[Congressional Record Volume 152, Number 20 (Thursday, February 16, 2006)]
[House]
[Pages H377-H385]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
IRAQ
The SPEAKER pro tempore (Mr. Sodrel). Under the Speaker's announced
policy of January 4, 2005, the gentleman from Iowa (Mr. King) is
recognized for 60 minutes.
Mr. KING of Iowa. Mr. Speaker, this Member appreciates the privilege
to address you, Mr. Speaker, and to stand on the floor of the people's
House, the United States House of Representatives, and convey some
thoughts that I think need to be shared with you, Mr. Speaker, and
hopefully picked up by the American people.
As I listen to the presentation and delivery that continually comes
here on this floor night after night, Mr. Speaker, and as I analyze the
tone and the attitude and the lament that flows continually from the
other side of the aisle, I hear this constant strain, this constant
strain of, and this is a quote, ``It would be different if we were in
charge, but we are not in charge,'' meaning the minority party.
But I am going to say this, that the members of the minority party
have the same individual responsibilities as the members of the
majority party. Each one of us is \1/435\th of this task that we have
here, \1/435\th of the total voice of the American people, designed by
our Founding Fathers, written into our Constitution, drafted in such a
way that we do redistricting in America and we do so every 10 years. We
draw new lines. We make sure that each of us represents pretty close to
the same number of people, approximately 600,000 people. And the voice
when you hear me speak, Mr. Speaker, is the voice, hopefully, of the
600,000 people in western Iowa that I have the honor to represent. And
I would like to think that when the voice of any of us steps down here
and speaks, it is the voice of the collective opinions of their
constituents within the districts of all the Members of this House of
Representatives.
If one listened to this debate here on the floor night after night
after night, one could easily, an uninformed person, come to the
conclusion that if you are a member of the Democrat Party, if you are a
member of the minority party, you are really powerless to do anything
about this.
Take, for example, the case in point, the alleged $9 billion that is
wasted in construction in Iraq. And I would point out, Mr. Speaker,
that I came to the floor the night before last, and I spent perhaps 55
minutes outlining the effort in the Middle East, the effort in Iraq,
and particularly the construction projects that have been initiated
there. I led a CODEL over to the Middle East and particularly into Iraq
for the very purpose to identify, follow through, observe the projects
that had been initiated, those that had been constructed, to go in and
probe and ask questions and get a sense of where those dollars, that
$18.5 billion that was part of an overall appropriations bill, where
they went, how they were spent, under what conditions, and what are the
projects that have been initiated and the projects that have been
completed.
I did not bring the poster over here tonight that has that chart on
it, Mr. Speaker, but I do bring it in my memory. And as I discussed
this with the United States Army, who had a responsibility for
somewhere in the neighborhood of $13 billion in those projects, they
have initiated over 3,300 projects with those dollars. They have
completed over 2,200 projects with those dollars, and there remains
another 1,100 projects that are either in the process of construction
right now, soon to be completed, or they will soon be initiated, and
the last projects will be completed some time after the first of next
year. They will be the last pieces of that fallen place.
And I heard the statement on the floor the night before last that all
of that money was wasted. All of it. So if it is not even going to be
qualified that one single dollar out of $18.5 billion went to something
good, I wonder how much value one would put on the rest of the
statements that are made by that side of the aisle and by that
``informative'' team, and I put that in quotes, Mr. Speaker.
[[Page H378]]
So I watched as they were nearing completion on the mother of all
generators up by Kirkuk, a project that has 750,000 pounds of generator
and turbine to drive that generator mounted there and is up and
generating electricity for the people in that area.
We have heard the complaint that Iraq's oil production is not up to
where it was at the beginning of the war, that there is less
electricity available and less electricity production than there was
before the war. Or before the liberation, I prefer to say, Mr. Speaker.
And I can categorically inform you that that is simply not true. The
oil royalties before liberation in March of 2003 that came into the
Iraqi Government were $5 billion a year. The royalties for the oil that
was exported and collected, royalties for the last year were $26
billion.
Now, one cannot conclude that oil production is down with five times
the royalties being paid to the Iraqi people to help fund their overall
budget. And, yes, we have put money in that and resources in that. We
have put minimal dollars into oil development and production, and we
have done so because we have said the United States is not in this for
the oil.
We are in this for freedom for the Iraqi people. We are in this to
erase the habitat that breeds terror, and there has been extraordinary
success that has been accomplished there. But to own the oil or to
invest United States taxpayer dollars into that oil infrastructure and
then turn around and turn it back over to the Iraqis was never part of
our plan. We did suggest that oil revenue in Iraq would go to pay for
the reconstruction in Iraq. And after we had been there for 6 or 7
months, it was apparent that that kind of revenue just was not going to
flow, that the infrastructure in Iraq was so dilapidated, that it had
not been reconstructed, had not been modernized in at least 35 years.
So think, for example, of massive oil fields that have significant
quantities of oil, oil so rich that it seeps to the top of the ground
up by Kirkuk, but yet not drill a well. Or not drill wells in
significant numbers. I should qualify that statement. To not build
pipelines, to not build refineries, to not build a system to extract
that oil, refine the oil, and distribute the oil to the rest of the
world so that you can continue to increase your production while world
consumption is going up, those are things that did not happen under
Saddam Hussein's regime.
So the production that was there 35 years ago simply diminished
gradually in increments as Saddam took those resources for his own uses
and starved the Iraqi people. But the production of oil is up. The
production and generation of electricity is up, Mr. Speaker. An average
day of electricity before the liberation, and I will pick a month,
early March, 2003, would produce over 2,000 megawatts of electricity.
{time} 1600
Today, it is over 5,000 on peak days, and it falls off maybe 1,000 on
your average days. But it is still significantly more production.
Now, the statement will be made on the other side of the aisle, if
they are paying attention and if they are astute, they will say, but
Baghdad has less electricity than they had before liberation.
Mr. Speaker, that also is true. And the reason for that is because
Saddam focused his electrical resources into Baghdad. Baghdad had 10 to
12 hours of electricity every day under Saddam Hussein's regime. The
rest of the country got very little at any time, an hour or two a day.
