[Congressional Record (Bound Edition), Volume 145 (1999), Part 12]
[House]
[Pages 16627-16633]
[From the U.S. Government Publishing Office, www.gpo.gov]


[[Page 16627]]

              TOO MANY UNKNOWNS FOR ``PROJECTED'' SURPLUS

  The SPEAKER pro tempore (Mr. Ose). Under the Speaker's announced 
policy of January 6, 1999, the gentleman from Tennessee (Mr. Tanner) is 
recognized for 60 minutes as the designee of the minority leader.



  Mr. TANNER. Mr. Speaker, I want to thank the gentleman from Iowa (Mr. 
Ganske) for that very interesting special order.
  This is, I think, the first time I have asked for a special order in 
the 10 years that I have been in Congress. So my colleagues can readily 
see this is not something I do routinely or every night. My colleagues, 
I hope, can understand why I feel so deeply about the matter about 
which we are going to talk about here for a few minutes with the 
gentleman from Texas (Mr. Stenholm) and the gentleman from Texas (Mr. 
Turner).
  There has been a lot of talk in this town around the country of a 
surplus. There are projections of a huge surplus over the next decade, 
and many people are running around with all sorts of ideas about how to 
spend it.
  But what really upset me last week was the mark-up that we had in the 
Committee on Ways and Means on which I served and in which this 
surplus, 87 percent of the nonSocial Security surplus for the next 10 
years, was marked up in a tax cut bill.
  Now, one of the reasons I ran for Congress in 1988 was because of my 
concern for the financial integrity of the United States. I am going to 
show this chart. I do not know if my colleagues can see it or not, but 
this is the way the country spent money from 1980, when I was in the 
Tennessee General Assembly, until now, and how we either paid or did 
not pay for what we spent.
  The yellow part here is the administration of President Nixon. The 
green lines are President Ford. The yellow-red lines here are President 
Carter. The orange looking lines are President Reagan. This aqua green 
is President Bush. Then down here on the end, the dark blue lines is 
the administration of President Clinton.
  I saw through the 1980s, as my colleagues did, a Republican President 
submit to, for 6 of the 8 years President Reagan was President, a 
Republican Senate and a Democratic House budgets that were never within 
$100 billion of being balanced. I saw the Congress, Republican Senate 
and Democratic House, in collusion with the administration, borrow the 
money necessary to fund those budgets.
  When I came here in 1988, we were borrowing in the name of our 
children and grandchildren over $250 billion a year to pay for the 
consumption that people of my generation have enjoyed. I thought that 
was wrong then, and I think it is wrong now.
  This is what it looks like on a bar chart in terms of building the 
national debt. In 1980, it was a little less than $1 trillion. Today, 
it is over $5 trillion.
  Now, my colleagues might ask, who owns this debt? Who do my 
colleagues and I, we the people, who do we owe this 5 plus trillion 
dollars? Well, we owe the Federal Reserve and government accounts; that 
is, the Social Security Trust Fund and some other trust funds, about 
$2.3 trillion. We owe other people in the country a little over $2 
trillion. Foreigners hold over $1.2 trillion of this debt, foreign 
interests.
  So if we take away the money that we the Treasury, we the people owe 
to ourselves, we come up with about $3.6 trillion in outside held debt 
that we are paying interest on every day.
  Put another way, we spend more on interest, or spent more on 
interest, this is fiscal year 1998, we spent more on interest right 
here, $364 billion, than we did on any other government program, save 
Social Security. Social Security is $379 billion. But it has its own 
funding stream, the FICA tax.
  We spent more money on interest than we did on national defense, 
which is right here in green. More than we did on medicine, and we 
heard the gentleman from Iowa (Mr. Ganske), the previous speaker, talk 
about medicine in this country, the orange right here. Agriculture, we 
can barely see, the little green line. We spent more on interest than 
we did education, than we did veterans.
  In short, we spent more on interest last year, almost $1 billion a 
day than we spent on anything that my colleagues and I can do for our 
children's future today.
  Now, part of this projected, and I want to underline the word 
projected, none of this money is here yet that they say is going to 
come into the Treasury from 2000 to 2009, this is the Social Security 
surplus, the blue. This is what the Congress and the President have 
agreed is off limits. We will not spend that. The red, $1 trillion is 
what is projected to come into the Treasury as a surplus over the next 
10 years.
  Now, mind you, 6 months ago, part of this money did not exist. It is 
only through reforcasting what we think the economy is going to be in 
the next 10 years that this has grown to the extent that it has. The 
money is not yet here. I do not know what the unknowns out there are. 
We may have a war, tornados, hurricanes, other natural disasters. This 
is only a projection that, as it changed 6 months ago, could change 6 
months from now and this money never show up.
  Now, here is why I was so upset last week. Here is the Social 
Security money in blue. That is off limits. That is for the people in 
this country who pay into the system and who expect to earn and draw 
their Social Security benefits when they retire. That is off limits.
  What is available, if one believes the projections, to spend or to 
cut taxes with is this part right here. Do my colleagues know what 
happened last week? Knowing of this horrendous suffocating debt that 
our children and grandchildren have, the majority party in the 
Committee on Ways and Means reported out a bill, I guess it will come 
to the House this week or next, that spends 87 percent of this 
projected surplus in terms of a tax cut.
  Now, nobody is against tax cuts. Certainly not me. But I will tell my 
colleagues, I think this is irresponsible from two standpoints. Number 
one, the money is not yet here. If it does not materialize, if the 
economy turns south, it may never get here. So to use 87 percent of it 
in tax cuts today betting on what is going to happen tomorrow I think 
puts our financial Treasury and our financial integrity as a Nation at 
risk.

