[Congressional Record Volume 156, Number 57 (Wednesday, April 21, 2010)]
[House]
[Pages H2779-H2786]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        THE STATE OF 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. Mr. Speaker, it's a treat to join you and my colleagues 
once again this evening and talk about a subject that has been 
troublesome to all of us for some number of months now, that is the 
state of the economy, the problem with unemployment, and the various 
causes and factors that caused some of the tremendous level of distress 
economically which we have been experiencing.
  Sometimes it's helpful as we wade into a rather broad subject such as 
the problem of jobs and the economy, it is helpful to take a look back 
a little bit, see what we can learn from some of the lessons of history 
and how we got into the mess in the first place.
  Some of the first rather troubling signs of the condition which 
brought on the recession go back to September 11, 2003, as recorded by 
the New York Times, not exactly a Republican or conservative oracle. 
The particular news article here says that there is a new agency 
proposed to oversee Freddie Mac and Fannie Mae. This is being proposed 
by the Bush administration, and it said that it today recommended the 
most significant regulatory overhaul in the housing finance industry 
since the savings and loan crisis a decade ago.

                              {time}  1715

  Apparently, we did not learn a lot from the savings and loan crisis. 
But the Bush administration was trying. And so they were requesting to 
Congress that there be an overhaul of Freddie and Fannie because they 
saw problems coming. Why was that? Because Freddie and Fannie had had a 
few billion dollars here and there that they couldn't really account 
for. And things weren't going so well for them. And so this is back in 
September 11, 2003, the middle of the Bush administration, Bush asking 
for greater authority to oversee Freddie and Fannie.
  Well, what was the result of that request?
  Well, the result of the request was that the Republicans in the House 
passed legislation to do that and sent it to the Senate. Now, at that 
time, we have the congressional Democrats weighing in. At that time the 
Democrats were in the minority in the House. And we had now-chairman, 
he wasn't at that time, but he is now-Chairman Barney Frank in the New 
York Times, same article, September 11, 2003. This is what Barney Frank 
says: these two entities, Fannie Mae and Freddie Mac, are not facing 
any kind of financial crisis.
  Now, this is a Democrat that's supposed to know what's going on with 
Freddie and Fannie. He's a chairman now of that committee, the 
committee that looks over these things.
  He says, they're not facing any kind of financial crisis. The more 
people exaggerate these problems, the more pressure is on these 
companies, the less we will see in terms of affordable housing.
  Well, it's always easy to look back in hindsight. Hindsight, people 
say, is 20/20. Congressman Barney Frank was obviously wrong, not just 
somewhat wrong, he was way wrong. He had previously been quoted as 
saying, we're going to roll the dice and make sure that anybody who 
wants to get a home loan can get it. And yet here he says there's no 
real problem with Freddie and Fannie. Of course what we find is there 
is a big problem with Freddie and Fannie.
  And so the Republicans, seeing this coming, passed a bill in the 
House. And as you know, when you pass a bill in the House, the next 
thing you do is send it to the Senate. Now people are much more aware 
today as to how things work in the Senate. It's not sufficient in the 
Senate just to have a majority of votes. You'd think, now there

[[Page H2780]]

are 100 Senators. You'd think, well, if you get 50-plus votes, you 
ought to be able to pass something in the Senate. The Senate is a very 
weird place. That's not how it works.
  It takes 60 votes in the Senate to bring something up for a vote. And 
once you bring it up for a vote, then you can pass it with 50-plus 
votes.
  So what happened then, the Republicans passed this bill to regulate 
Freddie and Fannie. It went to the Senate, and it died over there, 
along with a whole lot of other bills that the Republicans in the House 
passed, and it died because it did not have 60 votes.
  Why did it not?
  Well, the Republicans had 50-some Senators, but they would have to 
get five or six Democrats to go along. None of the Democrats went along 
with further regulation of Freddie and Fannie, and so the bill died in 
the Senate.
  So Freddie and Fannie cruise along happily through the night, and no 
concern about icebergs or bad weather ahead, and as we see, and as we 
saw, come to grief, and then require a major Federal bailout to try to 
protect them.
  Now, what Freddie and Fannie had been doing was this: for many years 
before this, even before 2003, there had been Federal policies saying 
that you have to--the different banks in different cities have to give 
loans to people, even though it may seem like the job that they have or 
the place where they want to buy a house is not a good bet financially. 
In other words, what you're saying to people is, yeah, you don't have 
too good a job, and we're not so sure you can pay this loan off, but 
the Federal Government was demanding that banks make these loans to 
people who were what the banks would call poor risks. And so we have 
more and more of these banks.
  Now, over time, Freddie and Fannie had carried some loans that were 
bad risks over time; and particularly under Clinton's last year, those 
percentages were kicked up, forcing Freddie and Fannie, effectively, 
because these loans all ended in Freddie and Fannie, to accept more and 
more loans that were very marginal.
  Now, for a time period, through the Bush years, things worked pretty 
well, because house prices, housing prices, as a lot of people 
remember, really started to go up. In fact, when I came down here as a 
Congressman in 2001, and I take a look back at about 2006 or 2007, I'm 
kicking myself. I'm saying, what was wrong with me? I must be really 
stupid because if I'd bought a house when I first came to Congress, it 
would be worth twice as much now because housing prices were shooting 
up because all kinds of people were dumping money into the liquidity 
that had been created which was being dumped into this housing market.
  So what happens?
  As long as that housing market goes up, up, up, up, up, people think 
this is a good deal. And so we don't have too big a problem. But all of 
a sudden, pop, the bubble bursts. Housing prices start to come down, 
and now all of these lousy loans are coming home to roost. The loans by 
Wall Street were then chopped into all sorts of little pieces and 
packaged up with all kinds of other loans and sold all over the world. 
So this created one whale of an economic mess.
  What was the start of it? The start of it was the fact that we had 
these liberal programs trying to suspend the rules of mathematics and 
saying you can make loans to people who can't afford to pay their 
loans, and you can just keep doing it and doing it, and nobody is ever 
going to have to pay.
  Guess who had to pay? You got it right. The U.S. taxpayer had to pay.
  And we come back again, now, we have this chairman, Barney Frank, 
who's now in charge of fixing this problem, which he was very 
comfortable with. Freddie and Fannie are not facing any kind of 
financial crisis. The more people exaggerate these problems, the more 
pressure is on the companies, the less we'll see in terms of affordable 
housing.
  It turns out that he was just wrong, and now his job is to try and 
fix it. Well, now we've got ourselves a good economic mess on our 
hands, and we're starting to have problems with the economy. And we're 
going to get into what happened next in just a minute. This is a 
regular whodunit. I hope you'll stay seated and ready to go. But I have 
my good friend from Louisiana joining me. And, Steve, please.
  Mr. SCALISE. I want to thank my friend and colleague from Missouri 
for leading this hour. And I know we've continued to have this 
conversation and talked about this months ago, back when the original 
bill came through to do the stimulus package and, you know, President 
Obama said that he's got to spend more money to get the economy back on 
track. And I know you're getting ready to talk about Henry Morgenthau, 
who was Treasury Secretary under Franklin Roosevelt. And he warned back 
then that spending and spending money and acquiring more debt doesn't 
get the economy back on track when you're growing the size of 
government. And it didn't work then and it's not working now.

