[Congressional Record Volume 156, Number 86 (Wednesday, June 9, 2010)]
[House]
[Pages H4314-H4321]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
THE ISRAEL BLOCKADE AND THE FLOTILLA
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, I yield to the gentlewoman from New York (Mrs.
Lowey.)
Mrs. LOWEY. I thank the gentleman. I'm just going to complete my
statement, and I appreciate your generosity.
The administration focused today on humanitarian and development
assistance to strengthen the Palestinian Authority so it can serve as a
viable partner in peace to Israel. But Abu Mazen must make clear to all
the Palestinian people that their security and prosperous future--and
we've seen an 11 percent growth in the West Bank--depends on rejecting
Hamas, recognizing Israel, and working with the international community
and Israel to achieve a two-state solution.
Despite the current tense environment, some positive steps have been
taken that will improve Israel's security as well as bolster U.S.
national security interests. Iran continues to be an existential threat
to Israel, the region, and the world. I am pleased today's agreement by
the U.N. Security Council to impose multilateral sanctions on Iran will
hold the regime accountable for its reckless pursuit of nuclear
weapons, and I look forward to Congress finalizing strong bilateral
sanctions and urge European partners and other responsible countries to
do the same.
We must continue to strongly support the U.S.-Israeli partnership
which provides invaluable benefits to both of our countries' national
securities.
Mr. AKIN. I yield to my good friend from New York (Mr. Engel).
Mr. ENGEL. I thank the gentleman, and I will be brief. I rise in
support of everything that my colleagues have said.
The U.S.-Israel relationship is a special relationship, and it's a
relationship that needs to be strengthened. The United States is
Israel's only true friend. In fact, when you look at the United Nations
or the so-called Human Rights Council in the United Nations, it's
really a kangaroo court stacked up against Israel. No wonder Israel
doesn't accept what the so-called ``international body'' says about
them, because they can never do anything right. They're always
condemned no matter what they try, no matter what they do.
My colleagues have pointed out that Israel, like every other
sovereign nation, has the right to defend itself, that Israel has at
least twice seized large caches of arms aboard Iranian ships bound for
Hamas and Hezbollah, and a blockade is an appropriate security measure
when employed in the face of hostility such as that directed by Hamas
against Israel.
Hamas doesn't recognize Israel's right to exist, has vowed to destroy
Israel, won't abide by any agreements that have been signed by Israel
and the previous Palestinian governments, and so Israel has to make
sure that terrorist attacks don't come from Gaza into Israel as they
have for such a long time. As my colleagues have pointed out, Israel
has offered to inspect the flotillas and let all the humanitarian aid
on the flotillas go to Gaza, but these people on the flotilla were
obviously not interested in delivering humanitarian aid. They were
interested in provoking a violent reaction from Israel.
I just want to stand in support of the U.S.-Israel relationship, a
strong relationship. Israel is our best friend and ally in the Middle
East. Hopefully, soon there will be a solution to the Israeli-
Palestinian conflict, two states side by side living in peace and
harmony, a Palestinian state and an Israeli Jewish state. That is
something that we all strive to work for.
I want to thank Mr. Weiner for organizing this. I want to thank Mr.
Hoyer, our majority leader, for always being a stalwart. I want to
thank Mr. Akin for giving us the opportunity to speak. When it comes to
Israel, this Congress is united with strong bipartisan support, and
we're going to keep it that way.
Thank you.
Mr. AKIN. I thank the gentleman. I think you're articulate, and I
think that that's accurate to say: there is a good bipartisan sentiment
that when a small nation is trying to defend itself, we have always
stood for people.
The basic principle of people being allowed to be free and have some
self-determination as to how they're going to rule their own country
and be free from the fear of terrorists, that's something that
Americans can really agree on. I appreciate you taking time on that
subject, and also my good friend from New York taking the time to
organize the hour. Very good job. Thank you.
Mr. WEINER. If the gentleman would briefly yield, I, too, want to add
my thanks to you. I don't know if they have C-SPAN in Israel, but
sometimes it's easy in that little country to feel beset on all sides.
We share the same common sense that they do, that they're victims of
terror, and I want to thank you.
We disagree on a lot in this place--and you're going to spend the
next hour or so pointing out some of those things--but there are some
things that have broad bipartisan support, and the support of Israel is
one of those things, and I want to thank you for being at the forefront
of that.
Mr. AKIN. Well, thank you very much, gentleman. And thank you for the
leadership you've shown tonight.
Democrat's Management of The Economy
Mr. AKIN. I would now change gears here and get on to another
subject.
We're dealing with some weighty topics tonight; the previous was of
course international relations, the other is closer to home, and it's
really the question of the economy: the Democrats' management of the
economy, what should be done with the economy, how does that affect
jobs and how does that affect all of our lives. I guess it sounds like
kind of a boring subject in some ways; but on the other hand, it so
much influences and affects every single person in our country that I
guess
[[Page H4315]]
we have to put up with a little bit of talk about economics just to
make sure that we're not destroying our country or destroying our jobs
and putting our grandchildren into debt. And so the whole topic of
economics and jobs can be a little perplexing, but it doesn't have to
be.
I do apologize ahead of time that I am, by training, an engineer.
Someone once said that engineers shouldn't be allowed in political
office perhaps because they're too logical, or whatever the reasons
are. But I do think it's important to back up just a little bit to say
where we are here in the economy and how we got to where we're going
and what mistakes have been made.
I'm not one to want to just criticize and not offer a solution, so
I'm going to try to do that. I'm going to try to draw some practical
applications as we wrap up in a while as to what we should be doing,
what policies should be changed, what does America have to do to pull
ourselves out of the economic nosedive that we're currently in.
It's not a graveyard spiral. There were days in the early days of
airplanes that when a pilot pulled his airplane up into a stall, fell
over backwards, he would get into what was called a graveyard spiral.
