[Congressional Record Volume 165, Number 121 (Thursday, July 18, 2019)]
[House]
[Pages H7140-H7146]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
FISCAL RESPONSIBILITY
The SPEAKER pro tempore. Under the Speaker's announced policy of
January 3, 2019, the gentleman from Hawaii (Mr. Case) is recognized for
60 minutes as the designee of the majority leader.
General Leave
Mr. CASE. Madam Speaker, I ask unanimous consent that all Members
have 5 legislative days to revise and extend their remarks and include
extraneous material on the subject of my Special Order.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Hawaii?
There was no objection.
Mr. CASE. Madam Speaker, I rise as a proud member of the Democratic
Blue Dog Coalition.
For a quarter century, the Blue Dogs in Congress have focused on
three missions: fiscal responsibility for our country, a strong
national defense, and commonsense solutions to practical problems.
We are 27 proud Democrats with democratic values. Our individual
views and votes on the broad range of issues that come before this
Congress run the gamut from progressive to moderate, centrist, and
beyond; but together, we believe that the best way forward for our
country on all of these issues is an underlying focus on fiscal
responsibility, a strong national defense, and commonsense solutions
wherever they may be found to practical problems.
Today, I wish to focus on fiscal responsibility. I do so as co-chair
with my colleague from Utah, Mr. McAdams, of the Blue Dog Task Force on
Fiscal Responsibility and Government Reform.
Let me start by saying, unfortunately, and very directly that it is
very arguable that at no point in our entire history have we operated
our Federal Government in as fiscally irresponsible a manner as we are
operating it today.
There are lots of indicia of this out there, but nowhere does this
show up more directly and stare us straight in the face than our
national debt. Let me say what that is.
Our national debt is exactly what it sounds like. It is the amount
that our Federal Government--you--owe to everyone who has loaned us
money to pay for government.
Why do we have to do that? Because we are not bringing into
government the revenues that are sufficient to match and pay for what
we are paying for out of expenses.
We are now operating with a chronic and exploding deficit, and we are
borrowing with abandon to make up the difference.
This particular chart is taken from the Congressional Budget Office.
You will not find a more nonpartisan, objective, and professional group
anywhere studying our fiscal responsibilities, our fiscal status, and
our budgets than the Congressional Budget Office. I encourage everybody
to take a look at their materials at cbo.org. This is just one of their
many publications, and it is a wealth of information:
[[Page H7141]]
CBO The Budget and Economic Outlook Fiscal Years 2019 to
2049.
They are not only responsible for what has happened today; they are
responsible for taking a look at the long-term, as any one of us would
want to do with our own budgets.
What this chart shows is outlays, or spending, on the top line and
revenues on the bottom line. In this particular chart, we are matching
outlays over time, and the timeframe here is about 15 years, against
gross domestic product, the percentage of gross domestic product.
Why is that important? It is important because one could have outlays
and revenues coming in, but the only way to match it up is, how much is
the strength of your economy overall? It is kind of like asking
yourself: Well, in my own household budget, what is my level of
spending, what is my level of borrowing, what is my level of income as
opposed to my overall financial situation?
So here we have the percentage of gross domestic product over on the
left in the vertical axis, and down here, time.
We can clearly see here that as we look out over a long, long period
of time, that if we continued on the way we are today, we would see
massive continuing spread of the two lines between expenses on the top
and revenues at the bottom.
To amplify the situation, when we take a look at where we are
currently, 2019, that dotted line right over here, that is about $1
trillion, that gap, $1 trillion in 1 year of a deficit.
So as we can see very obviously, not only are we in a very difficult
situation today, but if we do nothing about it, it will spread over
time.
Now, what actually finances that difference? Debt. We go out and
borrow it. It doesn't just arrive in the middle of the night in an
unmarked bag. It didn't just grow on the tree outside. We are operating
at a chronic and exploding deficit and borrowing to make up this
difference.
I am a returnee to Congress. I served in Congress from 2002 to 2007,
so I tend to match up my experiences then versus now. I had a 12-year
absence in between, half a generation if you want to think about it.
When I left Congress in early 2007, our national debt stood at $9
trillion. Today, our national debt stands at $22 trillion.
By the way, if you want to have a harrowing view of something, take a
look at usdebtclock.org and watch the numbers turn over about as
rapidly as anything you can see.
What you can see from studying the debt over time is an incredible
increase over here on the right side of this chart.
