[Congressional Record Volume 156, Number 88 (Monday, June 14, 2010)]
[House]
[Pages H4409-H4416]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         LESSONS FROM THE PAST

  The SPEAKER pro tempore (Mr. Murphy of New York). 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. It's a treat to be able to join my colleagues this evening 
as we take a look at, once again, some of the fundamental questions 
that we face as a Nation: the questions that center around our budget 
deficits, the world economy--particularly unemployment in America--and 
the various policies that are involved in some of these questions. 
These are things that have absorbed the attention of our Nation now for 
some period of time because the economy has been very tough. There are 
many Americans that are hard workers that are out of work, and the 
condition of our country overall, even particularly various States, is 
troubling at best, and dire probably would be more accurate.
  I think that it's appropriate sometimes just to look back a few years 
to see where we have come from and also to develop a little wisdom from 
the past and the lessons that we can learn from the past. I have chosen 
just to jump in at a particular point, an interesting point in history 
that I think a lot of people don't know. This isn't really old history. 
This is things most of us have lived in our own day.
  This was September 11, just 2 years after the attack on the Twin 
Towers, September 11, 2003, the situation chronicled by The New York 
Times, not exactly a conservative oracle, yet accurately reflecting a 
proposal, in fact, a plea, from President Bush. This is what the actual 
text of the article says: The Bush administration today recommended the 
most significant regulatory overhaul in the housing finance industry 
since the savings and loan crisis a decade ago.
  This is 2003. This is not 2008, when the housing crisis came crashing 
down upon all of our ears and destroyed the stock market and our 
economy. It says here: Under the plan disclosed at the 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.
  Freddie and Fannie, for people who have just gotten a little hazy in 
their memory, of course, were quasi-governmental. They were really 
private companies, but they were created with almost the implicit 
assumption that if anything goes wrong, the Federal Government will 
step in. And what was going on was that going back even before 2003, 
you had Federal policies. This is closely tied up with the ACORN 
organization and our President. You had Federal policies that said that 
banks had to give loans to people who were a very poor risk. There were 
certain areas of the country where it was very hard to get mortgages 
and for individuals to buy a house. We felt that home ownership was a 
good thing, in general. And so the banks, the Congress decided that the 
banks should be required to make loans to people who may not be able to 
pay those loans.
  So what you have here is social engineering. It reached its height 
almost under President Clinton in his last year. And he changed the 
percentage, saying that the banks have to up the percentage of loans 
which, by most other economic standards, would be just considered risky 
or poor loans. Well, what happened was the different bankers and other 
people who sold the loans took these loans and offered people money to 
buy houses, even though their credit or perhaps the job they had showed 
that they could not support that rate of mortgages and mortgage 
payments. So they sold all these things. But guess who picked up the 
tab? Well, it was Freddie and Fannie. And Freddie and Fannie got into a 
huge business of underwriting people's home mortgages, and this grew 
and grew and grew.

  Well, by 2003, even while we were in the height of the real estate 
boom and it seemed like housing prices were doubling every few years, 
Freddie and Fannie lost a few billion dollars or so, or a lot of 
millions of dollars, and that reflected the fact that Freddie and 
Fannie, in the President's estimation, were in trouble. So the 
President wanted more authority from Congress to regulate Freddie and 
Fannie, who were largely private, and the President had no authority to 
do that. So he is requesting authority.
  The response of the Democrats--in this case, particularly the top 
Democrat in the House at the time was Representative Frank. He said 
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, of course, 20/20 hindsight, you look back and say, Well, yeah, 
this isn't a very smart thing to have said because Freddie and Fannie 
were in huge trouble. They continue to be in huge trouble. They're 
extended way beyond what they have any means to pay for. They've got 
lots of debt that they shouldn't have. So there is a huge problem with 
Freddie and Fannie. But Freddie and Fannie were very popular here in 
Washington, D.C., because they had hordes of lobbyists with many, many 
thousands and hundreds of thousands and millions of dollars which they 
gave out to political people in Washington, D.C. So Freddie and Fannie 
were very popular, and it was quite a number of people, particularly 
Democrats, said, No, there's no real problem with Freddie and Fannie.
  As we know, Freddie and Fannie did have a problem and they're in a 
tremendous crisis. As that crisis developed, what happens is not only 
does ACORN and the social engineering threaten just the housing market, 
but it affected not only just our economy but the entire world economy 
and created this crisis which started in housing but, unfortunately, 
did not stay contained just to the housing market.

[[Page H4410]]

So we see the beginning of the economic problems that we're 
experiencing now started with ACORN, started in the housing market.
  Now, there are people who say sometimes that this is evidence of the 
failure of free enterprise. I bristle a little at that because this is 
not a failure of free enterprise. This is a failure of government 
social engineering. The loans that didn't work, I suppose that those 
loans were made in the name of compassion, although I don't know what 
is compassionate about asking somebody to take a loan and giving them a 
loan that they can't afford to pay and slowly they get farther and 
farther behind in debt and eventually get evicted from their house. 
That doesn't seem, to me, very compassionate.
  Anyway, it was this social engineering that got us into trouble. 
People could not afford to make these loans. And for a while there it 
got to be a pretty good deal, because you could get a loan where you 
wouldn't have to make any payments for a couple of years. You could buy 
a house for $300,000, make no payments for a couple of years, sell it 
just about the time you're going to have to make this huge, big 
mortgage payment, and double your money. That worked okay for a while 
until the bubble popped. Anyway, we start to get into serious economic 
problems.
  Now, as that continued, it affected other parts of the economy. As 
people are aware, we had the great big TARP or the big bailout of $700 
billion, something that I did not vote for and many other conservatives 
did not vote for. We believed that that problem could have been solved 
by changes in accounting rules, but I won't go into the details of 
that. Following that, then, is President Obama is elected, recognizing 
there were some difficulties in the economy. We had unemployment that 
was getting up there, 7 and 8 percent unemployment. At that time, the 
President came in and told us that we needed a big stimulus bill.
  Now, I have to say that many conservatives are skeptical about 
``stimulus'' bills. Just the premise of the whole idea is flawed.

