[Congressional Record Volume 151, Number 133 (Wednesday, October 19, 2005)]
[House]
[Pages H8966-H8972]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




              DEMOCRATIC ALTERNATIVE TO CUTTING THE BUDGET

  The SPEAKER pro tempore. 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. Madam Speaker, as we gather here tonight to talk over the 
problems of the budget, our colleagues on this side of the aisle, the 
Republicans, are locked in a dispute over how to pay for Hurricane 
Katrina, the cost of which could fall between $100 and $200 billion, 
maybe even more, for the Federal Government alone.
  Some, for the most part their most conservative Members, have 
proposed big cuts in programs that range from student loans, to 
Medicaid, to food stamps, about $50 billion in spending cuts spread 
over 5 years.
  They present these spending cuts as a way to offset, partially at 
least, offset the spending increases that the response to Katrina and 
Rita are going to require. But in actuality these spending cuts will 
not go to offset Katrina, because the Republican budget, the budget 
resolution operative for the year 2006, the resolution to be brought to 
the floor to be amended, already calls for $106 billion in additional 
tax cuts, $106 billion in new tax cuts.
  And when these new tax cuts are passed, the spending cuts proposed, 
ostensibly to offset the cost of Katrina, will instead go to make up 
for the loss of revenues due to the $106 billion in tax cuts. Since the 
spending cuts are $50 billion and the tax cuts are $106 billion, none 
of the spending cuts will ever make it to the bottom line where they 
might otherwise be available to offset the cost of Katrina.
  So the first problem that we as Democrats have with what our 
Republican colleagues are pushing is that it is not what it purports to 
be. It is not a plan to pay for Katrina. It is a plan to facilitate 
$106 billion in additional tax cuts.
  The second problem that we as Democrats have with their plan is that 
we believe the cost of helping one State sustain the catastrophic loss 
and cost of a natural disaster, a disaster like Katrina, Hurricane 
Rita, should be borne by all of us, by all of the States, should be a 
matter of shared sacrifice, has been in the past should be in future, 
it works and it is right.
  But we do not believe that those least able to bear the costs should 
be saddled with the lion's share of the load. And yet that is exactly 
what their plan will do, because they are pushing a plan that will pay 
for the cost of Katrina by coming down hard and heavy on the backs of 
students borrowing to pay for their college education, on the sick 
whose only access to care is through Medicaid, and on the very poor who 
depend upon food stamps to feed their families.
  This is just some of those on whom the cuts they are proposing will 
fall, and the reason we are proposing alternatives and opposing the 
plan that they are bringing to the House floor. What we have coming 
before the House is a plan for spending cuts that basically and simply 
does not achieve its stated purpose, because it does not go to cover 
the cost of Hurricane Katrina, and the spending cuts it does select, 
whether they are used to offset tax cuts or offset the costs of 
Katrina, as I have said, come down on some of these who are the least 
able to sustain and bear them.
  It is fair to ask, I think, as we begin to consider such a program, 
why is it we are insisting upon offsets for rebuilding Biloxi or Bay 
St. Louis or New Orleans, but not insisting on offsets to pay for 
rebuilding Baghdad or Mosul or Basra.
  Well, one of the reasons I believe that we are experiencing this 
newfound interest in offsets that might diminish the deficit is that 
the evidence of a swelling deficit that is not going away, it is a 
structural deficit, built into the budget, not a cyclical deficit 
deficit based on the ups and downs of the economy, one that is going to 
be with us for a long time to come because of fiscal decisions that 
were made in 2001, 2002, 2003 and 2004, is becoming so obvious, so 
widespread, so obvious, so significant that it simply cannot be denied.
  I mean, after all the basics are apparent and they are well known. As 
Yogi Berra used to love to say, you can look it up, it is a matter of 
record. Back in the year 2000, we had a surplus of $236 billion. Matter 
of record. The budget was in the black by $236 billion, unprecedented. 
That was a budget that was inherited by Mr. Bush.
  Today, just a few weeks ago as a matter of fact, the administration 
closed the books on fiscal year 2005, and when they closed the books 
they finally declared the balance at $320 billion. And they took some 
credit because that deficit is actually smaller than the deficit in 
2004, which was $412 billion. But a $320 billion deficit is nothing to 
crow about.
  Look at what has happened over the last four fiscal years. The 
simplest way to show it to you on the back of an envelope is to look at 
how many times our Republican colleagues have had to vote to increase 
the debt ceiling of the United States, and what those total increases 
come to since 2002.
  This chart shows it to you very, very clearly. It shows that in June 
of 2002, despite the administration's assurance that we would not have 
to increase the debt ceiling, the legal limit to which the United 
States can borrow for another 8 years, they were back a year later 
saying we need an increase this year of $450 billion.
  Then in May of 2003 they came back and asked for an incredible 
amount, $984 billion. You would think that big an increase would take 
you at least several years. This request was approved on May 26, 2003. 
By the summer of 2004 the Bush administration was back, Secretary Snow 
came back hat in hand saying we have just about run through the $984 
billion increase you allowed us last year, we need another $800 billion 
increase, and before we could leave for the winter break, last 
November, that had to be passed.
  Finally this year, we had a budget resolution on the House floor, 
passed the Senate, has now been passed as a concurrent budget 
resolution. It calls for an increase of $781 billion in the year 2006.
  If you add all of these debt ceiling increases together, you will see 
that to accommodate, to make room for the budgets of the Bush 
administration over the last four fiscal years, we have had to raise 
the debt ceiling of the United States by $3 trillion, 15 billion.
  So why do we have this newfound interest in offsets? It is because 
the budget is becoming undeniably unsustainable.
  I yield to the gentleman from Wisconsin.
  Mr. KIND. Madam Speaker, I thank the gentleman for yielding to me, 
and

