[Congressional Record Volume 155, Number 37 (Tuesday, March 3, 2009)]
[House]
[Pages H2915-H2922]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      THE ECONOMY AND OUR FREEDOM

  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. Madam Speaker, I'm just delighted to be able to join you 
here this evening and join my fellow colleagues in talking about some 
really, really exciting and important topics. The first we're going to 
talk about this evening is the economy and a little bit of the 
background on what's going on, where we've come from, where we should 
be going in the future. The second topic is going to be the topic of 
freedom.
  One of the things that I have a chance to do is speaking to many 
audiences is to ask them, what is it that makes America such a special 
place? Why is it that we love our country so much? And our country is 
so unique in so many different ways. What is the secret to that unique 
nature of America? And the word that always comes out is the word 
``freedom.'' It's right near the front of the tongue for most 
Americans. We're going to be talking a bit about the subject of freedom 
tonight.
  But before we do, we do need to take a look at the economy, what's 
going on there, and what's happened in the past and use that as 
somewhat of a guide as to where we should be going in the future.
  The economy, of course, works on numbers. And numbers, you can't 
cheat with them too much. People try to, but the bottom line is, 
somebody ends up having to pay.
  And so what we have here, going on in Washington, DC in the last 
number of weeks has really been incredible. We've charted absolutely 
new territory, I think irresponsibly. And we have heard for the last 6 
years about the tremendous cost of the war in Iraq, how we're wasting 
money there every single day. And yet, if you add up the entire cost of 
the war in Iraq, which we now concede is largely won, you take those 6 
years of costs, add them to the cost of what we spent in Afghanistan, 
add those together now, and it's not as much as what we spent in the 
first five weeks here in this Chamber in this supposedly stimulus bill. 
Many people are calling it a ``porkulous'' bill.
  And so how is it that the economy got to the point that it would 
cause people to go into debt so tremendously, spend so much money?
  Well, the story really goes back a number of years. It goes back to 
the Carter administration and really the creation of Freddie Mac and 
Fannie Mae. What happened was there were areas where it was very 
difficult for Americans to get home loans, and there were places where 
banks didn't really want to loan to people for fear that they wouldn't 
be paid back. And so the Federal Government created Freddie and Fannie, 
and those organizations are neither private nor public. They're 
somewhere halfway in between. And so Freddie and Fannie were given 
authority to help underwrite people's home loans and, actually other 
kinds of loans as well, but primarily for home loans.
  Well, as time went along, various Presidents started demanding that 
Freddie and Fannie make more and more loans to people who would be 
considered subprime, or that's a way of saying not as good a risk. And 
so by the time that we had President Clinton, toward the end of his 
tenure as President, he required an increase in the percentage of loans 
that Freddie and Fannie were going to make to people who were 
considered to be not very good risk kinds of loans. And so, what 
happened was, you have Freddie and Fannie now underwriting more and 
more loans, and you started to get a snowballing kind of effect.
  At that time, in 1999, the New York Times, in its editorial page 
reported, I believe it was September, that several people mentioned 
that this is not safe, that we are starting to create the environment 
for another savings and loan disaster in America. This is 1999, people 
were warning that this policy was not a good one.
  Was it a free enterprise policy?
  People say the reason the economy is bad, it shows the weakness of 
free enterprise. No, it doesn't. What's created the problem with our 
economy has nothing to do with free enterprise. It's socialistic 
programs of government jumping in and telling banks and economists that 
you have to take loans which we think there's a very good chance people 
will not pay back.
  Well, as the 1999 article in the New York Times indicated, this was a 
risky thing. As we move forward, we have Greenspan then reducing the 
interest rate, the economy getting stronger and stronger, the housing 
market just going up and up and up, increasing at a tremendous rate. In 
fact, if you looked at its rate of increase historically, you would 
have to start to worry that it might have been a bubble building.
  Well, by 2003 we have President Bush. And President Bush has come to 
the Congress. He says, hey, this is reported in a September 11, 2003, 
article, again in the New York Times, saying, I need authority to 
regulate Freddie and Fannie. We have got big trouble with Freddie and 
Fannie. They are making all of these loans and if the real estate 
market comes down some there is going to be the dickens to pay. You 
have got to allow me to get Freddie and Fannie regulated.
  And in the President's request, the Congress, in those days, run by 
the Republicans, passed a bill to regulate Freddie and Fannie. They 
sent the bill to the Senate, where it was killed, according to this 
article, by the Democrats in the Senate.
  Now, you have, in that very article that's quoted here, the New York 
Times, September 11, 2003, this is the Congressman now who is in charge 
of fixing the problem that was created, basically, another savings and 
loan type of problem. These two entities, Fannie Mae and Freddie Mac, 
are not facing any kind of financial crisis, said Representative Barney 
Frank of Massachusetts, the ranking Democrat on the Financial Services 
Committee. The more people exaggerate these problems, the more pressure 
there is on these companies, the less we will see in terms of 
affordable housing.
  Now, in looking out the back window, looking through history, we see,

[[Page H2916]]

Barney Frank was totally wrong. Freddie and Fannie are the heart of 
what has fallen apart and created a world economic crisis. The crisis 
is created by defaulting mortgages, and as that mortgage crisis has 
spread and continues to spread in the next couple of years, this is 
what's been driving the bad economy.
  So there's an irony here that the person from the House that's in 
charge of fixing the problem is the one who created the problem. Maybe 
there's some humor in there somewhere, I suppose.
  So I think we need to correct the rhetoric of various people that say 
that this is a failure of free enterprise. It's not. It's a failure of 
a big government program that was poorly managed, and it's like trying 
to make a dollar out of 15 cents.

