[Congressional Record Volume 155, Number 7 (Tuesday, January 13, 2009)]
[House]
[Pages H166-H167]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




    THE HERITAGE FOUNDATION SUPPORTS COOPER-WOLF SAFE COMMISSION IN 
                          STIMULUS LEGISLATION

  The SPEAKER pro tempore. The Chair recognizes the gentleman from 
Virginia (Mr. Wolf) for 5 minutes.
  Mr. WOLF. Madam Speaker, I come to the floor today to raise the issue 
of the dire financial situation facing our country.
  We must come together to face the reality that America is living on 
borrowed dollars to the tune of $11 trillion in debt and $54 trillion, 
soon to go higher, in unfunded liabilities with entitlements. We must 
offer a bipartisan solution to these long-term financial challenges.
  In recent days, there have been calls to consider the long-term 
budget controls in tandem with any economic stimulus package offered. 
The respected Heritage Foundation released a report last Friday, 
entitled ``Stimulus Legislation Must Include Budget Reforms to Address 
Long-term Challenges.''
  The report offered support for budget control mechanisms that would 
be set up through the Cooper-Wolf SAFE Commission legislation in the 
House and the Bipartisan Task Force for Responsible Fiscal Action 
effort proposed by Budget Chairman Kent Conrad and Ranking Member, 
Senator Judd Gregg, in the Senate.
  The Heritage publication, which I submit for the record, notes that 
SAFE ``would have the advantage of a two-step process. Its first phase 
would be a series of nationwide public hearings to talk frankly about 
the long-term fiscal problems and the tough options for fixing it and 
build public support for congressional action on a broad plan of 
action.''
  As our colleagues may recall, the SAFE process would culminate in 
legislative recommendations to Congress, and like the BRAC process for 
closing bases, Congress would be required to vote up or down on the 
plan.
  I know there have been questions raised about incorporating long-term 
budget controls in a short-term stimulus aimed primarily at job 
creation, but I would argue--and many would argue--that the time is now 
here to begin to confront the underlying problem of autopilot spending. 
I don't know about other Members, but my constituents continue to share 
their frustration with Congress' seeming to know only how to spend 
money with no regard for the future.
  We need to listen to the American people and show them that we can 
lead and that we can make the difficult choices. The longer we wait and 
the more consuming entitlement program spending becomes, the more 
draconian our choices will be. We are mortgaging the future for our 
children and grandchildren. The bottom line is we cannot deal with the 
short-term financial problems without thinking about and dealing with 
the long-term solutions.
  The SAFE Commission is not a new idea. Over 110 Members of Congress 
cosponsored the legislation in the last year. The Heritage Foundation, 
the Brookings Institution and the Concord Coalition all helped draft 
the bill.
  Jim Cooper and I joined bipartisan forces in the last Congress, and 
SAFE has continued to garner support from other leading voices, 
including the business community--the Virginia and Tennessee Chambers 
of Commerce, the Business Roundtable and the National Federation of 
Independent Business.
  We all know that it will take all of the political courage that we 
can muster to reject the partisan and special interest demands and to 
do what is best for the country. If other Members have a better 
bipartisan idea that can pass the House, they should be introducing it, 
and it should be included in the stimulus package.
  Not acting on this issue is effectively supporting either the ``do 
nothing plan'' or the ``maybe this problem will fix itself plan'' or 
the ``let's just bury our heads in the sand plan,'' but the numbers 
don't lie. The Nation's future outlook is sobering. Just in the short 
term, CBO projects that the Federal budget deficit for this fiscal year 
alone, which started in October, will balloon to $1.2 trillion and 
perhaps higher.
  We offered this SAFE idea as an amendment to the FY09 Financial 
Services spending bill last June. Unfortunately, we came up one vote 
short of passage. Congressman Allen Boyd, the founding member of the 
Blue Dog Coalition, spoke eloquently from his heart in support of the 
amendment, asking us to envision ourselves 20 years from now, sitting 
on the front porch and telling our grandchildren about the days we 
served in Congress.
  What will we tell our grandchildren--that we looked the other way, 
knowing that out-of-control entitlement spending would threaten the 
living standards of future generations?
  The stakes for the country's future may have never been so high. This 
is clearly an economic issue, but it is also a moral and a generational 
issue. Abraham Lincoln once said, ``You cannot escape the 
responsibility of tomorrow by evading it today.'' I believe the moral 
component of this issue goes to the heart of who we are as Americans.
  This is not a Republican issue or a Democrat issue. It is an American 
issue. If we can't find a way to come together on this fundamental 
issue, I will have serious questions about our ability to find 
bipartisan solutions that will work for the good of the country.
  I am asking our colleagues today to come together, to know that while 
we served in Congress we did everything we could in our power to 
provide the kind of security and way of life for our children and for 
our grandchildren that our parents and grandparents worked so hard to 
provide for us.
  This challenge, too, goes out to the leadership in Congress and to 
the soon-to-be Obama administration to make this a truly bipartisan 
effort. Put the SAFE Commission process in the stimulus package and on 
the fast track to enactment.
  I have never been more committed to an issue and to helping to find 
bipartisan solutions to address our long-term financial sustainability 
of this country. The American people expect nothing less.