                              {time}  2215

  But it is worse than that, and this is why. We have a suffocating 
national debt. The interest that we pay every day is more than we pay 
for defense, it is more than we pay for education, it is more than we 
pay for anything save Social Security. By spending all the money now 
that is projected as a surplus for the next 10 years, all we are doing 
is shoving this note and all the interest due on every schoolchild in 
this country that went to school today. They do not even know Congress 
met today. They were in school somewhere; or, worse yet, they are not 
even here yet. And all we are doing is shoving down all of these notes 
and this debt for them to pay. I think that is wrong.
  When we take 87 percent of the budget surplus that is projected and 
use it now to satisfy our own immediate desires for a tax cut, what is 
the message from this Congress to the kids of America? We took the 
money and ran. That is the message.
  Tom Brokaw, some of my colleagues know, has written a book called 
``The Greatest Generation,'' and I have received some letters from some 
of those folks and they say, ``John, if I must do without, so be it. I 
don't want you to send this suffocating debt down on the heads of my 
kids and grandkids. They deserve a better Nation. You are putting the 
country at risk, you, the Congress, if you take all of this projected 
surplus, do an almost $1 trillion tax cut today and do nothing about 
the debt.''
  I think it is not only selfish and wrong, but I think it could really 
endanger the future of this country. Because if the world economy 
collapses, if there is a downturn, if there is a recession, and if 
interest rates go up as we have to roll these notes, what is going to 
happen to the interest on them? It is going to have to go up, too. And 
right now we are already paying almost $1 billion a day. How much more 
can we stand before we have to say this country is in such bad shape we 
can no longer pay our bills?
  I think it is as serious a situation as we have faced or experienced. 
Because I know that a country that is bankrupt

[[Page 16628]]

