[Congressional Record (Bound Edition), Volume 145 (1999), Part 4]
[House]
[Pages 5469-5476]
[From the U.S. Government Publishing Office, www.gpo.gov]




                              {time}  2015

                THE NEW DEMOCRATS WANT FISCAL DISCIPLINE

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 6, 1999, the gentleman from Washington (Mr. Smith) is 
recognized for 60 minutes as the designee of the minority leader.
  Mr. SMITH of Washington. Mr. Speaker, tomorrow on the House floor we 
will begin the budget process. We will debate in the full House for the 
budget resolution, and the budget resolution is the parameters under 
which we will pass the spending bills later on in the session. So this 
is the first attempt to get a look at what our budget is going to look 
like for the fiscal year 2000.
  I rise today to talk about fiscal discipline and to urge fiscal 
discipline in that process, and I do so from the perspective of a 
Democrat, but a New Democrat, and I would like to explain that a little 
bit at the outset because I am a member of the New Democratic Caucus 
back here in Washington, D.C., but that is not something folks may 
necessarily be completely familiar with outside of Washington, D.C.
  The basic premise behind the New Democrats is that the Democratic 
party needed to change to address some of the legitimate concerns that 
the American public had with our party. Essentially we in the New 
Democratic Caucus believe that the Democrats did have to make some 
changes in some of its policies in order to address the concerns the 
public had expressed with us and the reasons that we started losing 
elections, quite frankly. We had to understand some of the changes that 
were going on in society and some of the changes that were going on in 
government and address them in manners that had not been previously 
addressed, and one of the biggest ones is fiscal responsibility.
  Now, as Democrats, we believe that government can, in fact, in 
certain areas be a positive force in peoples' lives. We can look to 
Medicare, Social Security, the interstate highway bill, the GI bill, 
laws that have protected our environment by cleaning up air and water; 
all of those areas have made a difference. So it is not that we do not 
believe, as some of our colleagues on the right, in the Republican 
party, sometimes believe, that government can never do anything right; 
it is just that we believe that they need to do it in a fiscally 
responsible manner, and there is a variety of reasons for that.
  First of all, all of the needs that we have as a society: education, 
defense, cleaning up and protecting the environment, medical research, 
taking care of our veterans, providing health care and pension security 
for our seniors are not one-time needs. Our generation is not going to 
be the only generation that is

[[Page 5470]]

going to need to address those concerns. It is going to be ongoing in 
the future. And if we spend all of the money right now in this 
generation, we are going to be doing a grave disservice to future 
generations. In fact, that is more or less what happened in the 1980's.
  Basically, as my colleagues know, there were a lot of compromises 
that were reached in this body in the 1980's, and I always characterize 
those compromises as being basically: Okay, we will take your tax cut 
if you take our spending increase, and we will just spend as much money 
as possible to make as many people as possible happy right now today. 
Put it on a credit card and forget about tomorrow.
  Well, Mr. Speaker, I first got into politics in 1990 when I was 
elected to the Washington State Senate. Basically I got elected right 
about the time the bill came due, and I know how difficult it is to do 
what we need to do as a government when the previous members of a 
legislative body have spent all the money and then some. It is 
completely irresponsible, and it mortgages the future of our children. 
Future generations will need infrastructure, they will need money for 
transportation, they will need money for public education, for cleaning 
up the environment, and if we have spent it all, they will not have it.
  So, being fiscally responsible should in no way be antithetical to 
the beliefs of the Democratic party. We need to emphasize it and make 
it a big priority.
  One of the other problems with running up such a severe debt, other 
than spending all of the money that future generations could spend for 
needed and necessary programs, is that the more money we spend, the 
more debt we go into, the higher the interest payment. This is a 
concept that everybody in America understands whether it is a mortgage 
payment, a car payment, a credit card bill. We understand that not only 
do we have to pay back that money that we borrowed, but it keeps going 
up in the presence of interest that accumulates on our bill every 
month.
  Mr. Speaker, I have a chart here that helps illustrate that problem 
in the Federal Government. Basically the third largest expenditure 
behind Social Security and national defense of our Federal Government 
is interest on the debt, $243 billion or 14 percent of the budget. That 
is money that does not go to educate our children, that does not go to 
provide health care for people in poverty, or seniors or people who 
need it. That does not go to help our environment, to help with medical 
research, to help with veterans, to do any of those things. It goes to 
pay for the irresponsible spending of those who went before us, and we 
should be keenly aware of that number because, as the deficit goes up, 
this number keeps going up as well.
  And finally there is another benefit to being fiscally responsible 
that goes beyond this that the next chart, as I will demonstrate in a 
minute, reveals, and that is that basically, if we can pay down the 
Federal debt; because keep in mind this number here is a yearly number. 
We are running up a deficit on a yearly basis; we are getting close to 
balance, but we are not quite there, but more on that in a second. But 
we also at the same time are incurring overall debt. We are borrowing 
more and more money. So even if we get our budget balanced, one of the 
critical things we need to do is start paying down the debt. If we 
start paying down the debt, that helps interest rates go down, and if 
interest rates go down, there are benefits all across the economy, and 
I will demonstrate a few of them on the other chart.
  One of the biggest ones that we can all relate to is a home mortgage, 
and basically if we can pay down the debt so that the public or the 
government sector is not gobbling up all the money, other people can 
have more access to it at a better rate. And my colleagues can see 
here, if you just reduce the mortgage interest rate on a 30-year fixed 
rate from 8 percent down to 6 percent, you can save yourself a great 
deal of money on the monthly payment, and over the course of a year you 
can save yourself a great, an even larger, sum of money.
  So, Mr. Speaker, this is another problem with being fiscally 
irresponsible, all of which brings me to the budget that is going to be 
laid out here on the floor tomorrow by the majority party. It fails to 
be fiscally responsible. It is not just Democrats that have trouble 
being fiscally responsible in the past. It is Democrats and 
Republicans. One of the things I always try to say whenever people get 
into an argument over whose fault the debt is, as my colleagues know, 
is it the Reagan/Bush presidency or is it the Democratic Congress; as 
my colleagues know, I believe in saying it is both of their fault. They 
made the decisions to spend more money collectively than they can 
possibly cover. So it is not just one party or the other that is 
responsible for this, but now, as the budgets are being rolled out, if 
the Republican budget passes, it will be the Republicans who are 
responsible for further fiscal irresponsibility because their budget 
sounds themes that are eerily familiar: massive tax cuts totaling well 
over a trillion and a half dollars over the course of 15 years, at the 
same time accompanied by massive spending increases primarily in the 
areas of defense, and education and in some arguably laudable areas. 
Keep in mind, as I said earlier, this is not an argument against 
spending money. This is an argument of spending too much money and 
going into debt so that we create a fiscally irresponsible situation.
  And lastly the last thing reflected in the current Republican plan is 
not only do they dramatically cut taxes and dramatically increase 
spending, but they also offer no plan at this point to do anything 
about entitlements, about Social Security and Medicare and Medicaid, 
all of which in their present framework are going to cost far more than 
the current budget structure could possibly accommodate. Medicare goes 
bankrupt in 2008, Social Security stops running a surplus in 2014 and 
goes bankrupt in 2032. All of those facts combine to make this 
Republican budget very fiscally irresponsible and to put us in a 
position of basically snatching defeat from the jaws of victory. We are 
just this close to balancing the budget.
  Personally I do not think that we should count the surplus in the 
Social Security Trust Fund as income to reduce the overall deficit, so 
I do not think we have a balanced budget yet, but even if you do not 
count that money, we ran a $30 billion deficit this past fiscal year as 
opposed to the nearly $300 billion deficits that we were running in the 
early 1990's. So we are getting close.
  I rise today basically as a New Democrat to urge fiscal discipline, 
urge us to get the rest of the way and to reject the Republican budget.
  I have some of my colleagues here who are going to help me in this 
argument, and I will at this point yield to the gentleman from North 
Carolina.
  Mr. ETHERIDGE. Mr. Speaker, I want to thank my friend from Washington 
State (Mr. Smith) for organizing this special order this evening on an 
issue that is really so important not only this year to this Congress, 
but to the future of this country and to our children who have not yet 
been born. And he talked a few moments ago about a new Democrat. As my 
colleagues know, that is a group, a caucus, as he has shared, has been 
formed here in Congress of Democrats who believe in growth, who believe 
in funding education, but also believe that we should balance our 
budget, and keep our House in order and that we should reduce our 
public debt. To make sure that we have a good sound economy I think is 
a sound philosophy, and it is most important and it makes sense for 
American families, as he just talked about.
  Before I came to Congress, as many of my colleagues know, I was the 
elected State superintendent of my State of North Carolina for 8 years. 
What they may not know is that prior to that I spent 19 years as a 
small businessman meeting payrolls, paying taxes. I knew what it was to 
go to the bank and borrow money if I had to, not only to expand, but to 
meet payroll if I had to on Friday if I had not collected enough of