                              {time}  1730

  You can't give people mortgages when they're not going to pay the 
mortgages.
  Of course, it was more than just the Democrats. I'm not blaming this 
entirely on the Democrats. It was the start of a failure of Congress. 
Beyond the failure of Congress, you also had other culpable parties. 
You had some of the people who were rating, some of the rating 
agencies--Moody's and Standard and Poor's--and they were rating these 
mortgage securities that would have been chopped up and sold all over 
the world. They were rating them AAA. Now, how they could do that with 
a straight face, I don't know, but they fed again on the Wall Street 
tremendous level of speculation. So that's how we got where we are.
  Now the question is: Now that we've gotten ourselves a first-rate 
recession going, what are the things that should be done to try to fix 
the recession?
  There are two basic schools of thought on this subject. One of them 
is known as Keynesianism. It was made popular around the days of FDR. 
Also, it was something that was very much supported by Henry 
Morgenthau, who we're going to talk about in just a minute.
  I do see my very good friend, Congresswoman Foxx, from North 
Carolina, a lady who has won all kinds of accolades in the last year or 
two. We think of her a little bit as the toughest grandmother in the 
entire U.S. Congress, and if there's anybody who is pretty long in what 
we in Missouri respect, which is commonsense, Congresswoman Foxx is 
certainly long in that.
  I would yield the floor to you, gentlelady.
  Ms. FOXX. Well, I want to thank my colleague from Missouri. I hope I 
can tie in some of my comments with where you're going with that quote 
from Henry Morgenthau. We've used it a good bit recently, and I think 
it is a really, really good quote to share with the American people. I 
think we need to keep doing it over and over.
  I certainly share your feeling that this is not a failure of 
capitalism, what has occurred in our country recently. Indeed, it has 
happened all over the world.
  Mr. AKIN. Could I reclaim my time for just a second? There's a 
little, funny story about where this quote came from of all things:
  My father is 88 years old. He was reading a flyer that had been sent 
to him from Hillsdale College, and it was a quote out of a book called 
New Deal or Raw Deal. It has just been published. So here is my father. 
He gives it to me. ``Son,'' he said, ``you don't read enough. Here. 
Take a look at this.'' So we've been using it some, but I yield time to 
the gentlelady.
  Ms. FOXX. Well, I'm trying to read The Forgotten Man right now. It's 
a wonderful story about what happened during the Depression and just 
before the Depression. I have to agree with you that we can't blame all 
that happened then on the Democrats, although they exacerbated the 
problem a lot, but I would commend that book, The Forgotten Man, to 
folks who are watching us and to anybody else. It's a history book, but 
it reads like a novel, and it's really a great piece.
  As I said, I want to try to tie in what's going on today with 
something I read recently. You're right; we don't get enough time to 
read books. We read a lot every day, but I was thinking that we need to 
set aside an hour a week, at least, to read books. I'm trying to do 
that. It's good for our souls to read those kinds of things.
  You know, Republicans have been criticized recently for not having 
new ideas. We've been told on this floor over and over again and we've 
been told by the administration that doing nothing in this situation is 
not acceptable, so the Democrats are doing what they say they know to 
do. They say our alternative is doing nothing. Well, that has never 
been our alternative. We've presented lots and lots of alternatives, 
but what we have to get people to understand is that the tried and true 
issue of keeping money out of the hands of the Federal Government and 
leaving that money in the hands of the citizens is really the best cure 
for this problem that ails us. Actually, it's the best cure for a 
society that is free, and I want to acknowledge that.
  Mr. AKIN. Reclaiming my time, gentlelady, what you just made is 
really an important point.
  What you're saying is Republicans do have an alternative, and part of 
that alternative is to stop spending money, but it seems like some 
people down in Washington, DC and a certain party have their ears 
plastered. They don't want to hear that as an alternative, but there is 
an alternative. It is the same thing that every commonsense household 
in America is doing, and that is, when you're troubled, stop spending 
money. That's a good first step, isn't it?
  I yield.
  Ms. FOXX. It absolutely is. Really, the root of our problem is that 
the government is spending more money than it has. When I talk in 
speeches or when I'm on the radio, doing radio shows or when I'm on TV, 
what I keep reminding people is that the government has only two 
sources of money--that which it takes from us forcefully, from the 
citizens who pay taxes--and the government does take it forcefully. 
Now, we know Americans have been good about paying their taxes, and 
they're actually willing to pay about 25 percent of their income in 
taxes--we know that from surveys that have been done--but it only has 
two ways of doing it: taking it from us forcefully or by borrowing it. 
Those are the only two ways because government doesn't create wealth. 
Government can destroy wealth, and it can destroy wealth in a hurry. 
What's happening with the stock market and with other savings plans is 
a good example of that, and I think my colleague from Missouri knows 
that.
  Mr. AKIN. Well, reclaiming my time, gentlelady, I think there are a 
bunch of us--and I'm not accusing you of this--in the baby boomer kind 
of category who have just seen our 401(k)s turn into 101(k)s. We 
understand, when the government does things the wrong way, it really 
can be expensive, and there are different ways. One, as you say, is to 
tax people. You don't have to pay your taxes. If you don't, you go to 
the free hotel.
  Ms. FOXX. That's right.
  Mr. AKIN. The other alternative is they can, of course, borrow it. 
Then of course, within that category, we have the other thing that we 
don't hear much about but which has happened extensively in the last 9 
months, which is printing it, a form of borrowing it.
  I don't mean to interrupt, and would yield to the gentlelady.
  Ms. FOXX. Well, I want to call to the attention of the American 
people an article that I read. You know, we've talked about reading. I 
think I read this during the Christmas holiday. It's an article by 
Terence Jeffrey. It was published in Human Events on the 5th of 
November of last year. The title of it is ``Wanted: Small Government.'' 
I just want to read a couple of excerpts from it, and then I'm going to 
put it in the Record.
  ``Up until the 1930s, the United States maintained a small Federal 
Government that mostly focused on the limited number of things the 
Constitution authorized it to do.
  ``Americans were responsible for their own food, clothing and 
shelter, and if they could not take care of themselves, they looked to 
their extended family, their neighbors, their churches, and local 
governments to give them a helping hand.
  ``Charity in America, in those days, did not mean the Federal 
Government compelling you to hand over some of your property to the 
State so the State could hand it over to someone else.

[[Page H2917]]

  ``Americans did not believe in spreading the wealth--they believed in 
earning it. The term `compassionate conservative' had not been coined.
  ``There was no Federal welfare state before the 1930s.
  ``That year, according to historical data published by the White 
House Office of Management and Budget, the entire Federal Government 
spent only 3.4 percent of gross domestic product. Because Federal tax 
receipts equaled to 4.2 percent of GDP in 1930, there was a Federal 
budget surplus equal to eight-tenths of a percent of GDP.''

