[Congressional Record Volume 152, Number 99 (Tuesday, July 25, 2006)]
[House]
[Pages H5831-H5837]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
THE OFFICIAL TRUTH SQUAD
The SPEAKER pro tempore. Under the Speaker's announced policy of
January 4, 2005, the gentleman from Georgia (Mr. Price) is recognized
for 60 minutes as the designee of the majority leader.
Mr. PRICE of Georgia. Mr. Speaker, what a pleasure it is to come back
to the House floor this evening. On behalf of the Official Truth Squad,
I want to thank the leadership and the conference for allowing me to
host this hour.
The Official Truth Squad kind of grew out of frustration on the part
of the freshmen class a little over a year ago. We felt that there were
a lot of things that were said on this floor that, taken at face value,
might be seen as being accurate, but, in fact, if you look at it a
little closer, they were not the truth. And we felt that there was not
a whole lot of time allotted to refuting the inaccuracies. Now, some of
those inaccuracies, Mr. Speaker, you have just heard.
So we are going to spend a little time over the next hour to talk
about accuracy. We are going to talk about truth because truth is so
doggone important in trying to determine what public policy ought to
be. If you are not dealing with real facts, if you are not dealing with
truth, then you cannot get to the right answer, cannot get to the right
solution. So it is my privilege to be able to join some of my
colleagues this evening and to, Mr. Speaker, talk about the kinds of
issues that are of importance to the American people.
[[Page H5832]]
And tonight we are going to talk a lot about the economy. But I want
to start by sharing with you, Mr. Speaker, and with my colleagues kind
of a saying that we have adopted, a quote that we have adopted, and it
comes from Daniel Patrick Moynihan. He was a former United States
Senator from the State of New York, and he had a wonderful quote that I
am very fond of quoting and it is: ``Everyone is entitled to their own
opinion but not their own facts.'' And there are a lot of opinions
around here, Mr. Speaker, but as I mentioned, oftentimes the fact is
far from the opinions that have been given. So it is my privilege to be
joined tonight by some folks who will talk about some truth and some
facts.
You have just heard some comments from some folks on the other side
of the aisle, some good friends of mine on the Democrat side, who have
decided to use some very specific instances and items that they would
support, that they believe ought to be done if we are going to get our
fiscal house in order.
We are going to talk about our fiscal house and how a lot of it is
moving along pretty doggone well. But I want to mention a couple things
because when given the opportunity to enact some of the programs, Mr.
Speaker, that they have just within the last 15 minutes said were
imperative to enact for our fiscal responsibility as a Nation, they do
not come along. They do not help. And we need not just Republicans to
be able to enact appropriate policies. We need Republicans and
Democrats, everybody working on behalf of the American people.
One of the things that you have just heard about just a moment ago,
Mr. Speaker, were PAYGO rules. PAYGO rules are rules that say you have
got to be able to identify where the money is before you spend it.
Sounds like a reasonable thing, Mr. Speaker. It is what you do in your
home. It is what I do in my home. It is what all of us do in our homes
if we are going to be fiscally responsible.
Well, not too long ago, Mr. Speaker, roll call vote 318, 2004; 318 is
the roll call vote, Mr. Speaker. If you want to look it up, that is
where you can find it. We had a proposal for PAYGO rules, and, again,
that means that you have got to identify where the money is coming from
before you spend it, for mandatory spending increases. And the vote on
the floor of the House of Representatives, right here, Mr. Speaker, how
many folks from the other side of the aisle that you just heard say how
important this was, that this was important, how many folks voted for
that? Roll call vote 318 in the year 2004: Not a single one. Not a
single one voted for it.
Mr. Speaker, that is the truth. People can talk a good line. They can
say that they need this thing or they need that thing or we need to do
this or we need to do that. Oftentimes Members on the other side go
home and say wonderful things about what they would do if they were
given the opportunity. Well, here was an opportunity that was given to
all Members of the House, and what happened is the fact that they did
not support it. Not one of them supported it.
I am a great fan of a balanced budget amendment. I believe that a
balanced budget is imperative for us to be fiscally responsible. In my
first term in Congress here I have recognized, as most folks have, that
the vast majority of the inertia here is all for spending, that there
is very little discipline in the programs themselves, in the process
that we have here, to restrain spending. So I believe that we ought to
have a balanced budget amendment. We ought to have a balanced budget.
We ought to only spend what we take in.
Now, our friends on the other side of the aisle, as you have just
heard, Mr. Speaker, within the last 15 or 20 minutes, said, oh, yes,
that is important. That is important too. In fact, it is so important,
one of them said it was the most important proposal of their group. The
most important proposal.
Well, I have got a couple votes to share with you, Mr. Speaker,
because these are the truth. When you have to cast a vote for the
record, you vote green or you vote red, that is recorded. That is
recorded in the Congressional Record, and we keep track of those things
because they are important. They are important because they are the
truth and they demonstrate where folks stand.
A couple votes here to make a balanced budget resolution binding.
That means that if we say we are going to balance the budget that you
have got to follow that resolution. You have to balance the budget.