is unable to defend itself, it is unable to help its citizens, and it 
is unable to be a force for peace in the world.
  Mr. Speaker, I want to now yield to the gentleman from Texas (Mr. 
Turner), because he has some comments he would like to make regarding 
this projected surplus.
  Mr. TURNER. Mr. Speaker, I thank the gentleman from Tennessee for 
yielding to me, and I appreciate very much the presentation that the 
gentleman has made. Each of us here tonight feel very strongly that we 
must, in order to be fair to our children and our grandchildren, we 
must take a fiscally conservative and responsible course of action with 
regard to the projected surplus.
  Those of us here tonight, Mr. Speaker, feel that we should, instead 
of devoting the vast majority of the projected surplus to tax cuts, we 
must devote the vast majority of the projected surplus to paying down 
that horrendous $5.6 trillion national debt, which is taking interest 
every year in every annual budget to the tune of about 15 percent of 
all Federal spending. In fact, I am told that just to cover the 
interest on that national debt we spend about 25 percent of the total 
revenue from the Federal income tax just to pay that interest on that 
debt every year.
  Mr. Speaker, we know that really paying the national debt down can 
give average working families more than any of these pie-in-the-sky 
tax-reduction schemes, that are mostly designed to benefit the wealthy. 
Because we know that paying down the debt, according to every economist 
we know, would result in even lower interest rates than we have today. 
And lower interest rates means for the American people lower house 
payments, lower car payments, or lower payments on those student loans 
they have taken out to send their children to college.
  In fact, every 1 percent decrease in interest rates saves the 
American people between $200 and $250 billion in mortgage costs. Paying 
down the national debt is the smart way to help average working men and 
women and their families have more in their pocket.
  We also know, as the gentleman from Tennessee pointed out, it is the 
morally correct thing to do. Why should we, now that we have good 
economic times, continue to jeopardize the future economic stability of 
this Nation and cause the preschoolers of today to be the ones that 
have to deal with the $5.6 trillion national debt that was accumulated 
over all those years, as was pointed out on the chart, that shows all 
those successive Democrat and Republican administrations that incurred 
those annual deficits that have resulted in our $5.6 trillion national 
debt?
  There is one question I want to address here tonight that even is a 
more fundamental question than the issue of what should we do with this 
projected surplus; should we cut taxes or should we pay down the debt? 
Let us look at the projected surplus itself. Because if the truth be 
known, we may not even have a surplus over the next 10 years.
  If we look at the numbers of the Congressional Budget Office 
projections, what we see is that they have estimated annual numbers 
over 10 years cumulatively totaling a $2.9 trillion surplus. That 
starts off in this year with a projected $120 billion surplus for 
fiscal year 1999. Those numbers go up steadily all the way up to the 
year 2009, where the projected surplus is about $413 billion. All those 
numbers together total the projected $2.9 surplus over 10 years.
  But let us just look at the last year, 2009, that $413 billion 
projected surplus. Those numbers are based on current law. Current law 
has in place some budget caps that we are now struggling to live within 
that were put in place in the Balanced Budget Act of 1997. What if we 
fail as a Congress to meet those budget caps? Those budget caps, in 
fact, will require us to reduce spending over the next 3 years by 8 
percent. Can we do that? I am not sure. If we cannot do that, we know 
that these numbers are totally unrealistic in terms of the projected 
surplus.
  Let us just suppose that the caps that we have in place are reached, 
and that discretionary spending, instead of staying within those caps 
and going down 8 percent over the next 3 years, ends up going up with 
inflation over the next decade. That would not be an unreasonable 
expectation; that is for government programs and costs to go up with 
inflation. That $413 billion surplus in the year 2009 would immediately 
shrink to $331 billion. And, in fact, discretionary spending could rise 
faster than that. Sooner or later it is likely to grow again at least 
as fast as the population or the real economy.
  Let us leave all that aside and let us see what would happen if, for 
example, the projected surplus for 2009 did not only shrink to $331 
billion because of inflation, but let us just say it stayed at the same 
level as the percentage of the gross domestic product that it stayed at 
for several years since 1970. We would then have only $151 billion in 
actual surplus in 2009.
  Today's surplus projections also assume that the growth in the health 
benefit costs will be relatively slow over the next decade. Every one 
of us know that hospitals in this country are under a great deal of 
pressure. Some of the cuts in Medicare have put great strain on our 
hospitals and other health care providers, and the CBO estimate says 
that health care spending, Medicare spending, will rise at 4.2 percent. 
That is a full percentage point below its long-term average since 1970. 
So what happens if health care costs continue to go up, as they have 
since 1970 every year? This would mean that the projected surplus for 
the year 2009 would only be $95 billion.
  Beyond those cost estimates that may be incorrect in the CBO 
estimate, consider productivity in our Nation, which has grown at 1.1 
percent since 1973. The CBO estimates of the surplus says productivity 
will grow at an average of 1.8 percent over the next decade. Let us say 
it does not quite make 1.8. Say it is only half that. So it is somewhat 
closer to the 1.1 percent that we have had since 1973. That would mean 
that the projected surplus for the year 2009 becomes only $27 billion 
instead of the $413 billion that we started out with in the original 
estimate.
  Further, what if the number of workers grows just one quarter of a 
percent, one quarter of a percent slower than the CBO projections 
estimate, due perhaps to a combination of fewer people seeking jobs and 
maybe fewer people finding them? In that case the deficit would grow to 
$102 billion.
  So, Mr. Speaker, looking at only five assumptions in the CBO 
estimate, we can see there may not even be a surplus over the next 10 
years. Fiscal conservatism requires that we recognize that the 
projections upon which the surplus is made by the Congressional Budget 
Office may not be worth the paper they are written on. We do not even 
have to talk about, as many people often do, whether the stock market 
may crash, because all the things I referred to are very minor changes 
in the direction of the economy that completely erases the surplus of 
$2.9 billion that we are using to base a major tax cut on, which could 
result in our children and grandchildren having an even greater 
national debt to pay off than they already have today.
  Mr. TANNER. I want to thank the gentleman for those comments, Mr. 
Speaker. I come from Tennessee, in a rural area, and if I just knew 
what the price of cotton or soybeans or a bushel of corn is going to be 
next week, I would be in pretty good shape. We do not know that, yet we 
are talking about 10-year numbers here, which as the gentleman 
suggested, may or may not materialize.
  Let me say one other thing before I recognize the gentleman from 
Texas (Mr. Stenholm), and that is that the term personal responsibility 
does not just apply to people on welfare. We have a responsibility here 
to try as best we can to keep the financial integrity of this country 
in at least as good as shape as it was when we got here.
  I do not believe it is financially responsible, as the gentleman from 
Texas (Mr. Turner) said, to base a massive tax cut on nothing more than 
a projected surplus. I do not think any prudent businessperson in 
America would say that they think that is a financially conservative 
doable thing and they wish we would do it.

[[Page 16629]]

  Mr. Speaker, I would now like to ask my friend, the gentleman from 
Texas (Mr. Stenholm) to say a few words. We have also been joined by 
the gentleman from Minnesota (Mr. Minge). This looks like a Blue Dog 
gathering down here.
  Mr. STENHOLM. Mr. Speaker, I thank the gentleman from Tennessee for 
yielding me this time and for taking this time tonight, and I 
appreciate my colleagues, the gentleman from Texas (Mr. Turner) and the 
gentleman from Minnesota (Mr. Minge), joining us. The gentleman is 
right, this is a joining of the Blue Dogs tonight, and my colleagues 
who are listening will hear us talking considerably about this very 
ill-conceived proposal that we have facing us very soon.
  I want to emphasize a few points that have not yet been made tonight. 
But first, last week the largest newspaper in my district had an 
editorial entitled ``GOP Tax Cuts Founded Upon Play Money.'' And this 
is one point I want to emphasize. My colleague, the gentleman from 
Texas (Mr. Turner), spoke very succinctly and very matter-of-factly 
regarding the absolute fact that all of these numbers we are talking 
about are projections, and for us to base the future, really, of our 
country on projections is very dangerous.
  And here I want to make a point, since we have mentioned the Blue 
Dogs tonight. One of the things that we believe in, if we are going to 
be critical of the other side's proposal, and we are very critical of 
the proposed $864 billion tax cut with play money, we feel if we are 
going to be critical of the other side, it is incumbent to say what are 
we for; what it is that we propose.
  And I have been asked by many of my colleagues and friends on the 
other side of the aisle, ``Charlie, what would you have done? What 
would you do?'' And we spelled this out very clearly in our budget 
proposal earlier this year in which we said the conservative thing to 
do is to be conservative. Do not spend the money until we have it. Let 
us realize that if we are going to use 10- and 15-year projections, we 
should use them for purposes of outlining what the effects are going to 
be. But, for Heaven's sake, do not spend the money until we have it in 
our hands.