                 Human Events--Wanted: Small Government

                        (By Terence P. Jeffrey)

       Up until the 1930s, the United States maintained a small 
     federal government that mostly focused on the limited number 
     of things the Constitution authorized it to do.
       Americans were responsible for their own food, clothing and 
     shelter, and if they could not take care of themselves, they 
     looked to their extended family, their neighbors, their 
     churches and local governments to give them a helping hand.
       Charity in America in those days did not mean the federal 
     government compelling you to hand over some of your property 
     to the state so the state could hand it over to someone else.
       Americans did not believe in spreading the wealth--they 
     believed in earning it. The term compassionate conservative 
     had not been coined.
       There was no federal welfare state before the 1930s.
       That year, according to historical data published by the 
     White House Office of Management and Budget, the entire 
     federal government spent only 3.4 percent of gross domestic 
     product. Because federal tax receipts equaled to 4.2 percent 
     of GDP in 1930, there was a federal budget surplus equal to 
     0.8 percent of GDP.
       Within a decade, things changed dramatically. In 1940, 
     Franklin Delano Roosevelt--founder of the modern American 
     welfare state--was preparing to break George Washington's 
     self-imposed limit of two presidential terms.
       Although the nation was still at peace, the federal 
     government had grown almost threefold--when measured as a 
     percentage of GDP--from what it had been in 1930. Federal 
     spending in 1940 was 9.8 percent of GDP. Federal tax receipts 
     were 6.8 percent. The Treasury borrowed 3 percent of GDP to 
     make up the difference.
       In fiscal year 2009, according to OMB's estimates, the 
     federal government will spend 20.7 percent of GDP while 
     taking in 18 percent of GDP in taxes. The Treasury will 
     borrow 2.7 percent of GDP, much of it from foreign creditors, 
     to make up the difference.
       And that does not count the $700 billion the Treasury will 
     borrow to fund the financial industry bailout.
       Today, the federal government eats up more than twice as 
     much of our national wealth as it did in 1940 and more than 
     six times as much as it did in 1930.
       What did Americans get for this massive increase in 
     government? More of their life is now mortgaged to the 
     government, and they are now more dependent on government.
       Most of the growth in federal spending has come in the 
     sector that the OMB calls ``human resources.'' As currently 
     budgeted, this includes federal spending on education, 
     training, social services, health programs, veterans benefits 
     and services, income security programs, Medicare and Social 
     Security.
       In 1940, the ``human resources'' part of the federal budget 
     consumed 4.3 percent of GDP. In 2009, it will consume 13 
     percent, or three times as much.
       Before the current economic crisis hit, the American 
     welfare state was on an unsustainable trajectory. The 
     Government Accountability Office informed the Senate in 
     January that it estimated there was a $53 trillion gap 
     between the entitlement benefits the federal government has 
     promised to pay over the next 75 years to people now living 
     in the United States and the tax revenue that can be expected 
     to pay for those benefits. Then-Comptroller General David 
     Walker said that for the government to cover this gap every 
     American household would need to put up about $455,000.
       That is the size of the mortgage the federal government has 
     already taken out in the name of every American family.
       We got to this place because politicians for decades have 
     been telling voters they would give them something for 
     nothing--when what they really meant was they would take 
     money from one set of people and give it to another.
       When they borrowed vast sums to keep their welfare-state 
     politics rolling, they were taking money away from future 
     generations--our children and grandchildren.
       Now we are being told we face the greatest economic crisis 
     since the 1930s. And we are being offered the same solution: 
     more federal programs so Uncle Sam can take better care of 
     us.
       In other words, the politicians want to take out a second 
     mortgage on top of the $455,000 they have already put on our 
     backs.
       America is heading down the blind alley of big government 
     toward the brick wall of national bankruptcy. The only way 
     out is to turn the truck completely around and head back 
     toward small government, self-reliance and freedom.

  Mr. AKIN. Reclaiming my time, gentlelady, I would like to highlight 
what you said.
  Those numbers are absolutely shocking. In 1930, you're saying the 
Federal Government was spending three point something percent of the 
GDP?
  Ms. FOXX. Correct.
  Mr. AKIN. Boy. Oh, boy. I'll bet you there's a lot of people who 
would love to see us get back to that kind of a number. Then the tax 
rate was four something, 4 percent?
  Ms. FOXX. That's right. No. What we brought into the Federal 
Government was 4.2 percent of GDP. Now, that could have been in 
addition to--well, it was mostly taxes, I guess. That's what it was.
  Mr. AKIN. Well, I sure appreciate your sharing that with us.
  You know, we are joined by another very good friend of mine, 
Congresswoman Marsha Blackburn. She is one of our great communicators, 
a lady from Tennessee.
  We're just delighted to have you with us, Congresswoman Blackburn, 
and would ask you if you want to chip in a little bit here in our 
discussion on where we are economically. I yield.
  Mrs. BLACKBURN. Absolutely. I thank the gentleman from Missouri for 
yielding, and I appreciate the opportunity to participate in the 
discussion that is here because, as we have all been home over the 
weekend and have been working in our districts, meeting with 
constituents, the economy is the number one issue. I have talked to so 
many people who are using the words that they are appalled, that they 
are horrified with what they see happening here. They are very 
concerned with what they see taking place with the economic policies of 
the new administration.
  Indeed, as a broker from one of our fine banks in Tennessee said to 
me yesterday, the stock market has voted on the Obama economic 
policies--on Pelosi, Reid and their economic policies--and they have 
obviously voted ``no'' because the stock market was over 9,000 before 
this administration took control, and now we see where it is today, 
which is at 6,700. It is of great concern to us.
  We know our Nation is in a recession. We know that people are 
hurting. We know that they want to see something done, and most people 
fully realize that you cannot declare a war on prosperity and get 
yourself out of a recession.
  You both have recognized, Ms. Foxx and the gentleman from Missouri, 
the quote from Henry Morgenthau and the importance of that, which is 
that it does not work, that this kind of spending does not work. I 
brought a chart along that I felt was important to the discussion that 
we are having.
  As my colleagues know, the Democrats took control of this body in 
January '07, and we see where we were with the Federal deficit, the 
green line. The orange line is discretionary spending, and mandatory 
spending is in the blue. Now, we continued to hear from the 
leadership--from Speaker Pelosi, from Leader Reid and from the 
President--that they inherited this debt, that they inherited an annual 
deficit, but I think it's important to note that they voted ``yes'' on 
all of this. It has pushed our spending.
  You can see what has happened with the spending in the past year 
alone. Stimulus I was $152 billion. You'll see where it comes in there 
in '08, the pre-TARP funds. That was from March to September of '08, 
$323 billion. Then there was TARP, the auto bailout--stimulus II--which 
was $787 billion. There was the omnibus, which was $410 billion. Now 
what we have seen happen with the spending is, by the end of '07, the 
Democrat-led House had moved our same year mandatory spending from $3 
billion to $37 billion, and by the end of '08, they'd increased that 
number to $333 billion.
  Ms. FOXX. Would the gentlelady yield?
  Mrs. BLACKBURN. I would gladly yield to the gentlelady.
  Mr. AKIN. I would reclaim my time and yield. I'm the one who's 
supposed to do this.
  This is part of the dinner conversation here. Being the father and 
the guy who serves the food at our dinner table, I would recognize the 
gentlelady from North Carolina.
  Mrs. BLACKBURN. I yield my time to the gentleman.