Well, there was a vote back in 1994, roll call vote 343, 1994. How
many Democrats voted ``yes''? Twenty-four with 229 voting ``no.'' As
you will recall, Mr. Speaker, 1994 was when the House changed. The
Republicans took over the majority.
Well, we have continued to give them multiple opportunities to enact
this kind of resolution. In fact, relatively recently, in 2004, roll
call vote 311, how many folks on the other side of the aisle voted in
favor of a balanced budget resolution on mandatory spending? Ten. Ten
folks. You just heard, Mr. Speaker, that they said this was one of the
most important things in their fiscal program; yet you cannot even get
more than 10 folks to vote in favor of it.
How about this year, Mr. Speaker, what happened this year when we had
a balanced budget substitute amendment to the 2007 budget. Now, this
was an important vote. This was an extremely important vote because
what this said is, yes, we believe that we ought to be absolutely
fiscally responsible and we need to enact programs that will take us to
a balanced budget as soon as possible.
Roll call vote 156, just this year, Mr. Speaker, 2006, how many
Democrats voted ``yes''? How many folks from the group that said that
this was the most important thing in their proposal? How many folks?
Zero. Zero.
Mr. Speaker, that is the truth. That is the truth. As Senator
Moynihan said: ``Everybody is entitled to their own opinion but not
their own facts.'' And that is a fact, Mr. Speaker. That is a fact, and
that is why the Official Truth Squad believes that it is important to
talk about facts, to talk about the truth.
Tonight we are going to talk a fair amount about the economy and
about economic principles and about where this Nation stands as it
relates to the economy, and I am pleased to be joined by one of my good
colleagues and fellow members of the freshmen class, Representative
Thelma Drake from Virginia, who, as a small business person,
understands the extreme importance of fiscal responsibility and really
has been a stalwart in calling forward the kinds of policies that we
need in this House and across this Nation in order to make certain that
we gain that kind of fiscal responsibility that all Americans, not just
Republicans, not just Democrats, but all Americans believe are so
important.
And I yield to my good friend from Virginia.
{time} 2045
Mrs. DRAKE. Mr. Speaker, I thank the gentleman for handling this hour
this evening and for inviting me to participate. I found what you just
went over with your numbers very interesting, because in coming here
tonight to talk about the economy and the very good news of what
America is facing with the growth in our economy because of the tax
cuts of 2001 and 2003, I wanted to share with you that there was an
excellent article in The Wall Street Journal today, and it went right
along the same path of what you just said.
That article started out by saying that John F. Kennedy believed that
an economy hampered by restrictive tax rates will never produce enough
revenue to balance our budget, just as it will never produce enough
jobs or enough profits.
In those days, when the Kennedy tax cuts were passed, 80 percent of
Democratic Senators and Representatives voted for those Kennedy tax
cuts. But the article goes on to point out that in 2003, when these
most recent tax cuts were passed, only 7 of 205 Democrat
Representatives voted for those tax cuts. And, more than that, the
editorials across the Nation went on to call the tax cuts economically
unsound and claimed they would increase the deficits by hundreds of
billions of dollars and said they were unlikely to stimulate the
wallowing economy.
What we have seen is absolutely the opposite of that.
We have also heard just recently that House minority leader Nancy
Pelosi has promised that if there is an election of a Democratic House
in November, that would result in the rollback
[[Page H5833]]
of tax cuts. It makes you wonder why, the article goes on to point out,
when tax rates go down, that economic activity goes up.
I would like to share with my friend, and I know he will talk about
it as well tonight, some of the facts of what has happened with those
tax cuts, particularly since 2003.
In the past 33 months, the size of America's entire economy has
increased by 20 percent. Incredible. Twenty percent. That is in the
words of Larry Kudlow. In less than 3 years, the U.S. economic pie has
expanded by $2.2 trillion, an output add-on that is roughly the same
size as the total Chinese economy. Incredible numbers.
In the 25 years before the 2003 tax cuts, economic growth averaged
1.1 percent annually. In the past 3 years, it has averaged 4 percent
per year, and the first quarter of this year, we are on track for 5.6
percent for this year. Incredible numbers.
In those 36 months since the tax cuts became law, 5.3 million new
jobs have been created. When we talk about Federal tax receipts, they
are up 15 percent or $274 billion last year, and when the capital gains
tax was reduced from 20 to 15 percent, capital gains tax receipts grew
79 percent from 2000 to 2004.
Before I came to Congress I was a realtor, and I understood the
capital gains tax on real estate. I can tell you there were many people
I worked with, including myself as well, that would not have sold a
piece of property at a 25 percent capital gains tax rate. We just would
not do it. There is such a thing as taxpayer behavior and there is a
breaking point.
What has happened with these tax cuts and the reduction to 15 percent
is people are making different choices. They are now saying I can sell
that rental property and I can go on and I can invest in something
else.
Americans are doing that. They are creating new jobs, they are
creating new opportunities, and our economy has grown incredibly.
Cutting the dividend tax rate from 39.6 percent to 15 percent has
increased those revenues by 35 percent from 2002 to 2004 and tax
receipts have tripled since 2003, reaching $250 billion for the last 9
months.