And the pilot would grab the stick of the airplane, pull it back
violently to try to get the nose of the airplane to pull off from the
ground and the airplane would just keep spiraling down and crash into
the ground. It ruined the pilot's whole day. Our economy may be at a
graveyard spiral, but there are things that we can do to prevent it
from crashing, but we're going to have to do that and do it soon. So
that's what I want to take a look at.
I want to back up just a little bit to the days back at this
superconservative oracle, The New York Times. This is September 11,
2003. This is really the beginning of President Bush's Presidency, and
he goes to the New York Times--and this is September 11, but it's not
2001, it's 2003--and it says here, this is the article: The Bush
administration today recommended the most significant regulatory
overhaul in the housing finance industry since the savings and loan
crisis a decade ago. That's interesting. President Bush was saying in
2003 that we've got to take a look at this finance industry and the
overhaul of this housing finance industry. And under the plan disclosed
at a congressional hearing today, a new agency would be created within
the Treasury Department to assume supervision of Fannie Mae and Freddie
Mac, the government-sponsored companies that are the two largest
players in the mortgage lending industry. Interesting. This is way
before the mortgage-backed security thing hit the fan and the whole
stock market crashed and all that sort of stuff; this is way before
that.
So President Bush, he's saying, okay, let's regulate these because
they're out of control. They've lost $1 billion or something. And he
thought, well, that's not pocket change. Here's the President asking
for this authority, and what do we have from then in the minority? We
had this from Representative Frank, he says: These two entities, Fannie
Mae and Freddie Mac, are not facing any kind of financial crisis. 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, people who know Freddie and Fannie know that these guys were big
players here on the Hill. They had lobbyists that were terribly
effective, went around and distributed a whole lot of money to a lot of
people, and they didn't want anybody playing in the deal they had
going.
So what happened here? Well, what happened was the House--at that
time in Republican control--passed a bill to regulate Freddie and
Fannie. It went to the Senate, and what do you think happened to it?
Well, in those days, Republicans had a majority in the Senate, but they
didn't have the 60 votes necessary for cloture, and so the bill was
killed by Democrats in the Senate. Freddie and Fannie continued on
their merry way, and all of a sudden, a number of years later, what
other people had seen--Bush had seen years before--was going to happen,
it happened, and we had this great big crisis start. Now, that was all
connected with ACORN, the organization that was pushing banks to make
loans that normally a bank wouldn't make because the people that the
loans were going to be made to couldn't afford to pay them.
So we started going on this track of passing out loans to people that
couldn't afford to pay them, and every time we sold one of those loans,
somebody made some money. And what did they do with all of those bad
loans? They dumped them all on Freddie and Fannie. And as you know, you
just keep doing something like this, pretty soon the music is going to
stop and there are going to be people without chairs. That's what
happened in the savings and loan problem.
{time} 1945
Now, what is going to be the solution? Well, we are going to talk a
little bit about that, about where we are going with the economy and
about what we need to be doing.
I am joined now in the Chamber by a good friend of mine, Dr. Paul
Broun, from the Atlanta, Georgia area, if I recall properly--not
Atlanta but, rather, some other part of Georgia.
Mr. BROUN of Georgia. The northeast corner of the State of Georgia.
Athens and Augusta are my two major cities.
Mr. AKIN. I yield to the gentleman. I don't know what you think about
Atlanta, so I won't say anything about that.
My good friend from Georgia, Congressman and Dr. Broun, please join
us.
Mr. BROUN of Georgia. Well, thank you, Mr. Akin, for yielding.
I'll tell you what. I hope the American people paid attention to your
explanation because it has been Democrats all along who have fought any
reform of Freddie and Fannie. Freddie and Fannie are right in the
middle of the cause of the financial downturn that we've seen today.
Just today, we voted on trying to name a committee of conferees from
the House and the Senate to talk about financial services, and we tried
to bring Freddie and Fannie into the fold, but Democrats across the
board have rejected from 2003, all the way up to today, to solve the
problem. When you have a fire going, you want to try and find out the
source of that fire and put out the source.
I'm a medical doctor. When you have a medical problem going on, you
try to find the source of that problem. If you have a cancer, you want
to not just deal with the symptoms of the cancer or even of the
metastasis--the spread--of the cancer, but you want to go with the
primary tumor and get it out.
So Freddie and Fannie are the source of the problem, and Democrats
across the board have resisted from 2003, all the way to today, the
efforts the Republicans have made to try to cut out this cancer of
Freddie and Fannie.
Mr. AKIN. I think what you're saying is important. You're using some
doctors' analogies.
Mr. BROUN of Georgia. I'm a doctor.
Mr. AKIN. I think that's good. It paints a vivid picture, but there
is a problem with Freddie and Fannie.
Mr. BROUN of Georgia. Absolutely.
Mr. AKIN. The problem with Freddie and Fannie is you don't get
something for nothing. I'm an engineer. I mean, it's one of those
things, if it isn't there, it isn't there. So what we're doing is we're
using Freddie and Fannie to make loans to a certain number of people
who can't afford to pay them. Then that means, Where is the money going
to come from?
Mr. BROUN of Georgia. Taxpayers.
Mr. AKIN. That's the point.
So the deal is: Is it the job of the American public to bail out
people who make irresponsible loans? How about all of the people who
get loans, who make their mortgage payments, who do everything by the
book, who then get hammered because somebody else didn't do it that
way? That's the basic question.
Is there any sense of fairness in this? Is this a good way to run a
ship? Because what we're doing is creating an incentive for people to
do the wrong thing, which is to take loans they can't afford to pay.
They put more stress on their own families economically.
