[Congressional Record Volume 155, Number 28 (Wednesday, February 11, 2009)]
[House]
[Pages H1214-H1222]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
CONDITIONS IN THE ECONOMY
The SPEAKER pro tempore. Under the Speaker's announced policy of
January 6, 2009, the gentleman from Missouri (Mr. Akin) is recognized
for 60 minutes as the designee of the minority leader.
Mr. AKIN. Thank you, Madam Speaker. It's a pleasure to be able to
join you again this evening and to talk about the subject that is
certainly on
[[Page H1215]]
the minds and hearts of Americans everywhere, and that is the
conditions in the economy.
We find ourselves this time at a unique position. We have heard for
the past 6 and 7 years about the tremendous cost--how there's billions
of dollars being spent day after day in Iraq and in a costly war in
Afghanistan. And so it is a bit of a surprise that we find now that if
you were to add the cost of the war in Iraq for the past 6 years, and
then add up the cost in Afghanistan, the war there for the past 7
years, and then add those two numbers together, you would find that
here, in the first 6 weeks of the administration, we are going to spend
more money in 6 weeks than we did in those wars over a 6- and 7-year
period of time.
How did we get to this curious place? When we start talking about
$800 billion, one of the dangers of entering this kind of unchartered
territory is that our eyes glaze over. What is $800 billion anyway?
Well, there are different ways of looking at it. If you think of it
from the point of view of the defense budget, we currently have 12 or
13 aircraft carriers. Those are considered by defense people as very
valuable. And you don't want to let people torpedo your aircraft
carriers because 12 or 13 aircraft carriers have got a lot of airplanes
on them, a lot of people on them. Costs a whole lot of money.
How many aircraft carriers could you buy with $800 billion? Well, we
are talking about, at the price we paid for some of them, about 250
aircraft carriers. Or, if you buy the most brand new, fancy one and
don't discount it any for mass production, you're talking about over
100 aircraft carriers that we are going to spend--kaboom--in the first
few weeks of a new administration.
So how was it that we got to this curious point that there appears to
be a crisis this severe? I have to say as a Republican, I don't
disagree that we have our economic problems and that there are things
that we should do about them. Fortunately, we have history as our North
Star to show us what will and what will not work.
First of all, how did we get here? Well, it was something that
developed, as you can imagine, over time. It didn't just happen
overnight. Going back to the Carter years, there was the Community
Reinvestment Act. What Carter and the people that were in Congress at
this time said was, Hey, we've got certain areas in some of our cities
where banks are not willing to give people loans. And that is not fair
because every American ought to have the opportunity to own their own
home.
So what we are going to do is we are going to tell the banks that
they have to give loans around to people all over their communities. Of
course, the banks were a little reluctant because the banks' concerns
were, Hey, some of these loans may not be paid and we are going to end
up picking up the tab. So that was starting with Carter.
Then, after Carter, we ended up creating what was known as Freddie
Mac and Fannie Mae. And those also were partly government, but partly
not government agencies, and their whole purpose was designed to try to
provide average Americans with loans for their houses, which is a nice
thing to do. They were really not under the administration control, and
yet it was implied that these loans would be backed up by the Federal
Government. So they were not really public, but not really private.
They were half and half.
And Freddie and Fannie started doing more and more and more
investment. They grew and they started picking up more loans of people
in America, to the point that last year Freddie and Fannie had more
than 50 percent of the loans of Americans, that Americans had on their
houses. So Freddie and Fannie got really big.
Well, when Clinton comes along, Clinton, during his last year in
office, he changed the rules some for Freddie and Fannie and increased
the percentage of the loans that Freddie and Fannie had to make to
people who were high risk people that would be getting these mortgages.
So that, in combination then with the fact that Greenspan drops the
interest rate low, you start to get a combination of more and more
people being loaned money that they can't afford to pay back, and
speculators who can't afford to pay the money, borrow money, knowing
that the housing market is going up like a skyrocket because, who
knows, housing has never come down in America, so just keep betting on
the fact that housing is going to be going up. So they continued to do
that.
Well, was this something that nobody saw coming? Not so. You can go
to the New York Times, not exactly a Republican right wing oracle, and
the New York Times on September 11, 2003, includes an article that
says, President Bush is asking for authority to regulate Freddie and
Fannie because they are getting crazy with the kinds of loans they are
making. He says, We are going to have a big problem if we don't
regulate Freddie and Fannie. These two entities. This is a New York
Times article. You can look it up. It's September 11, 2003.
So, Bush is pushing for regulation of Freddie and Fannie. In the
meantime, he is being opposed by who? Well, he is being opposed by the
Democrats. Particularly, Barney Frank makes this statement, These two
entities, Fannie Mae, Freddie Mac, are not facing any kind of financial
crisis, said Representative Barney Frank of Massachusetts, the ranking
Democrat on the Financial Services Committee.
That's interesting, isn't it? This is the man who's responsible for
fixing the problem, and he's the man that said, There isn't any problem
at all. We don't need to regulate these things.
The more people exaggerate these problems, the more pressure there is
on these companies, and we'll see in terms of affordable housing. He's
saying, Well, we're not going to be able to do enough affordable
housing if we were to limit any of the activities of Freddie and
Fannie.
Well, people have said, Well, this whole financial crisis we have got
in America, this is a problem of free enterprise. It has nothing to do
with free enterprise. This is a Big Government socialistic program that
was not regulated properly, and it started to cause trouble. And, as
you know, these loans got worse and worse. It was exaggerated and
exasperated by the fact that you have got rating agencies in New York
that were playing along with a very greedy Wall Street. They were
raiding these loans at AAA rating when a lot of people who made the
loans knew there's no way people could pay that kind of loan. They
weren't asking, How much money do you make; they weren't saying, How
are you going to pay it back? You want half a million? Fine. We'll
write you the loan. Boom. Give it to Freddie and Fannie and let the
government pick up the pieces when it crashes.
