[Congressional Record Volume 153, Number 52 (Monday, March 26, 2007)]
[House]
[Pages H3066-H3071]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        2008 FISCAL YEAR BUDGET

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 18, 2007, the gentleman from California (Mr. Campbell) is 
recognized for 60 minutes as the designee of the minority leader.
  Mr. CAMPBELL of California. Madam Speaker, tonight, and the next 60 
minutes, we are going to talk a little bit about one of the major 
issues that will be on the floor here in the House of Representatives 
as people vote later this week, and that will be the budget of the 
United States Government for the next fiscal year, the fiscal year that 
begins later this year. It's called the 2008 fiscal year budget.
  There will be several budgets offered; but if history is any guide, 
the one that is most likely to pass is the one that is being offered by 
the majority party, or the majority Democrats, in this case.
  That budget is a travesty. Tonight, we are going to show you why, why 
that is not the budget that should pass, why that is not the budget 
that should govern the United States taxpayers' money over the next 
year. This budget that we will see later this week proposed by the 
Democrat majority has the largest tax increase in American history. Let 
me say that again: this budget you will see the Democrats propose this 
week has the largest tax increase in American history. It has no reform 
of any of the entitlements.
  If we are going to save Medicare, we are going to save Social 
Security for future generations, as we will explain to you later, they 
are unsustainable. They have to be reformed. They have no reform 
whatsoever.
  They do not save or preserve the Social Security surplus. You know, 
people pay Social Security taxes. When they do, they presume that money 
goes to pay for Social Security. Makes sense. That is why it's called a 
Social Security tax.
  But, no, every year, a portion of that money is used to pay various 
other priorities of the Federal Government. The budget that the 
Democrats will propose this year for the next 5 years will not change 
that one little bit. Yes, this budget, Democrat budget later this week, 
is full of empty promises except one, to give you the largest tax 
increase in American history.
  Now, let's bore into a few of these things. Let's look into a little 
bit of this in detail. In order to do that I have a few charts here. I 
don't want to have anyone have some flashback to Ross Perot, I know he 
had charts, so I have charts too. I have charts to show you what's 
happening.
  This first one shows there is a misconception there, particularly on 
the Democratic side of the aisle, in spite of all the statistics, that 
somehow the deficit that we are in today was caused by the tax relief 
that was enacted back in 2003, that somehow allowing people at home to 
keep more of their own money to spend on their priorities, rather than 
Washington's priorities, that somehow allowing people to do that caused 
the deficit that we have today. It's absolutely not true.
  If you look at this chart, you will see that total Federal revenues 
declined until 2003, when the tax relief was enacted, and they have 
risen and are now up somewhere around 46 percent. Since then, the 
Federal Government has 46 percent more revenue, 46 percent more money 
than it did in 2003.
  I would ask the average American taxpayer at home, do you have 46 
percent more money, more revenue, more income than you had in 2003? If 
you don't, you should understand, the Democrats believe that the 46 
percent increase for the Federal Government wasn't enough, and that 
whatever you got, it was too much. Because they want to take some of 
what you have and put it right here in Washington, right here in the 
midst of the Federal Government.
  So the tax relief did not cause the deficit, actually caused an 
increase in revenue. Spending caused the deficit, too much spending, 
something the budget, the Democrats are proposing the majority party 
does, is more. Their

[[Page H3067]]

