[Congressional Record Volume 157, Number 21 (Thursday, February 10, 2011)]
[House]
[Pages H673-H675]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
JOBS, THE DEFICIT AND FEDERAL SPENDING
The SPEAKER pro tempore (Mr. Gowdy). Under the Speaker's announced
policy of January 5, 2011, the gentleman from Missouri (Mr. Akin) is
recognized for 18 minutes as the designee of the majority leader.
Mr. AKIN. Mr. Speaker, congratulations. You look good up in the Chair
there.
We are going to have a chance to talk for just a few minutes about an
interesting topic. It is something on the minds of Americans
everywhere, and that is about jobs, about the deficit and about Federal
spending and what we have to do in those areas.
I think sometimes it is helpful, you hear so much detail that you
need to step back at the 30,000-foot view and say what is the big
picture of what is going on. So I have here one of those traditional
pie-type charts, and it has an overview of the total spending of the
Federal Government in the year 2010. So what I want to do is just take
a look at that and then talk about what that means relative to the
problems we have in overspending in the Federal Government.
Also, this connects to unemployment in this sense, that when the
Federal Government spends too much money and is too intrusive and takes
too much in taxes, all of those things destroy the jobs created by
small businesses.
So let's just be completely clear. We have heard stories about
unemployment and these ``heartless Republicans.'' The problem is that
if you destroy businesses, you don't have any businesses, you don't
have any jobs. And that is what we have been doing. How is it we
destroy businesses? One, we overtax them; two, we overregulate them
with red tape; three, we make it hard from a liquidity point of view to
get loans from banks, because the Federal officers are looking over the
bankers' shoulders second-guessing the loans; fourth, we create an era
of uncertainty because we don't know what the silly government is going
to do next; and, last of all, we spend money like mad, which then makes
the economy that much harder for our businesses to compete in a world
competitive environment.
But let's take a look at this pie chart here, and there is something
here that when you start to think about it is really a little bit on
the frightening side. Let's take a look at some of the big chunks of
money.
The bottom one down here is defense. The Constitution of the United
States says that the Congress will provide for the national defense. It
is the one main thing that Congress is supposed to do. States can't do
it; locales can't do it. It is something that has to be done by the
Federal Government. That is why our U.S. Constitution says even in the
preamble to provide for the national defense. That is $692 billion here
in the 2010 budget. So there is defense.
This over here is the non-defense, what is called discretionary.
These are the funds that Congress spends every year, and that is $666
billion. This includes things like the Education Department, the Energy
Department, the Department of Commerce. It would be jails and prisons,
things like that. All of those, the Park Service, would all be in this
non-defense discretionary area. So these two, kind of similar size,
running in there about a little bit under $1.5 trillion in total.
Now, the other one that I want to call to your attention, though, is
all the rest of these. This is Social Security, this is Medicare, this
is Medicaid. And so what these things are, a lot of times people call
them mandatory spending. What does that mean?
Well, what it means is that sometime a long time ago a Congress came
along, passed these laws, and the law works like a little machine and
the machine spits out dollar bills whenever anybody meets certain
criteria. So we call it an entitlement. These little machines are
spitting out, printing out, dollars; and the Congress doesn't have to
do anything at all and the Federal Government is spending lots of
money. How much money? Well, Social Security, there is $700 billion,
there is another $519 billion in Medicare, and Medicaid, $273 billion.
Another thing that works a little bit like an entitlement is the
debt. So if we sell a Treasury bill, we have to pay the interest on it;
and when we do that, we get this interest. And then there is these
other mandatory things which are really other kinds of entitlements. So
it is not just Social Security, Medicare and Medicaid. You have got
SCHIP, you have got food stamps and things like that that are
additional entitlements.
So these things here, when you put all of these together, this is
kind of a spooky number. These things come out not too far away from a
little over $2 trillion, maybe $2.3 trillion. And what does that mean,
$2.3 trillion? What that is, that also is the amount of revenue in a
given year for the Federal Government.