[[Page 5471]]

my sales during the week. So it takes financial discipline. So I know 
firsthand how important it is to keep your books sound and your numbers 
straight.
  That is why it is so important, as I come to the floor this evening 
to join my colleagues in this special order because it is an issue I 
think we have to take about. Tomorrow we will be debating it on the 
floor and talk about fiscal discipline at the federal level that we had 
in North Carolina when I was there because I served for 10 years in the 
General Assembly at the State level. Four of those years I chaired the 
Appropriations Committee and had responsibility to write four balanced 
budgets, and Congress is now headed in that direction of getting our 
House in order.
  Mr. Speaker, that is why the Republican budget resolution is so 
troubling to me. If we look at it, they are talking about a $800 
billion tax cut over 10 years. It is too risky, it is too radical, and, 
in my opinion, too irresponsible. The Republican budget is a tax cut 
spree financed with fantasy surpluses yet to materialize.
  If the economy should dip and we hope it does not, but we know what 
history tells us, guess what happens? There is no money. The American 
people remember the 1980's when we had huge deficits. We do not want to 
return to that. That would certainly be a mistake.
  When the people of North Carolina sent me to Congress, they gave me 
simple marching orders. That was to help the Federal Government live 
within its means. And one of the first bills I voted on, major bills, 
was to balance the federal budget, and, as I have said earlier, as a 
former businessman you have to balance your budget, and if you cannot 
balance your budget and live within your means when you have a good 
economy, when do you get to do it? We must act now to pay down the debt 
when we have money, and that is the one thing that could stifle our 
economic growth and the expansion that we are enjoying and bring 
tremendous hardship on hard-working people all across America who have 
paid the price, who are now working hard and looking for us to do the 
things we ought to do that are right. Pay the debt down so, if we have 
another tough time, we can get through it.
  Mr. Speaker, future generations of Americans deserve the opportunity 
to strive and achieve without the questioned burden of debt that our 
current consumption is creating. We are consuming a great deal right 
now. We owe it to the next generations to pay this debt down and make 
sure that our children and our children's children are not saddled with 
it. If we use projected surpluses as an excuse to enact massive tax 
cuts, we will have no resources available to pay for debt relief for 
our children or our grandchildren.