And so these loans, as the real estate market gets higher and higher
and higher because of low interest rates, when that bubble starts to
pop, all of a sudden these loans start coming down and it poisons the
entire world economy. And that is what we have seen happen. Now, half
of those loans are still outstanding.
So this is not a problem with free enterprise. This is a simple
problem of the Democrats in the Senate killing a bill that the
Republicans passed in the House, allowing the President to try and
regulate. They couldn't do it.
{time} 1700
So, this problem is one of another social program, perhaps even sold
and marketed as compassionate, yet I don't know how it is compassionate
to have somebody borrow money that they can't afford to pay back. And
that's how things got started here.
Now what we're going to talk about is a couple of things: How bad
really is the problem? And I also want to mention the fact that there
are really two views at how to solve this problem. What you see on the
floor, we just saw an hour ago, the Democrats were saying, you know,
our package is fantastic, it's going to fix all the problems, it's
really great, we've got to hurry up and pass this thing which, as I
mentioned, is the equivalent of more than a hundred brand new, modern
aircraft carriers parked in a row. That's a fair amount of money, okay?
It's more than the entire economy of Australia. We're talking about
spending more money than we will receive in tax revenues for the year
2008 in America. In other words, you take all the money we collect at
the Federal Government in tax revenues and add it together, we're
spending more than that in the first 6 weeks. This is a fair amount of
money we're talking about here.
[[Page H1216]]
I am joined, though, right now by some very good friends and
colleagues of mine, and I think they've got some perspective on this. I
would like to go first to Congressman Mike Coffman. Mike brings us some
very unique qualifications from the State of Colorado. He was the
treasurer of the State of Colorado, so you've dealt some with money,
Mike. And then also you ran your own small business. I think that what
we need is not a lot of cries of crisis but some cold-blooded analysis
of what the problem is, what the proper solution is, and then we need
to be moving forward boldly but to do the right thing and not just
waste a whole lot of money.
I would yield time to Congressman Coffman from Colorado.
Mr. COFFMAN. Thank you, Congressman Akin. You're absolutely right.
This legislation will hurt this country. It will hurt us in the short
run. It will hurt us in the long run. Primarily because it does a
couple of things. First of all what it doesn't do is provide the kind
of stimulus that the advocates for this legislation are talking about.
It is not front end, so it is not timely; it is not targeted in the
sense that all of its elements are not stimulative in terms of being
jobs-producing; and it is not temporary in that it creates a lot of
recurring obligations. And so that as the economy is moving up out of a
recession, what you then have is the government is still running
deficits to pay for these programs and that that borrowing, competing
with private sector borrowing, driving up interest rates, driving up
inflation and hurting the long-term abilities of this economy to
recover from that. So I think that it's absolutely the wrong course for
this country. A lot of actions have already occurred. The Congress has
already enacted $700 billion in the form of TARP to get the credit
markets moving. Some of that well spent, some of that not.
Mr. AKIN. Congressman, if I could reclaim my time for just a minute
because you're making some great points. I would like to back up to
just a little bit higher altitude. What I'm hearing you say is, first
of all, the package that the Democrats are proposing includes a whole
lot of spending. If it's got a whole lot of spending, the assumption
then appears to be that if the government spends a whole lot of money,
it's going to make everything better. Now when you had to run the
treasury of Colorado, is that the approach you used, that when you got
in trouble you spent more money?
I would yield.
Mr. COFFMAN. Fortunately States such as Colorado have a balanced
budget requirement so they're not allowed to run an ocean of red ink
like the Federal Government, so there is certainly an advantage there
in terms of fiscal responsibility and accountability that certainly
doesn't exist with this legislation.
Mr. AKIN. As a small businessman, then, when you got in trouble
economically, did you spend a whole lot of money to get out of trouble?
Mr. COFFMAN. What you had to do as a small business owner is to
restructure your business to make it more efficient. There's no effort
whatsoever to restructure government to make it more efficient. And
States are asking for their own bailout. It relieves them of that
responsibility.
Mr. AKIN. Reclaiming my time, it seems like what I'm hearing from the
Democrats and Republicans is that people look at this from a totally
different point of view. What I keep hearing the Democrats saying is
we've got to stimulate spending. Most of the people I know, if they had
money, they would love to spend it. They don't need to be stimulated to
spend the money. And it seems like what you are saying is that it's not
that we need to stimulate spending, what we need to be doing is
stimulating productivity, that we need to be having those jobs created
by small business or larger businesses and that those jobs then put
money in people's pocket and then they're going to spend naturally.
I yield.
Mr. COFFMAN. Congressman Akin, we are ignoring small business, which
is the backbone of this economy, in this equation. And the central
issue there is I think we've got to look at the grassroots of our
financial system and we see there that credit markets aren't moving.
And I think if we examine some of the regulatory framework around that
as well as the TARP elements that are not working at that level, that's
the central issue to get the economy moving, not pouring in billions
and billions of dollars in wasteful spending.
Mr. AKIN. In other words, it seems to me that in that we already have
a huge Federal debt, if going into debt more was going to make the
economy good, we'd have a rip-roaring, great economy right now if you
agree with that Keynesian assumption that was started.
I'm just going to go way back in history, a little bit even before my
time, to the guy who was in charge of spending a whole lot of money the
first time this Keynesian notion came to be. This is a guy that worked
for FDR, the guy who started this whole thing. And his theory was spend
enough Federal money and the economy's going to turn around. So we
start with a recession and it becomes the Great Depression.
Eight years later this guy, Henry Morgenthau, he is appearing before
the Ways and Means Committee right here in Washington, D.C., and he's
talking about this theory about spending in order to stimulate the
economy that we've heard for the last hour and he talks about how well
it worked, because this is a guy that thought it was a great idea, this
Keynesian model. He says: ``We have tried spending money. We are
spending more than we have ever spent before and it does not work. I
say after 8 years, the administration, we have just as much
unemployment as when we started and an enormous debt to boot.''
