Mr. Cummings, for 5 minutes, today.
Mr. Emanuel, for 5 minutes, today.
Mr. Israel, for 5 minutes, today.
Ms. Millender-McDonald, for 5 minutes, today.
Mr. McDermott, for 5 minutes, today.
(The following Members (at the request of Mr. Jones of North
Carolina) to revise and extend their remarks and include extraneous
material:)
Mr. Flake, for 5 minutes, today.
Mr. Smith of New Jersey, for 5 minutes, May 4.
Mr. Conaway, for 5 minutes, today.
Mr. Dent, for 5 minutes, today.
Mr. McHenry, for 5 minutes, April 28 and May 3 and 4.
Mr. Bradley of New Hampshire, for 5 minutes, today.
Mr. Gutknecht, for 5 minutes, May 4.
Mr. Peterson of Pennsylvania, for 5 minutes, today.
Mr. Davis of Tennessee, for 5 minutes, today.
____________________