                              {time}  2100

  The government cannot stimulate really the economy; the government 
can only just create an environment where the private sector can be 
productive, can produce jobs, can create wealth. But the government 
cannot create wealth, and it cannot really stimulate. It can only 
simply take money and spend it.
  So this stimulus bill was put together at about, not $700 billion 
like the big bailout for Wall Street; this was an even bigger bailout 
of about $800 billion. This is what we were told before the bill was 
passed: Our stimulus plan, this is the Democrats speaking, will likely 
save or create 3 to 4 million jobs; 90 percent of these jobs will be 
created in the private sector, and the remaining 10 percent are mainly 
public sector jobs. This is President-elect Obama January 10, 2009. And 
then the Romer Report estimated unemployment without stimulus is 8.8 
percent in 2010. So, in other words, we were told, If you don't pass 
this stimulus bill, what is going to happen is you are going to get 
unemployment that is going to go as high as 8 percent, so you need to 
hurry up and pass this big stimulus bill.
  Now the stimulus bill was not a stimulus bill. It was an investment 
in big government. It was an investment in socialism, and it was never 
going to work. We stood on the floor, I and a number of other 
Republican colleagues, a year ago and said, This will not work. And it 
is not because we were geniuses that we knew it would not work; it is 
just because history shows that this approach is flawed. It doesn't 
work at all.
  So, now as we take a look, the private sector has lost nearly 8 
million jobs. They claimed it was going to create three to four in the 
positive. We have lost 8 million since 2008. The government has gained 
656,000 jobs of government employees. A lot of these are temporary 
Census workers. And in May, only 5 percent of the job creation was in 
the private sector. In fact, the May unemployment rate was at 8.7 
percent, approaching 10 percent. So this stimulus bill didn't work.
  Now you could say, how is it you know it wasn't going to work. Well, 
we know because it has been tried before. It was tried by FDR. In fact, 
his Secretary of Treasury, Henry Morgenthau, tried this same basic 
idea. And as a former engineer myself, it is like the concept of 
reaching down into the loops of your boots and lifting hard and 
attempting to fly around the room by lifting your own boots.
  What they decided to do was, when the economy was having a hard time, 
with a little bit of coaching from dear little Lord Keynes from 
England, that what we would do is have the government spend a ton of 
money, and when the government spent this money, it would get the 
economy going. It would, quote, stimulate it, and get us back onto a 
sober track. Well, of course, that is pretty appealing to politicians 
because you get to be the guys to hand out all of other people's money 
in giveaways. That is what the stimulus bill included, a lot of 
handouts to various State governments so that their pensions could be 
propped up when the State governments had irresponsibly spent pension 
money that really wasn't there, and promising all kinds of retirees 
that they could have a much fatter pension than what the government can 
afford, that and a whole series of other things.
  But this bill was not even a classic FDR kind of stimulus bill 
because that would have been lots of cubic yards of concrete and 
hydroelectric dams and also lots of roads and sort of public works 
projects. This stimulus bill was much longer in increasing sort of 
welfare-related type of giveaways, giveaways to various States and 
buttressing and increasing various government handouts. And it was not 
as long and concrete in those types of jobs.
  Be that as it may, we can learn from Henry Morgenthau, if the leading 
and liberal party in this Capitol can learn from history, but they 
didn't.
  This is Henry Morgenthau going way back to 1939 after the Great 
Depression, and he appears before the House Ways and Means Committee 
and he says, We have tried spending money; we are spending more than we 
have ever spent before, and it does not work.
  Now we have read this here on the floor many times, but people in 
politics don't want to hear it because they like dishing out other 
people's money.
  He continued, I say, after 8 years of the administration, we have 
just as much unemployment as when we started, and an enormous debt to 
boot.
  It sounds hauntingly familiar; doesn't it? We did the stimulus bill. 
We created that much more debt, spent $800 billion, on top of the $700 
billion for the Wall Street bailout; the one was a bailout for big Wall 
Street firms, the other was a bailout for States and other individuals 
who spent more money than they should, and so we are supposed to bail 
them out. How well did it work? Well, Henry Morgenthau said it didn't 
work. And what do we find? Oh, my goodness, it doesn't work. Our 
unemployment is higher now than when we spent the money.
  So we are saying, okay, is this a failure of free enterprise? No, it 
is a failure of government to be able to straighten the economy out by 
taxing people a lot and spending all of their money. That just doesn't 
work. It may make you popular with the people you give the handouts to, 
but it does not get the government going. Unemployment, of course, 
skyrockets.
  Now here is the logic of how this thing works. Here is a picture of 
it graphically. This white line is the private sector level of 
employment. You can see the drop in employment coming down here in 
terms of the number of jobs on this axis, and the red line is the 
increase in government employment. So, as private sector jobs are going 
down, which means that is where you get tax revenue by people who are 
making income in their jobs, as the private sector is flat on its back, 
you see the red line here is government spending for hiring all kinds 
of different people who work in government.
  In fact, some statistics came out the other day saying people who 
work for the government now on the average are making twice as much as 
the people working in the private sector. That sounds hauntingly like 
what is going on in Europe. Obviously, you can't have a whole lot of 
people working for the government making more money per person than the 
people in the private sector because pretty soon, there just isn't 
going to be any more money