I think that it is important to talk about that tax cuts truly do
work. We have often heard it said that if you allow people to keep more
of their own money, they will create jobs, they will create
investments, they will spend the money. They will use it in our
economy, all for the benefit of our Nation. But what we have today is 3
years of solid record to show that that model works.
I appreciate you giving me the opportunity to be here to talk to you.
I appreciate the article this morning in The Wall Street Journal. I
would encourage everyone to go back and read it and to really see what
has happened in our economy, because often when we hear the rhetoric
that we hear over and over and over again, we don't realize the
positive impact of these tax cuts.
You and I both understand that if these tax cuts are rolled back,
that is a tax increase on the American people, and you and I disagree
with the other side that says, well, revenues are good, let's just
raise the rates and they will be that much better, because that fails
to calculate what happens with taxpayer behavior and the negative
impact on our economy
Thank you for what you are doing. Thank you for giving me the
opportunity to be here.
Mr. PRICE of Georgia. I thank the gentlelady from Virginia. What
wonderful points you made and shed light on the Official Truth Squad
and facts that you brought before us, the issue about the tax cuts, the
capital gains and dividend tax cuts now at 15 percent, which we have
attempted to extend and worked so hard to extend. If one would believe
everything that they hear from the other side, you would believe that
every single person on the other side of the aisle supported that
continued decrease. Not the case, as you well know. Not the case.
There is really wonderful and good news as it relates to the economy,
the remarkable economic growth that you have cited, and we will go
through some of that in just a little bit.
Taxpayer behavior, I appreciate your mentioning that, because people
across this Nation know what goes on here in Washington as it relates
to tax policy, and they tailor what they do in their personal lives
based upon that. There is no doubt about it.
I would be happy to yield for a moment, if you would like.
Mrs. DRAKE. I just want to thank the gentleman from Georgia again. I
think that is an important point about taxpayer behavior. I think it is
important that we allow Americans to keep as much money in their pocket
to spend the way they see fit, and we now can show you that is the best
model for increasing revenues for our government.
I think it is also important to talk about when those tax cuts went
into effect, that they weren't anticipated, and it was $2.2 trillion
over the last decade that we had not anticipated because no one thought
the tax cuts were going to do what the tax cuts actually did.
So, that, in itself, those $2.2 trillion we had not calculated, is
actually as if the residents of Florida didn't pay their income tax for
10 years. That is that amount of money. It is a huge amount of money.
I believe, and I know you do too, that our tax policy has got to
support our economy, grow our revenues, and what you are seeing in the
tax cuts, particularly from 2003, are doing exactly that.
Thank you for telling America.
Mr. PRICE of Georgia. Thank you so much. I appreciate your
participation tonight in this edition of the Official Truth Squad,
trying to bring some truth and fact and positive news to you, Mr.
Speaker, and our colleagues.
I like charts, because I think that they oftentimes say so much more
than I am able to put into words. We are going to go through some
charts here.
This is one of my favorite charts, because it points out the time at
which the tax relief occurred, the decrease in the capital gains and
dividends and the consequence of that, the incredible economic growth,
12 quarters of 4 percent average growth since that point. We are going
to talk about that. I am going to leave that up for a little bit
because it is such wonderfully positive news that we need to be telling
all of our colleagues about the importance of the changes in policy
that indeed drive this kind of economic performance for our Nation.
Mr. Speaker, I have the privilege of serving on the Financial
Services Committee, and we have an opportunity in that committee, as
some other committees in Congress do, to hear from the Federal Reserve
Chairman at least twice a year, sometimes more often, but at least
twice a year.
Last week, the new Federal Reserve Chairman, Mr. Bernanke, came and
spoke to our committee, and we had an opportunity to ask many
questions. In response, he always gets the question, what is the state
of the economy. How are we doing?
In response to one of those questions, I think he used the word
``robust.'' The economy was robust. And I know that doesn't jive with
what some folks will have you say, but I think it is important to
appreciate that the numbers, in fact, demonstrate that that is indeed
the case.
I would like to share, Mr. Speaker, a couple of the comments that the
Federal Reserve Chair made to our committee just last week. He said
that since our February report, the report of the Federal Reserve, the
U.S. economy has continued to expand; that real Gross Domestic Product
is estimated to have risen at an annual rate of about 5.6 percent in
the first quarter of 2006; that with respect to the labor market, more
than 850,000 jobs were added in the first 6 months of this year; and
that the last unemployment rate stood at 4.6 percent, which is a
remarkable rate, Mr. Speaker. We will go over that along with some
other statistics that I think are important to point out as it relates
to the economy.
When he comes to Congress, he brings with him and presents to all
Members of Congress what is called the Monetary Policy Report of the
Board of Governors of the Federal Reserve System, the group of
individuals who set monetary policy for the United States. In so doing,
they look at all sorts of different parameters that relate to our
economic performance and whether or not they need to do something as it
relates to the interest rate, to try to stem the potential tide of
inflation.
I would like to share, Mr. Speaker, with Members of the House and you
[[Page H5834]]
some of the comments and statements made in this official Monetary
Policy Report of the Federal Reserve, just some short portions.
Regarding monetary policy and the economic outlook, the report says,
``The U.S. economy continued to expand at a brisk rate.''