  But of course now we've got this bailout bill, this permanent bailout 
bill by Chairman Barney Frank, who, as you pointed out, was defending 
Fannie and Freddie when they helped create this mess, and Chris Dodd. 
And they've got this bill that creates a permanent bailout fund.
  And then it also taxes a lot of our banks who didn't have anything to 
do with creating this problem in the first place. And, in fact, this 
bill not only will create this permanent bailout fund and will enshrine 
this whole concept of too big to fail, but it's going to hurt our local 
banks, the folks that actually played by the rules, that didn't do 
anything wrong. And now they're going to be at a disadvantage. It's 
going to be harder for them to give loans to our small businesses and 
middle class families who are trying to get by, because now they're 
going to actually create a two-tiered system that favors those big Wall 
Street fat cats that helped create this problem that are now 
permanently too big to fail and get a permanent bailout fund at the 
expense of our local banks who didn't do anything wrong and played by 
the rules. And so it's really frustrating when you see this bill moving 
through.
  And they're trying to call it a reform. Really, all it does is it 
lets the SEC off the hook for their failures to actually do their jobs 
as regulators when they let Bernie Madoff off, and they had a Ponzi 
scheme similarly in south Louisiana by this guy called Stanford. Once 
again, a report just came out the other day that the SEC knew about 
this back in the 1990s and did nothing. And the SEC's been derelict in 
their responsibility so they're going to try to go create some new 
Federal agency to do the job that the SEC was supposed to do but didn't 
do. What we ought to do is hold those folks accountable, like the folks 
at SEC and the folks that propped up Fannie and Freddie that created 
this mess, instead of trying to blame somebody else and punishing our 
local banks who didn't do anything wrong, and now making it harder for 
them to give loans to our small businesses and middle class families.
  Mr. AKIN. Congressman, as I hear you speak, I'm just reminded that I 
probably didn't do you justice to introducing you, because, to some 
degree, you're an economic wizard because you stood here on the floor a 
year ago, just before we were going to pass this cap-and-tax bill, and 
actually, I guess I'm thinking about the--I called it the porkulus 
bill. Some people called it the stimulus bill. And you told, on this 
floor, and this is nationally recorded for anybody who wants to look at 
it, you said that stimulus bill is not going to work.
  Now, the Democrats were saying, if you don't pass the stimulus bill, 
you're going to have more than 8 percent unemployment, so you guys 
better pass the stimulus bill. And you stood here on this floor, I 
remember you doing it, saying, it won't work.
  Well, now, a year and a couple of months later, you're a regular 
economic genius because you saw that it wasn't going to work. You 
understood the principle of why it wouldn't work. They went ahead on a 
one-party rule, without any Republican support, passed a bill that we 
knew wouldn't work, and now it hasn't worked. And now we've got over 10 
percent unemployment. And they said, if you don't pass a bill, you'll 
have 8. I wish we had just stuck with 8, I suppose.
  But $700 billion of supposed stimulus. Now, we do have the Chief of 
Staff for the President, a former Member of the House, who said that 
every time one of

[[Page H2781]]

these economic crises come along, you've got to milk it for everything 
you can get. And so they loaded into this $700 billion bill all kinds 
of expansions of welfare and all kinds of government programs and 
hiring a bunch of people by the Federal Government. And of course it 
wasn't going to work.
  You didn't have to be really an economic genius, although you are. 
All you really had to do was to read a little bit of history.
  Mr. SCALISE. And if my friend would yield.
  Mr. AKIN. I do yield.
  Mr. SCALISE. You're too generous in your praise. I don't think it's 
much of being an economic whiz as it is being a student of history. And 
as you were saying, we've studied history. And you don't need to figure 
out and reinvent the wheel here.
  Our country has cyclically gone through good times and bad. You know, 
sometimes we're up, sometimes we're down. A typical recession lasts 
about 18 months, and our country was in a recession, and it was 
starting to taper off. And we were in the sevens, 7\1/2\ percent 
unemployment, which was too high. But the President was saying, you've 
got to pass that $787 billion stimulus bill or else unemployment might 
go over 8 percent. Basically, they said unemployment won't go over 8 
percent if you pass the bill. And of course we knew that wouldn't work 
because, as history shows us, it's never worked before. It's only 
created even more problems. And sure enough, just like history's always 
shown, and just as we predicted over a year ago, when they spent all of 
that money growing the size of the Federal Government, not creating 
jobs in the private sector, it actually created more problems to the 
point where unemployment is now hovering over 10 percent.
  Mr. AKIN. What amazes me, Congressman, is if you looked out at the 
average guy in America that runs a family, okay, there's all these 
families all over the place, all over America. How many of them would 
be dumb enough to think when they're in hard economic times that what 
they're going to do is they're going to increase their level of 
spending. They're going to go out and spend a whole lot of money in 
order to make the fact they're in hard economic times better. You know, 
I don't think there are that many dumb people in this country that 
really believe something like that.
  And yet somehow or other a majority of legislators in the Federal 
Government fell for that scam. I think a lot of times people fall for 
something because they want to, not because it makes any logical or 
rational sense.
  But these weren't the only legislators that have been sucked in. You 
know, you go back to the days of FDR. There was a recession going, and 
he managed to come up with just the right policies to turn it into the 
Great Depression because he wasn't any genius on economic matters. And 
so at the end of 8 years of the Federal Government spending money like 
mad, his Secretary of the Treasury, Morgenthau comes back to the House 
here, to the Ways and Means Committee, and he makes a statement. We've 
tried spending money. I guess we've heard this before. We're spending 
more than we've ever spent. They spent nothing compared to what we're 
spending before. And it doesn't work. I say, after 8 years of the 
administration, we have just as much unemployment as when we started, 
and an enormous debt to boot.