[[Page H4411]]

in the private sector. Not only will you slow the businesses down that 
create the jobs, you will kill the businesses dead, and then we will 
really be going from a recession to more like a great depression.
  So here we have the big government Democrat way. We see that this 
whole plan of stimulating the economy really is a failed scheme. You 
could say, well, you have your theories; everybody has their theories. 
But the fact of the matter, we just did this $800 billion experiment 
with your money, the taxpayers' money, and it hasn't worked. And the 
economy has not responded. That shouldn't be anything surprising 
because in a few minutes, we will get into the logic of how that works 
and why it doesn't make any sense.
  As we continue along after the big proposal for the stimulus plan, we 
have other major initiatives that the President and Speaker Pelosi and 
Senator Reid have been proposing. The first was this cap-and-tax deal. 
We saw that last spring a year ago, and that, of course, was to deal 
with global warming. The theory was, of course, in that, that 
CO2 was a very, very bad gas, and it is making the planet 
heat up at a terribly alarming rate, and we have to reduce the amount 
of CO2 that is being created because that is actually going 
through a feedback loop in our weather system. The CO2 has a 
disproportionate amount of leverage and is creating global warming. 
That is the proposed idea anyway.
  If you assume that is true, which as an engineer, I don't believe 
that is true, certainly the data does not support the radical claims of 
global warming that we have seen from that community. In fact, we have 
seen evidence in some of the e-mails of the cheating that was done, 
where the lab was being fudged and the facts were being skewed in order 
to make it look like global warming was a bigger problem.
  But even if you believed that were true, if you really want to get 
rid of CO2, all you have to do is close down some coal-fired 
power plants and replace them with some nuclear plants. In fact, in 
America, if you just took 20 percent of our coal-fired plants and 
changed them to nuclear, it would get rid of the CO2 
produced by every passenger car in America.
  Was that what this big old cap-and-tax bill did? No, this bill was 
huge amounts of government bureaucracy, and it was a huge taxation. It 
was a big taxation scheme. It was a big power grab by the Federal 
Government. Would it really reduce CO2? Probably not.

                              {time}  2110

  It just increases the power of Washington, increases taxes. It's of 
course breaking the President's promise. He said, I will not tax 
anybody who makes more than $250,000; and yet this is a tax every time 
you flip your light switch. So this was one of his initiatives, and he 
has a whole bunch more. And every one of these initiatives is carefully 
crafted, whether they were done intentionally or not I am not saying, 
but every single one of these things has the effect of further 
destroying jobs and ruining our economy.
  I am joined by a good friend of mine from down in Georgia, my good 
friend Dr. Gingrey, and we are going to talk a little bit about some of 
these problems. And then as we start to conclude this evening, we are 
going to talk about the positive things, the things that can be done to 
fix this problem. These problems are not things we haven't seen in 
America.
  We have not seen this much gross uncontrolled Federal spending, this 
much lack of discipline, fiscal discipline in our country any time that 
I recall. It's been this bad, but that doesn't mean that there aren't 
solutions and there are things we can do. But we need to do them 
rapidly and soon.
  I would now recognize my good friend, medical doctor and U.S. 
Congressman from Georgia, a good friend, and a very bright fellow, Dr. 
Gingrey.
  Mr. GINGREY of Georgia. Mr. Speaker, I appreciate the gentleman from 
Missouri for recognizing me. And just looking at some of the slides 
that he is presenting in regard to the one that's currently on the 
easel, Mr. Speaker, I encourage all of my colleagues on both sides of 
the aisle to pay close attention to that, the one entitled ``Obama Plan 
Taxes.'' And the gentleman from Missouri has already explained the 
bullet points, cap-and-tax, the carbon taxation, health care taxes, 
employers' tax if they don't offer a government-approved plan, and 
medical device manufacturers taxed on the sales price of their 
products, and then of course the last two, the death tax, tax on 
inheritance, and capital gains tax.
  One that's not on that particular slide, Mr. Speaker, that is really 
troublesome, of course, is raising the tax on dividends from 15 percent 
to whatever one's marginal rate might be. And with President Obama 
planning to let the Bush tax cuts expire, that means all the marginal 
rates will increase, and the highest rate will go up to 39.6 percent. 
So individuals in that income tax bracket will be paying not only 39 
percent on their earned income, but 39.6 percent in fact on capital 
gains.
  What a job killer, Mr. Speaker, to tell people, you know, you're 
going to have to pay this much to invest. The stock market is already 
struggling. Do we want to deal it a death blow? It makes no sense 
whatsoever.
  I wanted to, if the gentleman would allow me, and I know we will 
engage in a colloquy back and forth, but Mr. Speaker, I did want to 
mention one thing. Maybe it's already been said this evening, but I 
don't think it can be said too much, and that is the President reneging 
on his promise to the American people in regard to health care: if you 
like your health care plan you can keep it, until you can't keep it.
  Mr. AKIN. I don't think he added that little piece, did he, until you 
can't keep it? You can keep it. He didn't add, ``until you can't keep 
it.''
  Mr. GINGREY of Georgia. Mr. Speaker, the gentleman was absolutely 
right. That was Phil Gingrey's addition to the quote, the President's 
quote. But what I mean by that, of course, is the fact that under the 
Medicare Advantage program in particular, a very popular way of 
receiving health care for our Medicare population, fully 20 percent of 
the 45 million people who are on Medicare in this country, 20 percent 
of them choose Medicare Advantage because the advantage is there, the 
advantage to be able to get an annual physical examination as part of 
their Medicare benefits, the advantage of being able to have a 
screening done for a lot of diseases--I am talking obviously about 
screening for breast cancer, screening for colon cancer--without any 
copay required. The coverage in many instances of prescription drugs 
for folks so that they don't have to buy supplemental at about $130 a 
month, Mr. Speaker.
  The President under ObamaCare and the Democratic majority have cut 
those programs 17 percent a year. And I know my colleague from Missouri 
knows this. It adds up in the aggregate over a 10-year period, Mr. 
Speaker, of a $130 billion cut to the Medicare Advantage program, 17 
percent a year.
  Now, when we started this debate, it was implied, maybe correctly, 
that Medicare Advantage insurance companies that ran these programs for 
our seniors got reimbursed on average 14 percent more than traditional 
fee-for-service Medicare expenditures on an annualized basis. Well, why 
cut it 17 percent if they were getting 14 percent more? If your 
argument is let's cut the fat out of Medicare Advantage, you cut the 
fat. And then you are down into the muscle and the gristle and the 
cartilage, right down almost to the bone.