              [From the Heritage Foundation, Jan. 9, 2009]

 Stimulus Legislation Must Include Budget Reforms To Address Long-Term 
                               Challenges

                       (By Alison Acosta Fraser)

       Congress and President-elect Barack Obama have set their 
     sights on a massive economic stimulus bill crammed full of 
     spending projects intended to ``jolt'' the economy into 
     recovery. By some counts this package may reach $1 trillion, 
     or nearly 85 percent of the total of all budget bills passed 
     last year.\1\
       This is not the way to spur economic recovery. But even if 
     it were, Obama already recognizes he faces a difficult 
     challenge: how to keep the stimulus focused on short-term 
     deficit spending and avoid a huge, long-term expansion of the 
     federal government--and with it a dramatic increase in the 
     staggeringly large unfunded obligations due mainly to Social 
     Security, Medicare, and Medicaid. To deal with that 
     challenge, Obama should work with fiscally responsible 
     Members of Congress to include four key budget reforms in any 
     stimulus legislation:
       1. Put long-term obligations from Social Security, 
     Medicare, and Medicaid front and center in the budget 
     process;
       2. Establish a bipartisan congressional commission to 
     develop a package of long-term reforms for entitlements;
       3. Establish equitable policies for assessing and enforcing 
     spending and revenues changes in the budget; and
       4. Create a long-term budget for entitlement spending.
       Spending and Deficits Hit New Records. Federal spending is 
     projected to top 25 percent of GDP in 2009, according to the 
     Congressional Budget Office (CBE), the highest it has been 
     since World War II, and that is before any stimulus 
     legislation. The deficit is projected to reach $1.2 trillion 
     by the end of this year, and any stimulus would likely push 
     the deficit to more than $1.6 trillion.
       Similar large deficits are projected to continue into the 
     future.\2\ Such deficits are a loud alarm to which 
     policymakers must listen: Federal spending is out of control. 
     But even they ignore the deeper fiscal problems of Social 
     Security and Medicare. These programs together, not even 
     counting Medicaid, have an unfunded obligation that is 
     equivalent to a mortgage of $43 trillion.\3\ Future 
     generations will be forced to pay for those obligations 
     through higher taxes unless the programs are modernized.
       Budget Restraint. While making the case for his massive 
     short-term stimulus proposal. President-elect Obama 
     acknowledged the threat entitlements pose to the economy, 
     noting, ``If we do nothing, then we will continue to see red 
     ink as far as the eye can see.'' He called budget reform ``an 
     absolute necessity,'' and he has pledged to confront the 
     problems from Social Security and Medicare in his budget.
       Budget writers in Congress are also alarmed. Senate Budget 
     Committee Chairman Kent Conrad (D-ND), called the deficit

[[Page H167]]