And here we go again. It's like we can't learn from history. This is
the author of this whole program and it just doesn't work. It wouldn't
work for your small business, would it, gentlemen? And it didn't work
for the State of Colorado. That's why you have a balanced budget,
because you have the same common sense most American families know,
that when you get in trouble you don't go buy a new car and run up a
whole lot of debt.
We're joined tonight by another great colleague, a gentleman from
Virginia, been a legislator for many years, a very good friend of mine,
Congressman Forbes. It's just a treat to have you here.
I yield.
Mr. FORBES. Thank you, Congressman Akin, for having this special
order and for allowing me a few moments to talk about this very
important topic. We hear a lot of times people on the other side of the
aisle saying, well, you voted for this package, why aren't you voting
for this package? As I stand here tonight with you, I'm one of 16
Members of this body who voted against all of them.
Mr. AKIN. Reclaiming my time, I claim the same badge.
Mr. FORBES. You do.
Congressman, one of the things that I would say tonight as I come
here, I don't have any charts and I don't have any graphs with me, but
just a couple of weeks ago I was home and my nephew's house burned
down. I walked in there with him as we went through that house and his
children were looking through just ashes. They had nothing left of even
their memories. And when I go around back to my district, I've got some
friends and some constituents who feel that way right now in this
economy. The graphs aren't important to them. What they know is that
they're suffering pain and they're looking and worried about losing
everything they have in their lives. But it's because of them and it's
because they understand that we can't wastefully spend money, we've got
to make sure that the help we give them is directed and it's going to
work, that we need to ask the tough questions. And there is one
enormously tough, fundamental question that we have to ask America
tonight and it's simply this. Last year, Americans lost $14 trillion of
net value, net worth. The question we have, the question facing America
today, is whether or not we are simply going to redistribute what's
left or whether we're going to rebuild what we lost.
Our friends on the other side of the aisle want to redistribute
what's left. We have a program that will rebuild what was lost.
Mr. AKIN. Reclaiming my time for just a minute, because I'd like to
underline what you said. You're working
[[Page H1217]]
on the same assumption that has worked historically, time after time,
and that is to look to the productivity of the private sector to create
wealth instead of government to redistribute it. You know, we just tax
or don't tax, we slop the money around, but we don't create anything,
the government.
I yield back.
Mr. FORBES. I'm not prepared to throw in the towel and say, let's
just redistribute what's left. I think we can have a bold program that
will rebuild what we lost and go beyond that. The other thing that's
very interesting is this. If you look at the bailouts that were spent
last year, as we all know, those bailouts total almost the entire
amount of discretionary spending Congress had in 2007. We're getting
ready to double that. Once we do that, I think most Americans don't
realize that we will not pay for that, we will give that to my
granddaughter who turns 2 years old on February 14. But here's the cost
we will pay until she reaches our age and one day pays it off. The
interest carry on that alone equals the entire budgets for NASA, the
National Science Foundation, the Department of Transportation, the
entire cost of the White House, the entire cost of the Department of
Justice, the entire cost of the FBI, the entire cost of the Department
of Homeland Security, every Army Corps of Engineers project in the
country, the Small Business Administration, and every expense of
Congress combined. That's the interest we have thrown away for the next
20 or 30 years. And, Congressman, I would say this. When you come in
and lay that on the budget table for this Congress, they have got to
ask this: How do we pay for those lost budgets? They will do it either
with massive, massive tax increases which our economy cannot withstand,
or they will do it by having to find massive cuts somewhere else. And I
would suggest one of the places is defense that they're going to go to.
Let me just close with this. The other questions when I go in the
McDonald's and I go in the Sunday school classes and I just go to
ordinary citizens who don't have the charts and they don't have the
graphs and look them in the eye, and just ask them this: Have you
received your check from the bailout yet? Because I guarantee you the
CEOs on Wall Street have received theirs. And everyone looks at me and
says no. And then you ask them, are you able to borrow more easily
today than you could before all these bailouts started? They look you
back in the eye and say no. And then I ask them, are you less worried
about the future today than you were before the bailouts began? And
they all say no. And then I ask them this simple question: If
government would come to you today, would you feel better if we gave
you a $6,700 check and said, here, you go pay down your credit cards,
do whatever you want, or trust government to do it? What do you think
their answer is: Give me the money.
So, Congressman, I would just say today, it's important we get this
right. This stimulus package doesn't get it right. I believe we can
rebuild instead of redistributing. I hope that's what Americans will
ultimately hold out for.
Mr. AKIN. It's just such a treat to have the gentleman here from
Virginia, Congressman Forbes, who gives us such good advice. You have a
great voting record, such tremendous common sense. I think the American
public agrees with you. We've taken just a bunch of phone calls and a
sense of where our district is all the way out in the State of
Missouri, and the people realize that just massive, massive levels of
Federal spending is not going to solve this problem. And it isn't about
stimulating people to buy stuff. It's about productivity. It's about a
very positive vision that you've set forth this evening, the fact that
we can rebuild, that we have the can-do attitude in America that if we
just let freedom work, we can take care of this problem, and there are
very simple, straightforward solutions that through history have
worked. And what you're proposing is that very simple idea. The other
alternative is, quite frankly, socialism, redistributing a whole lot of
wealth, huge, massive government spending, and at the end of all of
that, the author of that Keynesian economics under FDR said, 8 years
later, we're tremendously in debt and we've got the same unemployment
we had. It flat didn't work.
Thank you so much for joining us.
Mr. FORBES. Thank you.
Mr. AKIN. We're joined by another great colleague of mine from the
State of Indiana, my very respected friend and senior statesman,
Congressman Burton.
Mr. BURTON of Indiana. First of all, let me thank you for taking this
Special Order and if you wouldn't mind I would like to put that chart
up there for just a minute and then we'll take it back down.
That chart shows a line that shows the amount of money in
circulation. And you can see that it was pretty constant up until, I
think, right in the middle of the eighties or maybe in the nineties.