[[Page H2918]]

  Ms. FOXX. Thank you. I appreciate the gentleman from Missouri 
yielding.
  I was trying to make this point today, and I think it's so important 
that you've brought this up.
  Let us remind the American people that the Democrats took control of 
the Congress in January of 2007. Do you remember--I remember--that we 
had 54 straight months of job growth up until January of 2007? Do you 
remember that number?
  Mr. AKIN. Yes.
  I would yield to the gentlelady from Tennessee.
  Mrs. BLACKBURN. I thank the gentleman for yielding.
  Indeed, you're exactly right. We had had job growth. We had had 
economic growth. It was basically unparalleled. The 2001 and 2003 tax 
reductions had worked. We had not seen this kind of growth since Ronald 
Reagan.
  As the chart points out, you can look at where the Federal deficit 
was, which was at $8 trillion. You can look at where discretionary 
spending was placed and where our mandatory spending, this blue line, 
was placed.
  Now, what we see as the mandatory spending alone is that they grew 
from $3 billion to $333 billion in a 2-year period of time. So you can 
see what is happening with our spending. Whether it is our 
discretionary or our mandatory spending, it is going through the roof, 
and of course that runs our Federal deficit and our national debt up.

                              {time}  1745

  This year alone, we're at over $2 trillion in a deficit, and our 
President has just proposed a $3.5 trillion budget.
  So we know what is going to continue to happen to these lines. You 
can look at the CBO scoring--and, see, the CBO is a nonpartisan 
organization. You can look at what is happening in their scoring and 
see that we're going to have trillion-dollar deficits as far as we can 
see with the tight spending that we have brought forth.
  Mr. AKIN. Reclaiming my time.
  The gentlelady from Tennessee has a very, very effective chart. And 
what you're pointing out is that we're in uncharted waters. We have not 
dared to take and swallow this much debt in the past.
  I was trying to put some kind of a handle on what we passed just a 
couple of weeks ago on this House floor on about--I think it was--what 
was it, $840 billion. Now, I don't make that much money. So I tried to 
think, Well, what's something big that the Federal Government buys. And 
because I'm on Armed Services, I think of aircraft carriers. They're 
bigger than tanks. They're like a whale. They're tremendous. Well, an 
aircraft carrier, we've got 11 of them. And they're valuable. And we 
put other ships around them to guard them. And we don't make aircraft 
carriers very often because they're so expensive.
  So let's take the average cost of those 11 aircraft carriers and 
divide it into $840 billion that we just spent a couple weeks ago--
money that we don't have--and you're talking about 250 aircraft 
carriers--can you picture that--end-to-end-to-end. This is a lot of 
money. Or if you want to get one of those kinds of Cadillac aircraft 
carriers, the big long-deck ones that really do all of the fancy stuff, 
you're still talking over 100 aircraft carriers. That's money that we 
don't have that we just spent, and it was supposed to be for stimulus; 
but we called it ``porkulous'' because there wasn't really much 
stimulus.
  But that's talking about doing some big-time spending following that 
same old Keynesian idea that if the government spends enough money, 
that everything will be okay.
  To this engineer, that's a little bit like grabbing your bootstraps, 
lifting up, and trying to fly around the room.
  We're joined by another very good friend of mine, Steve Scalise, 
Congressman from Louisiana. I think you wanted to also talk a little 
bit about where we are with this level of spending and what's going on 
with these taxes.
  Mr. SCALISE. I want to thank my friend from Mississippi, as well as 
the gentlelady from Tennessee, because as we start to see the real 
numbers--and the American public has been concerned about where the 
economy is--but they are also real concerned--and we're seeing more and 
more each day--real concerned about the gross level of spending that's 
coming out of this administration as a response to the crisis.
  I think if you look at what's being presented, and as people are now 
starting to look and grab some of these numbers--and we're not just 
talking about hundreds of billions of dollars now; we're talking about 
well over a projected deficit of $1.7 trillion in this budget. So it 
makes people harken back and say, number one, what levels do these 
compare to. And when you look back, you can go back--you have to go all 
the way back to World War II to find a budget, a level of spending 
that's presented in this budget, a level of spending that's as high a 
gross domestic product of a percentage of GDP that we've had. And we 
haven't had this high a level of spending since World War II.
  So if you go back to World War II and, of course, the Great 
Depression right before it, it really sparks a lot of comparisons that 
are frightening. And I think that's where the public is, but that's 
where the markets are. I know my friend from Tennessee talked about 
that, too. The markets are responding to what's happening here in this 
city in Washington, D.C., and it's not good. Their reaction is not 
good, what that means for people's 401(k)s. Just in the last 2 months, 
people have lost 20 percent of their 401(k)s because of the results of 
these policies not only that were passed in the spending bill just 2 
weeks ago, but this budget that's been presented with its gross level 
of spending with its absorbitant level of tax increases.
  So if we look here at a chart, this is a break down of the 
President's proposal of tax increases that's in this budget, this 
budget that has $1.7 trillion of new debt--not debt that was carried 
over from the previous administration. The buck stops here. And this 
President submitted this budget, he created this new level of spending, 
and he's choosing to pay for some of it--clearly not all of it--but 
some of it by one of the largest tax increases in the history of our 
country.
  And while he says that less than 5 percent of the people of this 
country will pay these taxes, this chart will show you something very 
different, a stark difference in what we've been hearing; $1.4 trillion 
has been proposed by this President in this budget in new taxes at a 
time, of course, that our economy is in a recession.
  Mr. AKIN. Reclaiming my time a second.
  That should send the alarm bells off in people's minds. When you're 
having not only just a little recession but what's starting to turn 
into almost a depression and you're talking about huge tax increases, 
you don't want those two things in the same sentence, I believe.
  I yield.
  Mr. SCALISE. I think when we talk about, now that we're in a 
recession, will we be going to a depression, look at what happened in 
this 1920s and the 1930s as we did go into a depression. And in many 
cases, it was policies in Washington, D.C., that not only pushed us 
into the depression but kept us there for 8 years. We were in the 
depression for 8 years. It took World War II to get us out of it.
  And if you go back to 1932, the President who raised taxes during an 
economic downturn that was so severe in the 1930s--Herbert Hoover 
raised taxes, of all things, while the country was entering a 
depression. In 1932, Herbert Hoover on his way out as being voted out 
as President, he raised taxes dramatically. We're seeing the same 
process followed again. And then the people say, ``Those who don't 
learn from history are doomed to repeat it.''
  When this country was entering the Great Depression in the 1930s, 
they raised taxes dramatically, and it helped--that and the gross level 
of spending--helped make that an 8-year process instead of a short 
depression that we could have gotten out of.
  So if I can go back to this chart. Where are the taxes going to be 
paid? Who's going to be paying for those taxes? It's $636 billion of 
those new taxes are going to be thrown onto the backs of our small 
business owners. So when they talk about people who make over $250,000 
a year--and I know some people want to pay class warfare and try to 
divide this country at a time when we need to be uniting this country 
and finding real solutions--they