                              {time}  2230

  We suggested very strongly, let us fix Social Security and Medicare 
first. The primary responsibility of this Congress should have been, 
should be, and I hope will be, let us fix Social Security. Save Social 
Security. Everyone now agrees, since all the rhetoric we have been 
hearing around here is a lock box, we are going to save the money, we 
are no longer going to spend the Social Security trust fund for 
anything other than Social Security. We all agree to that, we thought.
  But if we carefully analyze this $864 billion tax cut as proposed, we 
will find I believe the numbers will show that we are spending Social 
Security trust fund dollars in that 10-year plan. I believe those 
numbers are there.
  I have a new set of numbers tonight that we can use, but I think it 
is going to be important that we use CBO numbers when they come out. 
And if we are going to show that if we have this $864 billion tax cut 
over the next 10 years, we will use Social Security trust fund dollars 
in payment of that tax cut.
  But here is the thing that I want to emphasize tonight, and it has to 
do with Social Security also. And this is something that is being 
overlooked thus far in this whole debate. What happens in the second 10 
years? Once we put a tax cut in place, it goes on and on and on. And 
since there are pressures in the first 10 years to do all of which the 
Committee on Ways and Means majority has suggested, they have 
interestingly done, as Congress so often does, they allow the major 
part of the actions of the tax cut to occur in the second 10 years.
  How much? It is now estimated $2.9 trillion will not make it to the 
Federal Treasury in the second 10 years, to which a lot of people and a 
lot of our colleagues will say, hooray, that is what we were sent here 
for. Send the money back home.
  The only problem with that is in 2014, only about 14 years from 
today, that is when the baby-boomers begin to retire in earnest. That 
is when the pressures on the current Social Security system will build 
to the highest level that we have seen since Social Security was first 
started.
  Now, let us use a little bit of what I like to call west Texas 
tractor seat common sense. It can be Tennessee common sense. It can be 
Minnesota common sense. It can be any of our 50 States common sense.
  If we have a program that has been clearly defined by most of us as 
one of the best government programs ever created, Social Security, and 
what it is doing for senior citizens today, and if we believe, as I do, 
that we need to do the same thing for our children and grandchildren, 
why would we pass a tax cut in 1999 that is going to guarantee that the 
Congress in the year 2014 will have a very difficult if not impossible 
hurdle to meet? Why would anyone suggest moving revenue of $2.9 
trillion at exactly the same time that Social Security is going to have 
a need for those moneys in order to pay the promises off to those young 
men and women, all working men and women, who are working and paying in 
today, why would anyone have the gall to come to the floor of the House 
and suggest this is good policy, good economics, good anything?
  But that is what we have been allowed to believe thus far by the 
rhetoric thus far. But we hope that with actions and discussions like 
tonight and the debate on the bill when it gets here and other 
discussions about this proposed tax cut, as much as I would like to see 
it, too, the gentleman from Tennessee (Mr. Tanner) said a moment ago he 
is for it, we are all for it, that is not the question.
  The question is what is the fiscally responsible thing for this 
Congress to do? And again, I come back to this very simple statement to 
my colleagues that are asking what would we do. What I wished we would 
have done this year, I wish the Committee on Ways and Means would have 
spent the last four or five months debating a Social Security plan, a 
solvency plan, a proposal that would put Social Security on solid 
ground.
  We have many out there, the gentleman from Arizona (Mr. Kolbe) on the 
other side of the aisle and I, joined by about nine cosponsors, now a 
partisan group, the gentleman from Michigan (Mr. Smith), another 
Republican, has come up with some ideas. The gentleman from South 
Carolina (Mr. Sanford), another Republican, has come up with some 
ideas. We have various bipartisan suggestions.
  Why did not the Committee on Ways and Means deal with Social Security 
first? That is what the Blue Dogs suggested. Take care of Social 
Security first. Then let us deal with Medicare, as the gentleman from 
Texas (Mr. Turner) mentioned a moment ago.
  Most of us who represent rural districts are hearing from our 
hospitals saying, if you do not make some changes in the Balanced 
Budget Agreement of 1997, if you do not make some changes, we are going 
to be forced to close our doors.
  Now, we heard an excellent presentation by the gentleman from Iowa 
(Mr. Ganske) in the previous special order just before us today in 
talking about some of the problems associated with health care a moment 
ago. But there is another problem with health care that is very 
prevalent in rural America and that is whether we are going to have 
health care available. If we do not address the very real priority of 
medical spending, Medicare and Medicaid, and do it in a responsible, 
conservative way but do it in a way in which we allow our hospitals to 
stay open, for many of our rural communities there will be no money, 
there will be no hospitals. And that is not just crying wolf. That is 
something that is a very, very real fact.
  There is one other area, then I will yield back and allow the 
gentleman from Minnesota (Mr. Minge) to join us tonight. But we talk 
about we do not send the money back to those that paid it, we are going 
to spend it. One of the things that gets overlooked by this is the very 
real fact of who owes this debt? The American people.
  Who is paying the interest, the $300-plus billion that the gentleman 
from

[[Page 16630]]