About economic projections for 2006 and 2007, ``In broad terms, the
participants expect a sustained moderate expansion of real economic
activity during the next year and a half.''
Mr. Speaker, that is good news, as far as I can tell. I don't know
about others, what they think ought to occur, but I think any time that
you have relatively reliable individuals predicting that real economic
activity is going to expand over the next year and a half, that is good
news.
Economic and financial developments in 2006, I found this
fascinating, because if you look at the kinds of natural challenges
that we have had as a Nation, one would think that the economy would
have been not terribly vibrant. But here is a portion of a paragraph
under the economic and financial developments in 2006. ``Although last
year's hurricanes caused the pace of aggregate economic activity around
the turn of the year to be uneven, real GDP, gross domestic product,
increased at an average annual rate of 3.6 percent for the final
quarter of 2005 and first quarter of 2006, about the same pace that
prevailed during the preceding year-and-a-half. Over this period,
payroll employment posted additional solid gains and the unemployment
rate declined even further.''
Mr. Speaker, that is the kind of positive information, the kind of
good news that we in this Congress ought to be sharing with each other
about the tax policy that has been enacted and about the consequences
of that tax policy and how that is benefiting the job performance and
the job creation throughout our economy.
What about the household sector? This monetary report breaks down our
economy in many different areas. The household sector, consumer
spending, you have to have money in order to spend it, as you know, Mr.
Speaker. Over the first half of 2006, rising employment and the lagged
effect of increases in wealth continued to provide support for spending
by households, the continued increase in household spending.
How about the business sector? Fixed investment, real business fixed
investment increased at a solid rate on average during the final
quarter of 2005 and the first quarter of 2006. Over that period, real
business spending for new equipment and software rose at an annual rate
of 9.75 percent, a pace similar to that over the first three-quarters
of 2005.
It is why you see this chart that demonstrates the kind of economic
growth. You can't have economic growth without investment in our
economy, and the business sector continues to believe strongly in our
economy and the positive effects that their investment will continue to
have.
How about the government sector? That is something that folks kind of
track to make certain that resources are available for the Federal
Government and State and local governments to be able to cover the
needs of our society. In terms of the Federal Government, the quote
here in this Monetary Policy Report is that ``The deficit in the
Federal unified budget narrowed further during the past year. Over the
12 months ending in June the unified budget recorded a deficit of $276
billion, about $60 billion less than during the comparable period last
year.''
{time} 2100
Mr. Speaker, as you know, the kind of tax policies that have been put
in place have resulted in a decreasing level of deficit, a decreasing
level of deficit. When I am home, I know it is kind of like you, Mr.
Speaker, when you meet with civic groups and neighborhood groups and
constituents, and they are concerned about spending at the Federal
level, and rightly so.
As President Reagan used to say, we do not have a revenue problem in
Washington; we have got a spending problem. And we do. And we are
working to decrease that level of spending. But we are also
appreciating and realizing that tax policy has consequences, and that
good tax policy results in economic growth and increased revenue to the
Federal Government in order to cover the kinds of appropriate expenses.
We will talk about spending in just a little bit, Mr. Speaker. How
about State and local governments? ``The fiscal positions of States and
localities continue to improve through early 2006. In particular,
revenues appear on track to post a relatively strong gain for a third
consecutive year.''
Mr. Speaker, that kind of quote in the Board of Governors Federal
Reserve System Monetary Policy Report to Congress, one would think if
you read that, understood that, and believed that to be true, which I
believe it to be true, that you would not hold the kind of ``Chicken
Little'' attitude that many folks around here hold, about saying that
the sky is falling.
In fact, the economy is ticking along pretty doggone well. We are
going to go through a lot of numbers tonight to demonstrate that in
fact we have good news to tell the American people. Good nows to tell
the American people.
How about international trade? This is an area of great concern to me
and many of my constituents. What about what is going on in the area of
international trade? ``Real exports of goods and services increased.''
Exports increased, Mr. Speaker. You do not hear that often. You
certainly do not see it on the nightly news.
Real exports of goods and services increased 14\3/4\ percent at an
annual rate in the first quarter of 2006, far faster than the 6\1/2\
percent rate recorded in 2005.
In the labor market. How about the labor market, unemployment and
employment? Conditions in the labor market continued to improve in the
first half of 2006.
Payroll employment increased 176,000 new jobs per month, on average,
during the first quarter, a rate roughly in line with the relatively
brisk pace that prevailed during 2004 and 2005.
Mr. Speaker, I wanted to share those with you and with Members of the
House so that they would understand and appreciate that when you talk
about the truth and when you talk about facts and you have individuals
whose job it is to shoot straight with the Congress and straight with
the American people, the kind of information that you can derive here
leads one to believe that the economy is doing pretty doggone well.
Now, some folks say, well, it may be doing well, but it probably is
not doing as well as it is elsewhere. You have heard that. Mr. Speaker,
I know there are some folks who believe that. But thank goodness there
are groups of folks who are looking at our economic performance as it
relates to the rest of the world, especially the major industrialized
nations of the world.
This is a report from the Joint Economic Committee that compares the
economy in the United States with the economies in the major Western
countries, Canada, European countries, European nations and the
Japanese economy.