                              {time}  1730

  Now, this obviously proves that we learned nothing from history. 
Certainly the Democrats learned nothing from history because that is 
exactly what we just did a year ago. We spent $787 billion. It wasn't 
even good old Keynesian stuff. It wasn't hydroplants. It wasn't 
building big ships for the Navy, putting people back to work with the 
government getting manufacturing jobs on the street. No. It's all this 
more food stamps, welfare checks, bailouts for States that hadn't 
managed their budgets responsibly. So here we go.
  So you said, gentlemen, this isn't going to work. You knew because 
Morgenthau told us. The Democrat that worked for FDR told us it 
wouldn't work. And we tried it again, and it still didn't work. That is 
how we got started.
  Then after that, of course, we introduced some other factors in the 
economy which, just like FDR, we're going to take a bad situation and 
make it worse. I love these cartoons.
  Now give me one good reason why you're not hiring. We see the 
President here talking to some guy who owns the china shop and he's got 
a couple bulls coming in the door. Health care reform, cap-and-tax, and 
then the war tax. So we've got all of these taxes, and these bulls are 
coming in, and this guy is a little concerned about hiring these bulls 
to help his china shop.
  So, anyway, here we go. We're starting to get into the first part of 
last year. We're seeing unemployment going up. We're seeing the 
solution is government spending, and things have not gotten a whole lot 
better.
  I yield to my friend.
  Mr. SCALISE. The frustrating thing about all of this, and of course 
there's a saying that if you don't learn from history, then you're 
doomed to repeat it. And it seems like we're repeating history now. But 
what's frustrating is, really, starting back in January of last year, 
over a year ago, what the American people said, what many of us here in 
Congress said back then was we need to be focusing on creating jobs and 
getting the economy back on track. And, in fact, there are tried-and-
true ways of doing that that have been proven every time they've been 
tried. And one sure proven way of getting the economy going again is 
cutting taxes.
  Mr. AKIN. Wait a minute. You just cussed on the floor of the House. I 
didn't think you were allowed to say that. Horrible world. Cutting 
taxes. Oh, no. You're going to get accused of a hate crime, gentleman, 
if you keep that up.
  Mr. SCALISE. I know President Obama and Speaker Pelosi and her 
liberal lieutenants don't like the concept of cutting taxes. And, in 
fact, they have got a lot myths going around out there that cutting 
taxes are what created this problem instead of what we know created the 
problem, and that is like groups like Fannie Mae and Freddie Mac giving 
loans to people who had no ability to pay.
  But cutting taxes, if you go back in history, and you can go back to 
John F. Kennedy. You can go back to Ronald Reagan. When they cut taxes, 
Federal revenues grew because the economy got going again. People were 
spending money much wiser than government spends money, but they were 
spending money to create jobs. And jobs were being created, and the 
economy got going again because taxes were cut. And those tax cuts 
yielded in more revenues coming in to the government.
  Mr. AKIN. I would like to slow you down just a minute because you are 
smart in this stuff, and what you're saying is historically accurate. 
But I would like to take that apart, slow it down just a little bit so 
people can see the logic of why this works the way it does. Because 
what we know from Henry Morgenthau--if nothing else, the Democrats 
should be able to learn from Democrats, but they're not. They refuse 
to, and the reason they refuse to is because they don't like the answer 
that Morgenthau said, which is they can spend money like it's going out 
of style.
  Now, what Democrat could you learn from? You just mentioned his name. 
It was JFK. He understood enough about economics to know that if you 
back off the taxes, you can actually get the economy going. Well, how 
does that work? Well, when you back off the taxes, it leaves more money 
out there for small businesses to hire people. And if small businesses 
have more money to invest, they invest in a new wing on a building and 
a new machine tool and they invest in their own business, and those 
people then, as they invest, create jobs.
  So what you've said is this isn't rocket science. This is something 
that JFK understood. Ronald Reagan did the same thing. He cut taxes, 
and the economy grew. And Bush did the same thing. But here's sort of a 
weird thing. They call that supply-side economy. Democrats call it 
trickle-down economics. Whatever you want to call it, it works.
  But the thing that strikes me is that logically, how is it, because 
it seems like you're making water run uphill. What you're saying is 
that the Federal Government is going to lower their tax rate, and yet 
they're going to get more money back. That seems counterintuitive. So 
I'm thinking about it like Congressman Scalise.