Tennessee (Mr. Tanner) showed on his chart a while ago? Who is paying 
that? We are paying it.
  It is consuming an increasing amount of the percentage of income tax 
that we pay. We forget that when we pay down debt, as the Blue Dogs 
have suggested, when we pay down debt we reduce the amount that we have 
to pay on interest.
  One of the very real choices we are going to have to make very soon 
deals with military spending, defense spending of this country. And if 
we did as the current game plan, if we spend 87 percent of the 
projected available surplus for the next 10 years, there will be no 
money there for defense. Immediately folks will say that I am wrong 
about that, we propose to follow the President's suggestions on defense 
and, therefore, we will meet those numbers. Fine, I will concede that 
we will do that.
  That means that we are going to have to cut 31 percent out of every 
other function of the budget, 31 percent out of veterans' programs, 31 
percent out of agriculture, 31 percent out of education in order to 
meet the budget goal that has been set by the majority, who are saying 
that we can afford this $864 billion tax cut.
  My colleagues, we cannot do this. I appreciate the fact that many of 
you are agreeing with us today privately. But we hope that we will find 
a way. And to those that are asking what is that way, the Blue Dogs set 
it out. Let us take any projected surplus and let us be conservative 
with it, whatever it is, you pick the number and let us wait until they 
are real.
  First off, 100 percent of all Social Security surpluses go to pay 
down the debt. Then half of any non-Social Security surplus, pay down 
the debt with that also. And then the remaining, let us meet the 
priorities of this Nation, military, agriculture, health care, 
education, and veterans. And then let us deal with tax cuts targeted 
towards keeping this longest peacetime economy that we have seen in the 
history of our country.
  That is a pretty good plan. We hope our colleagues will be joining 
us.
  I yield back now to the gentleman and look forward to participating 
in a moment.
  Mr. TANNER. Mr. Speaker, I would just say this. Both of my colleagues 
all have done an excellent job talking about this problem. But it does 
not take a lot of sense. We talk here in Congress and our eyes glaze 
over with all these projections and numbers. If we have a trillion-
dollar projected surplus, we cannot take 87 percent of it and cut taxes 
today and then meet the needs of defense, education, health care, 
veterans and so on. We cannot do that.
  People know that. I think the American people are way ahead of us 
quite frankly. If anybody believes they can save Social Security, that 
we can do all the things we need to do with the military and veterans 
and education and health care, then there is a bridge in Brooklyn that 
is going to be sold pretty quick. They know better. They know we cannot 
have it all.
  And so, I hope that without regard to the numbers that make us glaze 
over, people know that we cannot have it both ways.
  So I would like to call on the gentleman from Minnesota (Mr. Minge) 
who helps the Blue Dogs with our budget, and he is going to talk a 
little bit I think about the budget priorities that the gentleman from 
Texas (Mr. Stenholm) mentioned.
  Mr. MINGE. Mr. Speaker, I appreciate the opportunity to address the 
body this evening.
  We really face a situation here in the United States at the end of 
the decade that is intoxicating. We face the situation where we have 
balanced or are close to having balanced the budget after decades of 
deficit spending. It is historic. It is dramatic. It is exciting. 
Everybody is seeking credit.
  Those of us in Congress are often boastful, we have a balanced 
budget. At the other end of Pennsylvania Avenue, the White House is 
talking about having balanced the budget. Talk of surplus rolls from 
the lips of all of us. But really we have not yet balanced the budget.
  We are hopeful that in fiscal year 1999 there may be a surplus if we 
disregard what we are making on the Social Security trust fund. But the 
fact of the matter is in 1999 we are already appropriating funds for 
so-called emergencies; and if I not correct, these emergency spending 
measures are eating up any possible surplus that we might have had in 
fiscal year 1999.
  Mr. TANNER. Money is money. It does not matter where it comes from. 
If it goes, it goes. My colleague is right.
  Mr. MINGE. So 1999 there is no surplus. And we can talk about it, but 
really what we are doing is relying upon the Social Security trust 
fund. The baby-boom generation is at its peak earning years paying into 
the Social Security trust fund at a very fast clip. And the trust fund 
is not yet paying out on the benefits to that baby-boom generation. So 
that is why we are accumulating some additional money.
  There is always this temptation to roll the Social Security trust 
fund into the rest of the budget and look at this temporary surplus 
that is being accumulated in Social Security as it ought to be 
accumulated but then act like this is a surplus in Federal operations 
overall.
  But the sad fact is we have been borrowing this money from the Social 
Security trust fund. The Social Security trust fund has been forced to 
invest it in U.S. Government bonds, and then we are spending that money 
that we borrow from Social Security for current consumption. We are not 
putting it away as a long-term investment.
  So I think one thing we have to be very clear on at the very outset 
is that in 1999 there is no surplus; and chances are in Fiscal Year 
2000 there will not be a surplus either because we face the prospect of 
yet more so-called emergency spending for Kosovo, for agriculture, farm 
crises, and other matters and that is going to eat up the hope for 
surplus in fiscal 2000 if we put that Social Security trust fund to one 
side.
  So I think that first it is very important that all of us here in 
Congress and the folks in the administration be straight with the 
American people.
  One thing that troubles me about this is that I notice the news media 
is critical of those of us in Congress when we talk about surpluses and 
we disregard Social Security but then the news media proceeds to report 
news from the White House or news from the leadership here in Congress 
and not point out that often the talk of a surplus disregards what we 
are doing with Social Security.