Now it has been shifted so the distribution of that electricity roughly
doubled the generation of electricity by setting up new generation
plants, setting up new transmission systems and new distribution
systems. And one of the things that is a constraint there now is not
being able to wield that power anywhere in Iraq where it is needed, not
having a central terminal where switches can be thrown and you can send
electricity to Mosul or Kirkuk or Tikrit or into Baghdad, into sections
and zones that need it. That is also going to be rectified within the
next half a year or so so that the need for electricity can be targeted
to the regions of Iraq where it is going to be the most valuable.
And the predictability that has been established there, it used to be
unpredictable under Saddam for the outlying cities, more predictable in
Baghdad because he took care of Baghdad. Today, it is predictable in
most areas of Iraq. But the areas of Iraq outside of Baghdad have gone
from one to two hours of electricity a day to 10, 11 and 12 hours of
electricity a day, at predictable times, so people that are running a
business or doing a little manufacturing or maybe there is someone
doing their laundry, they can plan their lives around having a stream
of electricity.
We don't know what that is like, to have to think about managing our
lives so that when the electricity is on we turn on the washing
machine, plug in the iron, turn on the air conditioner and go start the
pump to pump water for our livestock or even our irrigation. We don't
think about that. But that has been a fact of life in that part of the
Middle East from the beginning of electricity.
So all of the country of Iraq is far better off in access to
electricity and consistent supply, substantially better off, four to
five times better off, with the exception of Baghdad.
Baghdad is about one-fourth of the population of all of Iraq, excuse
me, I should say one-fifth of the population of all of Iraq, and their
daily electrical supply is down from what it was. It is no longer 10 to
12 hours a day, it is 2 to 4 hours a day. And that needs to be ramped
up, Mr. Speaker, and it will be. As soon as they are able to wield this
power in a more efficient fashion and get a couple more generating
systems up on line, then Baghdad will be moved up into the level with
the rest of the country and provide some stability for that city as
well.
But it is important that Baghdad be brought into the level of
electrical supply as the rest of the country. As Baghdad goes, so goes
Iraq. With that kind of a population of about 5 million people, it is
the core of the country. It a large metropolitan area, of course, Mr.
Speaker.
But they made significant progress. Some of that money went to great
good. Some of that money went to security. When you are going in to lay
a sewer plant because there are children playing in raw sewerage in the
streets of Sadr City and you have insurgents shooting at your
construction workers, some of that money needed to go for security, and
some of it did.
But if there is some money missing over there, and Paul Bremer says
it is not, and if the Inspector General says it is, then I go back to
the King law of physics, and that is everything has to be somewhere.
So if it is alleged that $9 billion are missing, Mr. Speaker, then my
challenge to the people that make that allegation would be, where is
it? Did it disappear into thin air? Whose hands did it go into? Was
there graft and corruption? If so, what? Be a little more definitive.
Don't throw out just some wild allegations that here is some money that
is missing and it is somebody else's responsibility to address this.
We all have the same responsibility, 1/435th of the responsibility,
all of us responsible to the people of the United States of America.
And to stand here and admonish night after night after night that if
they were just in the majority somehow they would do their job, but
they are in the minority so they don't have to do their job, that their
job is to criticize people in the majority, well, that is a bitter pill
to swallow for those of us who get out of bed here, go to work, work
late and do the research, and our staff goes to work in our district
and here on the Hill, and we have a network with people around this
city, around this country and in our districts and in our States and,
in fact, around the world.
I have watched my colleagues over here on this side of the aisle age
in the few years I have been here. I can look at them today and see
lines that weren't there 3 and 4 years ago. I see hair that is
absolutely gray that had a trace of it 3 and 4 years ago. They are
working hard for the people of this country. And things happen around
the world, and anything you can find to criticize can't be laid at the
feet, not everything, of the people on this side of the aisle that work
hard for the people of the United States of America.
In fact, I don't agree with all the decisions that are made by the
majority of this Congress, and who in the world
[[Page H379]]
would? If you agreed with the decisions that were made by the majority
of the United States Congress and you served in this place, or you are
someone who hopefully aspires to come serve in this body someday, if
you agree with the majority opinion, that means you are not thinking
for yourself.
Of course, we are critical among ourselves. We are critical among
ourselves as a Republican majority. We are critical on the other side
of the minority's opinion. But in the end we have to stand on our own
integrity, use our own intelligence, use our own research and be
objective, open up our eyes and ears, read, listen, hear, think,
analyze and resolve to do the right thing for the American people in a
bipartisan fashion that brings us toward a conclusion and towards a
successful conclusion. And that success is not defined as if the
Democrats were just in the majority in the House and in the Senate and
had the White House the world would be a different place. Yes, I am
convinced it would be a very different place, Mr. Speaker. But that is
not how you define success.
You have to lay out a plan and vision for the American people. You
need to stick to that plan. It has to have vision. It has to have
foresight. It has to have a short-term, midterm and long-term vision.
It has to be something that the American people can subscribe to and
believe in, something they can work for and work towards. In fact, Mr.
Speaker, it needs to be something that the American people can
sacrifice for so that they know that the delayed gratification can one
day turn this country into a better country, tomorrow, next week, next
month, next year, next decade, next generation, next century, and on
and on into the future of this great Nation, the United States of
America.
So I would submit, Mr. Speaker, that it is not that ``it would be
different if we were in charge.'' No, it won't be different. You will
still hear complaints. What makes things different is if you lay out a
vision.
So, in the brief time that is here on the floor of this Congress, Mr.
Speaker, I don't propose to be able to lay out a complete and total
vision for America. I would touch a few subject matters that were
raised here and then move on to the subject I came down here to talk
about.
One is the issue of foreign debt. I would agree, we are borrowing
money from foreign countries in order to provide for the funding to run
this government, and that is because we have deficit spending.
I am one that stands here and says I am for a balanced budget. I am
for a balanced budget without taxing the people of America any more
than we are today. In fact, the Bush tax cuts that were passed in 2002
and in 2003 were tax cuts that don't affect the bottom line of our
deficit in a measurable fashion. But what they did do was stimulate the
economy.
I would back us all up to the day, Mr. Speaker, that we had a
recognizable, identifiable dot.com bubble. We saw great growth in this
economy. It was speculative growth in the economy for the most part.
People said, well, we are in the information age. We have gone
through the stone age, we have gone into the industrial age, and now we
have transformed ourselves into the information age, and the
information age is an era by which the ability to store and transfer
knowledge in and of itself apparently had a lot of value.