But $22.5 trillion today. Let's just think about that. That is
$68,300 for each and every citizen of this country, $183,000 for each
and every taxpayer. Really? 230 years in our country's history to get
to a national debt of $9 trillion, but just 12 years later, increasing
by 250 percent to $22.5 trillion?
Again, we can't just look at the absolute numbers, because they don't
tell the full story. After all, if we had a thriving economy that was
producing an incredible amount of money, some of these figures wouldn't
make as much sense.
So let's, again, take the total debt against the total gross domestic
product, again, just like any house or business would do. We can see
here that if we chart total debt against GDP--again, on the far left
side on the vertical axis, we have GDP--as a percent of GDP, and down
here, we have a period that starts at the origins of our country and
concludes in 2049, from the start of our country to 2049, you can see
the peaks right here.
Obviously, our country was in bad shape at the beginning in the
Revolutionary War and thereafter. We were just starting out as a
country. And you can see, for example, the Civil War, this peak.
Wars are times when we have to borrow money. Wars are times that are
very, very difficult for economies, and obviously our expenses are up
and people have needs, and during that period, we borrow money. We
always try, or have always tried, to pay it back down because we don't
know when the next emergency will come along.
We can see another peak here, World War I. We see the Great
Depression right here, the Great Depression and Franklin Roosevelt's
New Deal, which was financed with borrowing. And then, of course, the
tragedy of World War II, the absolute peak of our debt versus our gross
domestic product, right there.
And why not? Our world was at war. Our economy was in a shambles. We
had to finance that war.
Not only did we finance that war, we financed the entire recovery of
the world, the Marshall Plan, in so many ways. We rebuilt our cities.
We rebuilt the national highway system. We incurred that largely
through debt. This was the highest point of our debt to date.
We see, again, some peaks that were related to great recessions and
downturns in our economy where we had to borrow for a little while,
then we came back down. And then we came to the last 15 to 20 years.
{time} 1415
Up until this point, we operated fairly responsibly. By 15 to 20
years, we abandoned fiscal responsibility and started down a road of
accelerating debt, for the most part unrelated to wars, other than for
Iraq and Afghanistan, which definitely had a consequence for our
national debt, but mostly a result of a failure in this body and the
administration to balance budgets as we went along.
Here we are in 2017, 2018, and 2019. What is scarier than anything
else is the CBO's projection of where it is going over time: out the
roof, straight up.
We can see that this is not a partisan issue. In this particular
graph, the percent of GDP is over on the left axis, and the bottom
vertical axis is over time. In more recent history, the postwar period
by Presidencies, we have Democrats in blue and Republicans in red.
We see over here President Truman in the late 1940s had a high
threshold of debt-to-GDP, a little over 100 percent. Then, of course,
it came down after that as we recovered. It went up in the era of some
of our Great Recessions and, of course, our wars.
Then, we had the period when we did the best, which was an evolution
from President Clinton into President Bush, which was the last time we
balanced our budget.
Then, there is that spike starting with President Bush through the
last Presidency and, especially, off the current Presidency into an
ascending column, which is a projection from the Congressional Budget
Office.
These are scary projections because the CBO projects that if we do
nothing, we will see our debt climb to around 144 percent of GDP within
a couple of decades.
Where does that rank us in the world? After all, we have had other
governments that have had high debt. We have had other governments that
have collapsed. We have had other governments for which their budget
problems have caught up with them. Let's take a look at that.
This chart shows the period projected from the current year out only
5 years. It asks the question: What is the growth in our debt-to-GDP as
compared to the rest of the world? How fast are we growing in our debt
versus the rest of the world?
Unfortunately, the line on the right is us. We project that our debt-
to-GDP will grow 11 percent over the next couple of years.
The next line is Italy. We have Korea and Japan, but the rest of the
world seems to be getting their growth under control. Some of these
countries are recovering from recessions, but some of these countries
just have sound economic practices.
The embarrassing thing about this chart, the scary thing about this
chart, is that we are not the world's leader. We are the world's loser,
in terms of controlling our national debt.
Why should we care about all of this? One of the questions asked
sometimes is: Why does debt matter?
I think the first and foremost obvious answer is that debt costs
something. It is not free. If we borrow money, we pay interest. That is
what everybody who loans us money expects. They expect to be paid some
interest. These interest payments accelerate rapidly in times of
accelerating debt.
We see here a projection, again based on figures from the
Congressional
[[Page H7142]]
Budget Office, of interest spending over time, the next 10 years, in
this particular case. We see that, today, we have interest of somewhere
around $400 billion a year but accelerating at a very rapid rate over
the next decade, up to close to $1 trillion a year.