                              {time}  2030

  We will not be able to lower interest rates on homes and expand the 
economy in the 21st century.
  Two more pressing crises, and I could list a whole bunch, but I only 
want to touch two facing America, and that is facing social security 
and Medicare. We have to invest in that and do it now, and the budget 
we will see tomorrow will not do that. It is a shell game. They show us 
how to increase revenues and expenditures for programs that are 
important to people for 3 to 5 years. At the end of that period they 
cut them off, because that is when all the big tax cuts kick in. What a 
cruel hoax to play on the American people.
  Secondly, investing in education, so that the next generation of 
American leaders will have the kind of education they need to continue 
to grow this economy in the 21st century. Not one penny in their budget 
proposal for school construction, at a time when there is crying across 
this country for modernization and new school buildings.
  We have a greater growth in school population for children in public 
schools than we have had in the history of this Nation. There are more 
children in school today, and yet, not one penny.
  The Republican budget proposal cripples our ability, in my opinion, 
to rise to these challenges, and we have an opportunity tomorrow to do 
something about it. We have a chance to say no, no to the excesses, but 
yes to a responsible budget that will provide opportunities for our 
children, that will provide targeted tax cuts, that will help grow this 
economy, and help us move into the 21st century in a position to 
continue to be the great Nation that we are, and provide strength and 
hope to people around the world.
  Mr. Speaker, I thank the gentleman for this opportunity to be part of 
this special order.
  Mr. SMITH of Washington. I thank the gentleman very much for those 
fine comments.
  One quick comment before I recognize my friend, the gentleman from 
Wisconsin. This is not easy. That is the reason it is called 
discipline. We all have people come back here and ask for a wide 
variety of programs and tax cuts.
  I have always felt, I long for the day when somebody walks into my 
office and asks for $10 million or $20 million or $50 million for some 
program or tax cut, and I can look at them and say, that is a complete 
waste of money. That is not going to do any good for anybody, anywhere.
  That is not true. Every dime we spend would do some good for some 
people. That is why we have to be disciplined to make sure we do not 
spend more money than we take in. The Federal budget is $1.7 trillion. 
We can do a lot and we should, but we should not give in to the 
pressure of taking it issue by issue and saying, we just have to spend 
the money. We have to think about the future, and think about the fact 
that it is their money that we are spending if we are not disciplined 
now.
  Mr. Speaker I yield to the gentleman from Wisconsin (Mr. Kind).
  Mr. KIND. Mr. Speaker, I thank the gentleman from Washington (Mr. 
Smith) for giving some time this evening to talk about a very important 
issue in regard to the budget resolution which is coming up tomorrow, 
which will have an impact on the course of fiscal policy on this Nation 
for years to come.
  I just came from my office, watching on television. I am sure many 
people throughout the country heard the President's explanation of our 
involvement in Kosovo.
  Now that military air strikes are underway in the Balkans again, I am 
sure my friends from Washington State, North Carolina, my friend, the 
gentleman from New Jersey, would extend our thoughts and prayers to the 
young men and women in American uniform who are once again being called 
upon to restore some peace and stability in Europe, along with the 
military personnel of the 18 NATO nations that have joined us 
unanimously in this policy.
  It is never easy to order this type of action to place young lives in 
harm's way, but I believe that it is the right policy at the right time 
for the right reason.
  As a student back in 1990, I had the opportunity of visiting 
Yugoslavia, and spent time in Kosovo, and I had a chance to meet a lot 
of Kosovar students and people there. These are good, decent people. 
They do not deserve to be murdered and forced out of their homes by 
Milosevic's army.
  If we are to learn any lessons from the Second World War, it is that 
the United States of America is not going to stand idly by and watch 
atrocities and genocidal practices being committed against defenseless 
civilians.
  Yet, it is the young men and women who are called upon yet again to 
do their duty, and I am very confident they are going to be able to do 
it professionally, with a great deal of loyalty, and courageously. May 
they all return home soon to their families and safely.
  On to the subject at hand in regard to the budget resolution, when I 
came to this body a couple of years ago, I was proud to join the New 
Democratic Coalition, which is new but expanding after every election. 
It is a group that stands principally for fiscal responsibility, along 
with making investments to promote growth in this country,

[[Page 5472]]