proposal over the next 5 years is to spend more and more and more, yet 
raise your taxes to do it. So they are taking the thing that is 
reducing the deficit and getting rid of it, and taking the problem that 
has created the deficit spending and giving you more of it. Let me show 
you a few more things why these tax reductions actually resulted in 
more revenue.
  They stimulate the economy. When you have more money, what do you do 
with it? You save it, you invest it. You spend it, you create jobs, you 
do all kinds of good things with it. That is why after the tax relief 
was enacted in 2003, we created more jobs, lots more jobs, every single 
month, not a single month without more jobs created in this country 
since the tax relief was enacted.
  What else did the tax relief do? It also increased gross domestic 
product. That is basically the size of the total economy. If you look, 
after 2003, it's not so good, but after 2003, gross domestic product 
has increased dramatically every single quarter. So many charts, they 
are falling down. The chart fell down and so did the unemployment rate 
after the enactment of the tax decreases. Again, here they go. 
Unemployment up close to 6.5 percent, and where is it now? Down around 
4.5 percent.
  These things are not coincidences. These good things that happened to 
the economy did not suddenly hit just when the tax relief went into 
effect by coincidence. No. The tax relief left billions and billions of 
dollars in the American public's hands and in the American taxpayers' 
hands so they could use it for their purposes and help the economy 
grow. That is what we should be doing more of, not less of.
  But the proposed Democratic budget does a lot less of that. Let's 
talk for a second about how much less. This proposed budget has the 
greatest increase in taxes in American history.
  Now, I could tell average taxpayers, people at home, how much is 
that? Oh, it's $392.5 billion a year. What does that mean? They don't 
know what that means. But let me tell you and bring it home a little 
better. It means $3,035 for the average tax return in America per year, 
per year, folks.
  As people sit at home and they watch this, imagine the Democrats' 
budget is saying to you, $3,000 per year, you have to pay more here to 
Washington so they can spend it on more of their priorities.
  We often hear, gee, in Washington, the spenders like to say, the tax 
and spenders like to say, oh, we need to do this, and we have to get 
the money. Where are we going to find the money if we don't raise 
taxes?
  Well, I would say this, where is the average American going to find 
that money? Do you think they just will say, $3,000 a year, oh, that is 
no problem. That is just about $250 a month. That is nothing. I have 
got lots of that. That is no problem, we are happy to do that.
  I don't think so. I think that would cause a tremendous impact on the 
average American family, a tremendous impact on their budget, and not a 
good one if it would have the reverse of all these effects. It would 
start to drive unemployment up. It would start to drive job growth 
down. It would start to the drive the economy down. We need to stop 
this budget that will appear here on the floor this week.
  Now, I would like to introduce the gentleman from South Carolina (Mr. 
Barrett). Mr. Barrett, before you begin speaking, I would like to point 
out to you, because I have these figures broken down by State, that the 
average South Carolinian under the Democrats' tax proposal would pay 
$2,482.66 more tax per year. So you might tell me, Mr. Barrett of South 
Carolina, how do you think the average taxpayer in South Carolina is 
going to pay for that?
  Mr. BARRETT of South Carolina. My friend was exactly right. We are 
talking about the largest tax increase in our history, $292 billion. My 
friend from California was exactly right. When you talk about facts and 
figures, it's one thing. But when you try to bring it home and let 
people understand exactly what it means to them personally, it's 
another thing.
  Let me just give you some examples. Nationwide, if the Democrat 
budget were to happen to pass, we are talking about some nationwide 
impacts. Here we go, a family of four earning $40,000 will face a tax 
increase of $2,052. That is a family of four nationwide and 113 million 
taxpayers will see their taxes go up by an average $2,200. Actually, 
$2,216, but what the heck, it's government work, let's round it off a 
little bit. Over 5 million individuals and families who would have seen 
their income tax liabilities completely eliminated will now have to pay 
taxes.
  So not only people that haven't paid taxes in the past now, another 5 
million individuals are going to have to hit the tax rolls; 45 million 
families with children will face an average tax increase of $2,864; 15 
million elderly individuals, elderly. Now, most of these are on fixed 
incomes, will pay an average tax increase of $2,934. And 27 million 
small business owners will pay an average tax increase, listen to this 
one now, listen to this one, $4,712. Let me read that one again, 27 
million small business owners will pay an average tax increase of 
$4,712. Unbelievable.
  Let's bring it home. I am from South Carolina, born and raised there. 
Let's put it in South Carolina terms. In South Carolina the impact of 
repealing the Republican tax relief would be felt. Here is how. It's 
higher than I thought: 1,300,000 taxpayers statewide who are benefiting 
from the new lower 10 percent bracket would see their taxes go up.
  In South Carolina alone, 1.3 million people added to the 10 percent 
bracket; 447,000 married couples in the State of South Carolina would 
see higher taxes because of the increase in the marriage penalty. We 
are penalizing people to be married; 427,000 families with children 
would pay more taxes because the child tax credit would expire; and 
212,000 investors, including seniors, would pay more because of an 
increase on tax rates on the capital gains and dividends.
  The gentleman from California was there last Wednesday into Thursday 
morning when we passed it, we voted against it, but the Democrats 
passed their budget. It's full of empty promises, with the exception of 
two, more spending and higher taxes. That is a done deal; it's going to 
happen. The Democrat budget says it's the largest tax increase in 
American history. The Republican budget will say no tax increases.