The red line is a scenario that is very likely if we do not make some
tough decisions. That gets us even higher.
This is the actual trend that we are looking at. That is a lot of
money to be paying just for interest.
To make matters worse, try to compare that level of interest spending
against some of our other spending.
In this particular chart, we see this line is our interest spending,
kept relatively modest until recently but then accelerating very
rapidly, as was indicated in my prior chart, to the levels out to 2029
that are truly scary. That is not the scary part, if that is not scary
enough.
This line is our total spending on our children. What do we do to
take care of the children of our country? That is our spending line.
Interest is just crossing it right now. This is our total defense
spending projected out over time with interest crossing over.
What this shows is that we are about to pay, in a very short period
of time, if we don't do anything, far more money in basic interest on
our national debt than we are spending on our children and our defense.
That is an inexcusable situation for us to be in.
The first basic problem is that we crowd out spending for other
Federal purposes, which forces us, by the way, to borrow more, which
forces us to have higher debt, which forces us to pay more interest.
Everybody who has been in a business or a personal situation knows
this.
The second basic problem with that is why should we care about debt--
national security. Where does this money come from? Who is lending us
this money?
Two-fifths of our interest payments go overseas, two-fifths of the
people in this world who are loaning us money. Two-fifths of our total
debt is loaned to us, basically, by other countries. Other countries,
26 percent.
This is the line that is scary: China, up to 7 percent now and
growing. Japan, okay, fine, we welcome Japan loaning money to us. But
on balance, I would rather the blue be the blue rather than owing the
money to other countries because who knows what is going to happen over
the next 10 or 20 years or generations.
This is, obviously, not just an issue of our own fiscal stability,
but it is a question of national security.
Another question of national security is that we need this money in
case we get into other situations in the world, hopefully not, but
prepare for the situation where we may have to have massive increases
in defense spending over the next generation.
These are areas where we have traditionally tried to pay down our
debt so that we can borrow back up to finance these additional
expenditures without destroying our economy. Yet, when we borrow in
good times to finance even larger Federal spending, then we have very
little safety net to be able to borrow in bad times.
That is not just a matter of budgetary stability. That is a matter of
national security.
Finally, why should it matter? Economic damage. There is a school out
there that is trying to justify more debt, which is largely not agreed
to by most economists. Most economists agree that, over time, large
levels of debt, large levels of interest payments, drive up basic
interest rates. They drive up basic interest rates, and that is bad for
the economy. They drive up inflation, and that is bad for the economy.
They lead to a situation where the markets out there--the people who
are loaning us money, the people who are relying on the United States
for its full faith and credit--start to doubt our basic fiscal
solvency. They start to not only loan us money, but they start to
charge us more interest, and that causes an economic problem.
Finally, it is just bad budgetary practice to skate too closely on
thin ice.
This is why we should care: because our interest payments are
crowding out spending; because it is a national security issue; and
because, over time, it is an economic issue.
How did we get into this mess? Well, obviously, we are spending more
than we are taking in. Our long-term deficit buildup and short-term tax
reduction and spending increases are really the issue.
This chart is an illustration, again based on CBO information, of
where our deficits are coming from today. When we are talking about the
total amount of deficits closing in on $1 trillion, we see that absent
recent legislation--we are talking about just the last 5 years or so--
we had a chronic deficit of close to $400 billion a year. That is
pretty bad since, if we take $400 billion and times it by 5 years, all
of a sudden, we are at $2 trillion of debt.
But, then, we made major mistakes from a fiscal responsibility
perspective in the last few years.
First of all, we had tax extenders that were not paid for. We will
get into that. We had tax credits, tax reductions, and tax rates that
were extended without accounting on the other side for the spending.
We had a major tax bill, which is still debated in this Chamber as to
whether it was the right idea or not. What is indisputable about that
tax bill was that it drove incredibly increasing deficits and
incredibly and rapidly increasing debt.
Then, finally, we had a budget agreement, last year, to raise the
amount of spending. There is nothing wrong with raising the amount of
spending, per se, if it is a public judgment and a policy judgment that
that is the best thing for our country. What is wrong is to pretend
that there is no consequence to our deficit, debt, and national fiscal
policy.
What do we do about it?
By the way, I want to go back to that point for a second. We are not
debating here whether our government should be bigger or smaller. We
are not debating here whether taxes should be higher or lower. We can
have that debate. It has been going on, after all, for 250 years and
even before that back to the Colonies. We have always talked about how
big government should or shouldn't be, how much we should or shouldn't
spend through government. We just had that debate here on this floor
today.