  And in the final analysis, what it means, Mr. Speaker and my 
colleagues, is that Medicare Advantage cannot survive. There is no way. 
And that means that these people, these 20 percent, 11 million of them, 
many of them in my 11th Congressional District of Georgia, northwest 
Georgia, are on the Medicare Advantage program, they are going to lose 
that coverage. It's as simple as that.
  And I yield back to my friend. I thank him for allowing me to join 
him this evening.
  Mr. AKIN. I appreciate it, Doctor. Certainly as a medical doctor you 
have been looking very closely over the last year at one of a whole 
series of these taxes. These things effectively work as taxes. Let's 
just take, if you will, health care out of the equation, whether people 
are healthy or get good health coverage.
  The point of the matter is that this cap-and-tax is a huge tax that 
the House passed on the use of energy, which affects anybody who uses 
energy. You don't have to be very well-

[[Page H4412]]

to-do to have a pickup truck and have to drive a long way to a job, and 
you spend a lot of money in gas or some type of energy. So this is a 
big tax on energy. This is a big tax on health care.
  There is going to be a huge, huge amount of taxes. They tried very 
hard to make it look like this is a trillion-dollar increase in taxes, 
and the numbers continue to come out that it's a lot more than that. So 
there's another tax. And then you have got the death tax, as you 
mentioned; you have got the capital gains dividend tax, which is one of 
the main things that helped get the economy going before.
  All of these things are boomeranging around, and you finally, when 
you get done with the whole thing, you end up with a cartoon that some 
humorous fellow put together here: ``Now give me one more good reason 
why you are not hiring.'' And you see these bulls coming into the china 
shop; and you have got cap-and-tax, or cap-and-trade, the health care 
reform, which is, of course, the biggest, probably the worst, bill we 
have seen; and then of course the various other taxes that are coming 
into this. And he says: ``Why are you not hiring?''
  And of course what's happening is we are doing two things, basically, 
in the economy. It's very simple. We are spending a whole lot of money, 
and we are taxing a whole lot. And, historically, that's exactly the 
wrong thing for us to be doing. And you have all of these taxes, and of 
course people don't even begin to realize how much that socialized 
medicine program is going to cost. Other nations have tried it. It's a 
total budget buster, even though it ruins the quality of health care as 
well.
  Mr. GINGREY of Georgia. If the gentleman would yield, Mr. Speaker. I 
thank the gentleman for yielding. If you would leave that cartoon up 
there just for a second longer. I love that cartoon. It really portrays 
what's been going on under this administration and the current majority 
party in Congress.
  I mean, this bull in a china shop approach, as this cartoon so 
adequately depicts, it's like rushing into a situation in a clumsy, 
haphazard way when the situation that you are going into is very 
fragile. And it deserves wisdom, and judgment, and temperament, and a 
measured response so that you don't go in and break all this valuable, 
fragile china. And the analogy of course would be our economy.
  And when you think about some of the bulls that came charging in, 
what comes to my mind, Mr. Speaker, my colleague from Missouri, would 
be something like the economic stimulus package of almost a trillion 
dollars that has grown a lot of government jobs, most of them census 
workers, but very few jobs in the private market. The charging in there 
with the TARP bailout, $800 billion. We are going to buy up all these 
toxic assets, these credit default swaps and all of these things that 
none of us really understood when we first started discussing this and 
how fit Freddie and Fannie had packaged all these mortgages and a lot 
of them with their very poor credit and not worth a whole lot.

                              {time}  2120

  So we were going to buy the TARP. It stands for Toxic Asset Relief 
Program, and not one toxic asset to this day, and it's been a year and 
a half since that bill passed, has been purchased.
  What we did, we started doling out the money to the nine largest in 
the country, said, Here, take these hundreds of billions of dollars 
even if you don't want it; and the poor community banks in my community 
and your community, the gentleman from Missouri (Mr. Akin) and other 
colleagues, all 435 of us, you know, we see struggling, and yet nothing 
is done to this day to help them.
  Again, I thought that slide was a very appropriate segue for me to 
show, you know, all of this bull-in-a-china-shop spending instead of 
cutting the deficit.
  Mr. AKIN. I'm going to get to that, but one of the things when you do 
what you're talking about, that bull-in-the-china-shop mentality of 
just spending money out of control and it's a bailout for big 
businesses, bailout for Wall Street, bailout for various States, 
bailout for individuals that didn't save money and we're going to give 
this and this and this, when the government starts getting into the 
bailout business--of course it's choosing winners and losers--there are 
lot of people that are not getting any bailout. They're being expected 
to pick up the tab for other people's financial errors.
  What happens is you start spending all this money, of course if 
you're running any kind of a responsible operation, you've got to have 
some sort of a budget saying, you know, how are we going to make this 
all work, because pretty soon you're going to start giving away more 
money than you have. In fact, I think somebody was quoted one time 
saying, the trouble with socialism is pretty soon you run out of other 
people's money.
  So budgets are necessary, and some of our leaders here on the floor, 
some of the Democrats said they recognize the fact budgets are 
necessary. The Democrat whip, Congressman Hoyer, said the most basic 
responsibility of governing was a budget. The most basic responsibility 
of governing. I have to agree with Congressman Hoyer. Here's 
Congressman Spratt, the head of the House Budget Committee, said, if 
you can't budget, you can't govern. Those are strong words and they're 
true words.
  Mr. GINGREY of Georgia. Indeed. If the gentleman would yield for a 
second, and, Mr. Speaker, what the gentleman is talking about here, 
these quotes from the Democratic whip at the time but now Democratic 
majority leader, the Honorable, and distinguished I might add, Steny 
Hoyer from Maryland and Representative John Spratt from my--well, I 
lived 20 years of my life, was born and raised in South Carolina, and I 
respect John Spratt and Steny Hoyer. I think Members on both sides of 
the aisle--so you're talking about not a couple of freshmen Members 
sitting on the back bench. You're talking about the chairman of the 
Budget Committee, who has been in this body and served with distinction 
probably for--I'm going to guess John Spratt has been here 25 years or 
so, Steny Hoyer as well, and we respect them. They're intelligent. 
They're thoughtful Members, without question. You know, we don't agree 
with them, we Republicans, Mr. Speaker. A lot of times we will be 
voting opposite, many times we will be voting opposite.
  But for these two gentlemen to have those quotes, this really says 
something, and the gentleman from Missouri is so right. When they say 
that--and then today it's like, well, we don't have a budget and, 
furthermore, we're not going to have one because, well, maybe the 
gentleman from Missouri would like to talk about that. But I think it 
needs to be discussed, because if you can't budget, I agree with Mr. 
Hoyer and Mr. Spratt, you cannot govern.
  Mr. AKIN. You know, there's a certain point where if you spend too 
much money and you try and put a budget together, the train is going to 
come off the track. I think that's where we are, and that's, I think, 
the reason why the Democrats said, yeah, you have got to budget. We 
always had a budget when the Republicans were in the majority and we 
always had a budget here in the House. It didn't always get through the 
Senate necessarily, but we had a budget in the House.
  We're also joined, as you can see, my friend, by another good friend 
of ours coming from the State of New Jersey, and that's Congressman 
Garrett. And, you know, I have to say that the State of New Jersey has 
been refreshing in the last year or so with their new Governor showing 
some fiscal responsibility, just giving heartburn to all the big 
spending people that want to spend that State into oblivion. And 
Congressman Garrett is a good friend of ours, a good, solid, fiscal 
thinker, and I'm just delighted that you've joined us in our discussion 
this evening.
  I yield.
  Mr. GARRETT of New Jersey. Thank you. I wasn't going to start off on 
that road, but it's probably a good one to talk about for just a 
moment. I commend the gentleman for his leadership on this general 
issue and being down on the floor bringing an educational point not 
just to the Members of the Congress who are here or watching back in 
their offices but the American public as well. So I commend the 
gentleman.
  Yes, I am from the great State of New Jersey, and we have gone 
through