So what has happened is all these entitlements now plus the interests
on the debt have gotten to the point that they are chewing up all the
money that the Federal Government takes in in taxes in a given year. So
then the question is, well, how about defense? How about non-defense
discretionary? How about these things? Do we have any money? No.
The point of the matter is you can zero this out, zero these out, and
these together are using all of the money that the Federal Government
is taking in in revenue in a given year. Now, that is kind of scary.
What that says is that we are starting to run deficits of over $1
trillion.
In fact, the Obama deficits for the last 2 years have been about $1.5
trillion. That is a lot of money. That is three times a bigger deficit
than President Bush's worst budget deficit. So you take his worst
budget deficit, which is about $450 billion, and we are talking the
last 2 years we are running at a $1.5 trillion deficit. So this is what
is going on.
So let's take a look. If you are like an awful lot of Americans, you
want to solve a problem. We have got a problem here. We are apparently
spending too much money. So you say, well, what are our alternatives?
How do we approach this?
I am thankful this evening also that we have got one of our very
bright young freshmen Congressmen from the State of Colorado. Scott is
here to join us, Scott Tipton. Scott, I just want to make sure you
knew, any time you want to jump in here, we could talk a little bit
about this.
[[Page H674]]
What is your reaction here? You are a little bit newer here to D.C.
But you take a look the size of this entitlement that is the same size
as what we take in for a whole year, isn't that a little bit of a
spooky thing to be walking down here and run into this as a problem?
Mr. TIPTON. You know, it really is. We just finished a tour of the
Third Congressional District of Colorado. Our district is about the
size of the State of Florida, the fifth largest congressional district
in the United States which is not an entire State, a massive land area,
a lot of diversity in terms of the economies.
Incredibly interesting to me as we traveled throughout that Third
Congressional District over this past week, we put on probably a little
better than 1,500 miles.
{time} 2130
Better than 30-plus meetings throughout that district. The
frustration level of the American people, the people in my district,
their understanding of the challenges that we face as a nation is truly
remarkable. The American people get it. And what they want to see out
of Washington is that Washington truly gets it.
As we're looking at your chart right now and we go to the revenues
that are coming in, the spending which is going out, we're looking at a
$1.5 trillion deficit that we are facing. That's going to be going on
top of a debt in this country of $14.3 trillion, an unsustainable glide
path that is going to take us to economic ruin.
As I traveled through my district, we found people that understood
that it's important to be able to build for the future. We challenged
them, and they rose to that challenge when we brought it down to taking
a picture out of their own wallet and looking at their child or their
grandchild. Many of us, myself and perhaps you as well, were raised
with that concept of the American Dream. We always believed that we
would have it better than our parents and our grandparents before them.
The challenge which lies before us is to deliver that American Dream to
our children and to our grandchildren.
I was in a conversation with a man from Craig, Colorado, born in
1924. In this conversation he recounted his life. He talked about
living through the Great Depression; obviously, World War II. And we
were talking about the economic circumstances of our time. And he said,
Scott, this is the challenge of your generation. The question yet to be
answered is: Will we rise to meet that challenge?
We've seen the government--and I think none of us can question the
intent has always been good. And I would challenge anyone who will
demonize others for their intent, because I think no matter whatever
program, there was a thought behind it. But the problem is, as
Americans, when we pull that checkbook out of our hip pocket, we know
there's only so much money. And if we exceed that amount, there are
going to be consequences that have to be paid. That's the reality that
the American people expect us to truly deal with here in Washington.
And they know that there are going to be some sacrifices. But those
sacrifices are going to be from the standpoint that we have overspent.
We're going to have to cut back. We have to be looking to the future.
We have to be standing for our children, for our grandchildren, to
deliver that dream that we have always believed as the American
promise.