highlighting issues such as the advancement of technology and education 
and the work force, a heavy emphasis on education issues, but 
underlying all this is the need for fiscal restraint, fiscal 
responsibility, and fiscal discipline.
  I, too, am concerned, as my friends, the gentleman from Washington 
State and the gentleman from North Carolina, are tonight about the 
ramifications of what is going to hit the Floor tomorrow and what is 
going to be debated tomorrow; the lack of fiscal discipline, the 
fiscally irresponsible decisions that are being made in the course of 
this budget resolution, and the long-term implications that that holds 
throughout the country.
  My friend, the gentleman from North Carolina, indicated earlier that 
what is being proposed is over an $800 billion tax cut, most of which 
is backloaded. In fact, it will not kick in until those crucial years 
when the aging baby boomers start reaching retirement, start entering 
the social security and Medicare program.
  If there is an economic downturn, it could reap devastating 
consequences for that generation and that generation of leadership 
having to do with serious revenue shortfalls at precisely the time when 
these very important programs, like social security and Medicare, will 
be facing their greatest challenge.
  The gentleman from North Carolina also pointed out a very fundamental 
fact. I remember not so long ago when there were great knockdown, drag-
out fights over budget resolutions and proposals that would extend out 
3 years. Now we have entered this era that we are not just talking 
about a 1-year fiscal cycle or 2-year or 3-year fiscal cycle, but a 10- 
or 15-year fiscal cycle, and fiscal decisions being made on projections 
way out into the next century.
  We are hard-pressed with the economic experts that we have, the 
Congressional Budget Office, the Office of Management and Budget, to 
even get the economic projections and numbers right over a 12-month 
period of time, let alone a 5- or 10-year period of time.
  So these rosy scenarios, and they are certainly very optimistic, and 
hopefully they will come true, of projected budget surpluses of the 
tune of $4 to $4.5 trillion over the next 10 to 15 years, are I think a 
very dangerous and irresponsible calculation.
  There are many warning signals, not only in our own domestic economy 
but in the international economic area, that could lead to a drastic 
downturn with the economic growth that we have fortunately been 
experiencing in recent years. If that downturn does happen, obviously 
it is going to affect revenue projections. It is going to affect other 
programs within the Federal budget.
  If these budget surpluses do not in fact materialize and we lock into 
huge tax cuts that are now being proposed, we could find ourselves 
returning to the era of annual structural deficits that we are just now 
turning the corner and pulling out of from the 1980s and early 1990s.
  I think the Democratic Party has a lot to be proud about and to talk 
about with regard to fiscal constraint and discipline that we have 
exhibited in the 1990s. Since the 1993 budget agreement, which was a 
very difficult vote for Democrats to take, many of them lost their seat 
because of it, there was not one Republican across the aisle who 
supported it.
  In fact, many of their leadership were right here on the House Floor 
decrying that budget agreement, claiming that if it was enacted, that 
it would result in the next Great Depression in this country. But in 
fact, it has led to six consecutive years of budget deficits and now 
projected budget surpluses that are outside of the social security 
trust fund.
  The truth is, and the American people and my constituents back home 
in western Wisconsin understand this fundamental fact, that all this 
talk about budget surpluses this year, next year, is really masking a 
social security surplus that the government is continuing to borrow 
from. We will not truly be running online budget surpluses until the 
fiscal year 2001, assuming, again, the economic projections do take 
place.
  But I think the most fiscally responsible and prudent course of 
action to take now is a go slow and cautious approach, wait and see if 
in fact these budget surpluses do materialize before we start locking 
in on major fiscal policy changes.
  One of the other things that disturbs me in regard to the budget 
resolution that we will be debating and voting on tomorrow is the fact 
that if we pass it and if it is implemented, we will be breaking a 
longstanding budget ruling of the 1990s called pay-as-you-go.
  This is, I think, a very important reason why we have been able to 
practice fiscal discipline, why we have been able to reduce the Federal 
budget deficit over the last 6 years, and why we have the potential of 
going into the 21st century on a much firmer fiscal note.
  Basically, pay-as-you-go means if you are going to offer any new 
spending or any new tax cuts, they have to be paid for by offsets in 
the already existing budget, meaning that you do not move forward on 
new spending or reduced taxes unless you can pay for it under the 
budget allocation as it exists.
  That rule would have to be violated in passing the budget resolution 
that we face tomorrow. I think that would be disastrous. I think that 
would be the wrong step to be taking right now, when we are starting to 
make this turn into an era of potentially fiscally responsible and 
sound footing, so we can make a serious investment in saving social 
security and Medicare, but most of all, start making the attempt to 
reduce the national debt.
  Right now it is at $5.5 or $6 trillion, going up, even today, and 
$3.7 trillion of that is publicly held, meaning that there is a 
government, Federal Government, obligation to pay back to individuals 
or corporations who are buying up Treasury notes and bonds. They have 
to come and they will come due. We have an obligation to pay it.
  With the projected budget surpluses, we are in excellent shape now to 
start downloading that publicly held national debt of $3.7 trillion, 
which is, by the way, what Chairman Greenspan is consistently begging 
us to do every time he comes before congressional committees to 
testify.
  We know how important the Federal Reserve has been in the economic 
activity we have experienced in this country. Why would paying down 
that national debt benefit us in regard to the Federal Reserve and 
monetary policy?
  It is very simple. The Federal Reserve Chairman Greenspan tells us 
that if we can reduce our national debt burden, that would mean the 
Federal Government would not have to go into the private sector and 
continue to borrow funds from the private sector in order to meet our 
Federal obligations and our deficit obligations.
  What would that mean? It would free up capital then in the private 
sector, and make it cheaper for individuals and companies to borrow for 
their own investment needs. It would enable the Federal Reserve and 
Chairman Greenspan to keep rates low, and to lower them even further.
  That really is the true economic story of the last few years, the 
fact that we have reduced interest rates, which has enabled individuals 
and corporations to borrow money cheaper, to make investments, to form 
capital, to create jobs, that leads to the economic growth we have had, 
the low unemployment and the low inflation.
  If there is one thing we should attempt to do, it is pass fiscal 
policy which will enable the Federal Reserve to keep rates low, and 
lower them even further. That is the big tax cut that all Americans can 
share in.
  Virtually everyone at some time has to borrow some money for some 
reason. Whether it is credit card payments, whether it is home or car 
payments, student loans, whether it is farmers in the capital-intensive 
occupation that they are involved with, small and large businesses, 
they are all having to borrow money.
  If we reduce the rate and the expense of borrowing it, that means 
more disposable money in their pockets. That is something that we 
should be striving

[[Page 5473]]

for. That is where our priorities should really lie.
  Unfortunately, that is not always politically sexy or politically 
juicy to take home to our constituents that we are representing. Tax 
cuts have always been popular and politically appealing, but unless we 
change that mindset in this body, unless we start becoming more 
concerned about the next generation, our children, and what type of 
fiscal inheritance they can expect, and less concerned about the next 
election, I am fearful that we are going to make bad decisions today 
that are going to affect my two little boys, who are just 2\1/2\ and 9 
months old right now.
  Most of what I do and the decisions that I make are done through 
their eyes; how is this going to affect them and their country in their 
century, the decisions that we make today. I think that is really what 
is at stake today. I think that is what the debate should be about 
tomorrow, how can we set the next generation up in the 21st century so 
that they do not have to face the burden of an exploding social 
security system or a Medicare system that is imploding because of the 
aging population in this country. That I think is the true challenge.
  I appreciate the leadership and the effort that my friend, the 
gentleman from Washington (Mr. Smith) is making, that other Members of 
the New Democratic Coalition have been making, my friend, the gentleman 
from New Jersey (Mr. Andrews), who is at the forefront of this issue, 
fighting about it every day. Perhaps we can change the mindset in this 
body and do the right thing, starting with this budget.
  Mr. SMITH of Washington. Mr. Speaker, I yield to the gentleman from 
New Jersey (Mr. Andrews), and I thank my friend, the gentleman from 
Washington State. It is good that this gentleman from Washington (Mr. 
Smith) came to Washington. We are glad he is here.
  I very much agree with the sentiments of my friend, the gentleman 
from Wisconsin (Mr. Kind). I have daughters who are 6 and 4, and I do 
look at these decisions the same way. When I was fortunate enough to 
come here in 1990, we were borrowing $400 billion a year to run the 
Federal Government. This year we will take in approximately $100 
billion more than we spend. Tomorrow and in many days that follow 
tomorrow we will make a choice as to what to do about that.
  As my colleagues have said very clearly and very well here tonight, 
there are many temptations in the short run. Virtually everyone who 
visits us in the Capitol wants more money from the Federal Treasury in 
the form of programs, or they want to send less money to the Federal 
Treasury in the form of taxes.