[[Page H4413]]

phenomenally bad fiscal times for the last decade or so in our State 
that brings us to the brink of economic morass that we're in in the 
State right now. In one sense, you might say that New Jersey is sort of 
like a microcosm of the rest of the country, and that is spending 
beyond its means.
  We hear a lot in the news with regard to the great State of 
California out on the West Coast, and that's simply because the State's 
so large and the economy is so large. But a lot of the economic funds 
and the debt limits, New Jersey is actually in a worse state than 
California is on a per capita basis.
  Mr. AKIN. I don't know if that's good bragging rights or not. That's 
pretty scary.
  Mr. GARRETT of New Jersey. New Jersey often says we're number one in 
a lot of things, and sometimes the things that we're number one in are 
great but at other times they're not so good, and the debt levels and 
the responsibilities of the taxpayers of New Jersey to pay them off are 
quite astounding. And the number that comes to head just as an aside 
right now is that per family, which is about four people, it's around a 
hundred thousand dollars, the debt level, if you add the State, 
counties, and local levels.
  Mr. AKIN. So local spending, the average family of four, is a hundred 
thousand bucks of debt, per family of four?
  Mr. GARRETT of New Jersey. Right. And if you translate that into if 
you wanted to go out and get a mortgage on your house right now for a 
hundred thousand dollars, at around 6 percent, I guess that would 
translate to around $600 a month. So that's what we are all on the hook 
for in the State of New Jersey.
  The Federal Government, of course, goes way beyond that, and I don't 
have to tell you that, but the Federal Government needs to simply do 
what New Jersey is doing right now and that is begin the process of 
living within its means. It's not an easy one by any means. That's why 
our Governor is making----
  Mr. AKIN. What would be the first step in living within your means? 
Would it not be putting a realistic budget together, perhaps?
  Mr. GARRETT of New Jersey. Well, there you go. It would be, and as a 
matter of fact, as you know, I serve on the Budget Committee and 
Chairman Spratt is the chairman of that committee. We had just this 
past week the head of the Federal Reserve, Chairman Bernanke, before 
our committee, and we put that question to him. We asked him a two-step 
process: What are the financial markets of this country looking for 
today, and why do you have so much unrest in the financial market? And 
he basically said it is because of all the uncertainty out there--I'm 
paraphrasing, if you will. And then we said, well, is it a problem that 
creates uncertainty, then, if the Federal Government does not make 
transparent exactly what we are going to be spending, i.e., present a 
budget? And he basically says, well, that is one of the elements of 
uncertainty, absolutely.
  Mr. AKIN. I guess he was being gentle at least, trying to give us a 
little nudge in the right direction.
  Mr. GARRETT of New Jersey. He was, and I was being a little bit 
gentle in those areas. I put a chart on the screen showing where we've 
been over the last several years because, you know, the Democrat 
majority always says that they inherited this problem and that all the 
problems that we're dealing with today are all President Bush's fault. 
And I put up a little chart on the wall showing going back, I guess it 
was, from 2000 and 2004 and showing what the budget deficits were, and 
that was the gray chart. I don't have the chart right here. So it was 
this big, then it got a little smaller and a little smaller, and then 
it went to the year 2007 and it got about this level, and 2007 and 2008 
it goes basically off the chart.
  Mr. AKIN. I think I've got that chart, gentleman. Maybe we'll 
proceed. I have one other chart here I think that's kind of 
interesting, because we've heard these statements now from the Democrat 
leadership saying budgets are critical, and as you know, you know the 
punch line, the decision is we're not going to have a budget. So here 
you have, this is The Hill, a newspaper. It says, Skipping a budget 
resolution this year would be unprecedented.
  The House has never failed to pass an annual budget resolution since 
the current budget rules were put into place in 1974, according to 
Congressional Research Service.