Mr. AKIN. Scott, when I heard you talking, it just kind of reminded
me, a few years back I spent a fair amount of time with the Boy Scouts
because I had four kids that went through the Boy Scouts program. They
got to be Eagle Scouts and all. One of the things we always used to
say, and to me, at least, it paints kind of a picture. You move in with
the Boy Scouts to a camping area, and some of them a little wet behind
the ears, but they somehow get the tents all assembled and they'd have
a little bit of fun spraying some hairspray into the fire and things
that little kids do; yet when it came time to clean up, we had this one
rule, and that is you're going to leave the campsite better than you
found it.
Our forefathers, my immediate parents, dad fought in World War II,
and he had the attitude that we've got a job to get done and we're
going to go over and get the job done. And they came back with the
attitude that they wanted to give you and me a better life and better
opportunities than what they had. And we've always wanted to pass that
down.
Now I've got some kids of my own and I want to pass to them a better
America, and yet what we're doing is we're passing them this tremendous
debt. And we're the first generation that's really passing a worse
America off to our kids than what we had before. And I think that's why
your constituents elected you to come down here and get this thing
straightened out.
Mr. TIPTON. It truly is. I believe that I grew up with--and perhaps
you did, too. My parents raised me with phrases like ``Yankee
ingenuity,'' ``American know-how.'' And I think that when we look at
the entire mesh of what's been coming out of Washington, frankly, over
the course of the last 10 years, we have seen an overreach of
government, which has stifled American creativity.
I'm a small business man, not a career politician. I've actually
gotten my hands dirty. I've created a business from the ground up. I
have risked. We've had to work hard. But one thing I've learned being a
small business man is you have to be nimble. You have to be creative in
terms of addressing the problems.
One of the real challenges that we face is there seems to be a
mentality in Washington, D.C., that once a program starts, it never
ends. We will build on it. We will expand it. We will create
redundancies, and we will build out that bureaucracy.
In the private sector, we do things a little bit differently.
Periodically, we audit. We take a look to see what we are doing and is
it achieving the goals that we are trying to achieve. If not, we
eliminate it. We start to approach it from a different fashion to be
able to make it work. I think it's that sort of creativity, that sort
of nimbleness, which Washington lacks, and it's what the American
people are truly crying for. They want to see us be innovative. If it
isn't working, don't do it.
Ronald Reagan made the comment, he said the nearest thing to eternal
life on Earth is a government program. Nothing has ever been said that
is probably more true here on Earth.
Mr. AKIN. Let's take a look at this problem because you've got all
these entitlements. And this represents all the money that comes in in
a year. Then things here are beyond. And yet we're thinking that you've
got to do defense and you've got to have the park open or you've got to
have a prison open. So how are you going to deal with this problem?
Let's take a look at the next chart. This is an optimistic way of
saying it. This is Medicaid, Medicare, Social Security, and it shows
over time--this is 1965--and over time, these things are getting
bigger because some of us baby boomers are coming along and putting
more demand on the system. But this is an optimistic chart because the
problem with it is you don't have the other entitlements in here or the
debt service.
So what the problem is, if you put those other things in, what we're
saying with this first pie chart is that, as you take a look at our
revenue from taxes, it's averaging about 18 percent. So here comes the
revenue along at an average of 18 percent, and here we are at 2011,
somewhere in here, and you put these other things in and it comes all
the way up to here. We can zero defense. We can take every soldier off
the field, every ship out at sea, every plane out of here. We can zero
defense to zero and all the other discretionary spending and, boom,
here we are. Our entitlements have eaten up everything that the
government takes.
One of the things that I find amusing and I've had to struggle with a
little bit, too, is the idea of how you lose weight. You get older. I
used to eat the double pecan pie ala mode, no problem, up to my mid-
forties. But as you get a little older, you've got to watch that carrot
cake or cheesecake or whatever. There's all of these ways of packaging
weight loss programs, but the hard facts are there's just two
variables: one is how much exercise you get, and how much food you eat.
And, unfortunately, all of these supposedly complicated budget things
come down to two things: how much money you're going
[[Page H675]]
to spend and how much revenue you've got coming in.