                              {time}  2045

  The Democrat budget will say, immense new spending. The Republican 
will say, we will hold the line and we were going to increase 
accountability.
  Entitlements, on the Democratic side, it is a complete failure, $77 
million worth of entitlement savings, $77 million when we are talking 
about literally hundreds of billions of dollars in entitlement spending 
that they are going to do. The Republican budget says reforms, 
improvements in reforms, trying to make entitlement more sustainable 
and adding to the longevity of it. So it is plain and simple.
  Again, the figure that the gentleman from California, Madam Speaker, 
quoted a little bit earlier, when you bring it home in South Carolina 
terms where everybody can understand it, where it hits their 
pocketbook, we are talking per year average for 5 years if the 
Democratic budget passes, $2,482.66 that my people in South Carolina 
will have to pay more.
  And I ask the gentleman from California, I don't think that is a 
pretty good deal, do you?
  Mr. CAMPBELL of California. I thank the gentleman for yielding.
  I don't think it is a very good deal at all. What are they going to 
get for that? I think that is part of the question here. What exactly 
are they going to get for that?
  Are they going to get some of the spending like we just saw passed in 
the bill last week, you know, maybe some things to help shrimp and 
peanuts and a few things like that? Is that the sort of stuff they are 
going to get? Are they going to get a bunch of earmarks? What are they 
going to get? I don't think they are going to get very much.
  I yield back to the gentleman from South Carolina. Do you see much 
that your South Carolinian constituents will get for their $2,500 a 
year?
  Mr. BARRETT of South Carolina. I thank the gentleman for yielding; 
and, no, I don't. Again, broken promises.
  One of the ways that the Democrats want to fund all this new spending 
is reserve funds. And you talk about a

[[Page H3068]]