                              {time}  2130

  Now, that's a fairly reliable report; at least they can get the 
history of whether we passed a budget in the House. They said we have 
always, since 1974, passed a budget, and yet we're not going to pass a 
budget this year. That's unprecedented.
  Mr. GINGREY of Georgia. If the gentleman will yield.
  Mr. AKIN. I do yield.
  Mr. GINGREY of Georgia. Again, we are getting back to that issue, Mr. 
Speaker, of not even having an intention to pass a budget. And I thank 
the gentleman from Missouri for bringing that point out, that this is 
the first time at least since 1974. The Congressional Research Service 
is very accurate in the information they present the Members of 
Congress.
  I was thinking about--it's been in the news so much, Mr. Speaker--the 
Euro zone. Those countries of the European Union, 27 of them--I guess 
maybe 23 or 24 are members of the Euro zone. They have that common 
currency. And the crisis that's going on there in regard to, the 
acronym is PIIGS, but it stands for the countries of Portugal, Italy, 
Greece and Spain. I'm forgetting one ``I.''
  But in any regard, Greece got this massive bailout of something like 
$140 billion, and the Euro zone from the International Monetary Fund 
with them pledged, I think, another $750 billion worth of bailout 
because these countries that constitute that acronym PIIGS, their debt 
ratio to their gross domestic product is so high. Well, look in your 
own eye. Don't curse the speck in somebody else's eye when you have a 
plank in your own, as the Bible says. But that's essentially what we 
are doing, the United States of America. That's what we are doing. Our 
debt to GDP is what, my colleagues? You can tell me. But it's close to 
90 percent, and by 2020, it will be well over 100 percent, if not 150 
percent.
  I will yield back to let you all discuss that.
  Mr. AKIN. I very much appreciate you bringing that up. Actually, I 
should pay you a few dollars for helping me get to the next slide 
because I've got a picture of where Greece and Italy and some of the 
European nations are relative to the U.S., but I will get to that in a 
minute.
  But I think, just before you joined us, my good friend from New 
Jersey mentioned the level of this deficit spending. And I think it's 
important to take a look on a bar graph as to what we're looking at 
here.
  I know that President Bush--and as a Republican, I heard this 
frequently--he was criticized for spending too much money. And I voted 
against some of those things and think, yeah, we did spend too much 
money because we had a deficit. But on the other hand, he argued that 
we had a couple of wars and a bad economy kicking things off. As you 
can see, the amount of deficit during the George Bush years here was 
coming down because of the things that they did by reducing taxes. They 
had the right formula for getting us going in the right direction.
  Here was President Bush's worst spending year, his very far worst 
when Speaker Pelosi was in charge of Congress, so he wasn't getting any 
help from the Republicans in the House at that point. This was Bush's 
worst spending year.
  And then you come to the first year of President Obama, and he 
triples the deficit. From about $450 or so billion of deficit, we go to 
$1.4 trillion of deficit right off the bat in the first year. I mean, 
this is absolutely skyrocket, smashing, incredible levels of spending.
  Mr. GARRETT of New Jersey. If the gentleman will yield.
  Mr. AKIN. I yield.
  Mr. GARRETT of New Jersey. And you are setting the record straight, 
but just to elucidate a little bit more on the record as to the process 
here in the House.
  As the gentleman well knows, all appropriation bills, all spending of 
taxpayers' money originates right here in the House. And who was the 
person holding the gavel at that time when those spending bills 
originated from here in the House? Well, it's the gentleman's name who 
was on the last chart, Chairman Spratt.

[[Page H4414]]

  So, on the 2007 year, right down there, that would have been when the 
Democrats would have been taking control of the Congress. They took 
control, and so they would have been having the appropriations process 
that year going forward. And so, realistically, who was responsible for 
that immediate uptick in the red chart right after that? Well, we 
didn't have to wait for President Obama to come into office in order to 
see the control of Congress that changed; that was the Democrat 
majority. And so although President Bush was still in the White House, 
where was the spending coming from at that point?
  Mr. AKIN. Originated in the House.
  Mr. GARRETT of New Jersey. Right here in the House.
  Mr. AKIN. So that was this one. But what happens when you put 
Chairman Spratt together with President Obama?
  Mr. GARRETT of New Jersey. Off the charts.
  Mr. AKIN. Here we go, $1.4 trillion.
  Now, there are different ways of looking at this. When you talk about 
billions and trillions, for poor little people like me, those numbers 
are very hard to understand or make much sense out of it. But one way 
to take a look at it is this deficit as a percent of gross domestic 
product; that is, all of the goods made in America, what is the ratio? 
This one, the worst, was 3.1 percent of GPD. President Obama's first 
year here, where you have total Democrat control, one party rule, 
you've got $1.4 trillion, which is, as I recall, 9.9 percent of GPD, 
which is the highest since World War II. So this stuff is unlike 
anything we've seen before. And this is part of the reason why the 
Democrat Party doesn't want to make a budget, because they're really 
proud of those numbers. If those were my numbers, I'd be scared to 
death. And I think the American public is concerned about that level of 
spending.
  I was going to jump just to a little bit--I mean, we've been very 
critical of the fact that we're doing two things wrong in this one-
party rule run by the Democrats, and that is too much spending and too 
much taxing. It shows a tremendous faith on their part of what the 
Federal Government can do in terms of solving problems. They believe 
that there isn't any problem that can't be fixed with more taxing and 
spending; that's where we seem to go.
  But let's talk about some stuff that's just so basic that many, many 
Americans understand this, particularly kids in Georgia or New Jersey 
or Missouri that have ever run a lemonade stand, just to understand a 
little bit about how businesses go. And so I put together a list of 
some of the main things that are job killers because the result of too 
much spending and too much taxing is there is unemployment. So what is 
it that kills a job? What is the solution to this problem? I'm an 
engineer. You're a doctor. And gentlemen, I don't recall----
  Mr. GARRETT of New Jersey. I'm a lawyer.
  Mr. AKIN. A lawyer. This is almost like one of those jokes, you know.
  But anyway, what is it that kills jobs? I've talked to my businessmen 
in my district, and I've heard this over and over: The first thing is 
excessive taxation. You take a look at the stimulus bill, huge amounts 
of Federal spending. You've got the socialized medicine bill. You've 
got the cap-and-tax bill, all those massive tax increases, capital 
gains, dividends, death taxes, all these, more and more taxation, heavy 
taxation. And what does that do? It kills jobs.
  Well, why would that be the case? Well, if you're a businessman and 
you're going to get taxed a lot, it takes your money away from 
investing back in your own business. And 80 percent of the jobs in 
America are with companies with 500 or fewer employees, and so if that 
guy that owns the business, he looks like he's a rich guy. Maybe he's 
making more than $250,000 a year. You say, let's tax that guy. But if 
you tax that guy, then he can't put the money back into building a wing 
in the business, putting new machine tools in it, or whatever the new 
technology is, and creating the jobs. And so this taxation inevitably 
works to create unemployment.
  The funny thing is the Democrats can't have it both ways; they can't 
have a war on business and say they're worried about unemployment, 
because it's businesses that employ people. They act like there isn't a 
connection between businesses and the people who get hired by the 
businesses. So if you tax a business out of business, there won't be 
any jobs. It's not that complicated. So the solution to these things 
isn't that complicated. You can't hammer the guys that own the 
businesses with all these taxes.
  Of course, the other problem that we've created economically is that 
the regulations on the banks are so tight that the small businesses are 
having trouble getting access to capital. There is a liquidity problem, 
and that's part of the regulation of the banks and the finance 
industry, which they've also managed to mess up.