Because whenever we would come up with a microchip that could store
and transfer information more effectively and more software programs
and more creativity that had to do with all of the intel industrial out
there, the investors of the world looked at this and said, my gracious,
I can't wait to jump on that, I can't wait to buy some shares of this
intel company, because it is going to grow, and I am going to double
and triple and quadruple my money, and I will be a rich person someday
because we are in the information age. Surely, this company can store
and transfer information faster and better than ever before. That has
to have value.
So that created this dot.com bubble, because we forgot something. We
forgot that the marketability of everything that we have has to come
back down to something that has substance, that is sustainable, and
that is this, and it has always been the case in the economy, you have
to produce a good or a service that has a marketable value.
Now, what does information have for a marketable value? Well,
companies will want to be able to purchase information and the ability
to store and transfer and sort that information because it makes them
more efficient in their decisionmaking process and in the delivery
process of their products or service.
So if I am in manufacturing, I will have sales and I will have
inventory coming in and I will be manufacturing things and my inventory
will be going out. We will have our marketing and distribution. All of
those things happen to be working.
Now ways that I can use the dot.com industry on that, this
information age, is that if I can sort my inventory better, if I can
order more efficiently and precisely, if I can get better bargains
because I am doing an Internet negotiation auction as opposed to a
purchasing agent sitting there on an old black dial telephone, yes,
information has value then.
If it allows me to store just-in-time inventory so I can bring the
trucks of my raw materials in just in time, so I cut down on my own
inventory, that capital investment, turn it into a product and turn it
out the door more efficiently, and if it helps my sales people get out
there and market that product, and if I can get that product made with
computerized equipment so that it is done with better precision and
more cost-effectiveness and better quality and get that on the truck
and get it delivered to the customer in just-in-time delivery time,
reliable, all of that information has value.
So we paid for those things because information had value. But we
created our ability to store and transfer information way beyond our
ability to utilize it within our economy. In fact, we created it to the
point where information itself had a recreational value, and that
recreational value became in some components of the Internet.
So here is the day today where a vast majority of the households in
America have Internet access, including mine, wireless. I was one of
the first ones wireless, one of the first ones with high-speed Internet
in my office. Actually I was the first one in the telephone service
company where my construction office is and my campaign office. That
office was the very first customer for high-speed Internet services for
that telephone company.
Out in the country where Marilyn and I live, it is another telephone
service company, we were the very first customer there to have DSL
high-speed Internet services in our house, because we also ran the
business out of the house and we needed access to high speed. So I love
technology. It has value.
But, in the end, when you pay for all of this information and this
technology and even when you market it to people for recreational
purposes, that means their disposable income, people say I have an
extra 25 or 40 or 50 dollars a month that I want to put into this
Internet. Even though I can get along without it, I really like the
convenience of being able to send out the e-mails to my friends and be
able to find the answer to any question I want to ask just simply by
going up on the Internet, do a search, and here it is.
So we marketed that as well off of the information age. But we
produced the ability to store and transfer information way beyond our
ability to market it. That was the dot.com bubble. You knew I would
come back to that, Mr. Speaker. That was the dot.com bubble.
So this bubble in our economy was the speculative bubble that was
created because there was investment made in the information age that
went beyond the amount of information that could be sustained by the
economy. And, like any bubble, bubbles will burst, and that bubble did
burst, and it burst about the same time, just before we had a
transition from President, from President Clinton to President George
W. Bush.
The bursting of the dot.com bubble, Mr. Speaker, and we forget that
so often, and as we saw our economy take the downturn and plummet and
try to adjust for the bursting of the dot.com bubble, we also saw two
planes go into the Twin Towers on September 11, 2001,
[[Page H380]]
right dead center into the financial center of America and the world.
At the same time, a plane went into the ground in Pennsylvania and into
the Pentagon.
We were all of a sudden from a nation that was scrambling to recover
from a dot.com bubble, we were thrust into a worldwide war on terror,
with our financial centers crashed down around us and left just a
smoking hole in the ground at the Twin Towers. Our economy went down
with that. It already was headed down, and as it ran down the hill, it
was pushed off the cliff by September 11.
So what did we do here in this Congress? A number of things to react.
And the decisions that were made were astonishing in their efficiency.
I look back on that era and I commend the people in this Chamber and
across in the United States Senate and the President, Mr. Speaker,
because two big decisions were made and made fairly quickly.
One I will just briefly reference, the PATRIOT Act, the need to be
able to protect us from an intelligence perspective from those who
would wish to do us harm and protect the privacy rights of the American
people at the same time.
I have sat through 12 hearings of the PATRIOT Act. We need to
reauthorize that, Mr. Speaker. That piece of legislation is far better
in its quality, and we have improved it some, more than anyone had a
right to expect, considering the pressure that this Congress was under
at the time to make those changes.
But the PATRIOT Act has sustained itself, and to this date, not a
single critic, not in the United States House of Representatives, not
in the government function, not in a hearing, even under specific
requests of the witnesses that were there in the hearings, not a single
critic has been able to name an individual who has had their privacy
rights and constitutional rights usurped by the PATRIOT Act. Only
hypotheticals, Mr. Speaker, and as we know, hypotheticals don't get you
very far in this world.
{time} 1615
So that was one thing, one action that was taken by this Congress
that was an amazingly efficient action, and we are to this day 4 years
beyond, and we have not suffered another attack on American property or
people on this soil since that period of time.
So the PATRIOT Act was extraordinarily effective. The Bush tax cuts
came right behind that, because we knew that with the bursting of the
dot-com bubble, and the attacks of September 11 and the crashing down
into a smoking hole with 3,000 American lives along with it, was our
financial future.
Now, if we had listened to the naysayers on this side of the aisle at
that period of time, we would have said, gee, we got to have a balanced
budget here, so let us raise taxes. That is how we will get ourselves
out of the smoking hole of the Twin Towers. We would have raised taxes
so we had enough money to do what? Arm this huge police force to go out
and serve warrants and try to identify these al Qaeda people that wish
us ill and go around the world and work with Interpol, and maybe we can
bring them to justice in handcuffs.
Some of them said we are not really at war here, and some of them
said, well, no, you need to understand them. Some of them said that one
man's terrorist is another man's freedom fighter. Those words were
spoken here, Mr. Speaker. And I think they were completely and utterly
wrong.