     ``jaw dropping,'' and House Budget Committee Chairman Jack 
     Spratt (D-SC) was suffering ``sticker shock.'' \4\ They 
     and their ranking member counterparts have encouraged 
     lawmakers to tackle the long-term budget problems posed by 
     these entitlement programs. Conrad and Senator Judd Gregg 
     (R-NH) have urged Congress to link the stimulus with 
     action to address the long-term budget crisis.\5\
       If President-elect Ohama is serious about fiscal 
     responsibility, he and responsible Members of Congress must 
     insist on budget reforms to prevent further deterioration of 
     an already alarming long-term budget problem and require 
     action to tackle these challenges directly. To that end, he 
     and responsible lawmakers should insist on these four key 
     budget reform measures being included in any stimulus 
     package:
       1. Put long-term obligations from Social Security, 
     Medicare, and Medicaid front and center in the budget 
     process, with an up-or-down vote on any budget that will 
     increase debts on future generations. Such a measure could 
     easily be incorporated into the annual budget resolution. 
     This would provide a more accurate and transparent assessment 
     of the federal government's commitments and provide all 
     Americans with a vivid picture of the problem. All major 
     policy changes should be scored over the long term to 
     indicate what impact they would have on the total unfunded 
     obligations of the government. That would provide lawmakers 
     and the public with a better understanding of the true long-
     term costs of new legislation. And to put Members on record 
     on their attitude to burdening our children and 
     grandchildren, they should have to vote during the annual 
     budget process if the proposed budget will increase long-term 
     obligations.\6\
       2. Enact a bipartisan congressional commission to develop a 
     package of long-term reforms that will make these programs 
     affordable. Bipartisan legislation to implement this type of 
     commission was introduced in the previous Congress: the SAFE 
     Act (H.R. 3654), co-sponsored by Representatives Jim Cooper 
     (D-TN) and Frank Wolf (R-VA), and the Bipartisan Task Force 
     for Responsible Fiscal Action Act (S. 2063), co-sponsored by 
     Conrad and Gregg. Under both bills, a commission would craft 
     detailed recommendations for a fast-track vote in Congress. 
     The SAFE Act would have the added advantage of a two-step 
     process. Its first phase would be a series of nationwide 
     public hearings to talk frankly about the long-term fiscal 
     problem and the tough options for fixing it and to build 
     public support for congressional action on a broad plan of 
     action.\7\
       3. Establish equitable policies for assessing and enforcing 
     spending and revenues changes in the budget. Any budget 
     enforcement mechanism is based on changes in projected 
     spending and revenues. The CBO projects a spending baseline 
     by assuming that all the laws authorizing spending--such as 
     the highway or farm programs, or even appropriations--will be 
     extended year after year and spending levels will continue 
     even if they expire regularly under existing law. But when it 
     comes to taxes, the CBO's baseline is current statute, and 
     any rates reductions, deductions, credits. etc., that arc 
     scheduled to expire are assumed to do so. The lopsided result 
     is that spending is given a free ride under the baseline 
     while any reduction in the growth of taxes is assumed to be 
     temporary
       This skewed baseline means current ``PAYGO'' rules are 
     biased toward tax increases. Thus, for any enforcement 
     mechanism to be considered fair and to be effective, it must 
     be based on the same baseline treatment for both spending and 
     revenues. Indeed, Obama's own advisors have already 
     criticized this lopsided policy treatment, which stacks the 
     deck in favor of higher spending and higher taxes.\8\
       4. Create a long-term budget for entitlement spending. 
     Unlike ``discretionary'' programs such as defense and 
     education, ``mandatory'' entitlement programs like Medicare 
     and Social Security are not budgeted annually. Entitlement 
     spending grows on auto-pilot, in conjunction with the 
     programs' regulatory framework, so there is not an open or 
     transparent consideration of priorities or budgetary trade-
     offs. And since spending levels are simply the product of 
     individuals using their entitlement, there is in a sense no 
     budget just a projection of likely total costs. And as they 
     grow unchecked, these entitlements crowd out other programs 
     and priorities.
       This must change, by constraining entitlement programs with 
     a real budget. To be sure, retirement programs require longer 
     time horizons and planning than typical discretionary 
     programs so that beneficiaries will not face unexpected 
     annual changes in benefits. Therefore, Congress should create 
     a long-term framework for a constrained entitlement budget 
     that would be periodically evaluated to ensure that these 
     programs are sustainable and affordable over the long term. 
     This could be done by creating a long-term budget window--for 
     example, 30 years. All spending would be reviewed every five 
     years, and the commission could recommend measures for 
     Congress to ensure that the programs live within this budget 
     framework.\9\
       There are many reasons to be concerned over the 
     unprecedented stimulus spending now being proposed, including 
     the ineffectiveness of Keynesian pump priming, the perils of 
     such an immense hike in government spending, and the creation 
     of new permanent government programs. With the first baby 
     boomers recently retiring, America is experiencing the first 
     waves of the entitlement tsunami. The stimulus legislation 
     could set the stage for a permanent sea of red ink and an 
     even larger tsunami of debt. Substantive budget reforms are 
     needed to prevent such a scenario from occurring.
       Truly Serious? If President-elect Obama insists on a 
     massive spending bill, he must ensure it does not result in 
     huge permanent new government programs and thus potentially 
     trillions of dollars in new burdens on our children and 
     grandchildren. He must demonstrate his commitment to tackle 
     the long-term entitlement challenges by working with Members 
     of Congress to build sound budget process reform measures 
     into the stimulus legislation. If he does not do so, the 
     young Americans who voted for him should question how serious 
     he is about protecting their financial future.