                              {time}  2140

  Then, of course, economic uncertainty is a factor, which is where 
people don't know what's going to happen next. What crazy scheme are we 
going to do next? Well, it means you're going to hunker down, and 
you're not going to hire people. Then, of course, red tape and 
government mandates--all of these things--kill government jobs, and 
we're doing every one of these things. It's like we've declared war but 
not on radical Islam. We haven't declared war on Iran, on Iraq or on 
North Korea. We're declaring war on U.S. businesses.
  Mr. GINGREY of Georgia. If the gentleman will yield, this slide, Mr. 
Speaker, the one that's currently on the easel, is labeled--for our 
colleagues if you can't see that--``Close Job Killers,'' and it has the 
different bullet points.
  I think, Mr. Speaker, that the third bullet point, ``Economic 
Uncertainty,'' may be one of the most important reasons the situation 
is so bad in our country right now. The gentleman from Missouri 
referenced kids in New Jersey, in my State of Georgia, and in his State 
of Missouri who are creating lemonade stands, who are making lemonade. 
Certainly, the ingenuity of the American people is such that, over the 
230-year history of this country, we have made a lot of lemonade--
despite being hit with a lot of lemons. Yet that, too, has its limits. 
When you have excessive taxation, when you have insufficient liquidity, 
when you have, yes, economic uncertainty, like we have never had in 
probably 25 years, and when you have red tape and government mandates, 
you can just make so much lemonade. That's the problem, and it goes 
back to the slide earlier of the bull in the china shop approach.
  Now here, this weekend, all of a sudden, after the President, Mr. 
Speaker, meets with our Republican leader, Leader Boehner, and with 
Leader Hoyer, they're talking about what we can do to cut down on the 
excessive spending and on all these deficits, the debt. Lo and behold, 
on Saturday night, out of the blue, having not discussed that on 
Thursday in the presence of the leaders of this body, President Obama 
now says we want $50 billion more, a mini-stimulus if you will, from 
this Congress in order to shovel it to the States on a temporary basis 
so we can keep teachers and public defenders and firefighters and all 
these folks on the job. Yet for how much longer? Then when you pull 
away and when you spend all of that $50 billion, who is it on the backs 
of? Once again, it's on the backs of the States that have to balance 
their budgets. It is fiscally totally irresponsible.
  Mr. GARRETT of New Jersey. If the gentleman will yield, first of all, 
isn't it amazing that we have gotten to the point where we would say 
that spending $50 billion is a mini-stimulus proposal? I know you're 
doing that flippantly in light of the fact that we have $700 billion 
here and $700 billion there and trillions of dollars by the Federal 
Reserve, but that is amazing that we've gotten to this point. Perhaps 
there is so much lemonade that the American public has basically soured 
on all of this spending that has been going on here.
  Not to play the puns any longer, you said earlier that this 
administration has waged war on business. I guess you could extrapolate 
that and say they're really waging war on job creation in this country. 
I think that's issue number one, job creation, because, by waging war 
against the expansion of businesses out there, that means we're not 
going to see job creation.
  Part of that war is a battle that is going on right now, literally as 
we

[[Page H4415]]

speak. It started on Thursday of last week. It will go on for the next 
2 weeks. What I'm talking about, of course, is the conference committee 
between the House and the Senate on the financial service reform, which 
is definitely an attack on your second bullet point there--insufficient 
liquidity.
  The bill that came out of the House and out of the Senate, under the 
majority party, will restrict liquidity; and it will restrict credit in 
the credit markets across this country. It will do so on a whole host 
of fronts whether it's through the Federal Reserve activities, whether 
it's through the CFPA, or whether it's through the regulations of the 
derivative markets; and I can just go down the list.
  What does all that mean to you, to me, and to all the folks back 
home?
  It means it will be harder to go out and get that auto loan. It will 
be harder to go out and get that home equity loan. It will be harder to 
go out and get that mortgage so you can buy a new house. It will be 
harder for that small business that wants to buy a new truck so it can 
hire one more person to drive that truck to do business. It will be 
harder for that small business to get a loan to expand its operation. 
All of those things--a lack of liquidity and the tightening of the 
credit markets--will hurt business, and it will hurt job creation. That 
is what is going to be rolling out, unfortunately, in the next couple 
of weeks here in Congress.
  Mr. AKIN. Gentlemen, fortunately for you, or maybe unfortunately for 
you, you are on the committee that is dealing with that. To me--and 
just tell me if I'm confused about this because I work more of the 
Armed Services side of things and the national security and the 
national defense side, and we've got a lot of bad news over there, but 
I'm not going to share that tonight.
  There is an irony here that the Federal Reserve has created this 
huge, massive liquidity. Yet it's like they've choked the funnel off so 
tightly that the liquidity can't drip down. The Democrats used to talk 
about trickle-down economics. I mean, this truly is kind of a trickle-
down scheme. You have all this liquidity created by the Fed. Yet it 
can't get down to the small business guy because, I assume, that part 
of this is the banking regulators and the banking policies that are 
saying to the local banks, That's not a good enough amount of security 
on that loan. You've got to go back because that loan is upside down. 
Even though that business has been there for 100 years, even though you 
know the family, even though you know they're going to pay off, even 
though they always pay on time, it's not good enough. You've got to go 
get a whole bunch more cash from them to make your books look right for 
your bank.