                              {time}  2245

  So let us make sure that we put the Social Security business to one 
side.
  Just to give all of us an idea of the magnitude of this and I think 
that the gentleman from Texas (Mr. Turner) and the gentleman from Texas 
(Mr. Stenholm) have alluded to this, but I would like to repeat it. If 
you are looking at the next 5 years, which is all that those of us in 
the Blue Dog Coalition have tried to do, just look out the next 5 
years, we would have about a $1 trillion surplus if we were rolling 
Social Security in. But if you back Social Security out, even under the 
most optimistic projections as to surplus, we would have around a $250 
billion surplus in that 5-year period once we have disregarded Social 
Security.
  Now, the other thing I would like to emphasize with respect to this 
so-called claim of a surplus is that the intoxicating effect of the 
surplus is sort of overwhelming in the political process, that we are 
all trying to find ways to both take credit for it and then to somehow 
lavish benefits, supposed benefits on various constituencies in this 
country with that surplus before we have realized it.
  So here we sit in 1999 and we are talking about surpluses that 
hopefully will occur in 2001, 2003, 2004 and on over the next 15 years. 
What we would like to do here in 1999 is commit Congress, commit the 
Federal Government, commit the American people to programs 5, 10, 15, 
even 30 years down the road, as the gentleman from Texas (Mr. Stenholm) 
emphasized, before we really have the surplus.
  What it reminds me of, we all talk about going on a diet. Everybody, 
even

[[Page 16631]]

those that are quite thin and trim talk about going on diets, but here 
what we have is a situation where we have sort of fattened ourselves at 
the trough with Federal money for all sorts of things, and many of them 
very good programs. We are not talking about the money has been spent 
on things that are necessarily inappropriate. There are constituencies 
that ask for all these programs, but we have spent money on these 
programs, and we are overweight. We are trying to do something about 
it. So we are going to go on a diet. Now we see that we are shedding 
these excess pounds so that in the future, 5 years, 10 years, 15 years 
down the road, we are going to be shedding these excess pounds, so what 
we want to do is start eating again before we have even shed the 
weight. We are looking at shedding the weight 5, 10, 15 years down the 
road but we want to start eating those rich chocolate and ice cream 
desserts right now.
  Mr. TANNER. What I think we have done is we have taken the Nation's 
credit card and we have maxed it out. Now all we can do are make the 
interest payments, and we are going to leave to our children, son or 
daughter, ``I'm going to give you a credit card. What I'm telling you 
though, is, it's going to take everything you're making just to pay the 
interest on what I have already consumed. The suit I've bought and put 
on the credit card is worn out. The meal that I had at one of these 
fancy restaurants is eaten, it's gone.'' And so we have maxed out, 
instead of taking the money that we see maybe as a surplus now and 
doing what I think is a pretty good thing, that is paying what you owe, 
where I come from, where you come from, that is considered poor form 
really if you come into money and you owe a fellow and you do not pay 
him. We owe our kids and grandkids. Instead of spending it now, I think 
we ought to pay them.
  Mr. MINGE. Another thing about this, we are all looking for political 
advantage out here in Washington. All the Republicans would like to 
say, ``We've delivered tax cuts,'' or we did this or we did that. 
Democrats like to claim that we did this or that. The White House likes 
to make claims. If we can take this surplus being hopefully accrued in 
the future and say we are doing things with that surplus by making 
decisions now when the surplus is not even in hand yet, we are building 
points supposedly with the American public. But I do not think those 
are points that we are entitled to earn. We ought to be, if you are 
looking at your credit card situation or I was talking in terms of 
food, I guess it depends on what you need more at the time, a good meal 
or need to go out and do some binge spending, what we ought to be doing 
is eating our vegetables here. We have got a few more years here where 
we ought to be eating the vegetables and we should not be talking about 
that rich dessert. Or as I know the gentleman from Texas (Mr. Stenholm) 
has said many times, the sun is shining now, now is the time to fix the 
roof, to fix the leak. What sense does it make to sort of languish 
there and try to get a suntan instead of doing the work of fixing the 
roof when the sun is shining?
  What I would like to emphasize is that in this setting, we have come 
up with a proposal which is really very simple, or humble in the Blue 
Dog group, and the proposal is reflected by this chart. I would just 
point out quickly, we would take 100 percent of the Social Security 
surplus and devote it to Social Security. The surplus over and above 
what is accumulating in Social Security we would split three ways: 50 
percent to pay down on the debt, reduce that credit card bill as you 
are talking about; 25 percent to invest in priority programs, and 
everybody has their list of priorities but this is an example of some 
things that many folks around the country recognize as priorities; and 
25 percent and have certain targeted tax reductions. So it is a simple 
formula, it is a simple approach and by showing this level of fiscal 
responsibility, the economists who have looked at the American economy 
and who have studied the impact of fiscal restraint on interest rates 
and other things have said, we will have a dividend of $165 billion in 
interest savings to the Federal Government over the next 5 years if we 
show this type of fiscal restraint. That is, it will cost us that much 
less, we will save that much in interest on the Federal debt which is 
sort of an interest dividend.
  Mr. STENHOLM. That is a point that I think needs to be reemphasized. 
If you took the $864 billion and applied it to the debt instead of a 
tax cut, we would reduce the interest cost over the next 10 years by 
$155, $165 billion. But more importantly, this bill, in the second 10 
years, that amount of money is $1.5 trillion that future generations 
are going to have to pay in interest in the next 20 years, and I hope 
we are still there part of that. But this is what is being overlooked 
by this frenzy among some to say that the only way we can save this 
money is to send it back to the people that paid it, forgetting that if 
we do not deal with the debt, we are going to continue to have to pay 
interest.
  A moment ago, the gentleman from Texas (Mr. Turner) made the 
observation, and it is a correct one, each one percentage point of 
interest cost the American people between $200 and $250 billion in 
increased mortgage cost, automobile cost, TV cost, daily living 
expenses. It is a built-in expense. Therefore, we feel that the most 
conservative thing we can do and the best tax cut we can give the 
American people, the absolute best tax cut, would be to keep interest 
rates where they are or lower. Remember what the Federal Reserve did a 
couple of weeks ago, they increased interest rates a quarter of a 
point. That cost, according to these numbers, about $60 billion, is 
what consumers are going to have to pay. Look at what that would have 
meant if that interest had not gone up. Why did the Federal Reserve 
choose to raise interest rates? They were afraid the economy was 
overheating.
  Why do we have a tax cut, particularly the largest tax cut in modern 
history? To stimulate the economy. If we stimulate the economy, what 
might the Federal Reserve do? Increase the interest rates. Who is going 
to be the winner? It is not going to be the American people.
  Mr. MINGE. It comes back to the Federal budget again, because the 
Federal Government is the largest single borrower in the U.S. economy. 
It costs the Federal Government money when interest rates go up just 
like it costs the homeowner and the business that has to go out and 
borrow. So that we are not doing any of us a favor when we set in 
motion the chain of events that provides the Fed with incentive to 
raise interest rates.
  Mr. TURNER. I think it is interesting to note what the Federal 
Reserve Board Chairman Alan Greenspan said when he testified before the 
Committee on Ways and Means that the gentleman from Tennessee (Mr. 
Tanner) serves on. He was addressing the subject of reducing the debt. 
He said it is much better to use the surplus for debt reduction than 
tax cuts, and he said it this way and I am quoting him. He said, ``The 
advantages that I perceive that would accrue to this economy from a 
significant decline in the outstanding debt to the public and its 
virtuous cycle on the total budget process is a value which I think far 
exceeds anything else we could do with the money.''
  I think that this debate that we are having this week in the Congress 
has redefined the party of fiscal conservatism, because just as the 
gentleman said a minute ago, all of these projections of the surplus 
that our friends in the other party want to base a huge blockbuster tax 
cut on are merely projections. What would be the conservative approach 
to take if it was at your house or mine? To do what is being proposed 
with this major tax cut that takes up 87 percent of the projected 
surplus is like a fellow sitting at his kitchen table with his wife and 
they are talking over their budget situation and somebody walks in and 
sits down over the kitchen table with them and says, ``Oh, by the way, 
you're going to get raises over the next 15 years and every year, we 
know you're going to be making more money.''
  He says, ``Well, I guess I will. That sounds pretty good. I believe 
I'll buy