[[Page H2782]]

  Let's say you're king for the day and the only thing you can tax is a 
loaf of bread. So you're thinking in your mind, How much tax am I going 
to put on one loaf of bread? You're thinking, If I put a penny on it, 
nobody's going to notice, and I can collect a penny on all of these 
loaves of bread. Then you think, Hey, how about if I put 5 bucks tax on 
the loaf of bread? Then I'd really get a lot of money every time 
somebody buys a loaf of bread. But then you'd think, But maybe people 
wouldn't buy as much bread if you've got to pay 5 bucks just to try to 
get the bread.
  And so you're going back and forth in your mind, and pretty soon you 
say, commonsense says there is some optimum tax on that loaf of bread 
where you can get the most possible money. If you go too high, you get 
less revenue for the government. If you go too low, you left money on 
the table. So there's some sort of an optimum point.
  And I think that's what Ronald Reagan and the other Presidents 
understood, that when you tax the economy too much, it basically drives 
it into the ground, which is exactly what's going on here. And so what 
you're saying about the fact that we drop taxes and that helps get the 
economy going, that's the logic of it. You actually drop the taxes and 
you get more money into the government. So the result was we dropped 
taxes, and what we saw was the government got a whole lot more money, 
and we started to pay off the debt.
  And so I thought it would be good to take that apart and explain the 
logic of it, because what you're saying historically is right, but it 
seems odd that the government drops taxes and they get more money back.
  Mr. SCALISE. If the gentleman would yield?
  Mr. AKIN. I do yield.
  Mr. SCALISE. History can teach us good lessons and bad lessons. There 
have been good things that have happened through our history and bad 
things. And clearly during the depression, that was a bad time in our 
Nation, but there were telltale signs and things that government did 
that made things worse that we should be learning from and, 
unfortunately, the folks running Congress right now haven't learned 
from.
  But there's also good things that have happened over the years, just 
as when President Reagan cut taxes and you just saw this robust economy 
take off for over 20 years and job creation that no one's ever seen in 
the world. And yet that is another part of history that's not being 
followed that we ought to follow. And Congress, over its time, has 
spent more money than it's taken in, too, and that's another lessen to 
learn.

  But I think what's so frustrating to people across the country, they 
want us to be focusing on creating jobs and getting the economy back on 
track, and that's something that I want us to focus on, too, but what 
they've seen is just the opposite--policies like this health care bill 
that's going to run jobs out and these other policies that you talked 
about.
  And now this permanent bank bailout fund that's moving through 
Congress, it's a top priority of the President, and the American people 
are saying, once again, Enough already. We don't want any more 
bailouts. We didn't want the first one. We voted against that first 
bailout because we knew it would fail, and it failed. And so here the 
President is again not learning from history but repeating the mistakes 
of history by trying to create this permanent bailout fund establishing 
more of this concept of ``too big to fail.''
  Mr. AKIN. That permanent bailout concept, isn't that a dangerous kind 
of thing? Because what we've seen is more and more of the government 
wanting to get into all of these different businesses, and that 
certainly is a scary kind of thing. And the other thing we're seeing a 
whole lot of, which is making people tremendously frustrated and angry, 
is seeing one thing being said and opposite things being done.
  The true engine of job creation in this country will always be 
America's businesses, but government can create the conditions 
necessary for businesses to expand and hire new workers. This statement 
is completely true. Unlike a lot of statements that are made, this 
statement is completely true. The true engine for job creation in this 
country will always be America's businesses.
  Let's put a little bit sharper point on it. What businesses? Well, 80 
percent of the jobs in America come from what are small businesses or 
businesses with 500 or fewer employees. So the businesses with 500 or 
fewer employees in America hire 80 percent of the employees in America.
  Now, the true engine of job creation in this country will always be, 
in America, as we say, smaller businesses, but government can create 
the conditions necessary for business to expand and hire new workers. 
That's absolutely true. The government cannot create a job no matter 
what it does, but it can create conditions which allow the small 
businesses to prosper and hire a lot of people. So this statement is 
entirely true. The President is right in this. The conditions can be 
created.
  Well, what are those conditions? Well, let's take a look at it. Does 
it mean $2 trillion in tax increases over 10 years? No, it sure 
doesn't. What happens when the government takes a whole lot of tax 
money out of the economy? It's taking it out of the pockets of the 
people who own the small businesses. Guess what tax category the people 
who are running those small businesses, guess what tax category they're 
in? They're in the exact bracket that President Obama said he wants to 
take tax from, people making over $250,000.
  People say, My goodness. If somebody's making $250,000, they ought to 
pay a little more taxes. Fine. Keep taxing them. What happens? If you 
keep taxing these guys, they won't invest in their businesses. If they 
don't invest in their businesses, where are the jobs going to come 
from? You can't have it both ways.
  And yet it seems that the administration wants to talk, saying that 
we've got to create the right conditions, and they're doing precisely 
the things that destroy jobs in America, worst of which is excessive 
taxation on the people that own the small businesses. So that's 
certainly the wrong thing to do. It's creating the exact wrong 
conditions. It is driving unemployment, making it even worse, which is 
what FDR did to take a recession and magically turn it into the Great 
Depression.
  One of the pieces of legislation that the President in his last State 
of the Union urged Members of Congress to support, the job-killing cap-
and-tax legislation. What's this? Well, this is a tax on energy. Well, 
wasn't there a promise that said, unless you make $250,000, we're not 
going to raise taxes? Yeah, unless you flip a light switch, and then 
you're going to get taxed because he is pushing a tax on energy. 
Everything uses energy, particularly small businesses.
  So if you put this cap-and-tax bill into place, you're doing another 
thing that makes it harder for creating jobs. That's why this cartoon 
has got a lot of truth when it says that you've got this health care 
and the cap-and-tax. These are things that are destructive to jobs.
  New taxes on employers who don't offer a government health insurance 
plan. Of course, the new socialized medicine bill is going to be brutal 
in terms of creating unemployment, because what are you doing? You're, 
first of all, trying to balance the cost of giving everybody Cadillac 
health care, and you're going to try to balance that on the back of 
small business owners. What are they going to do? They're going to say, 
Hey, I don't want any more employees than I could possibly have because 
I've got to buy health insurance for all of them, and it's terribly 
expensive. So I'm going to work my employees as many hours as I can 
just to make sure I don't have a single employee more than I need. So 
you're creating a tremendous economic pressure to get rid of jobs by 
passing this socialized medicine bill.
  So let's take a look standing back a little further.
  What is it, what are the things that are killing jobs? Because 
obviously something is killing jobs in America. What are the different 
factors that are killing jobs?
  Well, here is a whole list of them. If you want to kill jobs, this is 
the thing to do, and this is just what the administration has been 
doing for a year and a half. This isn't rocket science. This is very 
common sense. It's about as common sense as a lemonade stand.