And this was comparing the performance since the year 2001. That is
the last 5 years. I want to share with you, Mr. Speaker, a few quotes:
``Although some people have expressed dissatisfaction about the
performance of the U.S. economy, the economic data show that since 2001
the United States economy has outperformed every other large developed
economy.''
Mr. Speaker, did you catch that? The United States economy, since
2001, has outperformed every other large developed economy. That is
good news. That is good news. But it is news that isn't often shared
here on the floor of the House, certainly is not news that you see in
your newspaper, or that you see on the nightly news. That is remarkable
news, as a matter of fact.
There is a reason for it. I believe it to be the policies that have
been put into place by this Republican Congress, especially the tax
policy that was proposed by the President and enacted. But that quote,
again, Mr. Speaker: ``The United States economy since 2001 has
outperformed every other large developed economy.''
Real GDP growth. We rank first in economic growth in the world in
terms of industrialized nations. First place in job creation. First in
job creation. Largest cumulative increase in industrial production.
Largest cumulative increase in industrial production, 4.6 percent.
First in labor productivity growth.
[[Page H5835]]
Mr. Speaker, that is all wonderful, wonderful news, remarkable news
as a matter of fact. Again, it astounds me that we do not have this
kind of discussion going on on the floor of the House more often.
Because these are all good news items.
They are the kinds of things that when shared with the American
people result in a different kind of attitude about our Nation, about
the direction in which we are headed, about the kinds of consequences
that occur with appropriate and responsible economic policy, not the
kinds of economic policy that has been proposed by some in this
Congress which is to increase your taxes, because they believe that in
order to increase revenue to the Federal Government you got to increase
taxes.
We have demonstrated time and again if you decrease taxes, if you put
more money back in the hands of people, in the purses of Americans
across this Nation, and the back pockets of Americans, what happens?
The economy flourishes. The economy flourishes.
We are going to go through some other numbers here, and I am going
share a number of different charts again because I think that
oftentimes these charts just explain a lot that brings things to focus.
You have heard a picture is worth a thousands words; that certainly is
true when you are talking about some economic figures.
I mentioned that there had been stronger than expected economic
growth in the opening quarter of 2006. The economy has grown 18
consecutive quarters, and real GDP grew at an annual rate of 5.6
percent for the first quarter of the year.
Since the beginning of 2003, Mr. Speaker, real or inflation-adjusted,
not counting for inflation, GDP growth has averaged 4 percent per year,
which exceeds the World War II, post-World War II average of 3.4
percent per year.
So since the end of World War II, the average GDP growth annually in
this Nation has been 3.4 percent. And since the beginning of 2003,
because of the economic policies enacted by this Congress and by this
President, we have seen an average growth of 4 percent, greater than
the average over the last 60 years.
That is positive news, Mr. Speaker. That is positive news. This chart
demonstrates much of that. Along this axis here we have the quarters.
The green dotted line, vertical line here, is when the tax, appropriate
tax relief, tax reductions went into place, and what you see after that
is 12 straight quarters of 4 percent average growth.
Good news. Good news, Mr. Speaker. This demonstrates business
investment over that same period of time. Prior to the tax cuts, again
the Tax Savings Act was put into place at this point where the green
vertical line is. Prior to that, the kind of business investment in the
economy, and, you know, Mr. Speaker, that business investment is so
remarkably important to be able to increase the number of jobs, to have
our economy flourish.
Before that point, there was not positive business investment in our
economy. There was uncertainty. We had
9/11. We had come through a recession. And business wanted to have some
predictability to our economic policies. And what happened with the tax
reduction is that they gained that predictability, that reliability of
a positive economic policy from this Congress and from this President.
What happened since then? Twelve straight quarters of positive
business investment. What has happened with that is that we have seen
remarkable, impressive job growth and economic expansion. As I
mentioned, the economy has created 5.4 million jobs since August of
2003.
And if you see the job growth that has occurred over that period of
time, it is impressive. That is why I like charts, Mr. Speaker, because
they just speak volumes. Again, time is down on this axis down below
here: 2003, 2004, 2005 and 2006. This vertical green line is when the
tax, appropriate tax reduction policy went into effect.
You see the growth in jobs. What has happened since that point is a
steady growth in jobs over that period of time. 5.3 million new jobs;
5.3 million new jobs over that period of time. Just remarkable. I mean
truly, truly remarkable.
Now, some folks say, well, how is that cause and effect? Do they
really have anything to do with one another? This chart is a little
busy, but I think that it demonstrates what all of us know kind of in
our instinct, and that is the business investment, these are the bar
graph here, the red portion of the bar graph is the business
investment. Remember we had 12 straight quarters of business investment
after the tax reductions, the appropriate tax reductions that
stimulated the economy so well, 12 straight quarters.
This line, this blue line that goes up and down, and follows,
frankly, if you watch closely, follows business investment. As
businesses invest, back in early 2000, what happens? You have an
increase in new jobs. As businesses withdraw and retract and decrease
their investment in the economy, because of unpredictability, because
of concern about the economy, then what happens is that jobs decrease.
With the tax reductions, with the appropriate tax reductions,
allowing more Americans to keep more of their hardearned money, what
happens is that business recognizes that that is a good thing. They
invest and jobs increase remarkably, 5.3 million new jobs created since
2003, since August of 2003.