[[Page H8967]]

also thank him for the leadership that he has provided on the Budget 
Committee and highlighting this very important issue.
  I know people back home hear a lot of these numbers and figures about 
debt ceiling and the growth of the Federal budget deficit every year. 
But what is different this time I think is the most disconcerting 
aspect of what you are talking about this evening, and that is this new 
debt that is being created is not owned by ourselves any more. We are 
dependent on foreign entities; namely, China and Japan, as the number 
one and number two purchasers of this government debt that we are 
racking up.
  These are IOUs that are going to those countries rather than to our 
own citizens or to our own investors in this country, and we are 
becoming more and more beholden to those interests, especially China, 
in order to help us finance these deficits.
  From my perspective, I think it is incredibly dangerous and not in 
our best long-term economic or security interests to be so dependent on 
China to be financing the deficits of this magnitude, which have been 
taking place in recent years.
  Mr. SPRATT. Madam Speaker, the gentleman is absolutely right. First 
of all, foreigners are picking up the lion's share of our debt for now. 
It cannot go on forever. We know that. No borrower can go back to his 
creditors continually and endlessly and ask to borrow more and more.
  But it has had an effect. It has kept interest rates low, because 
foreigners are borrowing our debt. When they quit buying it in large 
shares, we are going to see a rise in interest rates, it is going to 
have a significant effect on our economy.
  Let me just show you the path we are on right now, to illustrate why 
the word not on a ``sustainable'' path has become commonplace in 
Washington today. Our trade deficit, our budget deficit are simply not 
sustainable paths.
  This September, just a month or so ago, CBO, by law, presented a 
budget update, economic update which they are required to present. We 
asked them to take this projection of the economy and the budget over 
the next 10 years and adjust it for assumptions that would capture the 
essence of the Bush budget.
  For example, we said assume that the tax cuts passed in 2001, 2002 
and 2003 will be extended when they expire in 2009, 2009 and 2010. We 
asked them to assume that we fix somehow the alternative minimum tax so 
it only affects the same number of taxpayers as it affects presently.
  We asked them to assume that there will be a drawdown beginning next 
year, this year, in the troop levels in Afghanistan and Iraq to the 
point where there are about 20,000 in each theater, and there will be a 
steady state like that.
  And we asked them to assume that the President's proposal for Social 
Security privatization is enacted. Factor all of these into the budget. 
Extend the budget out 10 years. And CBO, we said, tell us what the 
results are. And here are the results on this chart, and they are very 
stark.
  The budget deficit for last year, 2005, was $319 billion. Under the 
assumptions I have just outlined, that deficit will go to $640 billion. 
It will double over the next 10 years. The debt of the United States 
held by the public and held by foreigners will increase from $4.6 
trillion to $9.2 trillion. It too will double.
  And debt service, the interest we pay on the national debt, net 
interest that we pay on the national debt held by the public will 
increase almost threefold, going from $182 billion to $458 billion.
  That is why we say there is a debt tax implicit in this budget. There 
may be tax cuts today, but tomorrow if there is one thing obligatory in 
the budget, it is interest on the national debt.

                              {time}  1830

  It has to be paid or the credit of the United States will collapse. 
And look at what we are leaving our children, the burden we are leaving 
them to bear and the increase in debt service which buys nothing for 
the government, breeds cynicism of our government because when the 
citizens are paying $458 billion in interest on the national debt and 
seeing nothing in return for it except for the fact that the bond 
holders of America are getting interest payments, they get cynical for 
what government can do for them for charging such high taxes and doing 
so little in return.
  The debt of the United States will increase from 37 percent to 46 
percent of the GDP. That is the path we are on now, and that is the 
path everyone knows is not sustainable.
  Mr. ETHERIDGE. Madam Speaker, I think what the gentleman has pointed 
out, if our colleague were taking in context of where we were on 9/11 
when New York was hit, we had a surplus, and when that hit we had the 
resources of this government, as bad as it was, to help put this thing 
back together.
  Mr. SPRATT. We had some resilience.
  Mr. ETHERIDGE. We had some resilience. We had balance. We did not 
have to say we are going to look for offsets to help the people of New 
York get back on their feet. They are still recovering, but we did the 
right thing.
  I was down in Louisiana last weekend with members of the Committee on 
Agriculture. That is what makes this such an important night in what we 
are doing.
  We went to the food bank, the food bank in New Orleans, and really 
for Louisiana and the larger area the food they handed out last month 
was half what they had given out in one month the whole year last year. 
And we are looking at folks who have lost their jobs, who have lost 
their homes, who have lost everything they have, and we are saying that 
in this budget that we are going to offset against those folks?
  The gentleman has pointed out so many times we in this country help 
one another. It is not about taking from one group to fix another 
group. And as we look at these numbers, we literally are taking from 
our children and our grandchildren so folks today can live the high 
life. That is wrong.
  In the budget cuts we are going to be seeing coming down the road, 
the result of some of the policies that have been put in place over the 
last several years, we are going to see children denied an opportunity 
for education, a higher education. We are going to see heating bills 
for folks going up this year because of energy prices going through the 
roof, and they will not have money to pay those bills because we will 
not have the resources to help. These are the consequences of bad 
policy decisions that have been made in this body.
  Mr. SPRATT. They are becoming so abundantly evidenced that they 
cannot be overlooked or denied any longer. That is the point I am 
trying to make.
  Mr. ETHERIDGE. Absolutely. The gentleman is right on target.
  I saw that this weekend firsthand and I am sure others have as they 
have been there. This is important that we share this with our 
colleagues and folks tonight so they will understand that budgets are 
things that you do not pay much attention to sometimes until, as we say 
back on the farm, the chickens come home to roost, and they are not 
coming home to roost.
  Mr. SCOTT of Virginia. Madam Speaker, I would like to thank the 
gentleman from South Carolina for his comments. I want to get back to 
the chart where he has debt service in 10 years of $458 billion. When 
you use big numbers like that, sometimes I like to put them into 
perspective. At $45,000 each with that money which is just going down 
the drain, you could hire over 10 million Americans for $458 billion, 
at $45,000 each, 10 million. There are less than 9 million unemployed 
today, drawing unemployment. So that is just money right down the 
drain.
  You can hire everybody that is on unemployment, have money left over, 
and a $45,000 a year job for the money that we are going to waste on 
debt service because we have let this deficit get out of control.
  In the deficit for 2015, the gentleman has listed $640 billion. We 
need to put that number in perspective. The entire revenue from the 
individual income tax, what everybody pays in individual income tax, is 
approximately $800 billion. They have overspent, gone in the hole $640 
billion. You just wonder how bad it would have to get before they 
realized that this just is unsustainable.
  Mr. SPRATT. Let me make two points before I yield again.
  First of all, we all believe that disaster relief should be a program 
of