[[Page H2783]]

  The first thing is economic uncertainty. If you're a small business 
man and you don't have a clue what the government is going to do to you 
next, what do you do? In Missouri, we call it hunkering down. You don't 
make decisions. You don't hire people. You don't buy expensive new 
machine tools. You hunker down when there is economic uncertainty.
  So that's first of all when you have things out there such as cap-
and-tax, which is going to tax energy.
  You've got a new socialized medicine bill that nobody understands how 
it's going to be implemented. But we know it has been loaded with 
taxes. They have even got wheelchair taxes. I don't know what poor mind 
thought of the idea of taxing wheelchairs, but it seems kind of 
perverse to me. Maybe that should be a hate crime, too. I don't know.
  Economic uncertainty. This is a job killer. You want a steady 
economic climate if you want to keep jobs running forward.
  Consumption reduction. That's just talking about the economy slowing 
down. When you have the economy slowing down, it hurts everybody. Just 
as a rising tide floats boats, a tide that's going down, you end up 
sitting on the rocks. So the poor economy also is a job killer.

                              {time}  1745

  Excessive taxation is probably, probably the biggest factor which is 
going to kill jobs, and that's why it is that the Democrats should have 
learned from JFK. I don't expect them to learn anything from Ronald 
Reagan, but they could learn from JFK. They did the same thing Reagan 
did, and that is cut taxes so that the businessman has money to invest 
and create jobs. But instead what we have been doing is tax after tax 
after tax, all these new taxes. What's that do to the guy that owns the 
business?
  Well, to start with, he doesn't hire anybody. To start with, he 
reduces any kind of expansion to his business. But after a while, just 
like your body, if you keep cutting off your food pretty soon you start 
to get skinnier and skinnier and eventually guess what happens to that 
little business, it goes out of business and now there is no longer a 
little engine there to create jobs because that business is gone.
  And that's what FDR did, he drove the taxes so hard that the 
businesses started to shut down from excessive taxation. In a temporary 
sense, the business just doesn't hire. In a longer-term siege, what 
happens is the business goes bankrupt, and now there is no one there to 
start to create the jobs in the first place. Excessive taxation is 
deadly as a job killer.
  Insufficient liquidity is another problem that seems a little 
complicated but it makes a lot of sense. If you own a small business, 
one of the things that you have to have is liquidity. That is you have 
to have some money to be able to borrow to get going on different 
projects.
  There is a company in my district out in the St. Louis area called 
Innoventer. Innoventer is obviously an idea coming from inventions. 
They are inventive sorts of people, and one of their latest inventions 
is something that people that live in the Midwest would be tickled to 
know there is a use for, and that is pig manure. When you get out in 
the country, and you smell something that smells a little funny, you 
know you are near a hog farm.
  And pig manure is not one of those things that people will go out of 
their way to try to obtain, it's considered something of very low value 
and something you would just as soon not smell. Well, Innoventer has 
come up with a way of taking pig manure and putting it into essentially 
what is a glorified pressure cooker, they put it at pressure and under 
a certain temperature. And they break that pig manure into sort of like 
the oil that is pumped out of the ground, sort of a primordial kind of 
goo which they have found they can then use to make asphalt with.
  So what do you need in order to make this little business go? This is 
not as pretty as making lemonade, but you are going to create these 
furnaces, electric furnaces with pressure and these containers and 
eventually it makes this stuff which you then can turn into asphalt. 
And we have a section of road in the St. Louis area paved with this 
asphalt made from, you got it, pig manure.
  But you have got to have some money to build the equipment to do 
this. Well, where do you get the money from? Well, you get loans from 
banks, okay. So a lot of small businessmen, they will take a 3- or a 6-
year loan, and they have to pay a pretty good interest rate for it 
because small businesses can make a mistake and go bankrupt.
  And so they get a loan from the banks, and the local banks underwrite 
the small businesses and, as they convert pig manure to asphalt, you 
will see people getting hired.
  The trouble, though, is this: You have got to have liquidity. And so 
what has the administration done in order to make it so banks have 
liquidity? Well, they started one way with the crack cocaine in the 
Federal system, that is they released tons of money into this, they 
used to call it printing money. So at the high level in the big banks 
there is lots and lots of easy money that's created by the Federal 
Government.
  Usually that creates bubbles and then they blow up, but now what's 
happened is that easy money is not coming down through the arteries to 
the small businesses because the banking regulators are so tough with 
small business, the small banks are afraid to loan any money. And so 
now you have got guys that have imagination that would be creating jobs 
because there is insufficient liquidity. Now they are being choked out.
  Now this particular innovator has found maybe a way around it to get 
some money, but a lot of problems are in this liquidity are. What's the 
biggest culprit? Probably excessive taxation. Second biggest may be 
this liquidity, certainly the economic uncertainty. All of these things 
are factoring into that 10 percent unemployment.
  Excessive government spending is a job killer, but it does it sort of 
slowly and it does it on a rebound. It's not a direct effect.
  What happens is when the government spends too much money, then the 
problem is there isn't the liquidity in the economy and so the money is 
not invested in the businesses, therefore they don't create jobs. So 
that's how that works.
  And then, of course, excessive government mandates and red tape. 
Obviously if you are a small business person, and you have got to fill 
out pages and pages and reams of red tape, which small businessmen have 
to do in America, that takes away from your efficiency. If you are a 
great big company, you have got a couple of bureaucrats and, boy, they 
are experts at every red tape that comes along. You can get some 
efficiency in a big company dealing with red tape. But for small 
businesses, red tape is a real, real job killer. And so that's who the 
thing that we don't want.
  So, now, if you take a look at the logic of where jobs come from and 
what you don't want to be doing, and you take a look at what we are 
doing, you are saying hey, Congressman Akin, you are creating a perfect 
storm. About everything that creates unemployment, you are doing it 
all. And we have a statement from the President saying, hey, I 
understand. He says, I understand that the government, the government 
can create the conditions necessary for business to expand and hire new 
workers.
  He understands that principle, and yet we are doing everything wrong. 
Everything he has told us to do is going to affect the jobs.
  And so what are some of these little treasures? Well, first of all, 
this health care reform that we just passed, boy, is this a humdinger. 
I have been here 10 years--I hate to admit how old I am--I have been 
here 10 years, and I have seen some lousy bills in my day. But this 
health care, this socialized medicine that we just passed is two or 
three times worse than any other bill I have ever seen.
  This is going to have terrible consequences for unemployment and for 
just hammering small businesses, and it's going to create not only 
that, of course, it will create lousy health care, it will probably 
bust the Federal budget. But I am mostly on the subject of what are we 
doing about jobs?
  And this thing here is a job killer. This is a real job killer. You 
have got basically, just like we are talking about with Congressman 
Scalise, what we are doing is the Federal Government wants to take 
everything over. This is taking over a sixth of the economy. The 
government just going to