[[Page H2919]]

talk about that top 5 percent. Well, who is that top 5 percent? That's 
the small business owners in our country who have created 70 percent of 
our jobs.
  So if anybody can explain to me how raising $636 billion in new taxes 
on the backs of those very people who are creating the jobs that our 
economy needs, how is that going to get our economy back on track? 
That's something that the markets are reacting to and people across 
this country are starting to realize that it's a frightening 
realization.
  Mr. AKIN. This is something I want to be very clear in our discussion 
this evening. We're having this, like a dinner conversation.
  What I want to make clear is that the Republicans are not just saying 
``no.'' What you're saying is, You're doing the wrong thing which will 
make the economy worse.
  Now, what you've gotten to in your chart here is the absolute crux of 
what has worked in the past to pull us out of a recession. And it's not 
the government that pulls us out of a recession; it's the marketplace. 
And it's particularly the entrepreneurs and the inventors and the 
investors and those small business people. And what do small business 
people need in order to create all of those jobs--because depending on 
what you call a small business, you're talking 70 to 80 percent of the 
jobs in America come from small businesses.
  So if you harm the small business guy--even though he may be fairly 
well-to-do--you're cutting off your nose to spite your face. And what's 
going to happen when you take $636 billion out of small businesses--
that's the money they need to invest in new equipment, new processes, 
new procedures and innovation which is going to result in hiring the 
people that need to be hired.
  So what's happening here is this policy is economically crafted to 
make the problem worse.
  I would yield to my colleague.
  Mr. SCALISE. What you said is exactly true. And there is a double 
whammy on this budget on the tax increases that have been proposed. Not 
only do $636 billion in new taxes get thrown onto the backs of small 
businesses all across this country, but then they come through the back 
door; and this is where the rest of the 95 percent of the people that 
supposedly aren't going to pay a new dime in new taxes, this is where 
they get hit.
  This is their energy proposal on cap and trade. A carbon tax. This is 
something that you haven't heard a lot of people on the Democratic side 
talking about because as people see what this does, they realize this 
is where everybody else pays more money: $646 in new taxes on energy 
production in this country. And, of course, all across this country as 
energy taxes are increased, who pays for those taxes? That's not 
something that they just absorb. They have the authority to pass that 
on to rate payers.
  Mr. AKIN. Reclaiming my time.
  I think there must be something wrong with your chart here because I 
was just on this floor last week, and I heard the President say that 
nobody making less than $250,000 is going to pay any of these taxes. 
And I said, ``I'm glad I'm not going to have to pay these taxes because 
I make less than $250,000 a year.'' And now you're ruining my whole 
evening by telling me that that isn't true. Is that what you're saying?
  I yield.
  Mr. SCALISE. I'm sorry if you already ate dinner. I'm sorry to upset 
your stomach. But a lot of people across the country are starting to 
get very upset as they see the realization of these proposals because 
change as a concept sounds great. There are a lot of things we need to 
change about Washington, D.C. In fact, we've proposed an alternative 
H.R. 470. You can actually go on line. We put our proposals on line. We 
put that proposal out there weeks and weeks ago. H.R. 470 is a true 
alternative to get our economy back on track.
  What we've been presented with, unfortunately, with this 
administration is the oldest failed policy that will keep us deeper in 
a, not only recession, but can throw us into a recession; and that is a 
tax-and-spend approach, which has been proven to fail every time.
  So this cap and trade program right here, this is--they can call it 
whatever they want, but when you start having to pay higher fees on 
your utility bills, that's a tax to you. That's a tax increase. If your 
utility bill goes up and you're using the same amount of energy because 
of this carbon tax $646 billion, if people across the country don't 
think that's going to result in something that's going to have a 
significant impact on their budgets as they're tightening. And people 
are conserving energy. People are tightening their belts.
  But as they're conserving that energy, they're going to be getting 
hit with $646 billion in new taxes on top of the $636.00 billion that 
our small businesses will be hit with.
  Mr. AKIN. Reclaiming my time.
  You can be making $20,000 dollars a year, and you are still going to 
be burning some natural gas and using some electricity; is that right?
  Mr. SCALISE. That's not only right, but those people in the lower 
incomes are the ones that are least likely to be able to afford these 
massive tax increases they get on their utility bills. Because if your 
utility bill goes up even though you're using the same amount of 
energy, or in some cases you're using less energy--maybe you actually 
went and put some insulation in your attic because you wanted to lower 
your rates--this carbon tax is actually going to raise your utility 
bills even though you've done those things.
  Mr. AKIN. Reclaiming my time, gentlemen.
  You're getting me all upset. You're ruining my entire evening here. 
But I have a feeling what you're telling us is true. In fact, I know it 
is true.
  Mr. SCALISE. If I could ask for the gentleman to yield for one 
moment.
  Mr. AKIN. I would yield for one minute.
  Mr. SCALISE. There is one bit of good news. While these are difficult 
times, while there's a lot of bad news--and as people look at these 
details, it frightens a lot of people. But this has not been passed 
into law yet. These are proposals the President just filed this last 
week. We haven't even started having hearings in Congress. If people 
all across this country--as I'm sure they will do when they start 
realizing the negative impacts to our economy of these new taxes, these 
massive taxes--people, I think, are going to start lighting up those 
phones. They're going to start calling their congressmen. They're going 
to call the White House. And they are going to say enough is enough.
  The spending and the taxes, just like in the 1930s, didn't work. 
Don't take my word for it. Listen to the Treasury Secretary under FDR. 
This has been tried before and it's failed before. Not only did it 
fail, it pushed us into a deeper depression. And I think the public 
across this country is going to say, ``Enough is enough. We're not 
going to take these new taxes and this ridiculous level of spending,'' 
and the public can stop this.
  Mr. AKIN. Reclaiming my time.
  I think you're a little bit of a prophet, gentlemen, because they 
were dumping tea in the river in St. Louis this last weekend. I think 
people are starting to get wise and they're getting upset.
  I also am just thankful that we're joined by a very good friend, a 
very distinguished colleague from this House, Congressman Pence from 
Indiana.
  I would yield time to my good friend. I know that you have very good 
insights on these issues.
  Mr. PENCE. I thank the gentleman for yielding, and I thank him and 
all of my colleagues who will speak here this evening for taking the 
opportunity, Mr. Speaker, to come to this floor and talk about facts.
  Facts are stubborn things. And it seems like we're living in a time 
right now of soaring rhetoric. But the facts underpinning the Democrat 
budget are jarring, and they represent a fundamental departure from the 
course of American governance.