How is that compassionate, by the way, when you're the dad,
supposedly providing for your family, and you're in danger every month
of the mortgage payment, and they're going to put you and the kids and
the sofa out on the front sidewalk? That's not compassionate. Yet
that's what these policies
[[Page H4316]]
on Freddie and Fannie are doing. So we need to reform Freddie and
Fannie, and apparently, we're not willing to do that.
Hey, I want to jump forward just a little bit, gentleman. I want to
jump forward now past Freddie and Fannie. We've got the whole trouble
with Wall Street starting to melt down. We do the great big bailout of
Wall Street. Then the center point of the Democrats' plan was the
stimulus package. Unemployment started to go up, and the economy was
dipping. They said, This is a great opportunity for us to spend money
on all the things we want to spend money on. So they spent $800 billion
on the stimulus package, which is a whole lot of money, and the idea
was, if we spend enough money, it will get the economy going again in
spite of fixing Freddie and Fannie.
Now, what do you think about that theory that, if the government
spends tons of money, it's going to somehow get the economy going? You
know, a lot of people believe that idea.
I yield to my friend.
Mr. BROUN of Georgia. Well, I thank you, Mr. Akin, for yielding.
This has been described as Keynesian economics, which means bigger
government spending and more borrowing. You've got a great quote there
by Henry Morgenthau, who was FDR's Treasury Secretary. During part of
the Great Depression, he made this great quote, which reads, in part,
that we have just as much unemployment as when we started all of this
massive government spending, and an enormous debt to boot. That's
exactly what we're doing.
Most American people know--not all, and it's unfortunate. Most
American people know that socialism never has worked and never will
work, but this is socialistic, this type of philosophy of bigger
government, of central control from wherever the capital is. We saw it
in the Soviet Union. It is what Stalin put up there in the Soviet
Union. In fact, FDR sent his lieutenants to Russia. Back during that
period of time when the Great Depression started, which was early on in
the Roosevelt Presidency, he sent his lieutenants to look at what
Stalin was doing because they thought this was the greatest thing in
the world and that we needed to put in place that kind of policy here.
That's exactly what is going on right now with our leadership. They may
as well send their lieutenants back. They should go back and look at
the history of what Stalin did, and they should understand from history
that it doesn't work, because it will not and cannot.
Mr. AKIN. You know, I really appreciate your jumping a little bit
ahead because you anticipated where I'm going.
There have been some assumptions made by the Democrats about the
economy, and the question is: Are those assumptions any good or not?
One of the things that history does tell us is we should learn
something from it. Of course, FDR's Treasury Secretary, Henry
Morgenthau, after trying it for 8 years, turned a recession into the
Great Depression, and we consider it the greatest depression we had.
What they did was they just spent tons of Federal money, but at least
they spent it on concrete, like great big dams and roads and building
projects. Of course, the $800 billion that we spent wasn't spent on a
lot of stuff. It was much more of just government giveaways.
We are joined by my good friend, Congresswoman Lummis. I would just
be delighted if you could jump into our conversation here. We are
focusing, really, on the economy: What assumptions have been done that
are wrong? What do we need to get it fixed so as to straighten things
out?
Mrs. LUMMIS. Well, thank you. I thank the gentlemen for allowing me
to join you both this evening.
I thank the gentleman for his courtesy to the previous group that was
talking about our policy with Israel. I thought that was appropriate to
allow them to finish their remarks and to acknowledge the importance of
our allies there.
One of the issues that we are going to have to address, as we address
this economic downturn we are in, is the role of the Federal Government
in exacerbating the problem.
As we all know, Federal employment and private-sector employment are
not the same thing. A private-sector job pays for other people's jobs
through taxes; whereas, a public-sector job consumes more than it pays
in taxes. So it's important that we watch the relationship and the
growth of Federal jobs versus the decline in private jobs.
This first chart that I have shows the Federal Government employment
and how it has changed in the past number of years. I'd like to point
out the years 2002, 3, 4, 5, and 6 when the Federal Government's
employment was relatively flat--in fact, almost as flat as a pancake.
Then we get into the Pelosi Congress, and it's going up markedly, with
the year 2010 here on the end of this chart showing you that we're
getting back to levels that are unprecedented since Republicans took
over control of Congress in 1995.
I also want to illustrate what has happened to private-sector
employment during this time period. This chart compares private-sector
employment to public-sector employment, or government employment. The
red line is government employment. This more flat line of the red line
illustrates, once again, those years that were relatively stable--2003,
4, 5, and 6. Then the Pelosi Congress took effect, and here the
government employment begins to shoot up.
The scary part of this chart is the blue line, which is what is
happening to private-sector employment. It has crested. Then from the
Pelosi Congress on, it has declined dramatically, and these are the
years of the Pelosi Congress. When private-sector employment plummets,
the ability to pay for your family plummets. Unemployment payments go
up. Of course, those are coming out of the public sector. Tax
collections go down. The number of jobs, of course, declines
dramatically. This is an illustration of what has happened to our
economy. Unless we get this number under control, we are in trouble.
Among the things that I oppose, which the majority party here in
Congress is pursuing, are tax increases on the employer class. The
employer class includes those small businesses all over the country
which are employing less than 50 employees who are unable to borrow
money because of the constraints on capital that you addressed earlier,
Mr. Akin. All of these create the downward spiral that we are seeing.
In order to get out of that spiral, we have to make dramatic changes in
our tax policy, in our spending policy, and in our overall economic
policy in relation to other countries and in relation to the amount of
debt that we are issuing.
I yield back.
Mr. BROUN of Georgia. Will the gentlelady yield?
Mr. AKIN. I yield you time, gentleman.
Mr. BROUN of Georgia. Well, I'm sorry. I apologize, Mr. Akin.
I just wanted to address those things that you were talking about,
Mr. Akin--the Great Depression, the government spending and that the
unemployment didn't go up. As to what Mrs. Lummis just so very capably
showed us, government jobs are going up.