                                endnotes

       1. Estimated FY 2008 appropriations $1.154 trillion, prior 
     to all enacted supplementals. Office of Management and 
     Budget, ``Budget of the United States Government Fiscal Year 
     2009: Historical Tables,'' Table 5.4, at www.whitehouse.gov/
omb/budget/fy2009/hist
.html (January 9, 2009).
       2. See Brian M. Riedl, ``CBO Budget Baseline Shows Historic 
     Surge in Spending and Debt,'' Heritage Foundation WebMemo No. 
     2193, January 7, 2009, at http://www
.heritage.org/research/budget,wm2193 (January 9, 2009).
       3. Department of the Treasury, ``2008 Financial Report of 
     the United States Government,'' December 15, 2008, p. 41, at 
     http://fms.treas.gov/fr/index.html (January 9, 2009).
       4. Lori Montgomery, ``Congress Urges Spending Restraint,'' 
     The Washington Post, January 8, 2009, at http://www.
washingtonpost.com/wp-dyn/content/article/2009/01/07/
AR2009010701156.html?hpid=topnew (January 9, 2009.)
       5. Senators Kent Conrad and Judd Gregg. ``A Fiscal Battle 
     on Two Fronts,'' The Washington Post, January 5, 2009, at 
     http://www.washingtonpost.com/wp-dyn/content/article/2009/01/
04/AR2009010401436_pf.html (January 9, 2009).
       6. Alison Acosta Fraser, ``Federal Budget Should Include 
     Long-Term Obligations from Entitlement Programs,'' Heritage 
     Foundation Executive Memorandum No. 1004, June 22, 2006, at 
     http://ww.heritage.org/Research/Budget/em1004.cfm.
       7. Alison Acosta Fraser, ``The SAFE Commission Act (H.R. 
     3654) and the Long-Term Fiscal Challenge,'' testimony before 
     the Committee on the Budget, U.S. House of Representatives, 
     June 25, 2008, at http://www
.heritage.org/Research/Budget/tst062508b.cfm.
       8. J.D. Foster, Ph.D., ``Obama to CBO Revenue Baseline: 
     Nuts--and He's Right!,'' Heritage Foundation WebMemo No. 
     2019, August 11, 2008, at http://www.heritage.org/Research/
Budget/wm2019.cfm.
       9. Stuart M. Butler, Ph.D., Alison Acosta Fraser and Other 
     Authors, ``Taking Back our Fiscal Future,'' Heritage 
     Foundation White Paper, March 31, 2008, at http://www
.heritage.org/Research/Budget/wp0408.cfm.

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