And then you see it shot up like a rocket. And that's because we had to
print more money and get it into circulation and that's called
inflation. And when we start having inflation like that, the cost of
doing business, the cost of buying products, everything goes up, goes
right out the window. Now they're talking about putting trillions of
dollars back into this economy, and it's going to be borrowed money.
It's going to be borrowed from the taxpayers. And a lot of that is
going to have to be printed, which means we're going to have more and
more dollars in circulation, so we're going to have very high
inflation, and some people believe it will be hyperinflation.
{time} 1715
I would just like to say to my colleague that back in the 1970s, when
Jimmy Carter was President, we had the same identical problem, only
worse. And back then, the inflation went to 14 percent. Unemployment
went to 12 percent. And then they brought a guy in named Volcker, who
is back here again today.
Mr. AKIN. Could I reclaim my time for just a minute? Because I think
what you're saying is so important.
People are saying that today things are worse than at any time since
the Great Depression. And yet what you just said was that under
President Carter, what did you say the rate of inflation was?
Mr. BURTON of Indiana. Fourteen percent.
Mr. AKIN. What was the jobless rate?
Mr. BURTON of Indiana. The unemployment rate was about 12 percent.
Mr. AKIN. Reclaiming my time. Twelve percent jobless rate, rate of
inflation at 14, and what was the interest rate?
Mr. BURTON of Indiana. Well, Mr. Volcker, who is now back with this
administration, he came in and started ratcheting up the interest rates
to slow down the rate of inflation. Interest went up to 21.5 percent.
And I had a business then. And we had to close our doors, because we
couldn't sell real estate because nobody could afford to buy it at 21.5
percent interest. And so what happened was he ratcheted up the interest
rate to slow down the rate of inflation. And he killed the economy. He
absolutely killed it. And that is when Ronald Reagan was elected in
1980, and he came in with tax cuts which stimulated economic growth.
And we had one of the longest periods of economic recovery in history.
Mr. AKIN. Reclaiming my time for just 1 minute. Let's just go back
and talk about what has worked. It is not that we are in unchartered
territory in terms of the condition of our economy right now. We've got
some problems, but we can deal with them. And what we can do is use
what has worked in the past. And one of the things that worked was what
President Kennedy did, and then President Reagan did it, and then Bush
did it very selectively in the year 2003. And what it was was not just
any kind of tax cut, but a specific kind of tax cut which gets
businesses going, which encourages innovation and the creativity of
better processes, and taking the risk to hire new people to make
products that are better and less expensive. So it is that productivity
engine that gets going. It worked for JFK. It worked for Ronald Reagan.
And it worked in the second quarter of 2003.
So yielding back, I didn't mean to interrupt, but I just want to
underline the fact that this, what you're proposing has hard evidence
historically it is working, not to mention Ireland in contrast to
Japan, Ireland dropped their corporate tax rates, and their businesses
just shot up like a skyrocket. Japan did the opposite, and they had 10
years of malaise.
[[Page H1218]]
Yielding again to the distinguished gentleman.
Mr. BURTON of Indiana. Let me just conclude by saying this. The
economic problems we had in the 1970s were almost identical to the ones
we have today, but they were worse. And the economy got out of control.
Inflation got out of control. Unemployment got out of control, and it
ended up killing us, killing the economy with rising interest rates of
up to 21 percent.
The way to solve the problem is what my colleague just said, and that
is to cut taxes, as Kennedy and Reagan and Bush did, to stimulate
economic growth. If we do that, we won't have to deal with these
inflationary problems. These inflationary problems are going to be
borne not just by us, but by our kids and our grandkids. And they will
be paying four, five, 10, 15 times what it costs today for bread, milk
and everything else if we don't cut this spending out and quit wasting
all this money. And then, of course, they will probably get stuck with
taxes and less defense and things that are very important.
So I would just like to say to my colleague, and anybody who is
paying attention, we're going to see hyperinflation. Today, Mr.
Geithner, the Secretary of the Treasury, said he was going to have to
put another $1 trillion or maybe $2 trillion into the financial
institutions to make them viable again. That is going to be money that
is not going to be sold on the market to borrowers. A lot of the money
is going to have to be printed. And we're going to have very high
inflation. And we don't really need it.
Mr. AKIN. Reclaiming my time.
I just really appreciate, Congressman Burton, your long experience
here in Congress, the fact that you have really earned a great
reputation. It is a treat to have you here and to have this common
sense and this warning about inflation. This is a form of theft. It is
a form of theft because everybody, particularly old people who are
trying to live on a fixed income, are going to be penalized because
their money just won't go as far. And that is what happens when you
start to spend massive amounts of money. We're talking, if you take a
look at the debt after World War II, you're looking at 6 percent. We're
jumping this thing to 10 percent. This is unchartered waters. And that
is the kinds of spikes that we're talking about is inflation. This is
very, very serious. And it demands a good solution and not just
shooting off more Federal programs.
I will yield.
Mr. BURTON of Indiana. That is what is taking place already. There is
a spike in inflation already, and people are starting to feel it. When
you go to the supermarket and you buy a pound of something that you
used to pay for a pound, now they're putting the same product in a bag,
but they're only giving you two-thirds of a pound. And that is because
they want to keep the price constant. But there are inflationary
pressures right now. It is already existing. And what Geithner and what
we're doing with this so-called stimulus package and the other
legislation that is going to be coming down the pike is going to make
this thing a lot worse. That is why we need to do as you said and as
our colleagues said, cut taxes and get this economy moving in the right
direction again.
Mr. AKIN. Reclaiming my time.
It just seems to me that every family in America has the common sense
to know that when times get tough, one thing you don't do is go out and
spend money like mad. We have already been spending money like mad. In
fact, we allowed this whole situation to get away from us because of a
bunch of social programs that there was no fiscal accountability on
them. We tried to control it. But we were blocked by the Democrats. And
so now we have got ourselves in a little bit of a fix. But it is not
the end of the world. As you said, gentleman, it is not as bad as it
was under Carter when we had double-digit inflation, we were double-
digit on unemployment and those kinds of things. We're not there yet.