During the Depression, though, as you just said, there was a lot of
spending on infrastructure during that period of time. It did not take
care of the unemployment. If you look at the unemployment rate during
the Great Depression, it stayed relatively flat. It went up and down
some, but it stayed up a bit, and then it fell way off in spite of all
the big government spending and all the spending on infrastructure.
Back then, though, under the Roosevelt administration, they created
the WPA and the CCC camps and things like that. They put people to
work, who were on government welfare, building all that infrastructure.
Now we're paying people not to work.
Mr. AKIN. So things have changed, and it has gotten even worse,
hasn't it?
Mr. BROUN of Georgia. It really has.
Mr. AKIN. Let me just jump in for a moment.
You know, the charts that you chose actually have a relationship to
each other, and you alluded to the mechanics of what that connection
is, which is, when the government creates a job by hiring somebody, it
does create a job. The problem is it kills two other jobs in the
private sector. So you think to yourself, hey, if we have unemployment,
for the temporary sense, let's get the government to spend some money
and hire a bunch of people, and that will take care of the problem in
the
[[Page H4317]]
short term. Maybe the economy will rebound, and then maybe the
government will shrink, and more private-sector jobs will come along.
Not so. What happens, in fact, is, when the government creates jobs, it
spends a whole lot more money. It takes money away from the private
sector, and it drives the number of private jobs down.
So what you've just shown is an illustration and an example of a
failed economic policy. It's a failed economic policy, and we should
have known from Henry Morgenthau that it wasn't any good and that it
wasn't going to work. He said, Look. We've tried spending money. We're
spending more than we've ever spent before, and it doesn't work. Now
we're turning around and are doing it over again. With 8 years in the
administration, we've just as much unemployment as when we started and
an enormous debt to boot.
So what are we doing now? Oh, we're repeating this same foolish
policy.
Here it is. Nobody really wants to look at this graph. This is the
deficit under the Democrat budget. Now, I'm a Republican, and I'll
admit that we spent too much money when President Bush was President,
but it wasn't as bad as it could have been. People didn't know how bad
it could be. Now we do. Take a look at that. The very worst year of
President Bush's spending was in the Pelosi Congress here in 2008. That
was his highest amount of deficit in a given year. That's one-third of
what it was under Obama, the next year, and this is even more so.
Mr. BROUN of Georgia. Will the gentleman yield?
Mr. AKIN. I do yield.
Mr. BROUN of Georgia. I wanted to put some perspective on 2008, too.
That's when the President's chief economic adviser--I guess the
Treasury Secretary--told him that the sky was falling and that we
needed to pass the Toxic Asset Relief Program, or TARP, which many
Republicans voted against. I didn't buy the Democratic Treasury
Secretary under a Republican President because that's exactly what Hank
Paulson is. He's a Wall Street insider, a Wall Street banker. Wall
Street believes in big government. That's the reason they support the
Democrats. They overwhelmingly support Democrats financially.
That increase in 2008, under Bush, is principally because of the TARP
bill that a lot of people didn't like. I did not vote for that. I've
argued very much against it, and I have been a strong critic of the
Bush administration's being big spenders, but they were pikers compared
to the Pelosi Congress ever since she has been in charge.
{time} 2000
And even that is just miniscule compared to what has happened just
over the last 16, 17 months.
Mr. AKIN. It seems to me, gentlemen, that President Bush was Ebenezer
Scrooge by comparison to what we've got here. I mean, this is runaway
spending.
And this is created not just by TARP, not just by the, quote, ``jobs
bill'' where we just dumped all kinds of money into increasing various
government handouts and things. It wasn't concrete and roads; it was
just government-handout kinds of things.
But this tremendous level of spending then creates the very problem
which creates the unemployment, and it threatens our economy.
If you take a look at where this is going, you take a look at these
numbers, and you start to put it--these seem like a lot of money. This
one here is $1.4 trillion. Well, what does $1.4 trillion mean? Well,
let's put it into context.
Here's the context right here. This is a comparison to these other
countries over in Europe. This is deficit as a percent of GDP. United
States, 10.3. We've got Greece at 9.4.
Now, Greece has been in the news. It's been causing a whole lot of
trouble in the European Union. And its deficit as a percent of GDP is
9.4, and we're 10.3? These are not good numbers.
I think it's helpful to compare to the others. United Kingdom is a
little worse off than we are. If you go debt, this is a larger term,
this is going year after year after year, you see United States here is
at 99, debt as a percent of GDP. And you've got Greece and Italy that
are worse off than we are.
That's not a good sign when we're in third place to Greece and Italy
from an economic point of view. So this rate of spending just does not
work. This is a glide path.
I used the analogy of, you know, the guys, the World War I pilots
that used to fly those airplanes, whatever it was that Snoopy used to
fly. Many of those planes, they would get into that spiral and they
would just start to head down for the Earth.
And that is what has happened, is, because of lousy economics, we are
in essentially a graveyard spiral in America. And you, my friends, know
what the solution is to fix this.
And there was a solution to the graveyard spiral. And maybe it seemed
a little counterintuitive, but from a pilot's point of view, what
they're supposed to do--their instinct is to pull back on the stick to
pull the nose up. Instead, you had to do the counterintuitive thing,
which is push the stick down. And that would stop the spiral, the plane
would start diving, and when they had control, then they could pull the
stick back up again.
And there's the same kind of thing in our economy, which we have to
do or this economy is going to crash. And if you think 10 percent is
bad for unemployment, it could get a whole lot worse.
I yield to my good friend, Congresswoman Lummis.
Mrs. LUMMIS. I thank the gentleman for yielding.
The chart he has up does compare the U.S. to Greece. But what is
really frightening about that chart is, in 5 years, our debt to GDP
will be at 112 percent, whereas right now Greece is 115 percent. In
other words, in 5 years, we're going to be right where Greece is right
now. And that illustrates the type of nosedive that the gentleman said
we are in.