I think the people who have pledged to do us ill mean it. I think
they have proven it. And I think it is up to us not just to protect and
defend ourselves in this country, but carry the battle to them; and we
need to do that with a strong economy.
The Bush tax cuts provided that. And in spite of the criticism, in
spite of the things that have been laid out in opposition that say that
the deficit is because of the tax cuts, can you go back and calculate
the loss of revenue because of the tax cuts and will you see there has
been an increase in revenue that came from the growth in our economy.
The number is over 14 percent over anticipated revenue over the last
year, Mr. Speaker, and the deficit that was projected is significantly
reduced, and that is because we have had tax cuts that stimulate
business.
So I do not think I would want to have people in charge that do not
believe in free enterprise or people that believe that you could tax
your way into prosperity. These are the kinds of people that if you
give them the goose that lays the golden egg, they wouldn't think you
could feed the goose, but they do think you can cut the goose apart and
take the eggs and then go on and live in happy prosperity with that
basket of golden eggs the rest of your life.
That is the attitude that comes. At some point it goes backwards on
you. We have to have a revenue stream. We need a low broad tax scale so
that we can stimulate this economy.
With regard to the foreign debt, if we can balance this budget, we
can eliminate the increase in foreign debt. If we can produce a
surplus, we can pay down the national debt, which reduces the foreign
debt. But we have debt to American domestic indebtedness, as well as
foreign debt. Both of those concern me. The foreign debt concerns me
more than the American domestic debt.
We also have, Mr. Speaker, a negative balance of trade. That number
should come out fairly quickly, within the next 30 days. As I recall,
it was about this time last year when the 2004 balance of trade number
came to us, $617.7 billion negative.
That meant that we purchased $617.7 billion more from foreign
countries than we sold, than we exported to them. And some say, yeah,
and it was all purchasing oil that was part of that, that was most of
that deficit. But, Mr. Speaker, it was a significant portion. I do not
deny that. It was over $200 billion that we spent in purchasing oil
from foreign countries that added to this $617 billion in red ink trade
deficit.
And I submit that we can fix that a number of ways. One of them is
drill in ANWR, get that oil coming down here. That will be at least a
million barrels a day. That will reduce our dependency on foreign oil.
We are bringing in liquefied natural gas that has got to be
compressed in the Middle East and brought over here on a compressed
tanker and brought into a terminal and converted back to gas again and
delivered up here into the United States.
We sit on enough natural gas under the non-national parks, Federal
lands in America, to heat every home in this country for the next 150
years. And we can drill natural gas wells, but we cannot get the
distribution systems laid, we cannot get the roads built, because the
environmentals are in the way.
They seem to think that we should not develop our natural resources,
that this Earth is for every species except homosapiens, Mr. Speaker;
and I submit that we are here to have dominion, to manage all of the
species. But these resources are here for us.
We got that message clearly from God in Genesis, and I stand by that
need for us to develop our natural resources. So we should drill on
Federal lands for natural gas and oil. We should do it in an
environmentally friendly fashion.
We should build a distribution system so we can heat our homes in
America and run our factories and produce our fertilizer. Being from
the Corn Belt, Mr. Speaker, I have to say that corn uses more nitrogen
to produce it than any other crop. All crops use nitrogen. Corn just
uses more than any other. And the production of nitrogen fertilizer
uses natural gas.
It is essential in the production of nitrogen fertilizer. In fact,
the very cost of the fertilizer, the composition of that cost, out of
every dollar of nitrogen fertilizer, 90 cents out of that dollar is the
very cost of natural gas.
So if we can cut the cost of natural gas in half, we would nearly cut
the cost of nitrogen fertilizer in half. But instead, we have watched
fertilizer go from $2 up to $15 in America because we are not drilling
on our federally owned lands. We cannot get access to get the gas out,
if we can get in there to drill.
We are not drilling on the Outer Continental Shelf because there are
environmentalist extremists in the way. These are people that argue,
well, if you drill a natural gas well on the Outer Continental Shelf,
it will pollute our beaches. So I simply say, please
[[Page H381]]
submit to me a single case in all of history when a natural gas well
polluted anything.
If you have a natural gas leak, what happens to it, especially
offshore in the ocean? The gas bubbles up to the top of the ocean and
dissipates. It does that whether you drill wells or whether you do not,
because a significant amount of that natural gas just percolates up out
of the ocean floor anyway.
So it would not be measurable if we had a natural gas leak, but the
gas does not pollute anything; it just dissipates into the air. So
before it all does that, we should go get that gas, tap into that gas,
pipe it in here to the United States, and put it into these States that
can use it for fertilizer.
And so those things, those things alone would go a long way, Mr.
Speaker, towards reducing our dependency on foreign oil. Reducing our
dependency on foreign oil helps our balance of trade. But these are
components of the fix, Mr. Speaker, and I would say there is one more
step we need to take, and then I will go back to how we repair this
balance of trade and how we eliminate the foreign debt, how we
eliminate the domestic debt of this country and get us on sound fiscal
foundation.
One more component, before I go to that solution, Mr. Speaker, and
that component is to produce a balanced budget. Produce a balanced
budget so we do not have deficit spending, so we do not have to borrow.
If we produce that balanced budget without raising taxes so that we
diminish the production in this country, then we can have this robust
economy that we have today.
And this robust economy that we have is an economy that has grown at
a rate of more than 3 percent increase on its gross domestic product
each quarter for the last 10 quarters at a minimum. It has reduced the
unemployment rate to under 5 percent over that period of time. By
anybody's measure, that is the longest, most healthy economic growth
period since the early part of the Reagan years. So more than a
generation has passed since we have seen this kind of growth.
And I would point out that during the Reagan years we had high
inflation, the early part of the Reagan years. Before we got it under
control, we had high inflation, we had high interest rates. So that
kind of economic growth and that kind of lower unemployment ratings,
there was not as good an environment as it is today, because we have
got gradual growth, we have got controlled growth, we have got not too
hot in our economy, we have got not too cold in our economy, Mr.
Speaker, we have got just right.
It is cruising along here at a more than 3 percent growth, less than
5 percent unemployment. It is not as good as it can be. Unemployment
can be better than this. By historical standards, it is a high
standard. So I would say let us balance the budget without raising
taxes. Let us get our spending down. Let us tighten our belts, Mr.