shell game. We are talking about setting up reserve funds so we can 
spend more money, but there is actually no money in the reserve funds 
because we are going to put the money in there later on.
  Mr. CAMPBELL of California. Will the gentleman yield?
  Can you explain that to me again?
  Wait a minute. A reserve fund? I mean, a reserve fund to me is 
something where I put some money aside. You are telling me that they 
are saying they are setting up a reserve fund, the Democrats are, with 
zero money it.
  I yield back to the gentleman.
  Mr. BARRETT of South Carolina. Exactly. And as the gentleman from 
California knows, we had an empty jar, a big empty jar in our committee 
to illustrate that view.
  One of the ways that the Democrats in their budget spend more money 
is they set up this empty reserve fund to be funded later, that the 
committees and the agencies and organizations can draw money out to 
spend more money, but yet there is no money in the reserve fund to 
spend. So you talk about a shell game. It is a shell game at its 
finest.
  One of the things that I was proud of several weeks ago, I guess 
maybe it was 2 weeks ago, I was proud to be part of an RSC, the 
Republican Study Committee, a press conference that we had to talk 
about a Taxpayer Bill of Rights.
  And, Madam Speaker, what we are talking about here is giving the 
taxpayers across the country more accountability for their government. 
Four simple things, things that we have talked about and things that we 
would like to see come to fruition. Let me tell you what they are.
  Taxpayers should have the right to a Federal government that does not 
grow beyond their ability to pay for it. I don't think we see that in 
this budget, Madam Speaker.
  Taxpayers should have the right to receive back every dollar they 
entrust to the government for their retirement. It is incredible what 
we have done and what we are continuing to do, Madam Speaker, in this 
Democratic budget.
  Number three, taxpayers have a right to expect the government to 
balance the budget without having their taxes raised. As the gentleman 
from California well knows, the Republican budget that we will present 
later this week will do that in 5 years. We will balance the budget, 
save the Social Security fund, and do it all without raising taxes. The 
Democratic budget does not. It does not. Now they may say one thing, 
but the figures show something else.
  And, last, taxpayers have a right to a simple and fair Tax Code that 
they understand. Boy, that is a tough one there. But it is a game of 
trying to be responsible to the taxpayers, as my friend from California 
knows. It is a game of making sure that our people keep their money. 
They know how to spend it more than we do in Washington, D.C., and I 
trust my people more.
  Unfortunately, Madam Speaker, as my friend from California knows, 
this budget trusts the government more than it trusts the American 
taxpayer.
  With that, I yield back.
  Mr. CAMPBELL of California. Will the gentleman yield one more minute?
  Let me just ask you one more question, and then we will go on.
  The gentleman from South Carolina, so narrow it down. There will be a 
Republican alternative to the Democratic budget here that everyone on 
this floor will vote on this week. What are the major differences? I 
mean, could you lay out for me and for Madam Speaker and for anyone 
watching what are those differences?
  And I yield.
  Mr. BARRETT of South Carolina. I thank the gentleman for yielding.
  I think it is very simple. Number one, we will balance the budget 
without raising taxes; and, number two, we will reform entitlements. 
Because, as you well know, over the next 5 years, Madam Speaker, 
entitlement spending will grow 19 percent. Now that is without me, 
without my friend from California, without anybody in this House 
lifting a single finger. Entitlement spending will grow 19 percent.
  So the budget we bring to the floor this week will be very simple. We 
will slow the growth, not cut. We will slow the growth, because 
entitlement spending will still continue to grow. We will slow the 
growth of entitlement spending, and we will balance the budget without 
raising taxes.
  And I yield back.
  Mr. CAMPBELL of California. Thank you, Mr. Barrett from South 
Carolina.
  Now, Madam Speaker, so you don't think that we are just trying to do 
rhyming people here, we go from Mr. Barrett of South Carolina to Mr. 
Garrett of New Jersey. But before I yield to Mr. Garrett from New 
Jersey, you know, I am from California, and California taxpayers, under 
the Democrats' proposal, would pay $3,331.09 more per taxpayer in 
California.
  Now, I thought that was a lot. I thought that was a lot. It is one of 
the higher numbers on the page. But it is not as much as New Jersey. 
Taxpayers in New Jersey would pay $3,779.88 more in taxes under the 
Democrats proposal than they do now. And that is an average, again, per 
tax return filed per year. Almost $4,000.
  I am glancing here and I think, Mr. Garrett, there is only one other 
State that is going to pay, have more of an increase and that is 
Connecticut than New Jersey. So I am curious, Scott Garrett from New 
Jersey, what exactly do you think and what will people in New Jersey 
think and how will they deal with $4,000 a year more taxes?
  I yield to the gentleman.
  Mr. GARRETT of New Jersey. I appreciate the gentleman from California 
yielding.
  New Jersey is proud to be number one in a number of things. But, 
quite honestly, we do not like to be proud, we are not proud of the 
fact that we are number one when it comes to paying taxes in this 
country, whether you are talking about local taxes, sales taxes, State 
income taxes, property taxes. I think we are just about number one in 
all of those combined.
  Yet when you take that and you add what is happening here, this could 
be one of the most expensive weeks for the citizens of the State of New 
Jersey if this House proceeds with what the Democrat leadership plans 
to do.
  Now, I have the privilege of serving with you, the gentleman from 
California, on the Budget Committee. And as you know, we just debated, 
if you will, the Democrats' budget proposal just last week. Actually, 
we had a number of hearings over the last 3 months now, during which 
time we have had a number of experts come and testify on various 
aspects of the Federal budget and the ramifications of not doing some 
things in the area of mandatory spending.
  When you think about all the rhetoric that we have heard from the 
other side of the aisle, and maybe it was disquieting at some times, I 
think the one thing that maybe we can reach across the aisle here and 
maybe hear one language, one word that we are on the same page on at 
least, in rhetoric at least, is they agree with us on this one point 
and that is that we should get to a balanced budget at some point. The 
distinction, of course, is how they get there and how we get there.
  Now, anyone who tuned in to C-SPAN, if people did tune in C-SPAN and 
listen to those budget hearings that we had, they may realize, or they 
watch the stuff on the floor, what have you, might realize just how 
complex the Federal budget is. With talk of rescissions and special 
orders and earmarks and everything, it is a hugely complex matter that 
we deal with; and I appreciate your expertise that you come to the 
House with to be able to handle this.
  But, in reality, if you just step back for a minute, what we all do 
here on the House floor and in Budget Committee isn't a heck of a lot 
different than what every single American family, my own included, and 
the residents of the State of California and New Jersey have to do 
every single year, every week, every month when it comes to their own 
family budget, and that is to say they have to live within their means.
  Now, Washington doesn't have a good track record on this, but that is 
what families have to do. When it comes to families, I guess families 
don't really have a choice to say whether we are going to have a 
balanced budget or not. Washington does. People know how much money 
they are earning.
  Mr. CAMPBELL of California. Will the gentleman yield?
  Mr. GARRETT of New Jersey. Absolutely.

[[Page H3069]]