[[Page 16632]]

me a new boat right now, I believe I'll go out and buy some new camping 
gear and I believe I'll go out and see if I can't find us a new house 
right now.''
  Right then he would be making the wrong decision. He would be 
spending money that he does not even have, because somebody told him 
they think he is going to get a raise every year for the next 10 years. 
This is the same thing that has happened in this Congress. We do not 
need to be the Congress of fiscal irresponsibility. We do not need to 
be the Congress that took away the chance that we have today to pay 
down a $5.6 trillion national debt. We do not need to be the Congress 
that passes on that debt to our children and our grandchildren. We need 
to be the party of fiscal conservatism, the Congress of fiscal 
conservatism.
  I am glad to know that as a member of the Blue Dog Democrat 
Coalition, we are standing up this week in this Congress for fiscal 
conservatism and for the children and grandchildren that we want to 
have a prosperous economy in the years ahead.
  Mr. MINGE. I would like to emphasize another dimension, and, that is, 
folks in this country who have the most modest income are the ones that 
are hurt the most by higher interest rates. It is those folks who have 
accumulated some savings that will benefit from the high interest 
rates, at least theoretically, but it is the modest wage earner that is 
going to get hit. I think one point that is very important to make is 
that keeping interest rates low benefits those who are doing that 
borrowing or have debts, and also having a strong economy like this 
does a great deal to provide jobs and opportunity for the low-income 
people in America. We reduce the unemployment rate, low-income folks in 
our country are participating in our economy at a rate that they have 
not for many, many years, many decades and so trying to maintain what 
we have and not being irresponsible about it I think is one of the most 
effective ways to try to address the needs of modest income Americans.
  Mr. TANNER. We did some calculations in the committee and if we could 
keep the United States Government out of the credit markets, keep the 
government from borrowing money, operate on an even keel, it is 
estimated that that would mean a two point difference on mortgage 
rates. Now, on a $115,000 home with a mortgage, that translates 
directly into the pockets of those homeowners almost $2,000, a little 
over $1,900 a year that is money that they are not paying on their 
mortgage, they are getting to keep. Not only that, it makes housing 
more affordable, it makes automobiles more affordable. What does all 
that do? It keeps the economy going. And so if we could keep the 
government from borrowing money, and let me say this while we are 
talking tonight. I think it is incumbent upon us to tell the people of 
this country that we want to pay the debt that we all collectively owe, 
that we have all consumed, we did not spend it, I was not here in the 
1980s but we benefited from the increased consumption in some way and 
did not pay for it. If we could just say to them, we want to pay what 
we owe, we want to pay your children and mine and our grandchildren, 
but we are going to also tell you we are not going to engage in a lot 
of new, unnecessary spending, the Blue Dogs make that promise as well, 
because that would not do anyone any good.
  So for those who say, ``Well, we cannot keep it here, it has got to 
be spent,'' I know of no compelling force to spend money around here. 
You have to vote to spend it the last time I looked. You have a voting 
card and you vote to spend it. Well, it goes both ways. And so we want 
to keep the money here and pay it on the debt, not spend it. I think 
that would be a message that all of us could embrace here tonight.
  Mr. STENHOLM. If the gentleman will yield for one other point.