[[Page H8968]]

shared sacrifice. We should all want to pitch in and help the people of 
New Orleans and Bay St. Louis and the gulf coast. No question about it. 
But when you spread that burden across our whole country, and that is 
the way we should do it, it should be spread equitably and evenly and 
fairly.
  The second problem we have with what is being proposed and pushed 
right now, is that the costs would not come down evenly and equitably, 
but they would come down heavily on, in many cases, those least able to 
bear the burden. We do not think that is the way it should be done. We 
are not saying it should not be paid for in some respect or stretched 
out over time. We are simply saying, when and if it is paid for it 
ought to be equitably distributed.
  Let me make one other final point by saying that if you look at our 
charts here you will see that in the year 2015, way down here in the 
corner of this particular chart, the deficit will be $640 billion. That 
does not assume anything for Hurricane Katrina because it had not 
happened when these numbers were run.
  If you factor Hurricane Katrina in at today's level expenditure in 
that year the deficit will be about $645 billion. So the problem in the 
outyears here is not Hurricane Katrina. It is budget and fiscal 
decisions that were made in 2001, 2002, 2003, 2004 and are still being 
made today through 2010 with the insistence that all the tax cuts 
passed then have to be renewed. That is what is yielding you these 
outyear deficits. This budget that gets worse and worse by the year.
  Mr. KIND. Madam Speaker, what is equally troubling and if not more so 
is that the gentleman is talking about the prime retirement years of 
the baby boom generation. We all know we have an aging population in 
this country and that is when that demographic time bomb is about to go 
off. Unless or until this Congress, working with the administration, 
can turn this fiscal scenario around, it will be virtually impossible 
for our children and grandchildren to meet the burdens that are piling 
up on them today because of the demographics in this country. That is 
why it is important that we have this discussion tonight so hopefully 
we can bring some fiscal sanity back into the economic decision of this 
body before it is too late.
  Mr. SCOTT of Virginia. I would ask the gentleman from South Carolina 
(Mr. Spratt) to explain this.
  Mr. SPRATT. That is essentially on a linear graph, what we have here 
in a simple table. It shows a blip for Katrina but basically it adds 
very little to the outyear deficit.
  Mr. SCOTT of Virginia. So the outyear deficit is essentially the same 
whether you pay for Katrina or not. That it is really a blip on the 
screen. So whatever our fiscal problems are, Katrina is absolutely 
irrelevant because that is only a blip on the screen.