  Mr. CAMPBELL of California. I was going to say, one thing that you 
can do here in Washington is print money. The average family can't. If 
the Democrats were to pass this budget and give them that $4,000 or 
$3,800 tax increase in New Jersey, your citizens in New Jersey can't 
print money like the Federal Government to just run a deficit, can 
they?
  I yield back to the gentleman.
  Mr. GARRETT of New Jersey. No, you are absolutely right on point. The 
average family has to sit down and say, this is what my income is going 
to be for the week, the month or the year for the year ahead and say I 
am going to live within those means. At the same time, what they have 
to do is they have to set priorities. And I think that what the 
gentleman was also trying to elicit from the Democrats during this last 
budget hearing was to set priorities. What are your top-ranking 
priorities? What must we spend on and where should we spend it? And if 
there are other things that you don't want to spend on now because you 
don't have the money, what are they?
  They would never agree to do that, if the gentleman recalls. That is 
why I think they came up with this hollow, empty trust fund which, in 
reality, they could have said the trust fund is this big, since it is 
empty, or they could have said it is this large. Because if there is no 
money in it, there is no limit to how large the empty promises are.
  But the family budget can't do that, just like you said.
  But the other thing that the Democrats in Washington are able to do, 
besides print money, that the average family can't do, you know what 
else the family can't do? They can't raise taxes. A family cannot 
simply go out and say, I am short on cash this week, so I am going to 
raise taxes. That is why I started off by saying, as you pointed out, 
that this is the most expensive week for a family in the Fifth 
Congressional District for the State of New Jersey.
  Let me just give you one other number while I stand here. It was the 
New York Times, that paper did a study just recently looking at what 
the Democrats in the House and the Senate are proposing. They looked at 
it a little bit slightly differently but came up with a little bit 
different number, but still draws the point.
  They looked at an average family of four making $70,000 in the State 
of New Jersey. Now, if you are from the State of New Jersey, I don't 
think anyone from either side of the aisle would say that a family 
making $70,000 is rich by any means. It is expensive to live in our 
State.
  But they said that family, who did very well under the Republican tax 
decreases in 2003 that we passed with the creation of jobs and the 
like, that family, under the Democrats' budget that may pass this House 
this week, would see their taxes go up by $1,500.
  So if you think you are rich at $70,000, which I guess the other side 
of the aisle thinks New Jerseyans making $70,000 are able to pay more 
in taxes, those taxes are going up by $1,500. I think that is a burden 
that that average family should not have to bear in light of the 
property tax.
  The overall average is the number that you brought out for the entire 
State of New Jersey, approximately $3,000. You may have it in front of 
you. I don't have it here.
  Mr. CAMPBELL of California. Will the gentleman yield? $3,779.98 for 
the entire State of New Jersey.
  I yield back.
  Mr. GARRETT of New Jersey. So around $3,800 or almost $4,000. And you 
think about it. What could that $4,000 be used for? If you are the 
family and the husband and wife sitting down with your family, well, I 
would like to use that $4,000 to go on vacation this year. I would like 
to be able to use it on some other niceties or what have you. Or maybe, 
if they can't use it on that, maybe they have health expenses.
  I have a daughter in college right now. Maybe they have college 
expenses, other things like that. I am sure they could find a use for 
$4,000 to spend.
  I will yield.
  Mr. CAMPBELL of California. I think this discussion we are having 
right now gets to the core of the difference between what Democrats in 
Washington, how they look at things and how we Republicans in 
Washington look at things. They look at it from the sense of, well, if 
we don't raise these taxes, how is the government going to spend more 
money on this or spend more money on that, or how are they going to get 
to take that? Because that is what it amounts to. When you tax 
everybody else, you come here, the 435 of us, plus the 100 people in 
the other body, get to spend the money on the stuff they want to spend 
it on.

                              {time}  2100

  And so how can we spend that money if we don't do this?
  You and I, Mr. Garrett, look at it from the standpoint of families, 
of taxpayers, of people. What are they not going to be able to do in 
New Jersey with that almost $350 a month? I mean, that is a nice car 
payment. That is substantial child care. That is a chunk of a house 
payment. It is a lot of different things to a lot of people. And we 
look at everything from the sense of the family, the taxpayer. They 
come first and the government comes second. That is not the way the 
Democrats in this town look at it, is it?
  I yield back to the gentleman.
  Mr. GARRETT of New Jersey. Mr. Speaker, I appreciate the gentleman's 
yielding. I remember one of the comments from the other side of the 
aisle during budget process, I think you shook your head when they said 
this as well, where they said, Well, if we do a tax cut, the Federal 
Government is subsidizing that taxpayer. And we just shook our head at 
that because a tax cut is not a subsidy to the American taxpayer. A tax 
cut is simply saying to Mr. and Mrs. Taxpayer and family that you don't 
have to send quite as much of your hard-earned money each week to 
Washington. You are able to keep $3,800 of that money. And maybe you 
want to use that $3,800 in New Jersey to go on vacation to a beautiful 
State like the State of California.
  Mr. CAMPBELL of California. Mr. Speaker, reclaiming my time, it is a 
matter of it is your money. When you earn it, when people earn the 
money, it is their money. It is not the government's money. It is their 
money and the government takes some of it for necessary operation to 
run government. But it is not like it is all the government's money and 
the government allows you to keep some. That is not the way we look at 
it.
  I yield back to the gentleman
  Mr. GARRETT of New Jersey. I will just close on these thoughts: the 
difference that we are seeing here between what the Democrats will be 
proposing in their budget and the Republican alternative budget that 
should also come before the floor is in three areas, I think. We are 
both aiming towards the same goal, fortunately, of trying to reach a 
balanced budget by 2012, 5 years from now. But the Republican budget 
will reach that goal of 2012 without raising taxes by almost $400 
billion, which is what your chart behind you shows. And that is 
critical.
  So, number one, we will not put a burden of almost $4,000, $3,800, on 
the families in the State of New Jersey, $1,500 if you are a family of 
four making $70,000.
  Secondly, by not raising taxes we will not be undermining the pro-
growth policies of this administration and of this government over the 
last 10 years. Those pro-growth policies, for New Jerseyans at least, 
have created tremendous employment, very low unemployment, so that that 
family that is making that $70,000 a year or more or less in New Jersey 
at least knows that the unemployment rate is almost at historic lows at 
this point. So they know there is the opportunity for jobs, and because 
of that, there is great opportunity to improve yourselves in careers 
and what have you. And because of that pro-growth policy, we have seen 
the deficit shrink by 26 percent.
  And, thirdly, and I think this is very important to everyone at home, 
is that we are making sure on the Republican proposal that those 
dollars that we do spend, because we are always going to have some 
spending by the Federal Government, that those dollars will not be 
wasted, not waste, fraud, and abuse, but will be spent on those things 
that are critical to my State, to your State, to national security, to 
homeland security, and to our veterans as well.
  So balance the budget without raising taxes, make sure we continue 
the