We have always talked about the overall level of taxes. Should they
be higher? Should they be lower? Should we have high taxes to pay for
spending? Should they be lower to generate economic growth? Those are
good, solid policy decisions to be made.
That is not what we are talking about here. What we are talking about
here is the fiscal result when we don't balance spending and revenues,
the result when we don't balance spending and revenues.
We can choose to have high spending, but if we don't generate the
revenue for that, then we are going to end up with incredible deficits
and debt. We can choose to have lower taxes, but if we don't adjust the
spending at the same time, we are going to end up with high deficits
and debt. It just makes perfect sense.
That is all that we are talking about here. We are willing and able
to have the debate over the size of government and taxes.
Again, within our Blue Dog Caucus, we have disagreements on that. But
where we have centralization of agreement is in managing the
consequence of that debate and having it be an honest debate, not a
debate that pulls the wool over our fellow citizens' eyes on the
consequences.
What do we do about it? Well, I think, first of all, we start talking
about it again. It is really hard. Twenty years ago, in the great times
when we actually did balance the budget in the late 1990s and the early
2000s, public sentiment was high on deficits and debt. People cared
about this. People understood the risk.
Then, all of a sudden, politicians stopped talking about it. They
did, on both sides of the aisle, what many of us do when faced with a
major issue: We deny it. We don't want to acknowledge it. It is too
much trouble. We don't want to say that when we cut taxes and don't
adjust spending, there is a consequence for our deficit and the debt.
We don't want to say the reverse of that. We want to tell everybody
that everything is okay. After all, we can have our cake and eat it,
too.
I don't want to go back to my district and say, well, I can't vote
for a tax reduction because it is going to blow our deficit and debt.
[[Page H7143]]
This is an insidious situation. The consequences of deficits and debt
are not apparent right up front. They don't catch up with us for a long
time. But I think we all know, deep down, that we have a problem and
that is not true.
{time} 1430
And the second thing we have to do, at some point, is simply make a
plan and implement it. And that is what our Democratic Blue Dog
Coalition has done and will try to do going forward.
We have tried to come up with a blueprint for fiscal responsibility,
which today, we endorsed and released. And these are a series of points
that we believe need to be pursued in order to have some chance at
fiscal responsibility and sustainability over time.
From that perspective, I am very pleased that I am joined today by my
colleague from Utah (Mr. McAdams), my co-chair of the Blue Dog Task
Force on Fiscal Responsibility and Government Reform, to share his
views and to outline some of our agenda items.
I yield to the gentleman from Utah (Mr. McAdams).
Mr. McADAMS. Madam Speaker, I thank Representative Case for
organizing this Special Order today, and I thank him for his
outstanding work as the co-chair of the Blue Dog Task Force on Fiscal
Responsibility and Government Reform.
I am lucky to serve alongside him as co-chair, and I also want to
thank Stephanie Murphy for her tireless leadership in Congress and with
the Blue Dogs.
Madam Speaker, Washington has an addiction problem. It is hooked on
deficits, and it is hooked on debt. Our entire Nation, our children,
and their children will pay the price for this addiction.
On March 2, 2019, the debt limit was reinstated as $22 trillion as
Representative Case so appropriately outlined. To operate the
government at this limit, the Treasury Department deployed
extraordinary measures, accounting maneuvers, allowing government
operations to continue. But if those measures run out and our cash
reserves are depleted, the Federal Government would reach the
unprecedented day on which our Federal Government cannot meet all of
its obligations in full and on time.
The consequences of defaulting on our obligations are unknown, but
could be economically devastating, not only for the United States, but
globally.
As Federal Reserve Chairman Jerome Powell said recently about the
prospect of not raising the debt limit: ``It is beyond even considering
that the United States would not honor all of its obligations and pay
them when due. It is just something that can't even be considered,'' he
said.
We know that the costs of barreling towards this fiscal cliff are
already mounting. American taxpayers foot the bill for additional
borrowing costs that come from delays in extending the debt limit.
In previous years, uncertainty has caused interest rates on some
Treasury bills to spike in anticipation of going over the fiscal cliff,
resulting in many millions, if not billions of dollars in added
interest costs.
As we have done more than 100 times, we are now preparing to vote to
raise the debt limit. Raising it does not authorize new spending. It
enables the government to pay its bills and avoid the sorry reality of
becoming an untrustworthy borrower. What better time to pair that vote
with a plan to reform government spending?