  This is the size of the deficit, the solid line without Katrina, the 
dotted line with Katrina. And after a couple years, you do not notice 
the distance.
  Ms. McKINNEY. I will not take much time but I want to change the 
thrust just a little bit because I want to talk for a half minute about 
our education President.
  Now, it is my understanding, and I hope the gentleman will correct me 
where I am wrong and you will amplify what needs to be amplified where 
we are right, but our education President has underfunded No Child Left 
Behind by $39 billion. Now, he has also cut technical education, cut 
student loans, cut the grants available to students who want to go to 
college. And so basically they, the people who are making public policy 
in the Congress these days, are a bit out of touch with the way the 
rest of us live. We, our children, and those of us who are still 
students, rely on the funding that is available in the budget so that 
we can have the workforce for tomorrow being prepared today, and that 
is not the case.
  But the one thing I just want to say is, it is my understanding that 
all of these cuts in education can be likened to a student tax, and so 
I would like for the gentleman to amplify on that but I would just like 
to say that we had a minor, modest victory in the State of Georgia just 
yesterday because the courts in the State of Georgia turn back a 
legislative initiative put forward by the Republican controlled 
legislature and our Republican Governor. That was the much maligned the 
Voter ID bill.
  This Voter ID bill would have put a two-tiered structure in place for 
people being able to vote. That was a poll tax and the poll tax was 
turned back. Now we have got a student tax, a learning tax.
  Could the gentleman please talk to us about the impact of these cuts 
on the ability of us to prepare our young people for tomorrow's jobs 
but also how this becomes a learning tax on young people?
  Mr. SPRATT. Madam Speaker, I think the gentlewoman will agree that 
the essence of America's opportunity and the essence of opportunity is 
a good education, and what we are seeing in this budget is diminishing 
money every year for education. For example, the signature program of 
the Bush administration was No Child Left Behind and many voted for it 
on the assumption that there would be, yes, more accountability, higher 
standards but there would also be more money.
  And now, 2006, the difference between what was authorized and 
expected to be committed to this program and what is actually being 
made available in this budget is about 8, $9 billion. The number the 
gentlewoman gave was a cumulative number since the adoption of the 
bill. In addition, in order to make what is provided for the additional 
Title I funding available, the Bush administration has proposed to cut 
or kill about 48 educational programs. A lot of them are small 
programs, but they are the Eisenhower Science and Math Program.
  We just had a blue ribbon commission say we need to be investing more 
in science and math education if we are going to make it to the future 
and sustain our style of living.
  So we see a faint hearted commitment in name, in slogan, No Child 
Left Behind, but the dollars do not follow the children to the extent 
that we all expected when we voted for the bill in the first place, no 
question about it.
  Mr. KIND. Madam Speaker, I thank the gentlewoman for Georgia for 
raising this issue. I am a member of the Committee on Education and the 
Workforce along with the Committee on the Budget, and we are looking at 
under the majority party's budget reconciliation proposal of having to 
come up with close to $15 billion worth of cuts out of the education 
and workforce authorization budget at a time when, as the gentleman 
from South Carolina (Mr. Spratt) has just indicated, we need to be 
ramping up our investment in the workforce development of this century 
with our students and with the youth so that they have the skills and 
the tools that they need to compete successfully in what is a rapidly 
shrinking world and an incredibly competitive global marketplace.
  The reports are coming out almost daily in regards to how we are 
underfunding or not supporting programs to encourage more math and 
science and engineering students in this country.
  Earlier this year I spent 2 weeks in China doing a higher education 
tour there. They are investing heavily in their education 
infrastructure. They are graduating more English speaking engineers 
from their own Chinese schools than we are here in the United States. 
And if this trend continues, if we continue to sleepwalk through all 
this, there will be serious consequences that we will be paying in 
short order as we move forward, and this is where fiscal mismanagement 
and the misplacement of priorities come back to haunt the future 
prosperity but also the security of our country.
  We know what works. It worked in the 1990s with basic budget rules 
such as pay as you go, and the Democratic Party has been united in 
reinstituting those budget disciplinary rules. It did work in the 
nineties. That gave us 4 years of balanced budgets and surpluses and an 
opportunity to download our debt, so we were not dependent on countries 
like China to be financing the deficit. So we were in a better position 
to be dealing with a 9/11 catastrophe or a Katrina catastrophe or 
making the important investments for the future of our country.
  Because of the economic policies pursued by the majority in recent 
years, those options have been taken away, and they will continue to 
diminish our opportunities in the future unless we bring back some 
sense of responsibility to this Chamber again, and that is why I think 
special orders like this this

[[Page H8969]]

evening are very important times to discuss the various choices that we 
face today.

                              {time}  1845

  Mr. SPRATT. Madam Speaker, I thank the gentleman for his insight, and 
I now yield to the gentleman from Arkansas (Mr. Ross).
  Mr. ROSS. Madam Speaker, I want to thank the gentleman from South 
Carolina for taking this Special Order this evening; and as whip of the 
fiscally conservative Blue Dog Coalition, I rise this evening to share 
in the dialogue and to talk about the financial condition of our 
Nation's government. The Blue Dog Coalition aims to restore common 
sense and fiscal discipline to the way we operate our government.
  Madam Speaker, our Nation today is $7.990 trillion, nearly $8 
trillion, in debt. Put that another way, our Nation today is spending 
$160 billion a year simply paying interest on the national debt. That 
is about $500 million a day. In fact, it is $13 billion per month, it 