[[Page H3070]]

pro-growth tax policies that we have had in the past to create jobs, 
and make sure that those dollars are wisely spent. They all come under 
the umbrella of one thing, and you said it: to realize that these 
dollars come from the family budget. And our focus should be on the 
family budget and not on the Washington budget all the time.
  Mr. CAMPBELL of California. Mr. Speaker, I thank the gentleman from 
New Jersey (Mr. Garrett) so much for his comments and his hard work on 
these efforts and on these proposals to recognize that it is your money 
first, taxpayers. It is your money first. It is not the government's 
first that they let you keep some of. It is your money, and you should 
keep all of it except for the minimum amount necessary to properly run 
the government.
  Now let us talk about a few more things on these taxes. Some of the 
rhetoric that people may hear from the majority party here is that this 
tax relief in 2003, 2001, this just gave tax cuts to the rich. We hear 
that over and over: ``tax cuts to the rich.'' Well, as Mr. Garrett 
pointed out, a $70,000-a-year family of four in New Jersey is probably 
not rich, and they would be paying $1,500 or whatever the amount was 
that you said.
  Let us look at some of this. Now, these are numbers in billions of 
dollars, Mr. Speaker; so they can't relate to per person. This is the 
total Democrat proposed tax increase. This orange slice stands for the 
people who save money because of the 10 percent income tax bracket. 
Now, the 10 percent income tax bracket is the lowest tax bracket that 
exists. It is at $15,000 of income for a married couple. So this amount 
of this tax is going to people with roughly a taxable income of about 
$15,000. That is rich? I don't think so.
  Look at this slice right here, this red slice. This is people who get 
the child tax credit and the marriage penalty credit, these benefits 
which the Democrats have proposed to raise, to cut in half the child 
tax credit and to eliminate what was put in place sometime ago so that 
people don't get a penalty, don't pay more tax if two people both earn 
income get married. Under the old law, a lot of them pay more tax. Now 
a lot fewer of them pay more tax. This would get rid of that. Both of 
these phase out over a certain income level. So all of these are geared 
only for people at lower income levels.
  Let us look at this chunk. This is the death tax, which can affect 
all kinds of people, whether it is the person who is deceased or 
whether it is one of the many beneficiaries of someone who is deceased. 
And we know how the death tax has been destructive for family farms, 
family businesses, people wanting to pass their home that maybe has 
been in the family for generations, maybe only for a short period of 
time, but they want their children to have it, and they can't because 
the death tax got in the way.