                              {time}  2045

  I believe that we have to do something this year that is totally 
contrary to the political impulse, and that is to avoid instant 
gratification in exchange for what makes sense in the long run.
  For us to do what is right here, I believe we need to make a choice 
that says no to an awful lot of things that are worthy of saying yes 
to. I wish that we could double college scholarship Pell Grants. I wish 
that we could spend more on cleaning up Superfund sites. I wish that we 
could do more to expand child care opportunities right now for people. 
I wish we could get rid of the marriage penalty and further cut the 
capital gains tax. I frankly think we should get rid of the estate tax 
as well.
  We get a lot of votes and a lot of constituencies that would support 
everything that I just said. But I think the choice we have to make is 
whether or not we help people a little bit right now with a modest, 
almost symbolic tax cut, or whether we invest in their children's 
schools, defend their country through a stronger military, protect 
their environment, and most especially, assure that they will have a 
secure retirement with a Social Security check and a full health 
benefit through Medicare.
  The choice that will be on this floor tomorrow is rather clear. Both 
sides in fact want to place the lion's share of the surplus into Social 
Security. We have different ways to do it. I frankly think the way that 
the gentleman from South Carolina (Mr. Spratt) is proposing is the 
right way to do it.
  But the big difference is what to do with the rest of that surplus, 
and here is the difference: We choose Medicare in the Democratic Party. 
The majority party chooses a short-term reduction in taxes, which is 
alluring, which is popular, which is politically expedient, and which 
is wrong.
  The most risky and difficult way, the most successful way, if you 
will, to let the deficit genie out of the bottle again is to start 
reducing taxes because it is a politically expedient and easy thing to 
do. It is a surefire recipe for higher interest rates, less confidence 
from the markets, and a return to the chaos that affected this 
country's economy when I arrived here nearly 10 years ago.
  A lot of people deserve a lot of credit for bringing us to a point 
where we now have black rather than red ink. Our President deserves 
credit. Members of the majority party deserve credit. Members of our 
party deserve credit.
  Most of the credit belongs to our constituents who get up every day, 
earn their living, send their tax dollars here, and sacrifice for their 
family and their community and their country. I would hate to see all 
of that sacrifice given away, eviscerated because of a need for short-
term political expediency.
  The right answer with that hundred billion dollars surplus is to fund 
the massive unfunded pension liability that was created for 30 years 
around here by putting it back into Social Security where it should 
never have been taken out. Then take the bulk of it, the remainder, and 
make Medicare sound for at least the next 10 years so that, when people 
retire, they understand that an illness is not a financial death 
sentence.
  It is difficult to resist what is popular in the short run, but it is 
right, and it is necessary. The budgets that will come to this floor 
tomorrow compel us to make that choice: the next election or the next 
generation, a good headline tomorrow or a good retirement for the 
people that we represent today.
  I urge my colleagues on both sides of the aisle to put aside their 
partisanship, read these budgets, look through the eyes of young men 
and young women who are growing up in this country, and pass the 
resolution put forth by the gentleman from South Carolina (Mr. Spratt) 
on behalf of the Democratic Party tomorrow.
  Mr. SMITH of Washington. Mr. Speaker, in terms of the budget, there 
are two key facts out there that are not getting a lot of headlines 
that need to be highlighted, because I think part of the problem and 
part of the rush towards spending all of this money or cutting taxes, 
one or the other, is the perception that we have these never-ending 
budget surpluses.
  There are 2 key limitations to that fact that need to be pointed out. 
Number one, a significant portion of those budget surpluses is within 
the Social Security Trust Fund. That is not really surplus money. That 
is money, as the gentleman from New Jersey (Mr. Andrews) just pointed 
out, that we have to pay back to the Social Security Trust Fund. So to 
count it as income and spend it now is like spending money twice. That 
puts us into a fiscally irresponsible situation.
  Second is the coming expense of the entitlements of Medicare and 
Social Security and, to a lesser extent, Medicaid. We all know the 
statistics on those. They are very dire.
  Basically, there are more people who are going to be in the 
retirement community who are going to be eligible for Medicare and 
Social Security. They are living longer, and health care costs are 
going up, all of which is combined to create a situation where the 
expenses for entitlements are going to explode in the next 10 to 15 
years and beyond.
  My colleagues need to factor those two things in before they go 
passing a whole lot of money around thinking that we have surpluses 
that we do not in fact have and will not have in the future.
  Mr. Speaker, I yield to the gentleman from Arkansas (Mr. Snyder).
  Mr. SNYDER. Mr. Speaker, like a lot of Americans tonight and perhaps 
people all around the world, I have been

[[Page 5474]]