I think it is also important, Mr. Speaker, to concentrate a little
bit of time on the unemployment rate. When I originally studied
anything about economics a number of years ago, the economists at that
time would say that if you had an unemployment rate of 6 percent, your
unemployment rate was 6 percent, that that was considered full
employment, that because of people changing jobs, between jobs,
considering looking for a job in a different area, that an unemployment
rate of 6 percent was full employment.
Well, Mr. Speaker, at this point, as you well know, we have an
unemployment rate of 4.6 percent. I have got a chart that demonstrates
that in comparison to historical average. 4.6 percent unemployment
rate. And you see here that the 40-year average is 6.0. That was
considered full employment, certainly over that period of time, 40-year
average. In the 1990s the average was 5.8 percent.
But what is it now at this point? 4.6 percent. Mr. Speaker, that
truly is full employment. Remarkably positive news to share with the
American people. But you just do not hear that as often as one ought.
When you see those kind of statistics, 4.6 percent is below the average
unemployment rate for the 1960s, for the 1970s, for the 1980s, and for
the 1990s, phenomenal. And again the reason for that is appropriate tax
policy, appropriate economic policy, put in place by this Republican
Congress and by this President.
So the robust economy has been truly remarkable. Job growth has been
impressive, especially when you think about it, Mr. Speaker, think
about what has happened over the last 5 years, over this period of time
when those policies have been in place and the challenges that we have
had to our economy.
Just to name a few, we had the stock market decline beginning in
2000. The recession that we had at the beginning of this decade, the
terrorist attacks on 9/11 certainly affected the economy to a huge
degree.
The consequences and the responsibilities that we have clearly, that
all of us believe are so remarkably important in waging the global war
on terror, the hurricanes, devastating hurricanes of last fall and
before. We oftentimes, because of the magnitude of Hurricanes Katrina
and Rita, we oftentimes do not recall the kinds of annual hurricanes
and storms and natural disasters that oftentimes sap much of the
resources.
And then the higher energy prices. All of these things, and just one
could be thought to have affected in a remarkably adverse way our
economy. But what has happened, Mr. Speaker? What has happened is that
economic policy in place, appropriate tax reductions in place, allowing
the American public to keep more of their hardearned money. And what
happens is that the economy flourishes and we have an unemployment rate
of 4.6 percent.
Now, it has been said that in order to increase tax receipts to the
Federal Government, in order to increase revenue that is coming into
the Federal Government, you got to raise taxes. You hear that all of
the time from
[[Page H5836]]
folks who say, we need more money, we need more of your money, America.
We need more of your money in order to pay for the kinds of programs
that the Federal Government has to run.
But President Kennedy knew it, President Reagan knew it, President
George W. Bush knows it, this Republican Congress knows it, and that is
that when you decrease taxes, kind of counterintuitive, but when you
decrease taxes, what happens is that the economy flourishes, we have
talked about that a lot this evening, the economy flourishes, the
number of jobs increase, the amount of money that is being paid to
individuals increases, the number of folks who are employed increases,
and because of all of that, the tax receipts actually increase.
And it is important to appreciate that, because unless one
understands that, Mr. Speaker, unless you appreciate that the lower
taxes are, the higher tax revenue you get, then you are going to draw a
wrong conclusion about how we ought to proceed as a Nation.
The CBO forecast, the Congressional Budget Office forecast down there
on the far right was for 16.8 percent of a share of the GDP for tax
receipts. The forecast for the budget in fiscal year 2005 was the same.
What happened? What happened because of the tax policies is that we
have a remarkable increase in tax receipts to the Federal Government.
That is good news, Mr. Speaker. That means that the tax policy is
working. You allow Americans to keep more of their hardearned money,
then what happens is that the Federal Government sees more tax revenue,
and hopefully we will be able to continue to decrease taxes on
Americans, all across the spectrum, all across the spectrum.
Mr. Speaker, I think it is always important to talk, when we talk
about taxes, and when we talk about the economy, you oftentimes hear
our friends on the other side of the aisle trying to divide people
between the haves and the have-nots, the rich and the poor, upper class
and middle class, lower class. They will oftentimes say things like,
people need to pay their fair share of taxes. You hear it all of the
time, Mr. Speaker. I know you do.
Well, I think it is incredibly important to demonstrate who, in fact,
is paying taxes at this point in our Nation. This chart just speaks
volumes. Absolute volumes. On this axis here we have the percent of
taxes that are paid by what percent of individuals who are in our
Nation.
The top 1 percent wage earners. Mr. Speaker, the top 1 percent wage
earners in our Nation pay over 30 percent of the taxes. The top 1
percent pay over 30 percent of the taxes. You see that the top 5
percent pay over 50 percent of the taxes. And you go on down and
appreciate that largest bar there is the top 50 percent of wage earners
in this Nation pay over 96 percent of the taxes in this Nation.
That is a progressive tax rate. That is the kind of tax policy that
we have in place. I think we ought to decrease a lot of those taxes.