  Mr. GARRETT of New Jersey. I think, if a bank were standing here with 
us, it would say, Well, look at bullet point No. 3, ``Economic 
Uncertainty.'' It would say, With so much coming out of Washington that 
is uncertain, we have no idea, A, what the rules are going to be 
tomorrow and, B, what the economy is going to be tomorrow. So they 
would argue that they're trying to do the prudent thing, the safe thing 
and say, We're not going to loan to that person who, under normal 
circumstances, we would loan to.
  So you are absolutely right. The Fed theoretically is trying to 
provide liquidity, but the banks are saying, Whoa, not under this set 
of playing rules, which may change tomorrow or which may change next 
week. So the Federal Government is exacerbating the problem that they 
created in the first place.
  Mr. AKIN. Well, I appreciate your perspective there, particularly 
with your working on that committee. That is very helpful.
  Here are a couple of other charts that I thought were interesting. 
This gives a little bit of a sense of progress on a 20-year increment. 
This is 1970. The foreign holdings of our debt were 5 percent. This is 
who owns our debt. Foreign holdings were 5 percent in 1970. Jump 
forward 20 years to 1990. Foreign holdings were 19 percent. In 2010, 
foreign holdings are 47 percent. So not only are we being asked to pass 
another one of these stimulus bills to bail out these States that have 
been irresponsible in managing their pensions, but we are now asking 
foreign countries to come in and to underwrite our silly economic 
policies.
  Now, after a while, these foreign countries are going to ask, Wait a 
minute. What's going on over there? What are you guys thinking?
  Mr. GINGREY of Georgia. If the gentleman would yield, I know that 
time is short, but this is the whole point.
  Once again, Mr. Speaker, I talked about the euro zone in Greece. The 
country of Greece has had their credit rating downgraded. So any 
country that would lend them money--buy their financial paper--will 
have to charge a higher rate of interest. I think the gentleman from 
Missouri and my colleague from New Jersey would probably agree with me 
that, pretty soon, that very same thing could happen to our country. 
They would agree that our debt is not as credit-worthy as it has been 
and that, all of a sudden, we are going to have to pay a higher rate of 
interest to borrow money.
  I yield back.
  Mr. AKIN. I promised the gentleman that we did have a chart that was 
taking a look at these foreign countries. We've taken a look at Greece, 
and Greece has been in the news because it has just created shock waves 
in Europe as to how it has been affecting their economic system.
  This is the deficit as a percent of GDP. I mentioned that, as to 
where we are in the United States, which is at that $1.4 trillion level 
that we just saw last year and at another even higher year this year, 
we are at about a 10.3 deficit as a percent of GDP. Greece is at 9.4. 
So our deficit, as a percent of GDP, is worse than that of Greece. 
Spain and the United Kingdom seem to be worse off than we are, but we 
are the next worse on this chart with regard to the deficit.
  If you go to debt as a percent of GDP, you've got the United States 
here. Greece is ahead of us there, and Italy is ahead of us, but we're 
ahead of the other European countries as well. So this isn't exactly a 
cheery picture of the job we should be doing in terms of management.
  We are coming close on time here, and I have one other chart here, 
which is that of our corporate tax rates. The green one over on the 
right is the second highest corporate tax of any nation in the country.
  So what's the solution?
  I promised we'd deal a little bit with solution. The solution is 
quite simply that you've got to cut spending and that you've got to cut 
taxes. If the Democrats could not learn from Ronald Reagan or from Bush 
when they cut taxes and restored the economy, they should learn from 
JFK, who did the very same thing. Here is an example of this. It's 
called the ``Laffer curve.'' You can see that this red is the tax rate. 
As the tax rate comes down, the bar chart shows the total Federal 
savings in receipts, so we actually get more revenues in. When you drop 
taxes, you get more revenue.
  So the solution has been demonstrated by JFK, by Ronald Reagan, and 
by Bush. They turned economies around. Instead of doing what FDR did, 
which is what Henry Morgenthau told us would not work, you can simply 
do this: what you do is you've got to drop the tax rate and drop 
government spending. The trouble with dropping government spending is 
you can't do giveaways to everybody and do bailouts to everybody.
  So what's going to happen here?
  America is in the cross-hairs of a choice. We're either going to 
choose to follow--because there are two U.S.s: one U.S. had the idea 
that government is going to provide health care and education and jobs 
and food and housing. The other U.S. said that we believe the job of 
government is to provide life, liberty and the pursuit of happiness. 
That is a very narrow description of government--just national defense 
and a level playing field. Those are the two U.S.s. The one is, of 
course, the USSR, and that system didn't work. The other is the one 
that has worked for hundreds of years.
  We need to get back to that idea of a limited government, doing just 
what it is supposed to do constitutionally and not try to be the 
bailout king of the entire world and of the entire country.

                              {time}  2150

  I thank my good friend, Congressman Gingrey from Georgia, for your 
insight, and not only your medical professionalism but the way that 
you've run your office. And the same thing for

[[Page H4416]]

my good friend from New Jersey, Congressman Garrett. Thank you so much 
for joining us tonight.
  Good night, and God bless all of America.

                          ____________________