It is important we do the right thing but not just waste a whole lot of
money on things. I'm joined by a good friend of mine, a judge from
Texas. And he is a sober judge, too, which is a good kind. I think it
is the only kind they have in Texas.
And so I would yield to my dear friend from Texas.
Mr. CARTER. I might question that last statement just a little bit.
But I do thank the gentleman for yielding.
We've got the package back that is back from the Senate. And we were
hopeful that we would see better news. And actually we may have seen
worse news. And now we're at the level of the conference and we've got
things coming out of the conference which we see as basically we have
got a version of the House stimulus package which we all got to see
before we sent it over to the Senate.
A lot of people around here don't like Ronald Reagan. I happen to
think he is one of the best men that ever lived. But he made some
statements that the American people understand. One of my favorite
statements that Ronald Reagan said was ``the closest thing to eternal
life that you will ever see in your lifetime is a Federal program.''
Now I think we should step back and look at this ``stimulus
package,'' this ``temporary infusion of capital to make our markets
work'' and find that we are creating 32 new programs. That is a
potential for 32 new eternal lives.
Mr. AKIN. Reclaiming my time.
So what you're saying is this big bill that is proposed isn't
necessarily about creating jobs at all. It is talking about creating
new Federal programs. When is the last time you ever saw a Federal
program die?
Mr. CARTER. They never die. They continue to grow.
If the gentleman will yield back.
Mr. AKIN. I yield.
Mr. CARTER. What is very interesting is that as many of you can
remember, do you know the Food Stamp program that we started out with
was supposed to be a $25 million program and never would get above
that? And in this package alone, when we look at food stamps, over $17
billion is put into the food stamps in the stimulus bill, a 32 percent
increase over the just-increased program which was increased by 23
percent in October of last year.
Now that is one of those programs that we talk about that has eternal
life. It has gone from $25 million to just the increase in this package
of $17 billion. This is the kind of thing that I think the American
people will look at it and get a clearer picture of what we're talking
about when we talk about spending $1 trillion. The example that we all
learned and are giving now is what is $1 trillion? If you take 1
million brand new $1,000 bills, if you take $1,000 bills and you stack
them up until it is 4 inches high, you have $1 million. A $1 trillion
would be 63 miles high.
So, this spending, as the people look at it, they need to realize
what we are getting ourselves into. And every dollar is borrowed money.
We already got credit issues. We supposedly were going to fix it with
$750 billion, which we don't seem to have got to. And now we're going
for another trillion. When does it stop?
And I yield back.
Mr. AKIN. Reclaiming my time.
What you're talking about here is really unchartered water for us.
What we saw that FDR did back in the Great Depression was spending a
whole lot of money, and we still had a high unemployment rate. In fact,
his top guy, his Secretary of the Treasury said, after 8 years, all
we've done is get ourselves into debt. We've got the same level of
unemployment.
And so one of the things that we've been hearing to some degree is
that the President has been claiming is the Republicans don't want to
do anything. It is not that we don't want to do anything. It is that we
don't want to do the wrong thing. We don't want to do something that
historically has never worked. That is crazy. It didn't work for FDR.
It was tried by the Japanese where they kept throwing more and more of
their money at their economy. And the thing was just absolutely
wallowed in the water, and the Japanese economy, for 10 years, was a
mess.
And yet you look at what is the right thing to do and it is a little
bit of discipline, isn't it? It is the idea that the Federal Government
should tighten their belt and stop spending so much, and they need to
return the money back to the private sector to get it working again.
And the ironic thing about this is that when that is done, the bottom
line is that the government gets more money in tax revenues. So
everybody does well when the economy is strong. But when we suck all
the money out of the private sector and
[[Page H1219]]
use it all and spend ourselves and our grandchildren into debt, that is
not a good solution. So we don't want to do the wrong thing.
It is not that we don't understand the pressure and what is going on
in the economy. Judge, I have some constituents that have written me a
few letters, as you can imagine. I'll bet you have got some, too, on
this subject. Here is one. This is one that comes from Town and
Country, Missouri. ``For those of us who pay our bills on time, have no
car payments and live beneath our means, I appreciate your effort,'' he
is talking about my effort to vote ``no'' on all of these stimulus, and
I guess I call it ``porkulous'' plans, ``at some point, will you ask
your Democrat colleagues to once in a while think of me when they seek
to take my money and give it to my neighbor who either can't or won't
pay his bills and be responsible for his life?''
Now what we're talking about here is socialism. We're going to take,
after the economy takes a hit, we're going to spend money like mad.
We're not going to create jobs. We're just going to slop it around and
hope somehow it is going to make the economy better. And the facts of
history are that it doesn't work.
I yield.
Mr. CARTER. Sometimes when you hear the term ``socialism,'' those of
us my age and your age, we know what we're talking about. Young people
really don't know what you're saying. But they do know people
interfering with their lives. Because quite frankly, whether they were
going to college and paying exorbitant fees to go to school, or
whatever it is, as they have moved into the workforce, they see that
the government is available to interfere with their lives. And the real
issue here is we're growing government and we're giving government the
ability to interfere more and more in the lives of people.
One of the things that people are very upset about was a proposal, I
am not sure whether they're going to be in the conference committee or
not, but those proposals about having an organization of the government
make decisions as to what health care elderly people should be allowed
to have and not be allowed to have, who will be allowed to live and who
will be allowed to die, that kind of rationing of health care that is
at least being looked at and discussed should frighten everybody in the
age group, the young age group right now feel like they're invincible
and immortal, but some day they're going to be reaching the golden
years. And they must realize that not their family or their loved ones
will make those decisions, but Uncle Sam, through some agency, will
make the decision as to whether you live or die.
These are serious issues.