It is not as if we woke up this morning to suddenly face this fiscal
calamity. It has been building for decades, as we just saw. Both
parties in Republican and Democratic administrations have contributed
to the problem. The question is: What are we going to do about it? And
when will we start to get our borrowing and our spending addiction
under control?
The Blue Dog Coalition, of which I am a proud member, has a well-
deserved reputation for talking the talk and walking the walk when it
comes to fiscal responsibility.
Look at the Blue Dog priorities on fiscal responsibility and you will
see a comprehensive list of pragmatic steps that we can take, some of
which we have already taken.
For example, Blue Dogs support the House paygo rules. It is one of
the first things the Blue Dogs fought for when we got sworn in this
year. And I was pleased to see the House keep paygo rules.
We don't want those rules to be waived, but if they are, there should
be a vote held on a waiver. Blue Dogs support a constitutional
amendment to require a balanced budget every year, except in times of
war, in times of national emergency, or recession.
I was proud that my first bill introduced in this Congress was this
exact balanced budget amendment that the Blue Dogs have endorsed. We
want to return to regular order. Passing a budget every year and on
time and avoiding omnibus appropriation packages that do not align with
that budget.
As a former mayor myself who had to balance a budget every year and
do so in a bipartisan fashion, I was then, as I am now, accountable to
the taxpayers for every dollar we spent. Do elected officials face
tough tradeoffs? Yes, absolutely. That comes with the job. Just as
hardworking families and small business owners must do, you must work
together, and we, in Congress, must work together to set priorities and
make sure the checkbook balances at the end of each month.
It is important that we fully offset the cost of all new spending or
reductions in fiscal revenues with spending cuts or revenue increases.
We must make those tough choices. We need strict, enforceable spending
caps to ensure a fiscally responsible budget.
The Blue Dogs also support better oversight over our government
spending. The Government Accountability Office, or GAO, and the
inspectors general are important entities throughout the Federal
Government that hold Federal agencies accountable to taxpayers and
recommend improvements.
We believe that Congress should know what it is voting on by having
every conference report and bill that comes to the floor of the House
accompanied by a cost estimate prepared by the nonpartisan
Congressional Budget Office, and that should be done at least 24 hours
in advance of the floor vote. We believe that committees should
identify proper and related offsets before the legislation is reported
out of committee.
A $22 trillion debt burden is a heavy lift to eliminate, for sure.
But at the very least, we should be able to agree not to take on new
policies that add to that debt.
We teach our kids that if they want something badly enough, they need
to figure out how to pay for it. Tax reform should be deficit neutral.
Spending plans should be fully paid for. Even emergency spending, which
should be passed quickly to respond when our communities need it most,
should include a plan to pay for it, and we can think ahead and plan
ahead for those emergencies.
We should get away from the ad hoc emergency spending and figure out
how to establish a rainy-day fund which 45 States currently have. Every
man, woman, and child in America owes $68,000 as Representative Case
has highlighted as their share of the national debt. We will all be
morally bankrupt, as well as financially bankrupt, if we don't stop
kicking the can down the road and make future generations liable for
our lack of fiscal discipline today.
And so my colleagues often ask me why deficits matter? My answer is
because future generations will be forced to bear the burden of our
failure if we don't act today. And the longer it takes for us to act,
the more difficult those decisions become.
The cost of paying interest on our debt is the fastest growing part
of the budget. We will spend more on interest than on defense by the
year 2025. That is 6 years from now. Let that sink in. The government
is projected to spend $383 billion on interest payments for its debt
this year alone. This year, $383 billion.
So why do I care about the debt and deficits? It is because a strong
fiscal house means we have a stronger country. That $383 billion spent
on interest payments in our debt is $383 billion we can't spend on
other priorities, such as clean energy and transportation, and
affordable healthcare. The interest we pay on the debt is simply going
on to our credit card. It is becoming part of the debt.
So if you care about healthcare, if you care about climate change and
[[Page H7144]]
building a 21st century infrastructure system, if you care about
affordable housing and any other investment that the government can
make, then I urge you, care about the debt, and care about our
deficits. Because every dollar spent on paying down the debt and its
deficits or interest on that debt is one more dollar that could have
been invested in priorities that strengthen our country, that
strengthen our national defense, and strengthens the American people.
It is clear that we are on a dangerous and unsustainable course. The
decisions will not be easy. But our children and our grandchildren are
counting on us to make this right. We were elected to make tough
decisions.
I thank the gentleman for yielding to me.
Mr. CASE. Madam Speaker, I thank the gentleman so much, and I am
privileged to be his co-chair.
Would the gentleman engage me in a colloquy on a few of the issues
that he touched on?