And the problem is here, this 18 percent. I'd like to talk to this in
a couple of minutes. I don't think we can increase the amount of
Federal revenue that much. Maybe we can do some things to get that to
improve. But you can raise taxes, but the trouble is you raise taxes,
you do just what you're saying: You crash the economy; the businesses
close; there aren't jobs; you aren't picking up tax revenue.
So you can raise taxes, but it doesn't actually get you more money.
And yet we've got all this spending going on, which says it's a little
bit like if you can't do any more exercise, you're going to have to
stop eating. We're going to have to stop spending on all these things.
Jump in, Scott.
Mr. TIPTON. I think that, first of all, just to set the plate, and I
know that you will join with me on this, we have an obligation to our
senior citizens that are receiving Social Security, to those who are
about to receive it. And we also have another obligation, again, to our
children and our grandchildren. And we need to be able to have that
conversation in terms of how are we going to make sure that their
opportunities are going to be the equivalent or even better than what
our current senior citizens are receiving.
You show a pattern right now in terms of average revenues in relation
to expenditures, particularly as baby boomers come on line. That is
going to be something that we are going to have to deal with as a
Congress, and I think it's something certainly that they're expecting
leadership out of Washington. We are compassionate people. We will
stand up for our senior citizens. It's a pledge that I made that I will
keep for our senior citizens that are receiving Social Security. But
I'm also making a pledge to our children and our grandchildren. We are
going to be looking at ways to be able to address this so that their
future can be as bright and they're going to be looking at a better
America as well.
Mr. AKIN. Right. I think a lot of ways that you hear people talking
about how do you get into this kind of problem, some people who are
already very senior and dependent on some of these things, you're
probably not going to touch their things at all. But it may be that the
people who were not--maybe people in their thirties or forties, you put
a different kind of program together and may give them some
alternatives: Choose this, this, or this.
{time} 2140
Those are the kinds of ideas we've got to look at, but we have to be
honest with ourselves. I wasn't really aware of how bad these numbers
were, even though I've been here for a while, until a few months ago.
These entitlements are totally absorbing, even now, all of our revenues
here. So really this is a little bit like the guy who's overweight.
He's got a choice. You know, you're either going to have to reduce the
spending here or you're going to have to somehow get in more revenue.
The interesting fact on this is that there is evidence to suggest that,
when you drop taxes, you actually get more revenue.
As a business guy, you probably understand that to some degree,
Scott.
So here is an example of this top marginal tax rate. Back here in
1960, it was up at 90 percent for the guys making the most money. As
this thing was brought down--Ronald Reagan brought it down a lot--what
happened, as you see, is that the total Federal tax receipts actually
increased. A lot of times, it seems like: How in the world can you drop
taxes and get more revenue from the government?
Scott, say you were sort of king for a day and you had to put a tax
on a loaf of bread, not for a day but for a year, and that you've got
to get the maximum revenue for your little kingdom by taxing bread. You
think, Huh, I'll put a penny tax on it. Then you think, No, $10. Then
you think, Well, if I do $10, not enough people will buy the bread. So
you come up, and at a certain point, you've got an optimum tax. If you
raise it, you lose revenue. If you reduce it, you don't. So there is an
optimum point.
What this thing called a Laffer curve shows us is that, as we drop
taxes, we actually get more revenue into the Federal Government. So, to
a degree, we can use growth of the revenue to deal with some of the
problem. The trouble is that it's not anywhere near going to deal with
all of it, which means, no matter what you do, you're going to have to
cut spending, particularly that entitlement spending. So we have to do
that sensitively and carefully. It's going to be politically
controversial, but we've got to do something.
The SPEAKER pro tempore. The gentleman's time has expired.
Mr. AKIN. I thank you, Mr. Speaker. You've done an admiral job.
Thank you very much, Scott Tipton, from Colorado--a great new
Congressman--and the very top of the evening to the rest of my
colleagues.
____________________