Mr. AKIN. Reclaiming my time, Judge Carter from Texas, you say, well,
now wait a minute, we're talking about an economic question. And you're
all of a sudden moving over to a subject of essentially government
rationing of health care. Why in the world would you be talking about
the government rationing of health care in a bill like this?
{time} 1730
Well, the reason is because that was put in the bill. You know, when
you get some hundreds and hundreds of pages of legislation, nobody's
had a chance to read it except a few people they slip stuff into it.
And one of the things is the idea if we're going to move to the
government running all of health care, somebody's going to have to
decide how we're going to control costs. And so the way to do it in a
socialized medical system is that some bureaucrat has to tell you I'm
sorry, Judge, you're just too old for that replacement hip that you
have to have. Now, people think wow, that's really wild and wooly. That
would never happen in America. Well, it's sure going on up in Canada.
There is an example of a guy younger than I am, so this is getting
close to home and he, just like I do, he needed a new hip replacement,
and the Canadians said no, we can't afford to give you that. And by the
way, if you had enough money to pay for it on your own that would be a
crime. So what's he do? He comes down to America. But that's slipped
into this bill too, is the beginning or greasing the skids for this
rationing of health care by bureaucrats, and I believe that, and I
think Republicans believe that those health care decisions need to be
made by the patient and by the doctor and not by some bureaucrat
rationing health care.
I'd yield to the gentleman for this point.
Mr. CARTER. Also I hope that the American people understand, those of
us who oppose things like omnibus appropriations bills, and I serve on
the Appropriations Committee, there's a reason we don't, we want to
divide these appropriations bills out and deal with each subject
separately, because it prevents the hiding of things in massive bills.
When you put a bill on the desk that looks like all the Manhattan, all
of the Greater New York City phone books put together, and you're
supposed to figure out what's hidden in there that shouldn't be a part
of this, it is a tremendous task. And this is an exact example of just
that.
Mr. AKIN. Reclaiming my time, figuring it out in a very short period
of time. Within a day or two, you're going to have to vote on this
thing and you're supposed to go through that huge stack of a bill and
the system's designed that way so you can hide stuff in it.
I yield.
Mr. CARTER. And that's the whole issue. This is a massive, voluminous
spending bill. You know, we were all so proud, I've heard President
Clinton brag quite a bit about the fact that welfare reform that took
place back in the 1990s. And an integral part of that welfare reform
was the requirement that people go to work. I mean, that's kind of what
made the new welfare reform start to get people off welfare for the
first time in decades.
Right now, in this bill, there are provisions which are going to take
away that requirement of work on welfare reform, which means it's going
to put back into the old welfare system, that was a clearly failed
system, I've heard President Clinton stand up and say he takes full
credit for the welfare reform that took place in the 1990s, even though
some would argue that it was done by the Republican Congress.
Irrespective, we shouldn't be taking that away.
Mr. AKIN. Reclaiming my time, the Republican Congress did pass that.
Several times in a row he vetoed it and finally, I guess it was the
third time around I think he did sign the Republican Congress bill.
But I yield to my good friend, Judge Carter.
Mr. CARTER. That's exactly right. The whole point being that it's
something, when it worked we were proud to say we got people off
welfare and into real jobs. And one of the reasons was because we put a
go-to-work provision in that bill. This bill would take that out, which
is casting us back to the era of the 1960s and the 1970s and the failed
economic policies that we clearly corrected in the 1990s.
Now, that's going backwards, and I think the American people need to
know that this is not just too much money and too little stimulus. This
is also messing with their lives. Hidden in this bill there are things
that are messing with their lives.
Mr. AKIN. There was an interesting cover on Newsweek. It says, we are
all socialists. But judged by the way you're talking, reclaiming my
time, it doesn't sound like you're quite a socialist yet, and I think
there's an awful lot of people in your district and in my district that
are thankful for your common sense and your willingness to just
basically state it the way it is.
Now, I'd just like to take a minute or two here and talk about the
fact, and you alluded to this, as other Republicans have, this isn't
the end of the world. We've been in a lot worse places back when Carter
was President. It's not as bad as the New Deal yet, unless we keep
doing the wrong things.
But the vision of a bright and prosperous America where freedom
reigns, where people's God-given rights, particularly to own property,
are respected, that still is there. That heritage is deeply ingrained
in American spirit and a pride and a joy. People aren't interested in a
handout in America. They're more, or some are, but most true Americans
are much more interested in a good job and being able to be responsible
and provide for their families. And there is an economic system that
allows that to happen. It's what we've always done in America.
[[Page H1220]]
It's called free enterprise. It's not such a big surprise.
Now, what one of the things that seems to be a little disjointed, and
that is, where I disagree with my Democratic colleagues, and that is,
there's a connection between businesses, particularly small businesses,
and jobs. And that is, the connection is, that the businesses hire
people, and if you hammer the business into the dirt, you can't be
surprised if there aren't as many jobs there. And so the solution to
this is not for government spending. If government spending were the
solution, we would have a great economy right now. We've been spending
way too much money, and you and I have voted, Judge, to make sure that
we don't spend as much as we have been.
But here's actually graphs that show this concept of allowing free
enterprise to work. This vertical line on the chart is the second
quarter of the year 2003. Now, we've done some tax cuts in these first
couple of years. But take a look at what was going on with jobs. All of
these lines that go down means it was a month that we lost jobs. But if
you look over here, after we did the dividend capital gains tax cut,
now this is not a popular tax cut because what you're doing is you're
allowing people that own small businesses to keep more of their money
so they can invest it in their own business. When they do that, they
create jobs.
Look what happens. All the vertical lines are months when we had a
net increase in jobs in America. So if you're caring about
unemployment, which we should be if we have any heart in us at all,
what we should be saying is, let's do what works. The people who create
the permanent jobs that make the economy go, 80 percent of them are
small businesses. So you cannot take all their money away from them by
overspending Federally, and expect them to have any money left over to
do an improvement.
I would yield to my good friend, the judge from Texas.
Mr. CARTER. Y'all may have talked about this earlier. This
legislation would create, according to the Democrats, 3.7 million jobs.