                              {time}  1800

  And we need to talk about those things. I mean, the American people 
understand that the Federal budget is, in itself, the way a party and 
an administration lays out its vision for the future of the country. 
The American people deserve a budget that is fiscally responsible and 
puts jobs first. And as has been said on the floor before, the budget 
offered by this administration and supported by our Democratic 
colleagues in the House fails on both

[[Page H2920]]

counts. The American people know we can't borrow and spend and bail our 
way back to a growing economy.
  And history has shown that the policies that are embraced in the 
Obama budget will actually take our country not out of recession, but 
very likely deeper into recession. The last President of the United 
States to raise taxes during a recession was Herbert Hoover, who 
managed, by his deeply flawed judgment and policies, to take a strong 
recession in the 1920s and turn it into a decades-long depression in 
this country. And yet here we stand again at a crossroads in our 
Nation's history when so many families are hurting, so many small 
business owners are struggling under this economic downturn.
  Mr. AKIN. Reclaiming my time, gentleman, what you're saying is we're 
just not learning from history. It's not that the economy is brand new, 
there are patterns here. It's not that the Republicans are the party of 
``no,'' it's the fact that these solutions don't work and they're going 
to hurt our constituents, and that's why we get a little excited about 
them.
  I mean, here you have the quote from Henry Morgenthau, he is the guy 
that, along with little Lord Keynes, came up with Keynesian economics. 
And he says, After trying it for 8 years, our theory didn't work. Our 
unemployment is as bad as it was before, and now we're in debt. And 
what we're trying to say is, don't accuse us of not having solutions, 
the solutions are there; but don't repeat history's mistakes.
  I didn't mean to interrupt, but just continuing to yield to my good 
friend from Indiana, Congressman Pence.
  Mr. PENCE. Well, I thank the gentleman for yielding, and I thank him 
for his typical eloquent insight. We are not paying attention to 
history. We are not learning from the candid comments like the 
Secretary of the Treasury under President Franklin Delano Roosevelt, 
who realized at the end of America's lost decade of the 1930s that they 
couldn't borrow and spend their way back to a growing nation. And yet 
here we are again.
  But I hasten to add, not only are we piling on our children and 
grandchildren a mountain range of debt to pay for--beginning with the 
stimulus bill, and now the omnibus bill, and now the President's 
budget--a transformation of government spending priorities along 
liberal lines, but they intend to pay for it, in part--because we're 
talking about record deficits. Even if the President hits his deficit 
reduction mark in 4 years, it will still be a half a trillion dollar 
deficit, which I remember Democrats decrying during Republican control 
of the Congress. But beyond all that, they're going to pay for it, in 
part, with tax increases on small business owners and family farmers.
  As the gentleman just described very eloquently, the American people 
deserve to know a couple of facts. Seventy percent of Americans work in 
small businesses in this country and in places like Indiana; 70 percent 
of people get up and go to work every day in a small business. More 
than 50 percent of the American people who file income tax returns at 
or above the level that the President intends to raise taxes are small 
business owners filing their taxes as individuals. And so we ask the 
question, Mr. Speaker, of the American people looking in, do you think 
raising taxes on your employer at the small business where you work is 
a pathway to recovery in America? Is it going to make your job more 
secure or less secure? Leave aside the so-called cap and trade bill, 
but raising the utility rates, the electrical bills for every homeowner 
in America, every business in America----
  Mr. AKIN. Just reclaiming my time for a minute, gentleman, what 
you're suggesting is, one, what's being done is exactly the wrong 
thing. And if you want a positive Republican recommendation, it would 
be to do the opposite of that, right? In other words, what we would be 
saying would be, look, if you've got 70 or 80 percent--depending on how 
big you call a small business--if that's where 70 to 80 percent of the 
jobs in America are, you want those small businesses strong. How do you 
make them strong? They have to have enough liquidity, enough capital to 
be able to invest in entrepreneurial ideas, to put in more productive 
assembly lines or machines or processes. So you have to invest, and you 
have to let that money work for you. And you have to leave it with the 
small businessman. But if you vacuum it out of his pockets with massive 
tax increases, he's not going to have the money to invest, and he's 
going to lay off more people, it's going to make things worse. So the 
solution is, quite simply, leave more money for the small businessman 
and back off the spending pedal a little bit.
  I don't mean to get overexcited. I want to yield again to my good 
friend from Indiana, and then go to a wonderful new Congressman from 
Wyoming.
  Mr. PENCE. Let me say as I close, I want to thank the gentleman for 
leading this hour of debate and say that there are two things that 
Republicans believe we ought to be doing. Number one is, we ought not 
to be growing the Federal budget beyond any reasonable expectation of 
the American people. We shouldn't be engaging in the runaway spending 
of the so-called stimulus bill, the omnibus bill and the President's 
budget. We ought to be doing what every family farm, every small 
business, every working family is doing, and that is finding places to 
save, finding places to cut back. And then, as the gentleman said, we 
ought to be doing what John F. Kennedy did, we ought to be doing what 
Ronald Reagan did, we ought to be doing, as a country, what this 
Congress and George W. Bush did after the Towers fell, and that is, not 
giving Washington more money of ours to spend, but giving working 
families, small business owners, family farmers more of their hard-
earned tax dollars to keep and spend. That's the pathway to prosperity.
  The President's budget, the Democrats' plans are a pathway to 
increased recession and hardship for the American people, and we must 
reject them.
  Mr. AKIN. Well, I reclaim my time. And I would once again thank the 
gentleman from Indiana for joining us.
  We have all kinds of expertise here tonight. And Congresswoman Lummis 
from Wyoming, my understanding is Wyoming has only got one 
Congresswoman, if I'm correct.
  I yield.
  Mrs. LUMMIS. Thank you very much for yielding.
  Mr. Speaker, it's a privilege to participate in this discussion.
  As a new member of the Budget Committee, I learned today that the 
President's budget would project the levels of spending in the war in 
Iraq at the same level that they are during the surge, and use that 
dollar amount and project it out to the year 2019. It does not account 
for the fact that President Obama has decided to withdraw combat troops 
from Iraq in August of 2010, but for this manner: if you project that 
spending is going to go up when you factor in inflation until 2019 at 
surge levels, and then you project that we're going to withdraw troops, 
that gives you $1.6 trillion that the administration is choosing to 
spend on other programs. In other words, that money won't be saved, it 
will be redirected into other components of this President's budget.