Mr. McADAMS. Will the gentleman yield?
Mr. CASE. I yield to the gentleman from Utah.
Mr. McADAMS. I would be happy to.
Mr. CASE. Madam Speaker, I thank the gentleman. Let's talk about his
proposed balanced budget amendment, by the way, of which I am a proud
cosponsor.
Some people criticized the balanced budget amendment which would have
to be ratified throughout our country, as an overly restrictive
mechanism, especially in times of national emergency.
As the gentleman's balanced budget amendment is crafted, is there
flexibility to borrow money and to deficit spend in times of genuine
national need?
I yield to the gentleman from Utah.
Mr. McADAMS. Yes, absolutely. We recognize that there may be
emergencies that are unforeseen and unplanned for. And in those cases,
the language of my proposed amendment would allow for deficit spending
to help our communities in times of need, in times of national
disasters or other emergencies. And I think that is important.
Mr. CASE. So we always have the ability to override the basic
provisions with that balanced budget amendment in Congress, or where we
believe that we do have to borrow that money. This is just a mechanism
to introduce the same fiscal discipline that a well-run business or
household has to follow?
I yield to the gentleman.
Mr. McADAMS. That is correct.
Mr. CASE. As, by the way, is the case with 49 out of 50 of our
States, who either have a similar balanced budget amendment in their
constitution or by statute.
Mr. McADAMS. Madam Speaker, that is correct. In my own State of Utah
that has a balanced budget requirement, and has established a rainy-day
fund, as I mentioned, such that when those emergencies arise, they have
funds available to account for that.
I would urge us to not only have that flexibility built into the
language of the amendment, but to plan ahead. While we don't know what
the next emergency will be or where it will strike, we know that dark
days are ahead of us, and that there will be natural disasters and
other emergencies and we should plan ahead for those.
Mr. CASE. Madam Speaker, the gentleman made reference to the fact
that he was a mayor, and I made the comment to the gentleman once, and
I believe it, that of all of the public officials I have ever worked
with throughout the country, I think mayors understand fiscal
responsibility the best.
The gentleman made reference to the fact that he functioned under a
balanced budget as a mayor. Was there any magic to that? How did the
gentleman do that? He had a requirement to do that, so what did he do?
I yield to the gentleman from Utah.
Mr. McADAMS. Well, one thing, I had a council of nine members: five
Republicans and four Democrats. And one thing I know from experience is
balancing a budget is hard. We have to make really tough choices. There
are certainly things that may not be meritorious expenses that are easy
to say no to, but by and large, we have to make some really tough
decisions.
We can't do it all, even though we might want to do it all. You
cannot do it all. And what it takes is, first of all, have a bipartisan
relationship where people put their priorities on the table, discuss
what they want to accomplish, and how they want to get there.
And then everyone has to continue to work together to refine
proposals, to make sure that you cut the fat out of proposals and make
sure that they are well refined, and every dollar spent is justified.
Ultimately, we have been able to balance a budget. We have to make
tough decisions, but we are able to balance a budget, because there is
that expectation, that requirement that we must get there, and so we do
get there.
Mr. CASE. Madam Speaker, so to that point, my experience in Hawaii,
where we have had a balanced budget for a long time--and I was a State
legislator--so I had knock-down, drag-out fights over all this kind of
stuff, whether it be to increase spending, or tax reductions, or tax
increases. But it was always against the backdrop that it had to
balance.
My sense was always that the folks that we represented understood
that that presented us with a series of tough choices, and they
understood that in the big picture, the tough choices that we had to
make as a result of a balanced budget, were for the better, the
overall, long-term, big picture fiscal health, economic health and
social health of Hawaii.
Did the gentleman have that experience in Utah?
I yield to the gentleman from Utah.
Mr. McADAMS. Madam Speaker, we did have that experience, and I would
add, it made us better. The county that I presided over as mayor, we
had a AAA bond rating. The faith in our ability to pay our debts meant
we paid lower interest rates. People knew that we would not default on
those debts, and we saved tax dollars because people knew that we could
balance our budget.
I would like to add one point to the gentleman's consideration.
Fiscal responsibility is important. It is important for our States. It
is important for this country.
But another element that I found in the process of balancing a
budget, when we had to make those tough choices, when, at the end of
the day, the ledger had to balance, what we were forced to do was go
back and look at every expenditure we made and ask ourselves:
Can it be done more effectively?
Can we stretch our dollars further?
Is the program or endeavor that we are engaged in the lowest-cost
alternative?