  We are scheduled to have the death tax continue to decline. But the 
Democrat budget has proposed to put it way back into full force and 
effect with a rate, I believe, of up to 55 percent.
  And then look at this chunk, the biggest chunk of all the marginal 
rates. That means seniors with dividends and capital gains income and 
people at all other schedules in the different tax brackets within the 
Tax Code. These tax increases affect everyone, not just the supposed 
rich.
  And let us look at what this would do to certain tax rates: the 35 
percent tax rate would go to 39.6. A capital gains tax rate of 15 would 
go to 20. The estate tax would go from 0 to 55 percent. The child tax 
credit, from $1,000 to $500. And the very lowest tax bracket starting 
at taxable income, technically, of 0 would go from 10 to 15 percent. 
So, again, tax increases on everybody all across the board.
  We talked a lot about taxes tonight. But as I said when we started 
this conversation, the reason we have a deficit is not because we 
lowered taxes. Lowering taxes stimulated the economy, created more 
revenue for the Federal Government. Mr. Speaker, the reason we have a 
deficit is because we spend too much. And here is a chart showing how 
spending drives the long-term problems:
  Here is our spending today, roughly 20 percent of the economy; so 
already the Federal Government is spending about $1 out of $5 that 
exists in the economy. But if we leave things alone, if we allow 
spending to go forward and grow as it is in law now and if we just left 
all these things alone, it will go by 2049, you see here, up to nearly 
double that, nearly 40 percent of the economy. So $4 out of every $10 
in the economy would be government spending.
  Now, what this chart doesn't show is in countries where they have 
done this sort of thing before. The private part of the economy 
contracts. It doesn't have money for investment. It doesn't have money 
for growth. If government takes 3,331 more dollars out of each taxpayer 
in California, as the Democrats have proposed to do to spend on some of 
this stuff, they don't have that money to save. They don't have that 
money to invest. They don't have that money to buy things that help 
stimulate the economy. The government has it. The government doesn't 
save it. The government doesn't invest it. The government just spends 
it. And as we know, in a lot of cases not particularly wisely. So that 
is what happens if we leave spending alone. That is why we have a 
deficit.
  Even with the Democrats' proposed tax cuts, which is the orange line 
here, Mr. Speaker, you see it isn't going to work. The spending 
increases much faster than even after those tax increases.
  So I say to the people who have put together the majority budget, 
what do you plan to do here? Are we ever going to deal with this rapid 
exponential growth in spending? Or are you planning to raise these 
taxes further? Is the $3,331 per taxpayer in California just the 
beginning? Are we looking over a 10- or 15-year period of time at twice 
that? Three times that? Four times that? The sort of thing it would 
take to get anywhere near this spending level?
  Chairman Bernanke is the Chairman of the Federal Reserve. And the 
Federal Reserve, I think there is pretty general unanimity on both 
sides of the aisle, as well as with the economists, that the Federal 
Reserve has done a pretty good job of managing our economy for some 
time, interest rates and inflation; and they tend to know what could 
set this economy off course and what could keep it on course. And I 
think they deserve a lot of credit for keeping the economy on course, 
not just over the last 3 or 4 years but over the last 15 or 20 years.
  But Chairman Bernanke said just earlier this year that ``without 
early and meaningful action to address entitlements, the U.S. economy 
could be seriously weakened with future generations bearing much of the 
cost.''
  What does he mean by that? When he talks about entitlements, he is 
talking about Social Security, Medicare, Medicaid, things like that 
that the government does. And he said if we don't deal with it early 
and meaningfully, if we don't take early and meaningful action to deal 
with the growth in these retirements, that the economy is in trouble.
  Now, the Democrat budget that will be on this floor later this week, 
let's see, it is a 5-year budget. What reform of entitlements does it 
include? Oh, yes. Zero. None. Not one change. Nothing in the 
entitlements over the next 5 years. Is that early reform? I don't think 
so. Is that meaningful reform? Well, if zero is meaningful, then maybe; 
but I don't think it is meaningful reform.
  So let us look at what happens if we don't reform. Again, here is 
revenue, this black line. That is income coming into the Federal 
Government, roughly the same tax rates that we have today. But look at 
what happens to spending. It goes from a little more than we are taking 
in right now to nearly double. Nearly double if we don't reform. That 
is why Chairman Bernanke said, Mr. Speaker, that we need early and 
meaningful reform or this economy is in trouble, as he said, with 
future generations bearing much of the cost.
  Mr. Speaker, we have a lot of discussion about children around here 
and what is good for children and how we are going to help children. 
Let me tell you something I know is not good for children, and that is 
sending them this kind of price tag for us, for our Medicare, our 
Social Security, our Medicaid over the next 15, 20 years, and asking 
them to pay double, at least, the tax rates, the tax burden, that we 
pay because we didn't act.

                              {time}  2115

  We know this is coming. This is not a Republican chart. This is not a 
Democratic chart. This is prepared by

[[Page H3071]]