is $444 million per day, it is $18 million an hour, it is $308,000 a 
minute. Or put another way, our Nation is spending $5,100 every second 
simply paying interest on the national debt. In fact, if every person 
in America wrote a check to pay off the national debt, the amount each 
person would owe, including the children born today, would be $26,000.
  It is hard to believe now that we had a balanced budget from 1998 to 
2001, because now this administration, this Republican Congress, has 
given us the largest budget deficit ever in our Nation's history for a 
fifth year in a row. In 2001, the deficit was $128 billion; in 2002, it 
was $157 billion; in 2003, $377 billion; 2004, $412 billion; and in 
2005, it went to $427 billion.
  That does not include the money that is borrowed from Social 
Security. No wonder this Republican Congress would not give me a 
hearing or a vote on my bill that basically said that politicians in 
Washington should keep their hands off the Social Security Trust Fund. 
In fact, if it were not for the money being borrowed from the Social 
Security Trust Fund, the deficit would have been $567 billion last 
year.
  Many American citizens, I know the citizens in Arkansas' Fourth 
Congressional District, are asking me where all this money is coming 
from that we are borrowing. We have borrowed $700 billion from Japan, 
$250 billion from China, and $76.2 billion from the Caribbean Banking 
Center. I had never heard of such. In fact, 45 percent of our deficit 
is being funded by foreign investors.
  In the aftermath of hurricanes Katrina and Rita, we are faced with 
the very important question of how are we going to pay for the 
rebuilding efforts. I find it interesting that these questions are not 
asked when we talk about paying for the war in Iraq. Just a few short 
months ago, $82 billion was passed in emergency supplemental 
appropriations. In fact, we spend $188 million every day in Iraq and 
$33 million every day in Afghanistan.
  In a time of war, in the aftermath of our Nation's most costly 
natural disaster in our history, the Republican majority in Congress 
and this administration are still proposing another $106 billion in new 
tax cuts. That is wrong. It is morally wrong. There is a lot of talk 
these days about values. I can tell you that those are not the kinds of 
values that I was raised on and still believe in.
  This Republican-controlled Congress claims these additional budget 
cuts are to pay for Katrina. Over $62.3 billion has been allocated for 
hurricane relief efforts. However, budget reconciliation is not 
applicable to emergency supplemental funding. We recently passed $82 
billion in emergency supplemental appropriations for Iraq. Where was 
the talk of reconciling the budget then? It is clear these budget cuts 
are not aimed at offsetting the cost of the devastating hurricanes, but 
rather at partially offsetting $106 billion in new tax cuts.
  The Republican-controlled Congress is proposing to slash programs 
such as Medicaid, food stamps, student loans and other programs that 
would directly and adversely impact the poor, the disabled, and the 
elderly. And those cuts, Madam Speaker, are wrong. It is about 
priorities. And this Republican Congress believes it is more important 
to fund tax cuts for those earning over $400,000 a year than to fund 
programs that benefit the poor, the disabled, and the elderly.
  I would like to wrap up my remarks by sharing with you a paragraph 
from a letter that I received just today from the National Council of 
Churches of Christ in the USA. It is signed by a number of 
organizations. Some of them you will recognize, like the National 
Baptist Convention USA, the National Missionary Baptist Convention of 
America, the Presbyterian Church, and the United Methodist Church. If I 
may read from that letter as my closing:
  ``The role of government is to protect its people and work for the 
common good. This is not the time for the budget reconciliation process 
to create greater hardships for those who are already experiencing 
greater suffering. To do so is not only unjust; it is a sin. It 
violates all the fundamental Christian principles of loving thy 
neighbor, caring for the poor, and showing mercy. As religious leaders, 
this violation is unacceptable to us.''
  And to the gentleman from South Carolina, I would say that this 
violation is unacceptable to me as well.
  Mr. SPRATT. Madam Speaker, I thank the gentleman for his comments, 
and I yield now to the gentleman from North Carolina (Mr. Price).
  Mr. PRICE of North Carolina. Madam speaker, I want to thank the 
gentleman from South Carolina for taking out this Special Order. We are 
having this discussion tonight as yet another potentially catastrophic 
hurricane turns toward the U.S. mainland, and once again we are not 
prepared. This time I am not talking about FEMA or the Department of 
Homeland Security; I am talking about being unprepared fiscally.
  Our former National Economic Adviser, Gene Sperling, put it best when 
he said that when the congressional leadership all of a sudden starts 
asking how are we going to pay for Katrina, they are asking a very 
narrow question. The question should be, How did this country get into 
such a fiscal mess in the first place? I tell you, the answer was not 
Katrina, and the answer was not Rita, and the answer is not going to be 
Wilma.
  These natural disasters do cost a great deal, and we are going to do 
what it takes to respond to the affected areas. But they are not the 
cause of our problems. What these hurricanes have done is lay bare this 
country's troubling racial and economic divides and the sorry state of 
our disaster preparedness. But they have also laid bare the dangerous 
deterioration of our fiscal health.
  Now, in the wake of Katrina, our colleagues on the other side of the 
aisle seem to have gotten religion on fiscal responsibility. Mind you, 
this is after they engineered an unprecedented fiscal reversal of some 
$9 trillion from budget surpluses and paying down debt in the Clinton 
administration to record deficits and deepening debt under George W. 
Bush. But our Republican friends are suddenly wringing their hands over 
the deficit. They are using Katrina as a pretext for doing what they 
wanted to do all along, and that is to cut the very safety net programs 
on which the victims of Katrina depend.
  All you have to do is take one look at this proposed reconciliation 
package and you will see how much they care about the budget deficit. 
And I appreciate the gentleman from South Carolina pointing this out 
earlier this evening. This reconciliation bill would not reduce the 
deficit; it would increase the deficit by more than $100 billion over 5 
years.