Are tax dollars being spent wisely?
Are programs invested in our citizens, whether it is a program to
reduce recidivism or to improve early childhood learning?
We were expected to look and evaluate the effectiveness of each and
every program because we were having to make competing choices. We were
choosing between one good and, hopefully, a better good, and that
required us to quantify empirically the outcomes we were receiving from
our programs.
{time} 1445
That was good for fiscal responsibility. More importantly, it was
good for the people we were serving because the programs we were
delivering were expected to improve. We held those programs to a high
standard on behalf of the citizens who we served.
Mr. CASE. I think what the gentleman is saying in a very gracious
Utah way is that the lack of a balanced budget where we always have the
recourse to just borrow money and kick some cans down the road
disincentivizes the efficient and effective expenditure of government
funds, of taxpayer funds. After all, if there is waste in that
expenditure, there is a safety valve there, whereas a balanced budget
drives a certain discipline.
Mr. McADAMS. Waste in plowing snow or fixing streetlights is one
thing, but in programs that serve our residents, there is a human cost
to programs that aren't held to a high standard. It takes a toll on
individuals and on families--on people--who were promised one outcome.
If a program fails to deliver on that, there is a human cost.
Mr. CASE. One other point that the gentleman made that I think bears
further discussion is the gentleman's reference to paygo. Of course, we
throw
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``paygo'' around here all the time. Sometimes, people's eyes kind of
blank out when we talk about paygo.
Can the gentleman talk a little bit more about the simplistic and
basic approach of paygo? What does it mean? What is its effect on the
work that we do?
Madam Speaker, I yield to the gentleman from Utah.
Mr. McADAMS. The rules of the House require that any legislation that
would have a fiscal impact has to be paid for. We can't simply add that
on to the tab and put it on the taxpayers' credit card. Every
legislation has to be paid for upfront.
Mr. CASE. In other words, not financed by additional debt, which
would have the result of driving up the deficit, the debt, and interest
payments?
Madam Speaker, I yield to the gentleman from Utah.
Mr. McADAMS. That is exactly right. I describe it as saying that the
first rule when you find yourself in a hole and are not sure how to get
out is to stop digging.
Mr. CASE. Let's take a pretty straightforward example. Let's say that
we wanted to reduce taxes.
By the way, we can acknowledge there is a debate about whether
reducing taxes does, in fact, generate revenue or not. But for these
purposes and especially the recent large tax cut, we simply did not see
a return on revenues from those tax cuts.
But let's just stick with the fact that if we reduce taxes, then we
have to either increase another tax and/or reduce government spending
somewhere to be able to have a budget-neutral, a deficit-neutral
outcome.
Is that correct?
Madam Speaker, I yield to the gentleman from Utah.
Mr. McADAMS. That is right. Every activity, whether it is reducing
revenues or increasing spending, should be neutral as it relates to the
Federal deficit.
Mr. CASE. Conversely, if we want to increase Federal spending, we
have to either reduce some other Federal spending or increase taxes,
correct?
Madam Speaker, I yield to the gentleman from Utah.
Mr. McADAMS. Exactly. That is correct.
Mr. CASE. The gentleman said that the House rules already provided
for paygo. So why are we here so concerned about it?
Mr. McADAMS. One of my concerns is the willingness with which both
sides, both parties, will waive paygo. It takes a simple majority to
waive paygo. We have seen that happen from time to time, whether it is
exigent circumstances like emergencies, but other things that we can
plan ahead and should look ahead for.
Mr. CASE. Essentially, we have a rule that is honored in the breach?
Madam Speaker, I yield to the gentleman from Utah.
Mr. McADAMS. Yes.
Mr. CASE. Of course. One of the elements of our Blue Dog fiscal
responsibility blueprint is to tighten up the rules on paygo so that we
stop the bleeding on debt and deficit spending.
Mr. McADAMS. Exactly.
Mr. CASE. Again, I am honored to be the gentleman's co-chair, and I
thank the gentleman for adding to our debate today.
Madam Speaker, I want to make one other point before I close on this
subject. I want to emphasize one of the points made by my colleague
from Utah. He talked about restoring the budget and appropriations
process. This starts to be real inside baseball.
Congress goes through a process establishing a budget, which is the
overall outline of Federal spending for the next year--because we do
everything on a yearly basis, for the most part--and then passing
appropriations bills that are consistent with that budget. In other
words, we make the big picture decision upfront in a budget, and then
we have our appropriations bills that must match that budget.