But it is important for people to appreciate that folks in the bottom
50 percent of the wage earners who are striving to get into this area
up here, and we are working as hard as we can to have policies in place
that will allow them to do that, but the bottom 50 percent of wage
earners in this Nation pay about 3\1/2\ percent of the taxes in this
Nation.
I do not say that to belittle anybody. I say that to bring truth and
fact to the discussion and to the debate. So when you hear people say,
people need to pay their fair share of taxes, well, I would suggest to
you, Mr. Speaker, that folks are paying their fair share and then some,
and then some of taxes that we have in this Nation.
Now, we hear a lot of talk, Mr. Speaker, about the deficit, about the
deficit, and how the deficit is too high and how we are not being
responsible in our spending. I would agree with folks that the deficit
is too high. Because I believe, as I have mentioned earlier, that we
ought to have a balanced budget, that we ought not spend any more money
than we take in.
But you hear people all the time saying this is the worst deficit in
the history of the Nation. In fact, Mr. Speaker, in fact, remember it
is the Official Truth Squad, in fact what we have seen over the past 12
months is a Federal deficit as a percent of GDP, Gross Domestic
Product, of 2.1 percent.
Now the average in the 1990s, the average in the 1990s, 2.2 percent.
That is higher Federal deficit as it relates to percentage. You can
talk about absolute numbers. But absolute numbers do not compare apples
to apples, because of inflation and expansion in the economy, and the
level of Federal revenue.
See, it is important to talk about percent of gross domestic product
when you talk about what the Federal deficit is. Again, this is not
where I would like it to be. I would like it to be zero. And you
remember the policies that we put on the floor of the House to vote on,
the PAYGO policies and the balanced budget policies that we put on the
floor of the House to vote on? Our friends on the other side of the
aisle overwhelmingly rejected them, overwhelmingly. That is the kind of
cooperation, we need greater cooperation in order to bring that down.
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But in spite of that, in spite of their reluctance to assist us in
appropriate fiscal decisions, what we see is a 2.1 percent Federal
deficit as it relates to gross domestic product. Ten years ago what was
it? 2.3 percent. And, remember, the average for the 1990s was 2.2
percent.
So I think it is extremely important, Mr. Speaker, for us to be
honest when we talk about the economy, to be honest when we talk about
the budget, and to be honest when we talk about where the problem is as
it relates to the budget. Where is the big money being spent? Where is
it going? And I have got a few charts that I would like to share with
you on that, Mr. Speaker.
These are pie charts that demonstrate where Federal monies go when
the Federal Government spends the large pot of money that it does every
single year, where does it go? Where does it go? And this breaks it
into three different areas in the pie chart and over a 20-year period
of time, 1995, 2005, and 2016. And the three different areas, the green
is the discretionary portion of the budget, the red is the interest,
and the yellow is the mandatory portion.
The mandatory portion is primarily Social Security, Medicare, and
Medicaid, those programs that are oftentimes called entitlement
programs. I don't like to call them entitlement programs because I
think that means that you absolutely can't reform them, that there
isn't any way to be able to change positively those programs for the
beneficiaries and for all members of our society. But Medicare,
Medicaid, and Social Security.
In 1995, those mandatory programs, automatic programs oftentimes I
like to call them, spent 48.7 percent of the Federal budget. 48.7
percent of the Federal budget. Now, these are programs that are on kind
of an automatic spending course. If we as a Congress don't act, then
they continue to increase at a rate greater than inflation. In 2005,
those three programs, Medicare, Medicaid, Social Security, basically
those three programs spent 53.4 percent of the Federal budget. Mr.
Speaker, that line continues to increase. In 2016, if no changes are
made or put in place, those three programs will incorporate 63.9
percent of the Federal budget. And in 30 years, Mr. Speaker, if I had a
pie chart that had us 30 years down the road, the entire pie would be
yellow. The entire pie would be yellow, because those three programs,
Medicare, Medicaid, and Social Security, would consume the entire
Federal budget.
Now, I point that out because I think it is important for people to
appreciate that one of the responsibilities that we have in Congress is
to make certain that that kind of economic policy doesn't occur. We are
living in a changing demographic in our society, and one that will not
sustain that kind of mandatory spending. And so the President 1\1/2\
years ago or so and many of us in Congress felt that it was appropriate
to begin moving in a direction of greater fiscal responsibility when it
comes to spending in the area of Social Security and Medicare and
Medicaid, and we selected Social Security to begin that debate.
And as you will recall, Mr. Speaker, as so often happens regretfully
and regrettably is that the folks who oppose any responsible spending
here from Washington demagogue that issue to a
[[Page H5837]]
degree that they scared every single individual across this Nation into
believing that the kind of policies that were being proposed were going
to destroy the program. Well, nothing could have been further from the
truth.
What we were attempting to do was to make it where that kind of
growth curve in a mandatory or an automatic spending program didn't
occur so there was greater fiscal responsibility here at the level of
the Federal Government and we were attempting to empower individuals in
their communities to a greater degree with the kind of resources that
they would gain from their employment.
If we don't, if we don't make certain that we address and
fundamentally reform those three programs, Social Security, Medicare,
and Medicaid, we will not be able to sustain the kind of Federal
Government, the kind of policies either in defense or in transportation
or in energy, all of the things that we need to be doing as a Nation in
a positive way to move forward, we will not be able to do those things
unless, unless we responsibly, responsibly, go ahead and reform the
mandatory spending.