Mr. Akin, could I ask you to put up the chart that you have there
that is called ``Tidal Wave of Debt''?
The chart that he's going to put up was prominently displayed on
numerous occasions today in the House Budget Committee, where we heard
from Dr. Ben Bernanke, the Chairman of the Federal Reserve. Multiple
questions made reference to this chart. And it is the trajectory on
this chart that Dr. Bernanke expressed such concern about.
If you look at the line of 2010 and follow it through the year 2046,
which is the end line of that chart, you see the enormous upward spiral
of our debt. This is, of course, part of the unsustainable situation
that Dr. Bernanke was asking us to address. And if we do not, we will
put our country in terrible financial straits.
So, we talked about a number of alternatives. One is
americanroadmap.org, which is the ranking member of the Budget
Committee, Paul Ryan's proposal. It is very comprehensive. It would
have a slow glide path to bring both our deficits and our debt under
complete control, and do it without raising taxes, and do it without
affecting the Social Security or Medicare benefits of people over age
55 or 56.
The problem is, the longer we wait, the more out of reach that type
of strategy becomes because of the enormous crowding out of our budgets
that will happen by interest on our national debt. Consequently, we
need to address the Paul Ryan proposal sooner rather than later.
Even under the Paul Ryan scenario, when compared to our anemic
economy, the budget cannot be balanced and the debt cannot be
eliminated until the second half of this century. So it takes over 40
years, given that scenario, to balance the budget and eliminate the
debt. However, that is the kind of slow glide path that we have to take
with an economy this anemic, and in a way that does not raise taxes.
And if we learned anything from the Japanese in the 1990s, it was:
You don't raise taxes during a recession. That is what slowed and
retarded their growth out of their economic slump.
Mr. AKIN. That's a great point. And let's repeat that. What you just
said was, you don't raise taxes during a recession.
And what we are going to talk about here tonight--there are some bad
assumptions that were made that are destroying our country and that are
destroying our budget, our economy, and just killing jobs in America
and creating a whole lot of hardship.
But it doesn't have to be that way. There is potentially good news.
But we
[[Page H4318]]
just have to follow the principles, just like airplanes follow
aerodynamics, we have to follow the principles of economics. And one of
those--you just got to the bottom line--is, you've got to ease off on
the taxes. And there is a logical reason for it.
Let's just take a look, though, so people understand the gravity of
what we are looking at. This is who owns our debt. This debt is created
because we are promising all kinds of benefits to American citizens,
all kinds of promises that we are going to give them health care and we
are going to give them housing and food and education and all the stuff
that the Soviet Union also promised their citizens. And who is picking
up the tab? A lot of foreigners are buying our debt.
Here it is. Foreign holding of American debt was 5 percent in 1970.
That was when I graduated from college. Foreign holdings, 1990, 20
years later, go from 5 to 19 percent in 20 years. Now, 20 years later,
in 1210, foreign holdings, 47 percent.
Is that healthy? How much longer are the Chinese and the other
foreign countries going to continue to pay us money that we don't have
to pay off American voters just to keep them happy? This is a glide
path that will end up in a crash.
The gentlewoman, Congresswoman Lummis, has suggested that, even now,
trying to pull this thing out is going to take a number of years. This
isn't something that can be turned around overnight.
And I think this 20-year kind of pattern reflects the fact that what
we are talking about is really serious here, but it still is basic
economic principles.
Mrs. LUMMIS. In May of this year, we issued some Treasury bonds, and
the sale was undersubscribed, which means there were not enough
countries or individuals who purchased U.S. treasuries, our debt, at
the price at which they are being offered, which means that pretty soon
we are going to have to raise the interest rates that we are willing to
pay people who purchase our debt.
When we have to raise our interest rates, that means that we are
paying more in interest on the debt every year. That crowds out private
investment from our economy. That makes it more difficult for the
private sector to create the jobs that were on this chart earlier. That
is part of the death spiral that we have been talking about.
Mr. AKIN. I would like to yield a little time to my good friend from
Georgia, please, Dr. Broun.
Mr. BROUN of Georgia. Thank you.
And I like this cartoon that you just put up, because this just shows
what is going on here, not only with our debt, with health care reform.
I call it ``tax-and-trade'' because it is about revenue. The
President himself said it was about raising more revenue for the
Federal Government. It's not about the environment at all. In fact, a
lot of what the President has said, he has admitted it is not about the
environment. It is about revenue and a bigger government, greater
control, central planning from Washington, D.C., and then the war tax.
They are adding tax after tax, and we are expecting the Chinese to
buy our debt. In other words, we are spending our children and
grandchildren's future, and the credit card is being held by the
Chinese.
And it is something that is totally unsustainable. And what it is
going to do, long term, is our children and grandchildren are going to
live at a lower standard than we live today because this is totally
unsustainable, totally unsustainable.
Mr. AKIN. I think you're an optimist. I really do. I'm not so sure
that our children and grandchildren will live at a lower standard quite
the way you're talking about. I'm not sure that this is not going to
create a more catastrophic kind of crash, where the whole credit system
of the United States--if your Treasury bill is no longer any good, you
have, by definition, just crashed your airplane into the ground and
it's going to ruin your whole day.
You are talking about a crisis unlike anything we have seen ever in
our history. That is what is potentially there. I don't think we should
be overly dramatic about it, but this is really serious stuff.
And what this cartoon is trying to point out is that there are a
whole series of Obama policies; every single one of them is diving the
plane faster and faster toward the ground.
First of all, there was the Wall Street bailout. Then there was the
stimulus bill, which was supposed to create jobs. We saw how well that
has worked. The private job creation is in the dirt, and we are
creating all the jobs by hiring government bureaucrats who are paying
more than the poor guys working in the private sector. That doesn't
work.