Speaker; let us get our house in order.
If you were running a company or running a business or taking care of
your family budget, and you realized that on the portion of your budget
that had discretion on the parts that you were going to spend, now we
all have fixed costs, we have to make our house payment or rent, we
have to keep the lights on, we have to keep the heat up some, maybe we
have some other fixed costs there, we have to buy some groceries, and
this cost of living, you can make a minimal budget on the amount that
is a fixed cost.
That is the equivalent to the entitlements in this Federal budget,
those things that are fixed today that are very difficult to change,
those items in our budget such as Medicare, Medicaid, Social Security,
and even to a lesser degree interest. They are all fixed costs. They
are growing, entitlement costs. We have to have national defense,
certainly, in this time. So if you would reduce those things down to
eliminating the nondiscretionary spending, which is Medicare, Medicaid,
Social Security, and you eliminate the Department of Defense, and by
the way I would reduce Homeland Security's funding, they have raised
that budget out of sight without the accountability that I would like
to see.
But if we go to non-defense discretionary spending, those things that
we do have control over, those things that if it were your family
budget, your going-out-to-dinner money, your vacation money, your
recreational-tickets-to-the-ball-game money, going-off-to-golf money,
those kind of things that you would naturally tap into if your budget
got tight, the discretionary spending portion.
If you looked at your budget and said, well, I have got it in mind
for $2,500 this year that I am going to spend to make my life a little
richer, but I am spending too much, and one of the ways I can balance
my budget is simply take that hundred percent of your $2,500 for your
recreational discretionary spending, reduce it down by 5 percent, down
to 95 percent.
Now who would not do that if they were running a family budget, or if
you are running a company, Mr. Speaker? Would you not do that? Would
you not look at those items that you could control and simply say, I am
not going to take this procedure of spending the red, I am going to
tighten my belt? I am going to do without for a little while so I can
get my budget back under control.
Well, what I have described is all we really need to do in this
Congress, Mr. Speaker. We need only address the other spending, the
non-defense discretionary spending portion, and we need to reduce it by
5 percent.
Now I do not think this is the best way to balance the budget; but it
is a way, an understandable way to balance the budget. Reduce that by 5
percent and we have balanced this budget, and in fact it balances the
budget under current increases of the entitlement spending on out
another 15 to 18 years, which becomes almost as far as we can to
predict any economy, in fact beyond our ability to predict the economy.
So we can balance this budget. We do not have the will to balance the
budget, so we borrow money because the people on this side of the aisle
cannot get along without their programs. They are afraid somebody will
throw them out of office if they say tighten your belt.
There are some people on this side of the aisle who feel the same
way. They band together. It only takes about 10 or 12 people on this
side of the aisle to see to it. Everybody on this side of the aisle
will vote against the budget, I guarantee it.
There will be a budget come to the floor of this Congress within a
month, and that budget will be debated on this floor. It will be one
that is crafted to be as responsible as it can be. When it is done, I
will make the prediction that not one Democrat votes for a responsible
budget that comes here on this floor, not one, because it is a
political vote and it is not an economic vote.
And so the belt is tightened over here. We try to send the right
message. And then the criticism flows out of the other side. You cut my
program. You squeezed this out. You starved children. You froze old
folks. That is an old line. You hear it over and over again, Mr.
Speaker.
I have not noticed that it works with the thinking people that have
watched history flow. But we should balance this budget. I testified
before the Budget Committee the day before yesterday, Mr. Speaker, and
I requested that they produce a balanced budget. Whether they can
produce the votes to pass it or not, I do not think they can get the
votes to pass it, they need to put a target up on the wall so the
American people know what it would take to balance the budget.
And I will be supportive of that in seeking to produce and develop a
balanced budget. I cannot hide behind the Budget Committee and say,
well, my friend, Mr. Nussle, did not produce a balanced budget. He is
doing the best he can. He has got to get 218 votes, and it has been
astonishing his ability to do so. He can take a 2.4 or $2.7 trillion
budget and spin it around his head and calculate it all out, break it
apart in pieces and put it back together.
He can go out and get the votes that he needs to get that done. I am
impressed with the work that he has done. But I still challenged them
to produce a balanced budget so that we know what we have to do and
that will help inspire the American people to come forward and say, let
me tighten my belt. I am willing to tighten my belt if my neighbor
tightens his. Cut my program here, if you like, just do not cut me out
of proportion to the person over here. I will take my fair share of the
load as long as you do not
[[Page H382]]
put the unfair share on me and give that other person a pass.
But we cannot get there in this debate, because the demagoguery gets
so heavy. And in fact last year we had reconciliation in the Ag
Committee. We needed to reduce the spending over 5 years by about $3.7
billion. We needed to find a way to do that. That is $3.7 billion out
of an annual expenditure of about 34 billion, by the way. So multiply
that by five and you are up there in this 165 or $170 billion range to
find $3.7 billion in savings there.
In the food stamp program alone there has been identified, even
today, by Secretary Johanns' announcement a 5.88 percent error rate in
handing out food stamps.
{time} 1630
Now that error rate, I suppose it could be by that percentage that we
missed that many people that should have had food stamps, but I do not
think so, Mr. Speaker. I cannot imagine that there would be an error on
that side that we did not reach out and help enough people. In fact, we
are out there marketing those services to people in a fashion that I
think we are going to find them instead of them finding us.
I would submit that nearly all of that 5.88 percent of error rating
in the food stamp program is all on giving food stamps to people who
did not qualify, and this does not constrain some of the
qualifications. We could tighten those qualifications down, too.
For example, when people come into this country legally, we say you
have to be here for 5 years before you can access benefits, welfare
benefits from our Federal Government. We could raise that up by a
couple of years without too much pressure, raise the standards. But
5.88 percent of inaccuracy translates into over $2 billion a year in
waste. And that $2 billion a year over 5 years is easy math. $10
billion dollars could be saved there.
But, you know, even though the numbers were bigger last year, I could
not get one soul on that side of the aisle to support one dollar in
cuts when we had the waste lying right in front of us, Mr. Speaker.
And, in fact, there has been more waste there than they have even
alleged took place in Iraq. But that does not disturb them because the
waste is going into the households of some of their constituents and
they have to answer to them. It is not the matter of the waste that
concerns them. It is the opportunity to be critical.