  Mr. AKIN. Reclaiming my time, are you saying in a way you've almost 
got a sneaky cut in defense spending?
  I yield.
  Mrs. LUMMIS. Thank you for yielding. It does, in a way, accomplish 
just that because it's taking money that is being spent on defense now 
and rerouting it into domestic spending that is discretionary and 
creates new programs. Now, I would not object to that but for the fact 
that this increased spending is in addition to new taxes. And the 
gentleman was accurate in pointing out the effect that that will have 
on small business.
  As you know, my State of Wyoming is all small businesses, that an 
individual tax rate of $200,000 will trigger a tax increase, that 
filing jointly at $250,000 in income will trigger a tax increase. And 
correctly you have pointed out that the brunt of that is going to fall 
on small business.
  Small business has been pegged as the opportunity for growth in this 
country through the entrepreneurial free enterprise ethic. And if that 
ethic is thwarted through high taxes, that will be a component of our 
country that is not growing. That is the component of our country that 
is creating 70 percent of the new jobs. So as large employers lay off 
employees because they were ``too big to fail'' and then failed

[[Page H2921]]

anyway, it would be a robust small business community that could absorb 
them if the tax structure were such that those monies could be made 
available by expanding the entrepreneurial spirit.
  Mr. AKIN. Reclaiming my time, lady, I think what I'm hearing you say 
is what we've been trying to emphasize all the way along.
  There are a couple of basic things we need to do with the situation 
that we're in, a situation that was created not by free enterprise, but 
by failed government programs that issued a whole lot of loans with 
government guarantees on them that people weren't going to pay. And so 
we got ourselves in a lot of trouble, but it doesn't mean that it's the 
end of the world. There are ways to fix these problems.
  America has been through a lot of hard times. A lot of people are 
kind of discouraged right now, but they don't have to be. There are 
solutions, it's been done before--J.F.K. did it, Ronald Reagan did it, 
even Bush did it in 2003. You can see the result of the dividend 
capital gains--the exact effect of what you're talking about, putting 
money in the pocket of the small businessman--not putting it in, but 
just letting him keep it, just getting off the taxes on the small 
businessman.
  And look what happens here to gross domestic product. These are the 
years of Bush before this tax cut went in place. And take a look at 
what jumps. You go from an average of 1.1 percent to 3.6 year after 
year because of the fact you did just what the wise woman from Wyoming 
is saying.
  And then if you want to say, well, what happens when GDP goes up? 
Well, here you go; here's what the job numbers look like; same time 
period, May 2003, we do the dividend capital gains tax cut. These are 
all job losses below the line, everything above the line is a job gain. 
It's an investment just basically allowing a small business, like an 
engine, to have enough liquidity and money to be able to make it run so 
that it can create those jobs and put America--and the other chart that 
we're missing is what happens to Federal revenues. And Federal revenues 
go up like a rocket because you've got all these people working and the 
economy going strong.
  We are also joined here this evening by Congressman Chaffetz from 
Utah. And it is just a delight to have you on the floor and to hear 
from some people out west. So I hope that you enjoy joining our little 
dinner conversation this evening.
  I yield.
  Mr. CHAFFETZ. Thank you. I appreciate it.
  I am deeply concerned about the direction of this country. I know 
there are people out there that are suffering.
  I recently had an opportunity go to the Payson City Chamber of 
Commerce and meet with small local business people. The Mayor was 
there, Mayor Burtis Bills, a wonderful gentleman. These people are all 
concerned about the economy. They all have their own businesses, from 
an auto repair shop, to a local flower business, to a home-based 
business that was just kicking off and won an award.
  The direction that we're taking with our Federal government I believe 
is an impediment to the success of those people. As I looked them in 
the eye, I didn't have anything to tell them that the stimulus or this 
budget would truly help them with. This budget takes from the American 
people; it doesn't give more of life, liberty and the pursuit of 
happiness. And fundamentally, that's what we here in the United States 
Congress are supposed to be doing. It's about who is going to control 
the destiny of our country.
  I believe in less government. The President says he believes in less 
government. But when you look at the budget, it's more government, it's 
more government spending.
  I'm mystified when they make the argument----
  Mr. AKIN. Reclaiming my time, last week we voted on what was called 
an omnibus. It was basically nine budget bills all in a row stacked 
together. And the result of that, just on the surface, was an 8 percent 
increase, which if you don't believe in increasing government, why kick 
it up by eight? That's the largest increase since back in the seventies 
under Jimmy Carter, Democrat Jimmy Carter. But 8 percent is really what 
it was because you've got to put all that porkulous money into the 
budget. When you do that, it's an 80 percent increase in the growth of 
all of these government programs.
  Somebody wrote a little note to me, I went to a Lincoln Days talk 
this weekend, and they said, the trouble with socialism is is that 
sooner or later you run out of other people's money. And I thought, 
that sounds like something that might have possibly been coined out in 
Utah. It's just common sense.
  I will yield.
  Mr. CHAFFETZ. If the gentleman would yield.
  You know, as we look at this, I liken it to a house. The furnace has 
gone out; it's the middle of the winter and the furnace has gone out. 
So what are we going to do? Well, we've been off redecorating the 
kitchen and we've remodeled the basement and we bought new drapes. We 
did everything except fix the furnace. And that furnace is the American 
entrepreneur, it's that man or woman who is going to start their local 
business. And you've got to look at the stimulus and say, what's in it 
for them? Less than 1 percent was tax cuts for that type of person, 
less than 1 percent.