Price tag is $838 billion. This is approximately $280,000 per job. And
it's estimated that the average income that would be derived--
Mr. AKIN. Reclaiming my time. That statistic just kind of got my
attention. You're saying that this package, it's going to cost us
$280,000 for every job we create?
Mr. CARTER. For every $50,000 a year job.
Mr. AKIN. Gentleman, I yield, but if you could sign me up for one of
those jobs, that sounds pretty good to me.
Mr. CARTER. I think the common sense of the American people is
boundless, and they know that what goes on in Washington is a whole lot
of smoke and mirrors. But when you say something very simple, we're
going to spend $280,000 to create a $50,000-a-year job, they say, what?
That makes no sense. And oh, by the way, we're saying this is
temporary, but it's got the potential to be permanent spending. That's
the real fear we have to be afraid of because then we go farther and
farther and farther in debt because it's all borrowed money.
Did you know that when this package hits the market to ask people to
loan us the money, it will be the largest amount of indebtedness in the
history of man that's ever been placed on the market?
Mr. AKIN. Just reclaiming my time, you're saying that when we go out,
because we've got to raise this 800-some billion dollars. We've got to
raise that money in the market. That means somebody's got to loan the
government that money, right?
Mr. CARTER. That's right.
Mr. AKIN. And we're counting on what, foreign countries like China to
loan us the money? And we're hoping that they're going to buy, what,
our Treasury bills?
Mr. CARTER. That's right.
Mr. AKIN. How far can we push this?
Mr. CARTER. The other thing we have to remember is what looms on the
horizon is even more borrowed money to where some estimates are this
year we'll put in 2.3, I think it is, trillion dollars we will be
seeking that to borrow that amount of money. The $838 billion will be
the largest indebtedness ever put into the market, according to the
experts. So what happens when we've got almost $2.5 trillion?
Mr. AKIN. Reclaiming my time, what you're saying once again, in other
words, is we're going into uncharted waters. We're talking about
something in the neighborhood of $7,000 per family, just in the first
six weeks of this administration.
Mr. CARTER. And if the gentleman would yield for one more thing.
Mr. AKIN. I do yield.
Mr. CARTER. On the commonsense side of this whole thing, this all
started, if you remember what you heard from the administration and
from our colleagues on the other side of the aisle, this was an
infrastructure building bill. That's what we were going to do. We were
going to rebuild the infrastructure of America. When people hear
infrastructure, they think roads and bridges. And yet, it's my
understanding that the $30 billion that the House sent over to be spent
for roads and bridges has been reduced to $28 billion coming back. So
it's a joke.
Mr. AKIN. Reclaiming my time. 28 billion out of 800-something
billion?
Mr. CARTER. Is going for roads and bridges, that's right.
Mr. AKIN. Well, my understanding, though, is, gentleman, that they
had money, at least in the version that came from the House, for
millions of dollars for education on sexually transmitted diseases.
Now, that's a totally different definition of stimulus, isn't it? How
does that help us to get jobs in the economy?
Mr. CARTER. Well, that's a good question. If you'd yield back. That's
the kind of thing that we ought to be thinking about. And let's be
clear. Some of the things that they're spending money on are good
causes and they're causes that ought to be in the regular budgetary
process which, by the way, comes up very shortly. We should be getting
a budget from the Obama administration within the next couple of weeks.
This is all above that.
Mr. AKIN. Reclaiming my time, though, gentleman, you talked about a
culture of smoke and mirrors here. This was supposed to be a jobs
package. It was supposed to be a stimulus. I'm calling it a
``porkulus.'' But that was the theory. And yet what you're saying that
it has in here, it really isn't; it's more about big government
spending. I yield.
Mr. CARTER. Well, as we look back, and I've heard the chairman of the
Appropriations Committee rail in favor of what FDR did in the Great
Depression and how successful it was. And yet, right there by his own
Secretary of Treasury's admittance, the spending programs failed. And I
think history is now showing us that the spending programs and the tax
increases that came in the latter part of the ``New Deal'' kept us in
the Depression, didn't get us out of the Depression.
Mr. AKIN. Reclaiming my time. Essentially what happened, we had a
recession during the time of the New Deal. They tried this Keynesian
economics, which, at that time, you could at least give them credit;
while it didn't make any common sense, at least it hadn't been tried.
And here you have the author, the guy that was really behind it, even
almost before Little Lord Keynes came along, this guy, Henry Morganthau
was supporting this thing. And then 8 years later he comes before our
committee and says, it does not work. And then it says, also at an
enormous debt, to boot.
Now, why would we want to turn around and do the same thing over
again, when there is a bold initiative that can be taken, just as has
been done, that history has proved works. I had just shown the chart of
what happened when we did the dividend and capital gains tax cut to
allow small businesses to keep more of their money to make the
investments in their businesses. And we saw the fact that right after
that tax cut right here, we see all these jobs being created.
What else happened? Well, let's take a look at the Gross Domestic
Product of the country. These lines to the right are after that tax
cut. You can see that the average has gone up to 3 percent, whereas
before that tax cut it was at 1.1. And here's the best thing of all. If
you care about all these different other ways that the Federal
Government could spend money, one of the things you'd want would be the
economy to be strong because then you have more revenue.
Take a look at--let's see. I've got to try and find the chart that
shows what happened. Somewhere along the line we
[[Page H1221]]
lost one of the charts here. But the bottom line was when you did that
tax cut, second quarter of 2003, what you find is immediately the
Federal revenues start going up. Well, it doesn't surprise you when you
think about it because look at all the more people that have jobs.
They're all paying taxes. And you see the Gross Domestic Product going
up.
So when the economy gets better, we have more money to spend. And
that is what has always made America great. It's because there are
certain basic true principles that are not smoke and mirrors. It's not
a whole lot of government redistribution of wealth, and not everybody
is a socialist, in spite of what the cover of Newsweek wants to tell
us. And I'd yield.