And then you've got this cap-and-trade. ``Cap-and-tax'' is what I
call it. It was passed out of the House. What a mess that is. I am an
engineer by training. It is supposed to save us from global warming,
but all it is, is more big government and more taxes. Fortunately, the
Senate is not dumb enough to have passed it yet.
And then you've got, of course, the socialized medicine deal, which
surely will break the budget unless they put in enough waiting lines
for everybody and enough rationing so that it won't break the Federal
budget.
So all of these policies together are creating those numbers and
those graphs that we see.
Mr. BROUN of Georgia. Will the gentleman yield before you take the
chart away?
Mr. AKIN. I do yield.
Mr. BROUN of Georgia. Well, there's a bull that's in that china shop
that's not indicated in this cartoon, and that's the abject failure,
non-stimulus bill, as I call it, which has been an abject failure. The
non-stimulus bill has been an abject failure, and it's going to be a
job-killer.
Everything that this administration, that this leadership in Congress
today is doing is killing jobs. And it's not doing anything except for
creating a bigger government and creating temporary government
employees. It's creating a lot of jobs here in Washington, D.C., but
they don't help my State of Georgia. They don't help New York State or
California or Texas.
They are creating a bigger central government that's going to kill
our freedom. And we've got to stop it.
Mr. AKIN. The thing is, you and I are not talking can tonight, we're
not talking about tonight something that is speculative or based on
theory. These graphs are ending in 2010. These are actual numbers. This
is what has happened, and it doesn't work. It didn't work for FDR, and
it's not going to work for President Obama and the Democrats. It just
won't work.
That is what is happening to employment in the private sector. And
the red line, of course, is government. And a whole lot of that is
these census people running around and snooping on everybody and
figuring out who lives in what house and everything, which, of course,
makes you feel just wonderful that we're putting those kind of
government jobs on instead of just killing manufacturing.
Let's get to the mechanics, though, because all of this stuff, it's
not rocket science. This is basic, basic economics.
{time} 2015
I just wish some of the Democrats had run lemonade stands when they
were kids. They could understand some real simple kinds of economics
here.
One of the things, we had a town hall meeting back in my district. I
thought maybe I am getting too radical, maybe I have been here too
long. You know that old folk song you have been on the job too long. So
I asked them. I said, Now, if you wanted to kill jobs, what would you
do? What are the job killers? You know what was the top of their list?
Excessive taxation.
Now, this is a connection that you were making, gentlelady, a moment
ago, between the taxes and these jobs going down. And of course part of
what you use the taxes for is to pay for all these public sector jobs.
So what's the connection here? Why is it that taxation just kills the
economy? It's not just any taxation, but it's particularly taxation on
what? On businesses. Why? Because businesses have to have money in
order to add new processes, come up with new technology, new machines,
a new building to do something in. They have got to have some money to
do it with. And if you take it all away by taxing them, you make it so
that they can't create the new jobs.
The places where jobs are created in America are largely, 80 percent
of the jobs, are in corporations of 500 or fewer people, which you call
medium or
[[Page H4319]]
small size. A lot of them are just mom-and-pops with, you know, 10
people, or five people, or 20 people. That's where the jobs are
created. And if you tax the people that own those small businesses, you
say, hey, that guy's making $200,000 a year, we are going to--that's
what Obama said in the campaign, hey, if you are making 250,000, look
out because I am going to tax you, but anybody under 250, you are okay.
Of course he wasn't telling the truth, because he had that tax that
they were pushing on this global warming deal where if you flipped a
light switch, you would start getting taxed. But aside from that, the
fact is he wanted to tax heavily the people that own these small
businesses. Guess what that's going to do to employment? It's the worst
thing in the world. And then there is some other points, too.
I yield to my good friend from Georgia.
Mr. BROUN of Georgia. Well, thank you, Mr. Akin, for yielding. And
you are exactly right. Not only does excessive taxation kill the
ability to do all the research and development that you were just
talking about, but small business can't even buy inventory. So they
can't sell their goods to consumers. The consumers don't have the money
to come and buy the goods and services. So it kills the economy. It's
just very, very simple economics.
The thing is we are going in the wrong direction. You talked about
the energy tax that's been proposed, that Nancy Pelosi jammed through
the House of Representatives here. It's what's called a regressive tax
because it's going to hurt people on limited incomes and poor people
the most. It's going to make their gasoline prices go up. In fact, I
have heard many Democrats, many Democrats here on the floor of the
House of Representatives say they would like to see gasoline at $10 a
gallon.
Now, somebody who is out working hard today trying to make a living,
who is just making the house payment and paying their bills and just
scraping to get by and trying to get by, if their gasoline price goes
to $10 a gallon, they are going to be just really out of economic luck,
so to speak.
Mr. AKIN. How are you going to pay that mortgage payment now?
Mr. BROUN of Georgia. That's right. They can't afford their mortgage
payment now, or some are just barely paying those things. And then the
energy tax on their electricity when they flip on the light switch, or
when their heating unit comes on, up North particularly. I, thankfully,
live in the South, so we are more concerned about air conditioning.
A lot of old people in Georgia and Florida and all through the
Southeast and through the Southwest are dependent upon air conditioning
just to live. And if their electricity bills go sky high, as the energy
tax is going to make it happen, if that ever passes, there are a lot of
people that can't afford to run their air conditioning anymore. And
people are actually going to have a hard time with hyperthermia is what
we call it in medicine as a medical doctor, which means their body
temperature is going to go up, they are going to get dehydration, and
people are going to have a lot of problems. And it's going to make a
greater impact on our health care system and people are going to die
because of that.
But it's going to kill jobs too. And it's going to be a job killer
just like the ObamaCare that's been estimated by experts to kill over 5
million jobs in this country.
Mr. AKIN. Five million?