In what we refer to here as regular order, what we would do is first
have a budget resolution that passes the House, passes the Senate, and
is agreed to by both the House and the Senate so that we know what our
roadmap is. Then, we would take each of the areas of government that
needs appropriations every year.
The way we do it is, there are 12 separate appropriations bills, and
we would individually pass each of those bills consistent with the
budget. We would do all of that by October 1, which is when our fiscal
year starts.
We would call that regular order. That would be quite regular order
for any business and any personal budget.
The last time we followed regular order was 1995. The last time we
went through a full budget process, an individual appropriations bill
process, was 1995. And that has simply thrown our Federal fiscal house
into disarray. We saw that with an incredibly tragic and unnecessary
Federal Government shutdown just late last year and earlier this year.
That was in part to be laid at the feet of our failure to follow basic
budgetary, fiscal, and appropriations procedures.
We have tried, on a bipartisan basis, to fix this. In fact, just last
year, we had a bicameral, bipartisan committee set up to reform the
rules of the House and the Senate as to the budget and the
appropriations process.
I want to read a passage from that committee's report. This was the
Joint Select Committee on Budget and Appropriations Process Reform,
Republicans and Democrats, House and Senate.
Here is a quote from the committee's report in late 2018: ``There
have been numerous breakdowns in the budget process in recent decades.
Fiscal year 1995 was the last time Congress passed a conference report
on the budget resolution followed by passage of 13 separate
appropriations bills before the beginning of the new fiscal year.''
We now do 12.
``Continuing resolutions, CRs, have become the status quo for funding
the Federal Government, demonstrating Congress' failure to complete its
work on time. CRs create uncertainty for agencies and the American
people.''
By the way, I stop to describe a CR as a resolution that says: Sorry,
we can't figure out what to do in this next fiscal year. So while we
are trying to figure it out, all we are going to do is continue the
spending the way it was in the last fiscal year, no adjustment of
spending levels, no adjustment of priorities, and no update for current
situations. Let's just kick this can down the road.
That is a CR.
Back to the report.
``In many years, there has been concern that parts of the government
would have to shut down due to the failure to enact even stopgap
appropriations, and shutdowns of various durations have actually
occurred. In the 115th Congress alone,'' the most recent Congress,
``there have been two government shutdowns. Whether it is Federal
employees being furloughed, national parks shutting down, adverse
effects on defense and law enforcement, shutdowns inflict severe damage
and uncertainty on the Nation's fiscal state. Additionally, multiple
JSCBAPR members expressed frustration regarding the lack of legislative
tools available for Congress to address national needs or the national
debt in a bipartisan manner.''
The committee's report was submitted very, very late in the last
Congress, so there was really not enough time to debate it fully and to
proceed, but the report certainly remains highly relevant together with
recommended legislation. Our Blue Dog Caucus believes that reform along
those lines is necessary.
Finally--and I don't speak now for the Blue Dogs, but I do speak for
myself and, I believe, many individual Blue Dogs and perhaps others--we
have another mechanism available to us, a mechanism that we shouldn't
have to follow but that sometimes may be the only way to cut through
the political dialogue and the fears of people to make tough decisions.
That is to develop independent commissions outside Congress of experts,
hopefully on a neutral basis and hopefully on a nonpartisan or
bipartisan basis, who are charged with reviewing and making decisions
on revenue and spending matters and reporting their results back to
Congress, hopefully for an up-or-down vote. If Congress gets the
opportunity to pick at a balanced report once it comes back, then it
defeats the purpose of the commission to start with. Simpson-Bowles was
one very well-known commission that failed, and there have been others.
It is certainly conceivable that if we can't get our act in order in
Congress--
[[Page H7146]]
as we should be able to do, and as I believe the American people want
and think we should do--then we need to resort to some other mechanism
to get this House in order.
Finally, we need public support. We need to get people involved again
in this issue.
As I said earlier, the late 1990s and early 2000s were the height of
public concern over deficits and debt, and it resulted in external
pressure to Congress to balance our budget.
A succession of two Presidents with bipartisan Congresses, by the
way, got it balanced. The public demanded it; we delivered.
Now, it is almost a forgotten issue. It doesn't even rank in the top
10 of major issues. We have many, many major issues. But, Madam
Speaker, I will tell you one thing, the issues that are in the top 10,
our solutions to those issues will be crippled if we don't get our
basic fiscal house in order.
In conclusion, the Blue Dogs believe that we are, in fact, in a
national crisis. We stand ready to work with anyone and everyone toward
commonsense, mainstream solutions.
Madam Speaker, I yield back the balance of my time.
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