[[Page H2784]]

take over health care. It's not a matter of fixing something broken in 
health care, it's a matter of scrapping it and having the government 
take it over, not instantly, but over time.

  The cap-and-trade, they call it cap-and-trade, it's really cap-and-
tax. This is that energy tax that the House passed, people were so mad 
about it. That was the one where they had 300 pages of amendments 
passed at 3 o'clock in the morning, and the bill was here from the 
floor and there wasn't even a copy of the bill when they passed the 
thing, the House passed it. And people got so mad that the Senate 
refused to take it up.
  But this is a big tax, of course, and, of course, that's not a good 
thing for small businesses. You have got other miscellaneous taxes 
coming, many of them associated with this health care reform. That's 
where some of those taxes are coming from.
  So we are doing, we are really doing all the wrong things, and it 
shouldn't surprise us that we are getting problems with unemployment. 
Obviously, there are other problems that are going on, too, pretty 
serious ones, and I would just like to talk a little bit about some of 
these other taxes.
  These are tax increases, tax increases. This is really fine print, 
isn't it? Look, there are 16 of them on this sheet. If Congress takes 
no action, these are the tax increases we are taking a look at in 2010. 
And so what happens when you increase taxes? Businessmen don't have the 
money to invest in companies, and you pull the economy down. Is that 
all we have got?
  Oh, no, you have got to remember we have got 2011 coming. These are 
tax increases, if Congress takes no action in 2011.
  Look at that, we have got another bunch of these. The marginal income 
tax rates will increase as follows. These are not small things, these 
are big deals. The 35 percent bracket will increase to 39.6. The 33 
percent bracket will increase to 36 percent. The 10 percent bracket 
will increase to 15, and the 25 is going to go to 28. So, first of all, 
all the marginal tax increases on everybody's income taxes are going to 
go up if the Congress doesn't take any action. This is 2011. This is 
2010 down here. Look at all these taxes.
  Now, we are having a tax party, aren't we, and it's going to give a 
tax to our economy. Dividends will no longer be taxed at the capital 
gains rate for individuals, thereby increasing the double taxation and 
dividends as much as 164 percent.
  Guess what kind of people have these dividends and have money 
invested in these things? People who own small businesses, of course.
  So you are going to tax those people. Guess what's going to happen? 
They are not going to expand the business, you got it.
  The personal capital gains tax will increase to 20 percent and 10 
percent from 15 and 5, and the child tax will decrease, so the standard 
deduction for couples, all of these things, there will be more and more 
tax increases. Is that it? Oh, no. No, there are more tax increases 
too. In 2012, the adoption of a tax credit will decrease from 13 to 
5,000. The credit for electric drive motorcycles, plug-in electric 
vehicles will expire, all these things, tax increases.
  And so is this the right direction? No, of course it's not the right 
direction. What we are doing is we are doing precisely what you would 
do if you are trying to crash the economy.
  Now, let's talk a little bit, I don't have charts on this, I want to 
talk a little bit about what's happening on the spending side. Is it 
because there are just so many demands on the Federal Government that 
we just have to keep spending money on all these things? Is it the 
Federal Government is just getting so expensive?
  Well, let's take a look. If you go back to President Bush, he was 
criticized for spending and the Republicans that were with him, myself 
included, were criticized for spending too much money. And you know 
what, that criticism was just. We spent too much money. And 2008 was 
the worst year in terms of Bush spending too much money; he had a 
deficit that year of about $450 billion. That's too much deficit.
  As you take a look at that, you say, by golly, I don't know how much 
$450 billion is, that's a little bit outside of my normal family 
budget.
  Well, one way to look at it is as a percent of our overall gross 
domestic product, the GDP. That's 3.1 percent, which is about common 
for a lot of Presidents in various years to have a deficit at about 3 
percent or so, that's not uncommon. And that was his worst year in 2008 
under a Pelosi Congress. So the Democrats were running this 
institution, you had President Bush in the White House, worst deficit, 
$350 billion.
  Well, what happened in 2009? That deficit, under President Obama, 
went from 450, went up to 1.4 trillion, that is more than three times 
Bush's worst deficit spending in 2009.
  So how does that relate to gross domestic product? Well, instead of 
3.1 percent, it jumps all the way to 99.9 percent of gross domestic 
product. That's the highest level of deficit since World War II, and 
that was 2010.
  What do you think 2011 is going to be like? Well, you have got it 
right, 2011 is worse. It takes it over 10 percent of GDP and so we are 
spending tons of money, that's part of the reason for these tax 
increases, but the tax increases aren't beginning to be able to keep up 
with our high level of Federal spending.
  And so what you got to the point now is when the Federal Government 
spends a dollar, 41 cents of that dollar that they are spending is 
borrowed money, it's not the Federal dollar. So they spend a dollar, 
but 41 percent of it is borrowed. What would happen, what would happen 
if the American family ran its budget that way, that you could go out 
and spend $1.40 but you didn't really have a dollar, you really only 
had, you know, 59 cents.
  I mean, I just can't imagine us putting ourselves into that kind of a 
situation. So a whole lot of Americans, not necessarily just 
Republicans, there's a whole lot of Americans saying this has got to 
stop, this is not the way to run a company.
  Yes, the President said something truthful here. He said something 
truthful. He said the true engine of job creation in this country will 
be Americans' businesses, but government can create the conditions 
necessary for business to expand and hire workers.
  What he forgot to add was governments can also create the conditions 
to put people in the poorhouse, drive every job out of this country, 
and put America's finances in a horrible mess.