  This reconciliation process, we all know, was intended to facilitate 
the passage of deficit reduction measures. But the Republican 
leadership has now turned the process on its head and is using it to 
push through measures that will drive us further into debt. The 
spending cuts called for in this bill will do absolutely nothing to 
offset hurricane recovery. Let us be very clear about that.
  From the beginning, the $35 billion in cuts contained in the 
reconciliation package were intended to partially offset not the 
hurricane but $107 billion in tax cuts included in this budget 
resolution. And now, if you add $15 billion, that is not going to make 
up the difference. What those cuts will do is threaten vital services 
that the victims of Katrina are counting on to help rebuild their 
lives: foods stamps, Medicare and Medicaid, student loans, and

[[Page H8970]]

low-income energy assistance. These could all be cut, just to name a 
few.
  What about wealthy Americans? They are going to get off without 
sacrificing a dime of the Bush tax cuts. Quite the contrary. The 
reconciliation bill is going to be used to fast-track new and extended 
tax cuts for those who need them least. Maybe that is the Republican 
idea of shared sacrifice.
  The very notion that we should offset the $200 billion it could cost 
to help millions of Americans and their families and communities get 
back on their feet after a tragic disaster and not offset the nearly $2 
trillion cost for the Bush tax cuts, or the $250 billion we are 
spending in Iraq and Afghanistan, well, that reeks of hypocrisy. And it 
actually worsens the fiscal meltdown of the last 4 years.
  Why should we offset the cost of rebuilding Biloxi, but not the cost 
of rebuilding Baghdad? And even worse, why should we make the very 
people we are claiming to help bear the lion's share of the cost? I am 
afraid you are not going to find very many honest answers from the 
leadership of this Chamber. You are going to find some deception and 
deficits as far as the eye can see. I think it is disgraceful.
  Anybody who votes for that reconciliation should be ashamed of 
themselves for what they are doing to the most vulnerable among us and 
what they are doing also to this entire country's future.
  This is a powerful message, Madam Speaker; and I appreciate the 
gentleman from South Carolina's leadership in blowing the whistle on 
these budget follies and also showing that the kinds of things we have 
been saying all along are laid bare by Hurricane Katrina. And the best 
response we can make is to not whack at the meager budgets that these 
victims already depend on, but to get serious about getting our fiscal 
house in order long term. So I thank the gentleman for his Special 
Order.
  Mr. SPRATT. Madam speaker, I thank the gentleman for his comments, 
and I now yield to the gentleman from Virginia (Mr. Scott).
  Mr. SCOTT of Virginia. Madam Speaker, I thank the gentleman for 
yielding to me, and the gentleman from North Carolina (Mr. Price) 
mentioned the question of whether the wealthy would be sacrificing in 
this budget. I just want to point out as we consider how to pay for the 
$200 billion potential cost of Katrina that there are two particular 
tax cuts that have not gone into effect yet, but will go into effect 
January 1. They are nicknamed PEP and Pease, the Personal Exemption 
Phaseout and the standard deduction phaseout. And as the gentleman has 
inferred, they only help the wealthy.
  Now, we have to show a chart, because no one will believe it unless 
you show a chart. This shows how that cost of PEP and Pease will be 
distributed. If you make under $75,000 a year, you will get zero from 
this tax cut. If you make $75,000 to $100,000, you might get a dollar. 
If you make $100,000 to $200,000, you might get $25. You can hardly see 
the bar. Take my word for it, there is a little bar there to show the 
$25 you might get. At $200,000 to $500,000, you get $558, on average; 
and at $.5 million to $1 million, you get over $4,000. But if you make 
over $1 million, this tax cut that has not even started yet but will 
start next year, you will get about a $19,000 benefit from that.
  To implement this tax cut, the 5-year cost is $200 billion. We wonder 
how to pay for Katrina? How about not letting this tax cut go into 
effect. That would cover the entire potential cost of a Katrina right 
there. But instead we are going to ask Medicare and Medicaid, possibly 
veterans health care, certainly student loans and school lunches, food 
stamps, and those who are most in need, those programs that the Katrina 
victims would actually be using, those are the programs that will be 
cut and not a tax cut for millionaires.
  I think our priorities are wrong, and I appreciate the gentleman 
giving us the opportunity to bring this kind of chart to show what kind 
of tax cuts have not even gone into effect yet, but will go into effect 
beginning next year. And when we say it is a tax cut skewed to the 
wealthy, this chart shows exactly how that takes place.
  Mr. PRICE of North Carolina. Madam Speaker, if my colleague will 
yield for just a moment.
  Mr. SPRATT. Madam speaker, I yield to the gentleman from North 
Carolina.
  Mr. PRICE of North Carolina. You know, our friends over at the Center 
for Budget and Policy Priorities have asked the rather obvious 
question, where did that $9 trillion go? Remember that fiscal reversal? 
And the answer to that is that the biggest chunk of it did go to those 
Bush tax cuts. A good portion of it has gone to increased defense and 
security spending after 9/11. Some of it comes from the bad economy and 
the fact that we have had a very sluggish recovery.

                              {time}  1900

  But you know what is not on the list is the sort of cuts that are 
being proposed by our Republican friends in this reconciliation bill, 
and that is domestic discretionary spending or for that matter domestic 
nondiscretionary spending.
  The country is not going broke because we are spending too much on 
food stamps, and the country is not going broke because we are doing 
too much cancer research or having too many after school programs, and 
yet that is where the Republicans choose to get religion on fiscal 
responsibility, in the very areas where the blame does not lie. So this 
Hurricane Katrina exercise is just more of the same. They are saying 
that the offsets for Hurricane Katrina are going to come from these 
areas that people desperately need, while leaving the main culprits in 
our budget meltdown untouched. That is simply unacceptable.
  Mr. SPRATT. Mr. Speaker, I yield to the gentleman from North Dakota 
(Mr. Pomeroy).
  Mr. POMEROY. Mr. Speaker, I am pleased to join the gentleman's 
special order and participate in the discussion with my colleagues.
  We are watching something extremely unserious unfold with respect to 
the Nation's balance sheet. We have to understand, as we deal with the 
budget of this country, we are dealing not just with the matters that 
are presently before us and will affect the upcoming year, we are 
literally talking about the future of this country. To the extent we do 
not pay our way, our kids pick up the difference.
  Many of us were terribly concerned when we saw the pre-Hurricane 
Katrina budget forced through the House, forced through the Senate, yet 
to be reconciled and passed finally, but it proposed to drive the 
deficit deeper and in fact that was from a position where the deficit 
position was the third worst in our Nation's history.
  Now the difference in the deficit, and we talk deficit around here, 
deficit is our annual shortfall. The national debt is what it all 
amounts to. When we run deficits, we add to the debt. And while we are 
third worst in the Nation's history in terms of annual deficit, we are 
absolutely on unchartered ground with the kind of debt we now have, 
debt approaching $8 trillion.
  This would be I believe very alarming by any measure, but a further 
look shows who owns the debt. The debt held by the public is 
increasingly owned by central banks of Asian nations. I have heard some 
Members, some friends of mine from the other side of the aisle say 
look, I know that is a scary deficit number, but we have had, relative 
to the size of our economy which is now bigger, we have been worse than 
this before. I do not think we ought to have the very worst in our 
country's history as the benchmark against which we compare, but how 
about the very best in our Nation's history. They try to excuse the 
scary state we are in by saying it has been worse in terms of real 
dollar terms compared to GDP.
  It has never been this bad. We have never had so much debt owned by 
foreigners. I am not just talking about Ole and Sven and whomever else 
across the world, I am talking about central banks controlled by 
central governments, especially Asia, Japan, and even more by China.
  This morning I visited with a former member of the Office of 
Management and Budget and asked her whether or not we were losing 
control potentially in the future of our monetary policy as a country, 
giving up essentially sovereignty of our ability to set interest rates 
in light of the level of debt owned by foreign governments. She 
indicated we are heading down that path.
  So anything that we talk about in this Chamber that adds to the 
deficit,