spending my time channel surfacing through the various networks and 
following what is going on overseas in Kosovo. The President spoke, as 
my colleagues know, within the last hour from the Oval Office about 
what is going on.
  From the standpoint of those of us who are dealing with these 
budgetary issues now and will be voting on them tomorrow, as we 
recognize our young men and women and the sacrifices they are making 
tonight, they are flying in the budget decisions that were made in 
years gone by.
  I hope tomorrow that our thoughts will be with those young men and 
women as we cast our votes on what we think the best budget is for the 
future of this country.
  The issues that have gotten a lot of attention over the last several 
months about the budget have been issues involving family security, 
Medicare, and Social Security. One of my specific concerns about the 
votes that we have to make tomorrow is another part of the security of 
our senior citizens, and that is the veterans budget. Frankly, I think 
that the budget proposal that apparently was just filed here in the 
last few minutes is not adequate for veterans. It is very disappointing 
and perhaps more disappointing in view of what is going on overseas 
this evening and today.
  Fortunately we will have the opportunity tomorrow to vote on a better 
budget for veterans. It will be the alternative offered by the 
gentleman from South Carolina (Mr. Spratt). It will not only add 
additional money to this next year's budget but will maintain that 
number through the next several years.
  As the gentleman from Wisconsin (Mr. Kind) did such a good job in 
discussing the problems of tax cuts down the line, unfortunately the 
budget document that we are going to be presented tomorrow takes money 
from, in my opinion, good programs in order to finance those tax cuts.
  So we see that the budget tomorrow, with regard to veterans issues, 
it takes the President's budget, it adds $0.8 billion to it for the 
2000 fiscal year, but then the number drops back down in 2001 and 2002 
and 2003 and 2004.
  So the veterans are being falsely, in my opinion, falsely fooled into 
thinking that somehow we have this great budget that is going to add 
money to their budget for their future, and it does not.
  The number is inadequate for the fiscal year that we are considering, 
and then it is clearly even more inadequate in the years following 
because it drops back.
  The budget of the gentleman from South Carolina (Mr. Spratt) adds 
$1.8 billion to the veterans budget for the fiscal year we are 
considering and maintains that level over the future. The majority 
budget adds $0.8 billion to go to the budget for fiscal year 2000, and 
then that number drops back. I think that is not correct and not the 
proper way to treat our veterans.
  What it demonstrates, though, is the importance of being fiscally 
responsible. We have some very real needs in this country, and I think 
Social Security and Medicare are appropriately at the top of the list. 
But veterans and our promises that we made to our veterans also should 
be at the top of that list, as should our national defense budget.
  The more we take these dollars and, in my opinion, irresponsibly make 
promises to the American people that somehow we can do it all, we can 
fund everything, we can fund Medicare, we can fund Social Security, we 
can fund veterans, we can fund national defense, and, by the way, we 
can send all this money home to them, if we make those kinds of false 
promises, we do a disservice to our responsibilities down the line.
  That is why I am pleased to be here tonight and support the efforts 
of this group in being fiscally responsible and voting for a budget 
that does not squander this opportunity to put away surpluses for the 
future of this country, for veterans, for national defense, and for our 
senior citizens.
  Mr. SMITH of Washington. Mr. Speaker, I yield to the gentlewoman from 
California (Mrs. Napolitano).
  Mrs. NAPOLITANO. Mr. Speaker, I join my colleagues to carry a message 
that we do need to invest in our future and not squander our resources 
on ill-conceived tax cuts.
  We have heard it before and we are going to continue hearing it, the 
recession of the early 1990s has been replaced with a record-breaking 
strong economy. Years of budget deficits have finally been replaced 
with a surplus.
  Now we need to determine what is the most responsible thing to do in 
these good economic times. Should we do what any prudent family would 
do when times are good, namely, pay down our debt and invest in our 
future, or should we spend away our surplus on massive tax cuts that 
mostly benefit those that do not need it, the wealthy?
  Before I think of what we go through, I do not think it is very hard. 
The answer is very clear. That is why I support my party's policy of 
paying down the national debt and investing in America's future.
  Let us dedicate the 62 percent we have talked about of the surplus 
towards safeguarding Social Security and 15 percent towards Medicare. 
This would ensure that Americans have access to Social Security 
benefits until at least the year 2055 and access to Medicare benefits 
until at least the year 2020.
  While we work to safeguard Social Security and Medicare, let us also 
start getting serious about paying down the national debt. Public debt 
is now the highest it has ever been at $3.7 trillion, that is with a 
``t'', and it is soaking up billions of tax dollars that could 
otherwise be used towards further strengthening Social Security, 
Medicare, investing in our schools and infrastructure and expanding 
health care services.
  In 1998, 14 percent of our government spending went into paying the 
interest on our national debt. That comes to $3,644 for every family in 
America, $3,644. That is more money than was spent on the entire 
Medicare program.
  The money spent on the interest payments on the national debt did not 
reduce the debt itself by one cent. It certainly did nothing to improve 
our health care, our schools, our drinking water, or to help small 
businesses succeed.
  Let us stop wasting money on the national debt's interest payments. 
Now that we have overcome a history of budget deficits, it is time to 
use that economic strength we have built towards finally paying off the 
national debt.
  In addition, we have put an end to wasteful spending by looking at 
how we do the furtherance of cutting the national debt. It is good for 
Americans because it would lead to a reduction in interest rates.
  Now get this, a 2 percent dip in interest rates would cut home 
mortgages, the rates in home mortgages significantly. A family 
currently making monthly payments on a $150,000 home with a 30-year 
fixed income mortgage at 8 percent is paying $844 a month. If their 
interest rate drop to 6 percent, that monthly payment would be cut to 
$689, a savings of $155 a month. That is better than any tax cut the 
other side is proposing.
  Now for college students, a 2 percent reduction in the interest rate 
would cut typical 10-year student loans for a 4-year public college by 
$4,263. That is an 8.5 percent reduction. For small business, a 2 
percent interest rate could reduce a 5-year start-up loan on $200,000 
by $11,280 over the life of the loan.

                              {time}  2100

  These are very real and significant savings that demonstrate how 
paying off the national debt can help working families.
  The President has proposed a budget that will cut the debt, reducing 
it to $1.3 trillion. That would be the lowest national debt in 
proportion to GDP since 1916. I hope that my colleagues will join me in 
supporting our President's plan.
  Common-sense fiscal discipline transformed the budget deficit into a 
surplus. Let us resist the temptation to spend our current surplus on 
tax cuts that will leave us ill-prepared to tackle