This chart points out the fact that the growth in those mandatory
spending programs, if the law isn't changed right now, if we don't act
positively together as a Congress, if we don't change that, these
programs will grow at a rate of about 6.2 percent every single year.
Now, you see that the rate of inflation is estimated to be about 2.4
percent. Well, those programs will outpace the rate of inflation. They
will also outpace the growth in membership in those programs. That is
again, Mr. Speaker, an economic policy that is truly unsustainable.
That is not something that we can continue as a Nation.
Mr. Speaker, I just want to point out that we are continuing to try
almost weekly to encourage our colleagues on the other side of the
aisle to assist us in being fiscally responsible, helping to solve many
of the challenges that we have. This week is no different. We will have
on the floor of the House this week H.R. 5766, which is an act called
The Government Efficiency Act. And what it does is sets up a framework
to target inefficiency, waste, fraud, and abuse in the Federal
Government to make certain, to make certain that we route out that kind
of waste, fraud, and abuse.
I want you, Mr. Speaker, to make sure that you watch how our friends
on the other side of the aisle vote on that, because you heard them
earlier say that making certain that we decrease inefficiency, waste,
fraud, and abuse is so incredibly important as a Federal Government. I
believe that to be true. We have got a bill that will do that. We are
going to give them the opportunity to vote ``yes,'' vote positively and
vote ``yes'' on something. So I encourage you, Mr. Speaker, to keep an
eye on H.R. 5766 as it comes up for a vote this evening.
I have got just a few moments left, but I am pleased to be joined by
my good friend and colleague from Georgia, Representative Lynn
Westmoreland, who is a wonderfully fiscally responsible member of the
freshman class, and I yield to my friend from Georgia.
Mr. WESTMORELAND. Thank you, Mr. Price, and I appreciate you doing
this tonight.
I have listened to the other side and your debate, and basically, Mr.
Price, wouldn't you just assume that this basically comes down to a
difference in philosophy? I heard about the deficit, I heard about the
spending. But I believe that this Republican majority and the
leadership in this House has given the other side every opportunity in
the world to reduce that deficit. I believe we had the Deficit
Reduction Act that the Republican majority had to pass themselves. And
their philosophy is, to reduce the deficit, they would raise taxes.
None of us like the deficit. We need to cut our spending. But every
opportunity that the majority has had to cut spending, we have been
opposed by the other side.
So I think what the people, Mr. Speaker, and, Mr. Price, need to
realize is that this is a difference in philosophy about how this
government should be run and about where the priorities for our
spending are. And I know you had the chart up there about Social
Security and Medicaid and Medicare. And we all want people to get their
benefits, but there is going to come a time of reckoning, and the
majority party in this House has taken the leadership to try to address
some of those things.
{time} 2130
Not by cutting them but just by slowing the growth, and yet at every
turn, at every turn you know that we have had opposition from the other
side. So there has got to be a point where they come to the realization
that they need to help us. They need to become part of the solution,
rather than just being a party of ``no.''
Mr. PRICE of Georgia. Madam Speaker, I appreciate those comments so
much, and I appreciate you reminding me about the Deficit Reduction
Act. It was in my notes, and I wanted to make certain we pointed that
out. We had that bill passed earlier this year in January. It would
save the American people $40 billion.
Mr. WESTMORELAND. If you do not mind me interrupting, but that was at
no cuts. This was just a decrease in the spending, a decrease in the
growth of our government; and they spoke about sitting around the
kitchen table and talking about your budget. We all do that. We all
have to do that. The American family has to do that, but at the same
time, if we know we are going to get a 5 percent pay raise or whatever,
we cannot spend more than that. Sometimes we have to rein in our
spending, and this is what the Republican majority has tried to do
here.
So I want to thank you for bringing the Truth Squad to the floor and
for explaining to all of us exactly the good things that this majority
party has done to put this country in the right direction, and I might
also add that our deficit has come down over the last quarter and the
last months due to these tax cuts that we gave the American people
because they know so much better about how to spend their money than we
do as a Congress and as a government.
But I want to thank you for taking this opportunity to bring the
Truth Squad to the floor and to bring truth to some of the things that
are said here.
Mr. PRICE of Georgia. Thank you so much. I appreciate that,
appreciate your comments, your pointing out again the Deficit Reduction
Act that we passed on the floor of this House earlier this year with
not a single vote from other side, again $40 billion in savings, which
is just simply decreasing the increase that is going up in those
mandatory programs, many of those mandatory programs.
So I appreciate you pointing that out, and it just really is a
privilege for me to be able to, on behalf of the leadership and behalf
of the Republican Conference, to be able to come to the floor tonight
and to share some positive news, to share some facts and share some
truth about the American economy, about the importance of allowing
Americans to keep more of their hardearned money; and when you do that,
when we do that as a Nation, as a national policy, what happens is that
the economy flourishes and people are better off.
Madam Speaker, I look forward to being able to share more comments at
some point in the future. I appreciate the opportunity to be with you
tonight.
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