[[Page H8971]]

increases the holdings of foreign governments of our national debt and 
diminishes the sovereignty we have over our own country, this is an 
extremely alarming situation and that is why I was so adamant against 
the budget reconciliation proposal being advanced in Congress.
  Recently we have had a new chapter in the debate. Majority Members 
have said my gosh, that Hurricane Katrina was expensive, we have to 
offset every dollar of relief we are spending on that hurricane. Look, 
I welcome very much some concerns about spending and deficits and the 
notion that we might offset some of this stuff, but if we are going to 
offset, let us look at the total picture. There is nothing about a 
Nation's balance sheet that treats hurricane debt different from other 
debt. So if we are going to offset for Hurricane Katrina, let us offset 
for the war in Iraq, let us offset for tax cuts which deprive the 
government of revenue and throws us further out of balance. That is not 
what they are talking about.
  In other words, this is window dressing on a scheme that ultimately 
drives us further into debt. Look at this chart. This chart shows the 
small bar which is the amount of spending they want to cut while the 
tall bar shows the depth to which the tax cuts they are including in 
this package would drive us further into deficit, further into the 
hands of more Chinese bonds residing in the Chinese government.
  We need to do something about this, and it does not start with 
basically this window dressing on cutting many of the programs so vital 
to those displaced by the hurricane as an excuse to offset hurricane 
relief. We need to get serious about getting back to a balanced budget. 
There are a couple of ideas that I would advance in the concluding part 
of my remarks.
  First, we need to reinstate a requirement given the deficits that we 
are in that we pay as we go from here. If we are going to take a step 
that adds further to the deficit, we have to find a way to offset that 
payment. If we spend more, we have to find a way to offset so we do not 
drive that deficit deeper. If we pass some tax cuts, we lose some 
revenue, we have to cut spending so we hold that deficit in balance.
  Mr. SCOTT of Virginia. Mr. Speaker, if the gentleman would yield, 
have we ever had PAYGO?
  Mr. POMEROY. Mr. Speaker, we have had these pay-as-we-go 
requirements, known as PAYGO, throughout the entire 1990s, and I will 
tell Members what brought it about. What brought it about was divided 
government. President Bush won, and the Democratic controlled Congress 
arrived at pay-as-you-go requirements to bring the budget into balance. 
President Clinton, dealing with a Republican controlled Congress, had 
pay-as-you-go requirements to get us to a balanced budget.
  Something very, very problematic has happened under united Republican 
control of the White House, the House and the Senate: They blew away 
the PAYGO requirements and have added to the deficit like there is no 
tomorrow, giving us such deep debt problems with the Chinese.
  Mr. SCOTT of Virginia. Mr. Speaker, if the gentleman would continue 
to yield, if you have a tax cut without PAYGO, you do not have to pay 
for it; and what happens when you cut taxes and increase spending 
without paying for it?
  Mr. POMEROY. What happens is you get yourself into the deepest 
deficits you have ever had in the history of the country, which is 
precisely the problem. What the gentleman means is you do not have to 
pay for it in this year's budget because your children are going to pay 
for it down the road as they retire the national debt.
  I would just cite a couple of other spending areas that might be cut, 
and it relates right back to the administration's handling of the 
hurricane. Just listen to this. You want to cut food stamps, Medicaid, 
programs that are going to be so vitally important to getting displaced 
people from the hurricane back on their feet again, but before we go 
there let us take a look at some of the ways the Republican 
administration has spent money for hurricane disaster relief: $1,275 
per person for a cruise ship that costs only $599 for an actual cruise. 
What kind of deal is that? Or $15,000 paid for a load of ice that was 
worth $5,000; $88,000 for mobile classrooms that normally cause 
$42,000; $59 per hotel room per night for months on end.

  And that is not all. The Federal Government paid full retail for 
trucks, laptop computers, clothing and sleeping bags. Firms have been 
awarded contracts for millions without competition. Contracts have gone 
to construction companies that do not even have building licenses.
  If we look at how this administration has administered the relief of 
the hurricane to date, we are going to find all kinds of places to cut 
spending before starting after programs which are so vitally needed 
like food stamps, helping displaced families get the groceries they 
need to feed their children.
  The thought that the other side of the aisle would cut these programs 
while trying to ram through a budget reconciliation package that drives 
up the national debt because it funds those tax cuts to the most 
affluent, even while you leave this shameful, wasteful spending totally 
untouched, this is a package of shame.
  I have just learned in the course of our hour that the budget 
reconciliation amendment will not be brought to the floor tomorrow. 
Apparently the disarray on the majority side found them short of votes 
to bring it up tonight. If something fundamentally does not add up, I 
would hope, and it is high time, there is a debate within the majority 
conference about it. We need to get serious about controlling the 
spending. We need to get serious about controlling the deficits. We 
need to get back on a path that brings us to fiscal sanity.
  Mr. SPRATT. Mr. Speaker, I thank the gentleman for his statement, and 
I yield to the gentlewoman from Texas (Ms. Jackson-Lee).
  Ms. JACKSON-LEE of Texas. Mr. Speaker, I cannot thank the gentleman 
from South Carolina (Mr. Spratt) enough for what I think is vital to 
the discussion on the proposed debate on the budget reconciliation. The 
reason I say that is because, and both of us have had experiences with 
hurricanes, but I have now been in a region for the last 2 months, or 
more, with the impact of Hurricane Katrina and now certainly Hurricane 
Rita. You know that Texas was not in the eye of the storm of Hurricane 
Katrina but experienced an infusion of almost a quarter of a million 
persons who were evacuated from that region. Now with the evacuation of 
those from Hurricane Rita, specifically in west Louisiana and of course 
east Texas, we have added to our family.
  As I looked at the distribution of funds and the local needs, I was 
struck by the fact that these dollars that are going to be needed for 
recovery are not going to materialize. I think it is important for us 
to realize that the budget that is being presented or proposed by the 
majority will not save money. It will not address some of the very 
stark realities of those who are experiencing the devastation of 
hurricanes.
  The idea that dollars dealing with health care and the fragileness of 
Medicare and Medicaid, which will be made even more fragile with this 
budget, the argument of transferring Medicaid dollars from Louisiana to 
Texas was a separate argument, but it was under the premise that we 
would have the money to take care of those on Medicaid.
  The idea that we would be cutting education dollars in contrast to 
cutting tax cuts, the idea that we would not have enough housing, which 
we do not have in the State of Texas, housing to supplement the hotel 
rooms, all of that requires a Federal infusion of an investment of 
dollars. That is not wasteful spending. Those are not the kinds of cuts 
we should be having when we are talking about the most vulnerable, 
individuals who do not have flood insurance, individuals who are trying 
to go back into Louisiana and rebuild.
  We know that the private sector will be a component, but the Federal 
Government, because of the major devastation, will have to help rebuild 
the States of Louisiana, Mississippi and elsewhere. But, this is what 
we have intended to do with our dollars, and I thank the gentleman from 
Virginia (Mr. Scott) on the Committee on the Budget because he has 
talked about this over and over again. That is that we will have two 
tax cuts that our good friends, in this instance my good friend, Mr. 
Pease, has offered that will take effect next year, and over a 5-year 
period will cost us $2 billion.