[[Page 5475]]

the challenge of extending the life of Social Security and Medicare and 
reducing the national debt.
  Just because the days of deficits are behind us does not mean that 
fiscal responsibility is obsolete. We need to continue on the course of 
maintaining a strong and healthy economy that will benefit all 
Americans, especially our children and future generations.
  Mr. SMITH of Washington. One quick point, Mr. Speaker, and then I 
want to yield to the gentleman from Connecticut (Mr. Maloney).
  When looking at fiscal discipline issues, I think tax cuts are fine. 
I do not think that there is necessarily a prejudice against cutting 
taxes. I think in certain areas we need to do it. Nor do I think that 
tax cuts are any greater threat to our fiscal discipline than spending. 
I think too much spending leads to the problems we have just as much as 
too much tax cuts.
  What I would emphasize in any budget is to look at the overall budget 
and keep one primary goal in mind: balance it. If we think that we can 
find room for some tax cuts by cutting spending someplace else, great, 
let us put it on the table, let us talk about it, and let us weigh 
those options. Whatever the spending program may be, whether it is 
veterans spending that the gentleman from Arkansas (Mr. Snyder) alluded 
to, or the capital gains tax cut and the marriage tax penalty that the 
gentleman from New Jersey (Mr. Andrews) alluded to, put it on the table 
and talk about it.
  The problem is, and what we have yet again with the Republican 
budget, they sort of throw everything on the table and promise they can 
do it all, all the tax cuts, all the spending increases, and just kick 
it off down into the future and let the credit card grow. That is the 
problem.
  Nothing against tax cuts, but we need to weigh them against spending 
increases or decreases and figure out what is best, with one 
fundamental goal in mind: balance the budget and pay down the debt. We 
cannot do that if we promise away all the money in both directions.
  With that, Mr. Speaker, I yield to the gentleman from Connecticut 
(Mr. Maloney).
  Mr. MALONEY of Connecticut. Mr. Speaker, I thank the gentleman from 
Washington (Mr. Smith), and I think his final comments, and the motif 
of this special order, is fiscal responsibility and fiscal discipline. 
The day has finally arrived that we can stand here and say that we have 
a real opportunity to do the right thing in regard to fiscal 
responsibility.
  If we look back over the past 30 years, we see what was the wrong 
thing to do, and it was done wrong on both sides of the aisle in this 
House and in this Congress at large. Thirty years we went without a 
balanced budget. We have accumulated a $5 trillion deficit. We raided 
the Social Security Trust Fund. We raided the Highway Trust Fund. The 
Congress raided the Land and Water Conservation Fund. Thirty years we 
have had a wrong direction. We have not made the right decisions; the 
decisions that are in the long-term interest of this country.
  Today we are talking about doing the right thing. Tomorrow we will 
have the opportunity to vote on some budget resolutions, one of which, 
the one offered by the gentleman from South Carolina (Mr. Spratt), I 
believe, does in fact do the right thing. It restores us to a path of 
fiscal responsibility.
  Let me draw a straightforward analogy between a typical family and 
the budget decision that we have to make tomorrow. A typical family 
might, over the past years, have had some fiscal stress. They might 
have taken out a loan to help finance a young member of the family 
going to college; they might have taken out a loan to replace a car.
  They now face the circumstance where they have a good time. They are 
in good economic times. They are at the end of a year and they are 
going to get perhaps a bonus. What do they do with that bonus? Do they 
pay down their car loan? Do they repay the student loan so that perhaps 
the next child in the family can go to college? Or perhaps they make a 
decision that they are going to take a fancy vacation, and they are 
going to spend their year-end bonus or the benefit of their fiscal good 
times on some other luxury.
  That is the choice that this House faces tomorrow. Do we do the right 
thing? Do we pay down the deficit? Do we save our money for Social 
Security? Do we make sure that we have adequate provision for Medicare? 
Do we do the fiscally responsible thing, or do we kind of go on a 
holiday and find things that, sure, we would all love to do, but that 
frankly we cannot afford?
  The answer, I think, is that we try to do the right thing. And when 
we look at what that right thing entails, it is very straightforward. 
We are proposing that 62 percent of the surplus be put aside to secure 
Social Security; that 15 percent of the surplus be put aside to secure 
Medicare for the future years. Those actions will extend the fiscal 
life of the Social Security program to the year 2050.
  The proposal made by the majority party adds no additional years to 
the life of the Social Security program. The budget proposal of the 
gentleman from South Carolina will take us out to 2050.
  Similarly for Medicare, the majority party will make a budget 
proposal tomorrow which will add no additional life to the Medicare 
trust fund. The proposal of the gentleman from South Carolina will 
bring us fiscal security in the Medicare program to the year 2020, and 
still leave us money to do targeted investments in things like 
education and make some responsible, affordable tax cuts: a tax cut for 
long-term care; the opportunity to make the research and development 
tax credit a permanent feature of the Tax Code, to encourage additional 
growth in economic progress in our country.
  Tomorrow is a very important day in the history of this country. 
Tomorrow we have a choice, an irresponsible budget proposal containing 
an irresponsible tax, or a responsible budget proposal that looks to 
the long-term financial and social health of this country that includes 
targeted tax relief.
  I sincerely hope that this House supports the proposal of the 
gentleman from South Carolina (Mr. Spratt) and that we adopt a fiscally 
responsible budget resolution.
  Mr. SMITH of Washington. Mr. Speaker, it gives me pleasure at this 
point to yield to the gentleman from Minnesota (Mr. Minge). He is a 
Blue Dog as well as a new Democrat. He has a budget proposal himself 
that I think is very fiscally responsible and I will be happy to hear 
about.
  Mr. MINGE. Mr. Speaker, I agree that tomorrow will be a historic day 
in the House of Representatives. It will be historic in part because 
for the first time in 2 years we face the prospect of adopting a budget 
and the possibility that we will have a concurrent resolution with the 
Senate that actually is the type of budget resolution that we have held 
to passing.
  In 1998 it turned out that the leadership of the institution was not 
capable of bringing up and passing a budget resolution. I think that 
was a tragic flaw that existed in the leadership of Speaker Gingrich in 
1998, and I am pleased to see that we are moving past that stage here 
in 1999, at least I hope we are.
  The question really, then, is what type of a budget will we end up 
with here in 1999? The thing that I would like to emphasize in our 
discussions this evening is that there are a variety of views as to how 
we should handle the possible abundance; the opportunity to make 
prudent decisions in a time of a possible budget surplus.
  Essentially, we have three different choices that we will face 
tomorrow. The majority will be proposing that we take the entire 
surplus that is generated from various Federal operations, from revenue 
collection to the operation of agencies, but excluding Social Security 
and the post office, that we take that surplus and we return it to the 
taxpayers.
  Now, this sounds good. I think all of us would like to do that. But 
then some of us ask, what about this national debt that we have? What 
about priorities that we have as a country? For some, the priorities 
are education, for others it is veterans, for others it is