Mr. BROUN of Georgia. Over 5 million. Five and a half million, to be
exact, jobs that health care taxes. And what it's going to do, is it's
going to mean that a small business man or woman who is trying to just
make a living, they are not going to be able to hire new employees
because of ObamaCare. We have got to repeal and replace ObamaCare. And
that's just the bottom line.
Everything that this Congress has done since I have been here 3 years
now, everything, and all of it has been under Nancy Pelosi's
leadership, everything that this Congress has done in 3 years that I
have been here is going to kill jobs, it's going to kill our economy,
and it's going to be killing the future of our children and
grandchildren. We have just got to stop this.
Mr. AKIN. You didn't even mention that little small detail of the
government becoming the master. The government is getting so big, the
government employees are making so much money it's effectively becoming
not the servant, but the master.
Mr. BROUN of Georgia. Absolutely. In fact, it's going to kill our
freedom also.
Mr. AKIN. I am very concerned about our discussion tonight because I
am afraid somebody may be watching and they are thinking, oh, my
goodness, there isn't any hope, things are terrible and bad. Yeah, we
are in a big financial mess because we have been doing the wrong
policies. But I want to take about 10 minutes, I want to talk about
let's wipe the slate clean. Let's stop all of this foolishness and
let's talk about what we do to fix it. Because we can do that. I want
to go first of all to my good friend----
Mr. BROUN of Georgia. Could you yield just a half a second?
Mr. AKIN. Let's talk something positive.
Mr. BROUN of Georgia. I am going to.
Mr. AKIN. Good.
Mr. BROUN of Georgia. And I want to remind the gentleman that during
our debate over ObamaCare we were accused as Republicans of being the
party of no. We are the party of k-n-o-w. We know how to solve this
economic downturn. We know how to create jobs. We know how to lower the
costs of health care. We know how to create jobs in the private sector
instead of Big Government. We know how and are fighting to save freedom
and to shrink the size of government, get government out of people's
way so that they can run their lives without all this government
intrusion. So we are the party of k-n-o-w. And I am excited about your
launching into this idea about the solutions that we have.
With that, I yield back.
Mr. AKIN. I love talking about solutions, because you know what those
solutions are about? Those solutions are about freedom. And that's a
good word. And that's what America has always stood for. And that's
what we need to talk about for a minute. But I do want to yield to my
good friend, Congresswoman Lummis.
Mrs. LUMMIS. The Republican Study Committee has a proposal through
Jim Jordan's subcommittee on the economy that would balance the budget
in 10 years. It would cut spending in areas other than homeland
security and defense, and it does not touch Social Security. I am one
of those who believe that we have to protect our entitlement system by
reforming it rather than by leaving it alone. But let's save that
discussion for another day.
Another proposal, one that I have with Representative Sam Johnson of
Texas, would reduce the size of the Federal employment force through
attrition. In other words, every time someone vacates a position
through retirement or other means, that position would go into a
position pool. And only those positions that are absolutely necessary
to sustain the rolls of government as contemplated by the Constitution
would be reclaimed and redeployed into the Federal employment force.
There are any number of ideas. The Paul Ryan proposal, the Jim Jordan
proposal, this proposal. Jeb Hensarling has proposals, many that are
comprehensive in nature that will provide that glide path to a better
economy and do it without raising taxes.
So even though you hear frequently that the Republicans are being
shortsighted in the fact that they do not want to consider tax
increases as part of an economic recovery plan, you are correct that
most of us don't. And the reason we don't is because we know we can
recover this economy without raising taxes, and raising taxes will slow
our ability to recover.
I yield back to the gentleman from Missouri.
Mr. AKIN. Thank you for that insight and the wisdom that you have
shared with us. This is a graph of actually what happens over time. And
this is this effect I was talking about. You know, when you were flying
those old-fashioned airplanes and you wanted to not drive your airplane
into the dirt, what you had to do was push the stick forward, which
would stop the spin. The plane would start to dive; but when you had
control, you could pull the stick back. That seemed counterintuitive.
[[Page H4320]]
Pilots for years would get in that graveyard spiral, and they would
keep hitting the ground until this one crazy pilot said I am going to
take my airplane up, I am going to put it in a graveyard spiral, and I
have a solution, I believe, to pull it out of the spiral and live. So
he bet his life on his solution. And he put it in the graveyard spiral,
he pushed the stick forward, the plane stabilized, and then he eased
the stick back, and the plane pulled out, and all the people on the
ground went, whoa, that was a gutsy move.
That's a little counterintuitive. When you are out of control going
down, your temptation is to jerk the stick up, which is what the
Democrats are doing. They are raising taxes, making the situation
worse, turning a recession into a depression. And what you have got to
do is to learn from the pilots who had before you figured out how to do
it. One of them, ironically, was JFK. Now, that guy's a Democrat, and
they didn't learn from him. Because he was in a recession and he said
less taxes, and the economy recovered.
Then a guy came along by the name of Ronald Reagan. He cut taxes like
mad. Guess what happened? Recovery of the economy. Then comes along
Bush. Cuts taxes. Recovery again. I mean, we have seen it over and
over. Here it is and it's counterintuitive. Why in the world if you cut
taxes could the government have more revenue and get the economy going?
Well, here is what happens. And think about it a little bit like
this. Say you are king for a day, Congressman Broun, you are king for a
day and you are allowed to tax loaves of bread. And you are thinking in
your mind now you have been technically trained as a doctor, you are a
scientific thinker, and you have got these loaves of bread, how much
are you going to tax a loaf of bread? First you think, huh, maybe a
penny, because no one will notice a penny tax on a loaf of bread. Then
you think, yeah, but if I taxed them more, I could get more money. So
you say, huh, maybe $10. Then you think, ah, no, maybe they wouldn't
pay $10 tax. So somewhere between $10 and a penny there is an optimum
tax to tax a loaf of bread to raise money for the government.