So I actually came to this floor, Mr. Speaker, to talk about a
different subject matter, but, as I listened, it changed the subject
for me. So now I promised that I would come with a solution on how to
repair this deficit in foreign trade and how to fix the foreign debt.
I would lay out real clearly, there is a policy out here, there is a
bill, H.R. 25, the FAIR Tax. The FAIR Tax is a piece of legislation
that takes the tax off of production in America and puts it on
consumption. It is a consumption tax. It is a national sales tax, and
it truly is an aptly named bill, the FAIR Tax.
Now, the way we fix this foreign trade deficit with a fair tax is
simply this, that whenever anyone goes to buy something off a shelf, a
product, and pays retail price for that product, imputed into that cost
is the Federal tax composition. For example, if you are a corporation
and you are producing a widget, you are going to need to calculate into
that your corporate income tax, any other Federal excise taxes that are
part of that that you would have to incorporate in your share of the
wage withholding in the employees. There are a number of other taxes
into that. You build that tax all into the price.
Corporations do not pay taxes. Private companies, sole
proprietorships, partnerships, LLCs, they do not pay taxes. Mr.
Speaker, that may be a shock to a lot of the American people, but I
will explain this. That is that, no, corporations do not pay taxes
because they have to add those taxes into the price of the products
that they produce, the goods and the services, and pass that along to
the consumer. If they did not do that, they would go broke. How could a
corporation have any capital to work with if they were going to pay
that tax and not incorporate it into the price of what they sold? So
they pass that price along, and it is built into the pricing mechanism
of everything that they sell.
When that product reaches the retail level, it has in it when you
take it off the shelf, a person, and that $1-widget you lift off the
shelf has 22 cents of imputed Federal tax built into that, 22 cents. So
if we could pull the Federal tax out of those goods and services, the
goods would go down by 22 cents, so your $1 widget becomes an 88-cent
widget.
But if it is a service and you take the tax out of that service, it
is higher yet. Now your 1 dollar's worth of service that you pay your
plumber, say your $100 plumber bill becomes a $75 plumber bill because
25 percent of that is imputed price, is built in there to pay the
taxes, passed along to, no big surprise, Mr. Speaker, people.
People pay taxes. Corporations do not pay taxes. Businesses do not
pay taxes. They collect them. And the reason they do is because
government has found out that they are more efficient in collecting
taxes than government can be. So we put that on the burden of the
businesses to collect the taxes. They impute it into the prices of the
goods and services they are producing. They tack it onto that price,
and you, the consumer, go up to the shelf, pull that widget off of
there for $1, and it is really 78 cents.
Mr. Speaker, let me correct the earlier statement. I am doing my math
on the run here. It is a 78 cent widget as opposed to $1 on the shelf
because you get to take 22 cents out of that price.
Now, another truism, Ronald Reagan said, what you tax you get less
of. And we know that. If you have to pay taxes, it is a disincentive.
So if you were going to produce a product and we were going to tax you
for it, you would look at that equation and say, why should I do that?
I have to pay too much taxes on this.
How about if you are going to work an extra 10 hours a week and it
comes in at time and a half and it puts you in another tax bracket and
we come along and say, but Uncle Sam will get 50 cents out of every
dollar that you earn. Now your $30 an hour that you can make on
overtime becomes $15 an hour. Are you going to work or are you going to
say, hey, boss, I would like a little time to go fishing, maybe a
little golf and spend some time with the kids. I do not really need
this overtime because I do not get to keep it. No, the tax is a
disincentive to produce.
So when Reagan said, what you tax you get less of, Mr. Speaker, that
is the equation that is there. And yet the Federal Government in its
wisdom, I will say lack of wisdom, has the first lien on all
productivity in America, every bit of productivity in America. Whether
it is a good or whether it is a service, when Americans step up to the
time clock and punch their time card in at eight o'clock on Monday
morning, thunk, Uncle Sam holds his hand out like that and he gets the
first of everyone's productivity. And Uncle Sam holds his hand there
until you paid your taxes for that day. Then he puts it in his pocket
and then you can go to work for the State and that gets put in the
other pocket, your State, Uncle Sam, and the other various taxes that
come along with this. And then at some point late in the afternoon you
are working for you.
Or you can compute it the other way, and you can take a look at Tax
Freedom Day. I do not know the exact date. It changes a little bit year
to year. How many days do we work before we are working for ourselves?
Tax freedom day falls in April or May. I am not sure of the precise
date.
Uncle Sam has the first lien on your labor, he has the first lien on
the earnings from your checkbook or passbook savings account, and he
has the first lien on the delayed earnings of your 401(k) and also any
mutual funds you have invested, all of the interest dividend earnings,
the capital gains. You buy a piece of property and you turn around and
sell that property, the margin will be taxed, and Uncle Sam will be
there with his hand out. That productivity that comes from labor or
capital is the productivity that Uncle Sam taxes. He taxes it all.
What I am proposing, Mr. Speaker, is that we step in here and we
recognize that and we take the tax off of all productivity in America.
Eliminate the IRS, the Internal Revenue Service, eliminate the IRS
Code, wipe that
[[Page H383]]
thing out all the way back to the early 1900s, 92, 93 or 94 years ago
that that began, Mr. Speaker, and pass the elimination of the repeal of
the 16th amendment so that we no longer have a constitutional authority
to put an income tax on our people.
That sounds really interesting and exciting and thrilling, and it is,
but we have to find a way to replace the revenue, and that is the
hardest question. I have asked a lot of different questions myself on
how to do that, but as I worked this policy out 25 or 27 or 28 years
ago, Mr. Speaker, I came to the conclusion then that the only way we
could fund the loss of revenue for eliminating the IRS would be to
produce a consumption tax, a sales tax, like 45 States have today.
The system is there. It is there to collect the sales off all of that
revenue. It is a very simple equation to say to the States, keep the
system you have in place, change the rates so we can fund the Federal
Government. We will pay you one-tenth of 1 percent commission for
collecting the Federal tax through your State Department of Revenue.
You send the check out here to the U.S. Treasury, and we will put that
into the general fund here.
It is an easy tax to collect. And the other five States that have to
generate a sales tax collection system, it has been done in 45 States.