                              {time}  1800

  We can also do that. That's what we are doing, and it's time for 
people to start pulling the alarm button and saying enough of this 
stuff.
  I am joined by my good friend from Texas, Congressman Gohmert, and I 
hope you will rescue me because I'm starting to get a little hot under 
the collar.
  Mr. GOHMERT. I appreciate my friend yielding.
  The other alternative to getting hot under the collar is just to have 
your heart broken. Part of it is anger. When you go through and read 
these provisions like I'm afraid so many people did not do, you know 
the impact it is going to have. And yet, you know, AARP got their deal 
negotiated, you find that in different places, the big pharmaceuticals 
got their deal negotiated, the insurance companies got something in 
there in a number of places. You got Plaintiffs Bar got some things 
negotiated. And you think, who in the world was negotiating for the 
people of America? Everybody else was getting their deals, unions got 
their deals, but when you read through this, you knew who it was going 
to hurt. On the one hand, we had people across the aisle saying they're 
going to help the working poor. If you read the bill, you knew what it 
was going to do. You can't increase that amount of taxes, just as my 
friend from Missouri was talking about, you can't increase taxes like 
that and not cause some people to lose jobs or have their income cut or 
have their salaries cut, which means cut income.
  I've talked to other people who say that because that passed they are 
winding down their business and people will be out of work at the end. 
It will take probably 1\1/2\ years, one fellow was telling me last 
weekend. So you know people are losing their jobs and how devastating 
that is to lose your job. A career is gone because somebody got 
overzealous here and passed bills with increased taxes.
  The working poor didn't get the help they were looking for. If you 
make 133

[[Page H2785]]

percent or less of the poverty level, oh, yeah, those were the people 
they were going to really help with this. They're going to get 
ultimately shoved into Medicaid that so many doctors aren't going to 
take anymore. Walgreen's, I read they weren't going to take any more 
prescriptions. That's not helping people in America. It doesn't help 
them to lose their jobs. It just is heartbreaking to see what is 
happening to people now because of this poorly conceived health care 
bill.
  I yield back to my friend.
  Mr. AKIN. You know, sometimes we use words, and you're talking about 
being heartbroken because you can connect the policy with how it's 
going to hurt people.
  Mr. GOHMERT. Already has hurt them.
  Mr. AKIN. And you say people are losing jobs. Sometimes I think it's 
helpful to put a picture in your mind. When I think about losing jobs--
and maybe this is one of my worst fears--I picture a house and a family 
that's not in the house and a big sofa sitting on a sidewalk next to a 
garbage can where all of the possessions of this family has been dumped 
out of the house because they can't live there anymore. That's what 
happens when you don't have a job.
  As a guy, I grew up in the era where the guy makes the income and 
provides for his family; that's what our job is to do. I think there 
are a lot of American men that are real men and they care about their 
family. They carry that pressure quietly. They don't complain about it, 
but in the back of their mind they're thinking about someday I might 
not have a job, and I don't ever want to get in a position where I'm 
sitting on that sofa on a sidewalk with my family saying where are we 
going to go next. A lot of people feel that pressure. And what we're 
doing is we're basically dumping people out of their homes.
  Another thing I don't get is how do you call it compassion to give a 
family a loan that they can't afford to pay for a house and then they 
get kicked out of their house. I mean, I'm hearing liberals saying 
they're compassionate. There isn't anything compassionate about that, 
it seems like to me. We're destroying the economy through bad 
economics. And the thing we're seeing is when you destroy the quality 
of health care, you're talking about people dying. That is the reason 
why this is so frustrating.
  I yield to my friend from Texas.
  Mr. GOHMERT. You are exactly right. The last person I heard from is a 
woman who is losing her job, heartbreaking because there is no need for 
these people to lose their jobs. We had over 4 million people lose 
their job since the so-called stimulus was passed. And now we passed a 
health care bill under the guise of ensuring 30 million more. I'm 
hearing now this past weekend people that have been told that because 
ultimately the owner is going to have a choice between $2,000 per 
employee or paying for the Cadillac health care that the government is 
going to require, they're going to drop the health insurance. So it 
seems pretty clear there is going to be a lot more than 30 million 
people that lose their insurance because of the added taxes that are 
put in here.
  Oh, and I love the provision--talk about helping the working poor--if 
you are not able to afford the level of insurance required by this bill 
and by the Federal Government--and I guess that's the 15 people that 
are on this board that are going to make all these great determinations 
for everybody's health care that the President will appoint--but if you 
can't afford that level insurance, then we're going to help you. We're 
going to tax you an additional 2.5 percent on your income, an 
additional income tax for the working poor that can't--as I had 
somebody tell me 2 days ago, if I could afford the insurance, I would 
buy it. I can't. Now I'm going to get hit with an extra income tax on 
top of that? Because people are leaving, they're finding out. Employers 
are finding out they are either going to let people go, cut their 
salaries, cut back the workforce. It is just so unnecessary. And yet 
this thing got rammed through and real people are now hurting because 
of the thoughtlessness of this Congress.
  Mr. AKIN. You know, the thing that was interesting to me, about 
December of last year there was a guy who is one cool businessman, he 
is the CEO of Emerson Electric--which is not a big household name to a 
lot of people, but Emerson is a gigantic manufacturing company 
headquartered in St. Louis with operations in countries all over the 
globe. And this guy was a little bit--I won't say it was a rant, but he 
was fired up. He said, Look, I think I know something about job 
creation. And he went back over the record of that company and all of 
the jobs that had been created and how profitable they were and what 
they were doing in manufacturing. They have all kinds of really high-
tech kinds of things like the electronic controls that control 
different businesses and huge complicated process industry and things 
like that, a lot of very sophisticated stuff. They have all of these 
jobs they have created through all of these years.
  So this guy is the CEO of this place. He has come up through the 
ranks. He is an engineer; he knows what it takes to make a company 
work. And he says, I'll tell you what, with what's being done in this 
country I can guarantee you we won't be creating jobs in America. We'll 
create jobs--we're going to create them in foreign countries because 
the foreign countries aren't doing this crazy stuff. We can put the 
jobs there and make a decent profit. Essentially what he's saying is 
the U.S. Government is forcing us not to make jobs and to do all our 
job creation overseas.