Well, the same kind of thing goes on on a larger scale. And what this
guy Laffer understood was if you drop taxes, what happens is the
economy gets going. When it gets going, there are more transactions.
And so even a lower tax rate will generate more revenue.
So here is what he did. This is like that airplane. He is dropping
taxes here, and take a look at government revenues. Government revenues
are going up and taxes are down. That seems like making water run
uphill, but it's not. Because when you get the economy going, then a
lower tax rate actually generates more money. And that's the solution
out of this problem.
So let's talk about what is it we have to do. We have to learn, if
nothing else, from the Soviet Union. The Soviet Union had the
philosophy that the government is going to give you health care, the
government's going to give you an education, the government's going to
provide for your retirement, it's going to give you housing and food.
The government's going to do all of that. And we laughed. Because we
said you can't--that socialism, that communism-socialism doesn't work.
And yet what are we doing here? The same thing.
We are deciding the government's going to do health care, the
government's going to do your education, the government's going to do
your housing, and then the food stamps. It doesn't work. So what I
think we understand is the government is just going to have to get out
of the business of taking care of everybody and get back in the
business of just simply managing the economy, providing for the
national defense, and they are going to have to push all of that
decision-making down to the State level and let the States do it. So we
have to have a good breath of freedom and fresh air instead of the big
Obama welfare state that we are doing.
Congressman Broun.
Mr. BROUN of Georgia. Mr. Akin, I am a pilot, and I want to say that
you are exactly right about getting out of a death spiral. So we do
push the yoke forward to stop the spin, to stop the stall, to get the
airplane flying again. And that's exactly what needs to happen to our
economy, by pushing the stick forward, by reducing taxes, particularly
on small businesses.
I introduced my JOBS Act. My JOBS Act is an acronym for ``jump start
our business sector.'' It would cut the taxes for business for 2 years.
It would suspend capital gains taxes and dividend taxes. It would cut
the two lowest income tax brackets down to 10 percent and 5 percent.
So if you think about it, that would leave dollars in the hands of
business, leave dollars in the hands of consumers so that they would
have the money to stimulate the economy. So it's something that would
stimulate the economy and start creating jobs. And that is something
that needs to happen. And it is by cutting taxes instead of raising
taxes.
What we see here is our leadership here in the House, the Democratic
leadership, wants to raise taxes. Our President wants to raise taxes.
One thing that I want to go back to is something that you talked about
when the President said he was going to raise taxes on people who made
$250,000 or more, that these are rich people. The vast majority of
those folks are small business men and women who are filing their sub S
corporations as personal income taxes. And those are really not their
individual income, but that's how much money comes into their business.
{time} 2030
So they're not just wealthy people who are living lavish lives. They
are men and women who are trying to make a living and create jobs and
just take care of their families. So when we hear let's tax the rich,
they need to pay more, actually what you're taxing people is out of
jobs. You're killing the economy. You're taxing jobs. We need to lower
taxes, and that's what you're fighting for.
Mr. AKIN. I really appreciate the gentleman for joining me tonight.
We, in a way, as Americans have got two choices here. One choice is
the path to freedom, and the other path is the path of servitude to Big
Brother government. Every solution that we've seen coming from the
Democrats--now, we've seen an unusual year-and-a-half. I have been in
Congress now 10 years. I've never seen a year-and-a-half like this.
This is a total one-party rule. Almost every bill that passes,
Democrats all vote one way, Republicans the other, and the Democrats
have such a majority, and everywhere along the line they can do
whatever they want and they have. And the solution is always more
taxes, more government, and more government control.
So, on the one hand, you have the world of the Big Brother government
taking care of things, and you're guaranteed that you can't fail
because the government will always be there to bail you out, not just
as a big corporation but as an individual. You can make bad choices.
The government will be there to bail you out; that's what they promise,
but it doesn't work that way.
In fact, what all of human history shows us is that one of the most
dangerous things to human beings is big government because big
government has killed more human beings than all the wars of history
combined. Just take communism alone, which is a big government theory.
Just communism alone has killed more people than all the wars since the
time of Christ, and so this faith in big government is a very, very
unlikely thing to put your faith in.
The other choice is freedom, the bright light and the fresh air of
saying go out and do the best you can; you may fall on your face but
get up and try again. That's what America was always founded on, the
idea that government should just protect life, liberty, and the pursuit
of happiness.
My good friend, Congressman Broun.
Mr. BROUN of Georgia. Thank you.
We have 1 minute left I think, and I just want to say that helping
poverty is a very simple formula. It's a good-paying job and the
education to fill that job. That's another thing that we know as
Republicans. We've got to create those good-paying jobs, and the way we
do that is in the private sector by reducing taxes on small business
men and women so that they can create new jobs. We will continue to
fight for freedom.
There's a wide gulf, just like you were saying, between the
philosophies of the leadership of the Democrat
[[Page H4321]]
Party here and our leadership on our side. It is socialism on their
hand. On our hand, it's freedom, personal responsibility, and
accountability, and we're fighting for freedom and continue to do so.
Mr. AKIN. Freedom is a beautiful thing, but we have to realize there
are a couple of things that come along with freedom. If you really want
to be free, you're going to have to be responsible as well. You can't
assume Big Brother government is going to do it all for you. The other
thing is, if you want to be free, you have to tolerate the fact that
other people near you may be successful. You have to suffer with some
guy next door that's made millions of dollars and he gets to get in a
fancy motorboat and ride around and maybe you'll feel jealous and even
covetous of him. But that's freedom. You have to allow people to
succeed, and you have to realize that you can also make a mistake and
fail but you can have the freedom to get up and try again, but at least
the government won't chain you down with regulations and bureaucracy
and red tape and drive you into the dirt like an airplane that's not
being flown right.
I thank you very much for joining me, Congresswoman Lummis and
Congressman Broun.
____________________