the Congressional Budget Office, the Office of Management and Budget. 
Any number of nonpartisan government agencies agree. All the experts 
agree. On the Budget Committee that Mr. Garrett and Mr. Barrett and I 
sit on, every single expert who came in said that this entitlement 
spending, this planned growth in spending, is a disaster, a budget 
disaster, that we can see. It is a train coming down the track right 
into our eyes. But we are not blinded. It is not like we can't see it, 
Mr. Speaker. It is right here. We can see it. It is right here on this 
chart. We know it is coming, and we know the only way to deal with it 
is to reform these things.
  So where are they? Where are those reforms? What will people do if 
that top tax rate rises?
  Let me pull out one of these other charts. Just think about it. 
Doubling taxes. I realize it is quite a few years off, but if we don't 
deal with it now, we will get there. What does that mean? I guess that 
means the 39 percent rate would go almost 80 percent. That capital 
gains would have to go to 40. The estate tax, I guess you just take it 
all, which has happened in some countries before. The child tax credit, 
you probably get rid of it. And the lowest tax bracket would probably 
need to go up to 20 or 25 percent.
  Those obviously aren't exact figures or anything like that, Mr. 
Speaker, but just to give a sense of what we are talking about here if 
we don't do something, if we don't change these processes and change 
this. Because if you look at this chart again, the reason we can see 
the train coming is, if we do nothing, absolutely nothing, to change 
Social Security, that is this one, Medicare and Medicaid is this one, 
interest on the debt is that one. If we did nothing to change existing 
law, it is not like you have to do more, that we have to take action to 
spend this money. This is the money that will get spent if we do 
nothing, if we leave it alone under existing law. That is why we have 
to take action, and it is for the kids.
  Our kids can't bear this burden. People have said that if we allow 
this to happen that my children will be the first generation of 
Americans to have a lower standing of living than their parents. We 
have never had that happen in this country, and we should never let it 
happen in this country. The only way it is going to happen is if we 
shirk our responsibility today, because, gosh, it is 15 years off, 
let's deal with it later.
  This isn't about destroying Social Security. This is about saving 
Social Security. Because you really can't pay for this. There isn't 
enough money in the economy. So we have to reform it. We have to change 
the way it works to save it.
  That is why Republican budgets will say we should save the Social 
Security system. We shouldn't spend it. That is why it is part of the 
American Taxpayers' Bill of Rights, which a group of us Republicans 
introduced a few weeks ago, where we said if you pay money for your 
retirement it should only be spent on your retirement. It shouldn't be 
spent on something else.
  This isn't about destroying Medicare or wrecking Medicare, as you 
will probably hear demagoguery on the other side. It is about saving 
it. It won't continue this way. There isn't enough money. We have to 
save it, and to save it we must reform it.
  You will see proposals, you will see reform, but not in the 
Democratic budget that we see today. And that is what is so 
disappointing, Mr. Speaker. We can't ignore it. We shouldn't ignore it. 
It is right there. It is right before us.
  Our children will look back at this time in the future as to what we 
did with their inheritance. And I don't mean about the death tax 
necessarily. I mean the inheritance of optimism that is so much a part 
of the American ethos, the optimism that the average American can 
always do better, that anyone can lift themselves up, that they can 
move things forward.
  Instead, this is saying, no, we have to take more of your money. We 
have to move things backwards. You may not be able to have the same 
things that your parents had because we need more of your money for a 
failed and inefficient system.
  That is not the America my parents left me, it is not the America 
that I want to leave my children, but it is the America that this 
Democratic budget is heading us towards.
  Mr. Speaker, we do not need the largest tax increase in American 
history. We need to let people keep more of their money, not less. 
Families will not struggle because government doesn't spend enough. 
Families will struggle when government spends too much and takes too 
much of their money.
  Mr. Speaker, we need a solvent Social Security system, a solvent 
retirement system, not one that takes the money that that is taken out 
of people's paycheck for their retirement and spends it on other things 
and not one that is unsustainable, that won't exist 20 or 30 years from 
now.
  Mr. Speaker, we need a Medicare system, a healthcare system, where 
people control their own healthcare, where people control their own 
destiny, not where the government is telling them what to do and 
telling them how to do it and using one of the most inefficient methods 
and high cost to do so. We have to reform that, or it won't exist in 
the future.
  Yes, this Democratic budget is full of empty promises. You will hear 
about them over the next few days and weeks. You will hear that they 
promise to spend more money on this and spend more money on that and 
spend more money on the other thing, and in some cases they are 
definitely planning to do that. What they are not telling you is where 
they are getting it, and they are getting it right out of your pocket.
  In some cases, they are going to say we are going to spend more money 
on this and spend more money on that and grow this program and grow 
that program; and, as Mr. Barrett from South Carolina said earlier, 
they don't actually have the money in the budget to do it. They are 
just telling you, oh, yeah, we are going to do it. But we will find the 
money later.
  Well, you can be sure where they are going to get that money, 
probably the place they get the other money, right out of the American 
taxpayer. It is the only place to go, unless you cut spending somewhere 
else, which we are very happy to talk about, very willing to do. That 
is always something you do in budgets, you set those priorities.
  Yes, it is a budget filled with empty promises, except one, the 
largest tax increase in American history.
  Mr. Speaker, American taxpayers deserve better, and I hope that we 
will defeat this budget later this week.

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