Mr. CARTER. Well, I would hope that we're not all socialists. I have
a young man whose wife is from Canada, who works for me. And I'll tell
you, he said to me, he said, you know what? I love my wife dearly, but
I didn't want to go live in Canada with those socialists. Please don't
bring it to our country. So there are people that are really concerned
deeply about socialism.
Mr. AKIN. Reclaiming my time, you know, what we're talking about here
is, are we going to let the marketplace work? Are we going to trust in
productivity? Are we going to trust in Americans that have always been
able to deal with these situations?
We have been through a lot of crises as Americans, and yet there's
something very, very special about our country. So many unique things.
Aside from just the beautiful land that we enjoy, as soon as there's a
tsunami or some huge storm or something, you see the Americans there
trying to help all around the world. And you see the Americans in a
positive way helping.
But then there's some things that we're proud of that they didn't do.
We won a couple of world wars at various times, and after we won those
wars, after every other Nation in the world wins a war, they claim more
territories and more jurisdiction. Instead, we didn't claim anybody's
territory. We simply taxed ourselves to help rebuild our enemies.
That's what makes us a different kind of country. And we're a country
that has always put a premium on freedom. Every time we get a chance to
give a talk, Judge, we ask people what's so special about America, the
word that just bubbles out of their hearts is it's about freedom; it's
about a chance to have a dream and to go out, and you may succeed, you
may fail, but we're the land where dreams can become reality.
{time} 1745
We are the only Nation in the world that is based on a creed, that is
based on a philosophical statement:
We hold these truths to be self-evident, that they are endowed by
their Creator with certain unalienable rights, that among these are
life, liberty and the pursuit of happiness.
Earlier versions have life, liberty and property. That means it's not
the job of the government to take everybody's property away from them
and to slop it around and redistribute it. That is socialism. This idea
was tried by the Soviet Union. The government is going to provide you
with a job and with health care and with food, and the government is
going to give you your education. That idea died in the dustbin of
history when the Soviet Union collapsed.
Our system is based on the idea of freedom and of allowing people to
go out and invest their lives in businesses, not in the government's
taxing their great grandchildren into the dirt.
I will yield to my good friend.
Mr. CARTER. You know, the great saviors of the socialist states'
medical plans were the medical facilities of the United States of
America. The reality came when the rationing took place as you
described. Just exactly what you described took place. The people who
had the money to get the health care came to the last bastion of
freedom for health care--the United States of America--and they got
that hip transplant or had a heart transplant or whatever it took so
that they could continue productive lives. That's the way we want it in
this country. We want to be able to work hard and to have the best, and
that's why we're standing up here today.
I don't fault the good consciences of many people who support this
plan. It is not going to work, and we can do better. Rushing to
judgment has already proven in the ``bailout bill'' to be a disaster.
Let's not rush to judgment.
Mr. AKIN. Reclaiming my time, I really appreciate your perspective.
It's not about doing something fast. It's about doing the right thing.
It is the thing that has always worked in history.
We are joined by our colleague, and I am just so thankful to have
another perspective on what we're talking about. It's not that we don't
believe that there are good principles that make things work, but
specifically, if people want to say, ``well, what sorts of things would
the Republicans suggest?'' there have been different Republicans
suggesting ideas.
One says, hey, let's just have a moratorium on Federal taxes. Let's
go 2 months or 4 months where we just don't charge anybody any taxes.
It will cost less than this $800 billion loan and bailout we're talking
about. Let's just let people keep their own taxes for a couple of
months and see what that does to the economy. I'll bet you would see
some immediate results.
Yet that is not a Washington-based solution. That is not a big
government solution. It is allowing freedom to work, and that is what
we are about.
There are other solutions which say, hey, let the small businessmen
keep more of what they make so they can invest and can create those
jobs. That's what happened before that worked fantastically. Why don't
we do that kind of thing again?
I will yield to my good friend.
Mr. CONAWAY. Well, I thank my colleague from Missouri for yielding me
some time. I want to talk about how we pay for this issue.
At least for the last 40 years, maybe a little bit longer than that,
the people in charge--currently us--have made an art form out of
solving our problems with somebody else's money. You can look at what
this Federal Government has done over and over and over. This just
happens to be the single most dramatic occurrence of this concept that
we have had in history.
What we will do to fix a temporary problem: In my view, this
recession is temporary. Expanding economies are temporary. We had a
pretty good 7- or 8-year run, and we enjoyed that. It ended. This
recession will end. It is not permanent. So what we are going to do is
we are going to borrow money that, in all likelihood, will never be
paid back to fix a temporary problem.
So why would you borrow money at this scope and at this scale to fix
a temporary problem that never gets paid back?
This is what we are doing to our children, to our grandchildren and,
actually, to every child yet to be born in America: Because this debt
will never get paid off, the interest carried on this debt currently
cumulative will be about $12 trillion. That interest carried, whatever
it is, will be a permanent burden, as it were, on every child yet to be
born. So, when my great grandchildren are in this position, they are
going to have to pay the interest on this debt, which means whatever
those resources are, those are resources that they will not have
available to them to fix their problems.
So, as we go about this $790 billion deal, just understand that this,
in all likelihood, ought to be considered the fiscal abuse of our
children, grandchildren and great grandchildren
Mr. AKIN. Reclaiming my time, I really appreciate the gentleman from
Texas (Mr. Conaway) for coming out and for joining us tonight and for
adding your perspective and particularly that point, because there is
an almost ethical point to what you are saying: We are saddling our
kids and our grandkids with a tremendous debt level.
Again, let's put this into perspective. We are talking about
somewhere between 100 and 200 aircraft carriers end to end. We've got
about twelve aircraft carriers. Now, that's what we're talking about.
This is a lot of money. This is more money than we spent in Afghanistan
and in Iraq during all of those years of those wars.
I very much appreciate my colleagues for joining me. Thank you, Madam
Speaker. I yield back.
[[Page H1222]]
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