It has to be a lot easier than having these 100,000 plus IRS agents
running all over here into our kitchens and our offices, prying into
our business, making Monday morning quarterback judgmental decisions on
the decisions of family and business that we have made and tried to do
things in an honorable and ethical fashion and still be dinged for
interest and penalty. When you cannot get two IRS agents themselves to
agree on this convoluted tax policy that is so confusing that I can
find no one on this planet, even the people on this side of the aisle
would not argue that if we had a chance to do this over that we would
construct anything that looks like what we have with the IRS Code
today. It is a disaster.
The cost of collection is beyond the comprehension of people who have
not drilled into this and put the pieces together and tried to add it
up. But I will give you the total on when you compile the costs of
collecting from the IRS.
Now there is some literature that is out there, and some of this has
come from Harvard University's Department of Economics, some of it is
coming from other economists, but it kind of works out this way, Mr.
Speaker. By the time we pay the IRS and fund their infrastructure and
build their buildings and maintain them, pay their travel and the
overall expenses of the entire agency, that 100,000 plus that are out
there every day, I am sure with a smile on their face, trying to
increase the tax revenue, and I give them credit for being good
servants, but I think they can do a little better in the private
sector. They are smart people.
By the time we fund the IRS and by the time we pay for our tax
preparers, our H&R Block people, if you will, Mr. Speaker, as a
euphemism. By the time we pay ourselves say $10 an hour to sit up half
the night on April 14, then you add to that the disincentives we talked
about on why people will not work that extra 15 hours of overtime
because the tax liabilities are too great.
When you open up the economy, when you accept the increase in
productivity that we will have if people are not punished in producing
and investing and saving, that adds up to a number that in 1991 was
over $700 billion and today it is over $1 trillion.
Think in terms of this. This economy, think of it as a huge cruise
ship out there sailing across the ocean in smooth sailing and this is
chugging along at maybe 10 knots. Because it is not going any faster
than that, Mr. Speaker, because we are dragging this anchor. This
anchor we are dragging is the IRS, the cost of compliance, the
decisions that are made to not invest, the disincentives for producing
because of the tax liability. You add that up to that trillion dollars
a year and think of that sitting in a treasury chest hooked to our
anchor chain, and we are chugging along in this economy at about 10
knots.
Now, we passed a FAIR tax, H.R. 25. We get to cut that anchor chain,
that trillion dollars we are dragging across the bottom. It floats to
the top. We throw it on board our cruise ship, and we get to invest
that in our economy. Right away the 10 knots turns to 20 knots, and we
are going along in 10 years in a doubled economy, at least doubled
economy from the freedom that comes from taking that anchor that we are
dragging and turning it into something that is productivity. It is
really that simple to take that economic incentive of the trillion
dollars and roll that back into our economy.
There is another perhaps $11 trillion in stranded capital that is
stranded overseas that cannot be repatriated into the United States
because of the tax disincentive that is there; and that money would
come back to the United States, too. The United States of America would
become the destination nation of choice for that capital that is
stranded out there in foreign countries. It is really naturally
American capital, $11 trillion. A trillion dollars a year that we are
dragging around in our treasure chest anchor across the bottom of the
ocean, the doubling of our economy that comes.
I would point out also, Mr. Speaker, that to get a handle on the
magnitude of a trillion dollars injected into our economy every year
that today is an anchor that turns into an asset, think in terms of, if
you will, Mr. Speaker, 1992 Bill Clinton was elected President. He was
elected President in part because he alleged and there were some
statistics that supported his argument, I do not agree with it totally
but there were, that our economy was in a downturn.
So when he took office and was sworn in on the other side of the
Capitol building, Mr. Speaker, one of the first things he did was to
ask for a $30 billion economic incentive plan. So he went to the
Congress and said, we need to borrow $30 billion, 30 with a B, and we
need to put it into make work projects, much like Americorps is today,
and once we put this $30 billion into the hands of these young people
that will go out and go to work in our communities to make the world a
better place here, that money will be spent. It will stimulate our
economy. It will get us out of this economic doldrums that it was bad
enough that it removed George Bush, Sr., from office.
That was some of the psychology of the voters of the American people
at the time. President Clinton came to Congress and asked for $30
billion. Congress debated and deliberated and they negotiated, and they
reduced the $30 billion, Mr. Speaker, down to finally $17 billion. It
would have been borrowed money. But, finally, they all looked at the
$17 billion dollars and said, it is not worth the trouble.
{time} 1645
We are not going to go ahead and borrow $17 billion, put it into
make-work programs, try to get it into the hands of the people so the
money could be spent to stimulate the economy, because it was not worth
the trouble; but if it was even arguable that it was at $17 billion and
if it was a matter of consensus that it would have been at $30 billion
borrowed money, annual spending $30 billion, think, Mr. Speaker, what
$1 trillion of wasted money, $1 trillion of maintenance costs and
overhead costs that go because of the IRS for tax collection.
Think what that $1 trillion turned into the asset side of the ledger,
into the productive sector of the economy could mean. That $1 trillion
would stimulate this economy massively; and inject in behind that $11
trillion that sits overseas, and you can see, I think, with ease, Mr.
Speaker, what would happen to the economy in this country.
We would double this economy in 10 years. We see the soundness of our
dollar come back. We quit punishing people for savings and investment.
Why are you putting money in your savings account with after-tax
dollars? How can you get ahead doing that? Or when you make an
investment and it is trapped here in a real estate investment, a
capital investment, and you see an opportunity to make some money and
roll it into something else and meanwhile give an opportunity to a
young person to start a business or establish a residence and you sell
that property, why do we punish you for that? Why do we give you
incentive to hang on to that property until your inheritance right?
Because you are afraid of being taxed?
This frees up the capital in America that would not be a punishment
for transferring that capital into other
[[Page H384]]
hands, that theoretically in every case will do something more
productive than it is today. Otherwise they could not afford to bid on
the value of that property. That is the theory.
So the things that we need to do in this economy that are good, Mr.
Speaker, are the things such as we need to incent savings and the fair
tax incents savings. We need to incent investment, and of course,
savings is investment. We need to tell people to put your dollars into
mutual funds and a company investment and capital investments and we
will not punish you for that. We will let you make all the money you
can make, and if you want to sell these shares and invest them over
here, then do so.