                              {time}  1815

  We said we were going to build roads and bridges and rebuild America; 
yet only 3.4 percent of that stimulus actually went to those types of 
activities.
  So I think you have to look at it through the lens of the American 
entrepreneur, the small businessman who's truly going to create that 
job. How are they going to grow their business from 10 to 20 employees? 
I visited with somebody in my office earlier today who had 64 
employees. The question for us is how are they going to get to 100? And 
it's not more government. It's not funding these outrageous programs 
that are going to do nothing for that local entrepreneur.
  Mr. AKIN. Well, reclaiming my time, I really appreciate your 
perspective. And I wish we had a little bit longer amount of time to 
talk with you because I'd love to get into that subject of freedom a 
little bit. But I know that we've also got a little Texas wisdom here 
in the Chamber here tonight, and I just feel like it would be a shame 
not to yield to Congressman Gohmert from Texas, actually a former judge 
and a gentleman noted for a good sense of humor as well, and we need a 
good sense of humor on this subject; so I would yield to my good friend 
Congressman Gohmert from Texas.
  Mr. GOHMERT. I appreciate my friend's yielding.
  Actually, I don't have a lot of humor to throw into this issue 
tonight. But I had read a Wall Street Journal article today. It was in 
today's Wall Street Journal. And just the opening paragraphs, if I 
might share that because there's a lot of wisdom in here:
  ``As 2009 opened, 3 weeks before Barack Obama took office, the Dow 
Jones Industrial Average closed at 9034 on January 2, its highest level 
since the autumn panic. Yesterday the Dow fell another 4.24 percent to 
6763, for an overall decline of 25 percent in 2 months and to its 
lowest level since 1997. The dismaying message here is that President 
Obama's policies have become part of the economy's problem.''
  And to finish up here:
  ``Americans have welcomed the Obama era in the same spirit of hope 
the President campaigned on. But after 5 weeks in office, it's become 
clear that Mr. Obama's policies are slowing, if not stopping, what 
would otherwise be the normal process of economic recovery. From 
punishing business to squandering scarce national public resources, 
Team Obama is creating more uncertainty and less confidence and thus a 
longer period of recession or subpar growth.
  ``The Democrats who now run Washington don't want to hear this 
because they benefit from blaming all bad economic news on President 
Bush.''
  This is the Obama economy now. The jobs that are being lost are 
because companies are finding no hope in this latest stimulus whatever 
you want to call that package or all the other spending.
  And I appreciate the gentleman's yielding because I do find this very 
distressing. We're in the Obama economy.
  Mr. AKIN. Reclaiming my time, it does my heart a great deal of 
sadness

[[Page H2922]]

to see my friend from Texas without a little bit of a twinkle in his 
eye, which is so commonly there. But this is a very serious subject. We 
try not to yell and scream too much about it, but we know that 
economically what's being done is going to harm our constituents. It's 
getting rid of jobs. It's making the small businessman have to 
basically shutter down and to keep his operation small, which is 
exactly the wrong thing for what we should be doing.
  And why is it that we need all of this money? That is the question 
that I think we need to be asking. Why is it that we have to be 
spending all this money on government programs? And the answer seems to 
me to be, again, we're not learning very well from history. Just bear 
with me for a second. I'd like to get your perspective on this.
  A certain number of years ago, there was a thing called the Soviet 
Union, and they were bad guys. And they were a bunch communists and 
they were socialists. And what was it that they thought? They thought 
the job of the government should be to provide you, first of all, with 
a job, and then they wanted the government to give you health care and 
food and housing and an education. And one thing particular about them, 
they didn't want you to talk about God ever.
  Now, in our country, let's see, we've got all this government 
spending going on so the government can provide you with health care 
and a job and food and housing and an education and it's politically 
correct not to talk about God because if you did that, gentlemen, you'd 
realize your rights come from God. Life, liberty, the pursuit of 
happiness, not big government nanny state. And I just wanted to toss 
that out to you to see if I could get a response from my good friend 
from Texas.
  I yield.
  Mr. GOHMERT. If we have time, when I was an exchange student in the 
Soviet Union back in 1973, I went out to a collective farm, and I've 
worked on farms and ranches. It was about mid morning. The farmers 
obviously hadn't been working. The field was suffering. And I said in 
what Russian I could speak back then, ``When do you work in the 
field?''
  And they all laughed. And one spoke for them in Russian and said, ``I 
make the same number of rubles if I'm out there in the field or if I'm 
here in the shade.''
  That is why socialism doesn't work.
  Mr. AKIN. So reclaiming my time once again, the problem with 
socialism is sooner or later we run out of other people's money.
  That concludes our 1 hour. I just thank all of my colleagues from all 
over the country joining us tonight. Next week we will try to get into 
freedom a little more heavily, but the economy is certainly a top topic 
and that's why we have given it a lot of attention this evening.
  God bless you all. Good night.

                          ____________________