[[Page 5476]]

the environment, for some it is the defense of our Nation, for others 
it is agriculture, for others it is health care, and the list goes on.
  We are spending here in 1999 substantially more money, by some counts 
$35 billion more, than what people are promising we can live by in the 
year 2000. And yet, from what I can tell, the Republicans and the 
Democrats in this body alike that are on the Committee on 
Appropriations feel this is an unrealistic position. So the question 
is, is it realistic to try to return all of this money or are we going 
to leave ourselves severely strapped? I daresay that there is not a 
person in this body that does not expect we would leave ourselves 
severely strapped.
  Another approach is to invest the money in priority programs. And a 
third approach is to try to find a mix.
  The Blue Dog Coalition, of which I am a member, it is a group of 
moderate to conservative Democrats, will propose a budget tomorrow that 
has a mix. In that sense it is similar to the budget proposed by the 
gentleman from South Carolina (Mr. Spratt). We propose taking 50 
percent of the money that is in surplus and using it to reduce the $5.6 
trillion debt; 25 percent of the money to be used as a tax reduction 
measure, or for tax reductions; and 25 percent for program priorities.
  We feel that this is a responsible division of how the budget surplus 
ought to be used. It recognizes the needs that we face here in America, 
health care, education, defense, veterans, agriculture, environment and 
others. At the same time, it recognizes the responsibility that we have 
in a time of prosperity and affluence to pay down our national debt to 
the maximum extent possible, while at the same time trying to give a 
dividend to the taxpayers and meet the needs of our great Nation.
  Mr. SMITH of Washington. Mr. Speaker, just in concluding the 
discussion this evening, as we are guided in our budget discussions, I 
think there should be some central principles. One of the most 
important principles in achieving fiscal discipline is to not play sort 
of the divide and conquer strategy; not get to the point where the sum 
of the parts adds up to more than we would like the whole to add up to.
  We have heard about a variety of programs this evening. We have heard 
about a variety of tax cuts. There is merit to all of them. What we 
have to do in putting together a fiscally responsible budget is put 
them all on the table at the same time. I guess what I mean by divide 
and conquer, it is really more of a divide and pander strategy, which 
is to say we take each issue area which may be a priority for somebody, 
whether increased defense spending, increased education spending, 
increased spending for health care, an estate tax cut, a capital gains 
tax cut.
  There are all groups out there, as well as individuals, who have 
their favorite. They come and talk to us about them and we want to make 
them happy. It is sort of the nature of being a Congressman that we 
want to make our constituents happy, so we want to promise all those 
things, and that is where we get into trouble.
  What we have to say is if veterans are a big priority, then make it a 
priority and make it work in the budget. Make the sacrifices in other 
areas to make sure that we can do that. But we should not promise more 
than the budget can contain. That is what leads us to fiscal 
irresponsibility.
  That is what, sadly, the Republican budget we are going to hear about 
tomorrow does. It promises all across the board and does not meet the 
test of fiscal discipline, getting us into the position of paying down 
our debt and be responsible to the future.
  We are not the only ones who have needs. Future generations are going 
to have needs. Whether it is tax cuts or spending programs, if we take 
it all now, we will be mortgaging their future.
  Mr. Speaker, I see the gentleman from Texas (Mr. Stenholm) has joined 
us, so I will yield to him to talk also about fiscal responsibility. 
But I urge more than anything that we balance the budget and start 
paying down the debt. It is the responsible thing to do for our future.
  Mr. STENHOLM. Mr. Speaker, I thank the gentleman from Washington very 
much for yielding to me, and I very much appreciate his taking the time 
tonight in order to discuss the subject that we will be debating in 
earnest tomorrow.
  I guess the one thing that he said that I want to overly emphasize is 
that if by chance we have surpluses, and most of us, I think, and most 
of the American people understand that when we owe $5.6 trillion, we 
really do not have a surplus to talk about. And since most of the 
surplus, in fact all of the surplus this year is Social Security trust 
funds, we in the Blue Dog budget that will be offered as a substitute 
tomorrow, we emphasize that we should take that money and pay down the 
debt with it and really do it. I believe we will have bipartisan 
support for doing that because everybody is talking about that.

                              {time}  2115

  But the one thing that some are not talking about, and this is why we 
will offer our substitute amendment, some are saying that we ought to 
take future surpluses. And it was not too long ago in this body that we 
had a difficult time estimating next year, and then we started 5-year 
estimations and projections of what surpluses and what the budget would 
hold, and now we are starting 10 and 15 years.
  My colleagues, I believe it is very dangerous for the future of this 
country to base 15-year projections and say we are going to have a tax 
cut that will explode in the sixth, seventh, eighth, ninth, tenth, 
eleventh, twelfth, thirteenth and fourteenth year. That is not 
conservative politics, at least if they are a businessman or woman. We 
understand that they do not make those kind of decisions today based on 
what might happen tomorrow.
  What we are going to be suggesting is, if in fact we do in the next 5 
years achieve a surplus of the non-Social Security nature, let us put 
at least half of that down on the debt, let us pay an additional 50 
percent down on the debt, and let us take 25 percent of that and let us 
meet the very real needs of which I know the gentleman from California 
is as concerned as I am about defense.
  Let us put some real dollars in recognizing that, just as we have our 
young men and women in harm's way tonight, that it is extremely 
important that we give them the resources to do that which we ask them 
to do. And we cannot do that with the budget the majority is putting 
forward tomorrow, and everyone knows that.
  It is time to get honest, and the Blue Dog budget will in fact get 
honest. And we will attempt, hopefully, to have a majority of this body 
agree with us.

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