[[Page H8972]]

  We have discussed this many times, and some people believe this is a 
frivolous discussion. Why are the Democrats talking about not wanting 
tax cuts?

                              {time}  1915

  We are talking about investment, and what we are suggesting is that 
these tax cuts are misplaced. They have nothing to do with increasing 
the minimum wage, which might be something we would want to consider. 
It has nothing to do with strengthening the middle class. And even as 
we looked at poverty in Hurricane Katrina, let me tell the Members 
there are middle-class working families that have been totally 
devastated. They are in our city. They had businesses. They had 
incomes. They had homes. Mr. Speaker, they do not have any of that now. 
And these tax cuts, taking away from giving them an opportunity to 
rebuild, SBA loans, fixing the infrastructure, which I have heard the 
gentleman from South Carolina (Mr. Spratt) and the gentleman from 
Minnesota (Mr. Oberstar) speak of eloquently, this is going to be the 
choice being made by our good friends in the budget reconciliation.
  They are willing to take tax cuts for the top 1 percent and 
prioritize that over health care, education, Social Security, Medicare, 
Medicaid, housing. But most importantly, the most vulnerable now in our 
Nation, not only the impoverished but almost 2 million people that are 
evacuated that are scattered across 44 States who may want to come home 
to the gulf region are going to need a little help from their friends 
in the Federal Government. Hard-working taxpayers now with this budget 
will not be able to finally support that this Federal Government can 
provide for them. And I hope that, as we look at this problem, we will 
be able to find some compassion for those who are in need.
  Mr. SCOTT of Virginia. Mr. Speaker, will the gentleman yield?
  Mr. SPRATT. I yield to the gentleman from Virginia.
  Mr. SCOTT of Virginia. Mr. Speaker, I believe the gentleman has some 
charts that he wanted to discuss about some of the choices that we are 
making.
  Mr. SPRATT. Mr. Speaker, these charts were compiled by the gentleman 
from Illinois (Mr. Emanuel), and basically what he is trying to show 
here is that we have a robust program of rebuilding and restoration 
ongoing in Iraq to the extent they can maintain anything there in the 
midst of that insurgency.
  For example, in terms of infrastructure, we have rehabilitated the 
Sweetwater Canal System, including repairs to the levees on the Tigris 
and Euphrates. On the other hand, we have cut $336 million from the 
Army Corps of Engineers, including funding for the levees on the 
Mississippi. We have rebuilt the Iraqi republican railway line. But in 
the United States there have been $2.5 billion in cuts in Amtrak, and 
the high-speed rail funding program has been eliminated. Community 
development, 3,120 community action projects completed in Iraq; $320 
million cut from community services block grants in the United States.
  $470 million for the construction of housing and public buildings and 
civic centers for Iraqi citizens; in this country $250 million has been 
cut from community development block grants; and the President's budget 
cuts for public housing, the capital fund, have been cut by 10 percent 
even though it is now already deficient to meet the needs of the 
program.
  This chart shows the same thing. In Iraq, 110 primary health care 
centers built or renovated. In this country $10 billion has been cut or 
is being proposed to being cut from Medicaid.
  I could go down the list, but the example is stark. We are not saying 
this should not be done in Iraq. We have got to help get that country 
back on its feet, and the sooner we can get out, the better. But in the 
meantime, we need to stabilize the country, and this is part of it, 
part of the economic reconstruction. But it stands in stark contrast to 
what we are willing to do in this country for infrastructure that we 
all acknowledge we need and see we need in a case like New Orleans when 
the levees break.
  Ms. JACKSON-LEE of Texas. Mr. Speaker, will the gentleman yield?
  Mr. SPRATT. I yield to the gentlewoman from Texas.
  Ms. JACKSON-LEE of Texas. Mr. Speaker, I want to say one sentence to 
that because what he just highlighted are two-pronged: one, we have to 
take care of all America, including those not so impacted by hurricanes 
Katrina and Rita, all of the folks who are vulnerable no matter what 
their station in life; hurricanes Katrina and Rita survivors but also 
the Americans who are hard-working taxpayers. This budget that they are 
putting before us does not do any of those.
  Mr. SPRATT. Mr. Speaker, reclaiming my time, I made the point earlier 
that the cost of catastrophes like Katrina and Rita should be spread 
over the whole country, the whole population, but spread equitably. And 
it is not right to saddle that heavy burden on those least able to 
bear.
  I thank our participants for their participation.

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