  Now, that's a tragedy; that's a tragedy. And he was shook up about 
it. He was upset about it because he's an American; he loves this 
country. He wants the jobs to be made here. But, no, we're going to do 
this socialized medicine gig, which has never worked in any country of 
the world. I mean, at a minimum, we could learn from the former Soviet 
Union. They had the theory that the government should provide you a job 
and health care and an education and food and a place to live. That's 
what their theory was, and it didn't work worth a crud and the Soviet 
Union collapsed. And so what are we doing? Well, the government is 
going to provide you now with education and food and housing--and 
health care, of course.
  I yield.
  Mr. GOHMERT. And of course we know where that all led. Ultimately, it 
led to the Soviet Union borrowing money, printing money as fast as they 
could and then ultimately coming to the day of reckoning. And when they 
realized we can't borrow enough, we can't print enough, and they have 
to announce we're out of business as a country, all of these states 
that made up the USSR, they're on their own. We're out of business; we 
can't borrow enough; we can't print enough.
  You know, another tragedy out of this health care bill--and not in 
terms of human suffering, but still a tragedy--was the media and the 
light that was cast from the media through this bill. Because you think 
back through the years, both Democratic Presidents and Republican 
Presidents, I don't recall in my lifetime a media being so oblivious to 
truth. I can't imagine under George W. Bush, Bill Clinton, George H.W. 
Bush, Ronald Reagan, Carter, Ford, Nixon, going on back, I can't 
imagine the media ever allowing any governmental entity to stand up and 
say we are going to save $1.3 trillion with this bill starting 11 years 
from now and going 20 years from now.
  Obviously, for the next 10 years we're going to cut Medicare $500 
billion, and we're going to raise taxes by $500 billion. We're going to 
do this for 10 years and then that will pay for 6 years of health care. 
And the mainstream media didn't utter a whimper. I just can't imagine 
the media letting that go without saying, excuse me, did you say it 
won't start saving money until 11 years from now when you're gone and 
out of office? But this is what we've come to; the media just let it 
go.
  Mr. AKIN. The thing that got me was, think of the logic: they have to 
come up with a bill and they wanted to come underneath $1 trillion. So 
how do they do it? Well, what they do is they say we're going to tax 
people over 10 years, but we're really going to start the benefits of 
the bill 4 years into that. So in other words, we're only going to do 
benefits for 6 years, but we are going to tax for 10, and therefore it 
all comes out to be less than $1 trillion.
  I mean, it is such bizarre math that it's laughable. If you said I'm 
going to start a lemonade stand and the first 4

[[Page H2786]]

years I'm going to collect money for lemonade and then I will start 
giving people lemonade at the end of the fourth year in order to make 
this thing come out, people would say you're crazy. You know, they 
would say this is bizarre.
  The other deal that was cut for the insurance companies--I mean, I 
just can't imagine why that didn't get more attention--you're a doctor 
and I'm a sick patient and you and I talk together about the fact that, 
Todd, you need to get your appendix out or something like that, and an 
insurance company comes in and they're going to second guess it. Well, 
if you make the wrong decision, you get sued as the doctor. But now 
here's a deal: you can make a decision, I make a decision, the 
insurance company comes in and says you don't need your appendix out, 
and then I drop dead and my wife says, well, the insurance company made 
a medical decision, they said Akin shouldn't get his appendix out. I 
want to sue the insurance company. Check the fine print, you can't sue 
them. You can sue your doctor, but when an insurance company makes a 
health care decision, they have no liability whatsoever. Now, why would 
the national media not pick up on something like that?
  You know, we ought to talk about something cheerful. We've only got a 
couple more minutes to go. Do you know one thing that's cheerful for me 
to think about? Repealing this piece of junk. That would make me happy. 
If we could repeal this piece of junk and we could go into health care 
and systematically fix the things that need to be fixed, that would be 
a very positive thing and it would put the economy on track.
  I would yield to my friend.
  Mr. GOHMERT. Just very quickly, not only should we repeal it 
completely, but all of these wonderful alternatives we have ought to be 
in the same bill. Not only are we ripping out this bad bill, but here 
fixes the system. We've got those bills, we just couldn't get them to 
the floor. I look forward to getting them to the floor.
  Mr. AKIN. Well, gentleman, you had some of those bills, and hats off 
to you because in spite of the fact that the President said we didn't 
have any bills, then later on he claimed that he had read all of our 
bills, which seems a little hard to understand----
  Mr. GOHMERT. And let me add, if I might, CBO sat on them since last 
summer and wouldn't even give us a score. Shame on them.
  Mr. AKIN. Yeah. Well, you had a number of the bills.
  Mr. Speaker, I thank you for allowing us to just talk about 
unemployment and what's going on with the economy.

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