You can make the very best decision that you like, and we are not
going to be in here with Uncle Sam's hand in the way, grabbing
something out of every single transaction, not having a first lien on
all productivity in America, but incenting earnings, savings and
investment, research and development, Mr. Speaker, capital investment,
higher education. That is where this money is going to go. The future
of this capital would go into those three things, Mr. Speaker.
So I would point out that there is a divide in the House of
Representatives. There is a divide in our philosophy. There is a divide
that I believe is rooted in this philosophy that of all of us here on
this planet, if you could somehow shake us up, erase our institutional
memories, start us as unbiased people again, and scatter us all over
the globe, without having a network that is going to tell us how to
think or indoctrinate us, some of the people would see their glass as
half full, and they would begin filling that glass up in an industrious
fashion, in a faithful Christian fashion many of them, and filling
their glass up because that is the thing to do, go out and earn, save,
invest, buy, sell, trade, make, gain.
When we do that, everybody prospers. Pull everyone up the ladder next
to us and strive for a better future for ourselves and for the
succeeding generation, for our babies that we have in our arms and for
our children that are growing up and for our grandchildren. That is
what this does for the next generations that are here and across this
country, Mr. Speaker.
Half of the people, well, probably not half, a portion of the people
see the glass as half full, and they would seek to fill it up, and they
seek to help others fill their glass.
There is another percentage of the people, the ones that are on the
floor with their lamentations night after night after night that say,
but my glass is half empty; and you know, I have sat in here for a
lifetime and that person over there that was filling their glass did
not put a single thing in my glass the whole time. Never mind they did
not lift a finger themselves to do a thing, but they see it as a glass
half empty. They see it as the economy is a zero sum game. They see it
as a pie that is never going to be bigger, that only can be sliced up
and however you distribute that pie, it will always be unfair in their
mind's eye.
But we see this as a Nation of opportunity, individual rights and a
Nation of opportunity, and we challenge people to be the best you can
be, be as productive as you can be, and we struggle to put policies in
place and encourage people to be as productive as they can be.
That is why I support H.R. 25, the fair tax, because it encourages
everyone to do as good as they can, to produce as much as they can. It
punishes no one for productivity. It takes the tax off of productivity,
puts it on consumption, and thereby incents earnings, savings,
investment, higher ed, research and development, capital investment.
All of those things improve the productivity of the American worker,
and those things increase the overall revenue and income of Americans.
We really have a choice. We can accept the standard of living of the
rest of the world. We can watch them catch up with us. We are on this
treadmill. We are on the front of the treadmill, and as they catch up
with us, we can begin to accept their standard of living or we can go
faster and we can go faster with technology, with education, with
capital investment.
Those are the things that we need to do, Mr. Speaker; and so I would
point out that before I came over here on the floor I did not know if I
would use it, but I used some of this technology that I spoke of
earlier and tapped in and did a little search for ``the 10 `Cannots' of
Abe Lincoln,'' and Abe Lincoln had this figured out and laid it out in
10 Cannots, and many things he has gotten credit for that he did not
do. I have no idea if he actually did this or not, but I am going to
give him credit because I think a lot of the man. I would point these
points out, and I would like to drill them into the brains of everybody
that votes for the future of America on this floor and across this
country Mr. Speaker.
Abe Lincoln said 10 points. You cannot bring about prosperity by
discouraging thrift. The fair tax encourages thrift and savings. You
cannot bring about prosperity by discouraging thrift, Abe Lincoln's
statement. So we want to encourage thrift.
He said you cannot keep out of trouble by spending more than your
income. You heard me say, Mr. Speaker, balanced budget. We want to come
with a balanced budget, and we want to put a tax policy in place that
encourages more productivity so that we can spread this tax out among
more people and have a lower rate and more individual productivity. The
sum total of the strength of a nation's economy is the total
productivity of its people.
Item number three, you cannot establish security on borrowed money.
Brings us all to a pause, Mr. Speaker, because we are paying for
Department of Defense spending on borrowed money. It is necessary that
we have Department of Defense spending, but that is something that
causes me to want to back up, take a look and determine that we can pay
our way, pay as we go. That means tighten the belt; we are at war.
Item number four, you cannot help small men by tearing down big men.
A little bit different verbiage in those days than there is today. In
other words, you cannot help the poor by tearing down the weak. And I
think he actually says that.
Item number five, you cannot strengthen the weak by weakening the
strong. Use your strength, build on those, help others, ask them, come
on up the ladder with me; but do not pull someone down that has climbed
up a few rungs. I keep hearing it over and over again, let us pull
those people down; the oil companies made too much money. Why did they?
Because the environmentalists would not let us drill for more and the
price went up. They invested at least in the energy future of America.
They will quit doing that if we punish them. You cannot strengthen the
weak by weakening the strong.
You cannot lift the wage earner by pulling down the wage payer.
Another solid point that needs to be hammered home.
You cannot help the poor man by destroying the rich. It is important
that we have people that have a level of prosperity. They build new
houses. They move out of those houses and build a bigger and newer
house. They sell that house to someone that can afford it and on and on
and on until they get down a level of ways where you and I can afford.
So you cannot help the poor man by destroying the rich.
You cannot further the brotherhood of man by inciting class hatred.
Class hatred is incited every single night on the floor of the House of
Representatives, Mr. Speaker. It does not help the brotherhood of man.
It drives a wedge between the brotherhood of man.
You cannot build character and courage by taking away man's
initiative and independence. One of the ways that that is done is to
create independence, and I spoke about individual initiative and
individual responsibility and individual rights, and I pray that we can
protect and defend those rights for all Americans, rich or poor, weak
or strong, whatever color, whatever sex they might be. We need to
guarantee their individual rights and protect them and give them that
opportunity.
The tenth one, you cannot help men permanently by doing for them what
they could and should do for themselves. I remember that statement of
Lincoln's.
So all of these principles of Abraham Lincoln's, the 10 Cannots, have
been violated on the floor over here night after night after night. If
we could get back to those principles, Mr. Speaker,
[[Page H385]]
if we could get to this point where we understood that individual
rights, individual responsibility, if we all could begin to climb that
ladder, if we could see our glass as half full and begin to fill out,
and as we did that, reached out and help our fellow man, if we could
take the tax off all productivity in America, we could prepare this
future for the young people, for the children, for those that are here
tonight, Mr. Speaker, and with that, I thank you for your indulgence.
____________________