                              {time}  2300

  As my colleagues know, a 1 percent increase in interest rates, 
according to my arithmetic, costs the taxpayers $56 billion, 1 percent 
on a $5.6 trillion debt that we have to pay interest on. That quarter 
of a point costs us a little over $14 billion, the quarter of a point. 
Look how difficult it is for us to find $14 billion of spending cuts 
which went away just like that when interest rates went up.
  Therefore, the whole message of the Blue Dogs tonight and earlier 
this year and will for the remainder of this year in this Congress is 
the fiscally-responsible, conservative thing for us to do is to pay 
down the national debt while we have the opportunity to do so and use 
this opportunity to fix Social Security for our children and 
grandchildren. You cannot do it both ways.
  If you take 87 percent of the projected surpluses and spend them 
today in a program that literally explodes in the second 10 years, it 
will make it fiscally impossible to meet the social security needs. It 
is one of the most irresponsible fiscal actions.
  In fact, I have termed this. I have been here now 20 years, going on 
21. This bill is the most fiscally irresponsible bill to come before 
the Congress in the 20\1/2\ years that I have been here, and I hope we 
will be able to turn that around, and I thank the gentleman.
  Mr. TANNER. I called it a generational mugging in the committee the 
other day, and I believe that is what it is. I believe it is a 
generational mugging that we are taking money now and, as I said 
earlier, taking the money and running instead of paying what we owe on 
behalf of our kids and grandkids.
  Mr. MINGE. Mr. Speaker, if my colleague will yield for another 
moment, finally I have a graph over here, a graphic display of what the 
Blue Dog budget is like, if you just think about the bones and the 
rewards that all of our dogs at home, they always like to have, and 
just take that bone. That is not a phony bone. We are talking about 
using half of a surplus that we hope will accrue to reduce the debt. 
That has its rewards throughout the economy, as we have said. We are 
talking about 25 percent for tax reductions.
  All of us would like to have tax reductions. It goes without saying. 
It is a bipartisan goal. But the question is: How do we do it 
responsibly? And let us allocate a responsible amount to tax reduction 
and not have, let us say, the White House and the congressional 
leadership get in some sort of bidding war over spending and tax cuts. 
That is terribly destructive. That eats into the debt reduction.
  And finally, we have all acknowledged that we have program 
priorities, and I agree with you. I have heard from the hospitals in 
rural Minnesota and in the metropolitan areas in Minnesota of the 
dramatic effect that the Balanced Budget Act of 1997 on health care and 
what this is doing to our institutions; and probably what is most 
dramatic and what is the saddest is what I see is happening with home 
health care and with nursing homes.
  As my colleagues know, we have loyal, dedicated, hard-working nursing 
home employees in our country that could earn more by going to fast-
food restaurants. But they are committed to working with seniors who 
are in nursing homes, and I think that it is just we ought to be 
ashamed at what is happening in nursing homes in our country and the 
wages that people that work there, and if we say that we cannot do 
anything to make sure that we can keep the doors open in those 
facilities and continue to provide home health care so that seniors can 
live at home as long as possible; and, instead, we are going to, 
whether it is launching into a new program or initiating tax cuts that 
we cannot afford. I think that is irresponsible.
  Mr. Speaker, I would like to thank my colleague from Tennessee (Mr. 
Tanner) for contacting us and urging that we get together this evening 
to discuss this very important issue.
  Mr. TURNER. Mr. Speaker, if the gentleman would yield, most of us who 
are members of the fiscally conservative Blue Dog coalition support tax 
cuts, but I was just discussing with my friend from Texas (Mr. 
Stenholm) the tax cut bill that was on the floor of the House just a 
year ago, a tax cut that I voted for. In fact, I have voted for each of 
the two tax cut measures that have been before this Congress since I 
have been a Member.

[[Page 16633]]

  Last year's tax cut bill was in the neighborhood of $150 billion over 
10 years. It was an $80 billion over 5-year tax cut. That bill passed 
the House by a small margin, died in the Senate, never became law.
  Here we are a year later, almost less than a year later, voting on a 
tax cut 5\1/2\ times as large as the one this House voted on less than 
a year ago.
  Now you cannot tell me that the budget forecasts and the surplus 
estimates have changed that much in 1 year. Common sense would tell us 
that what we are talking about in this tax cut is fiscally 
irresponsible, and I want to thank the gentleman from Tennessee (Mr. 
Tanner) for bringing this issue before the floor tonight and for his 
leadership as a member of the Committee on Ways and Means.
  Mr. TANNER. Mr. Speaker, I thank my colleagues very much, and I want 
to thank you all for coming, and I want to thank the folks here for 
staying around and listening to us, and I think maybe we might ought to 
do this again sometime with some more charts, not to glaze people's 
eyes over, but just to tell them we believe that we ought to pay our 
debts first and then have a responsible tax cut as well as bolster our 
military, our health care system, our education system through what we 
said we would do for our veterans and for our agricultural sector that 
is in real trouble.
  Mr. Speaker, with that I want to thank my colleagues.

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