[Congressional Record (Bound Edition), Volume 147 (2001), Part 2]
[House]
[Pages 3094-3101]
[From the U.S. Government Publishing Office, www.gpo.gov]



              SO-CALLED ECONOMIC GROWTH AND TAX RELIEF ACT

  The SPEAKER pro tempore (Mr. Flake). Under the Speaker's announced 
policy of January 3, 2001, the gentleman from Texas (Mr. Stenholm) is 
recognized for 60 minutes as the designee of the minority leader.
  Mr. STENHOLM. Mr. Speaker, tonight we Blue Dogs are going to take a 
few minutes to discuss tomorrow's vote regarding the so-called Economic 
Growth and Tax Relief Act, and we are going to do our best to explain 
to all who are listening and to our colleagues and to others why we 
believe that it is a terrible mistake to bring a tax bill to the floor 
of the House before we first pass a budget.
  Last week, President Bush submitted a budget blueprint outlining how 
he proposes to fit his tax and spending priorities in an overall budget 
framework. We welcomed this proposal as the first step in the budget 
process.
  Unfortunately, this House tomorrow is being asked to short circuit 
the budget process by bringing legislation to the House floor 
implementing the tax cuts before Congress has had an opportunity to 
consider the entire budget. Now, a careful reading of the 1974 Budget 
Act will find that we cannot do that. It is against the rules of the 
House to bring a major spending bill or a major tax cutting bill to the 
floor of the House before we get a budget.
  Tomorrow my colleagues will hear that technically speaking this is 
not breaking the budget rules, because technically we are still 
operating in the year 2000 budget and, therefore, technically this is 
not against the House rules.
  We are going to enjoy hearing the explanation as to why technically 
we can break the House rules. Many of my colleagues felt like that with 
January the 20th coming that we had gotten passed the playing on words 
of definitions of what various words are, and that we thought we were 
ready for some straight talk, but we are going to hear from the leaders 
of this House tomorrow that technically we are going to be legal with 
the rule and the consideration of this bill.
  Mr. Speaker, some of us believe that that is not a positive action. 
In fact, we believe very strongly that even if it is technically 
correct, that we ought to live up to the spirit of the budget law, and 
that is when we will find the Blue Dogs standing shoulder to shoulder 
bipartisanly with the majority in this House in dealing with the budget 
process, which will include tax relief.
  We have no argument whatsoever that in the budget of this year and 
over the next 5 years that significant tax relief is in order, and will 
and are prepared to vote for it, but that is not what we are going to 
do tomorrow.
  Being in the minority when we are overrun, when decisions are made by 
the leadership that we are going to bring a tax bill onto the floor, we 
are not going to have bipartisan consideration, it is going to be the 
bill that the gentleman from California (Mr. Thomas), the chairman of 
the Committee on Ways and Means, and the leadership have selected, and 
that is going to be the bill that we are going to vote on, there is 
nothing we can do about it, unless we have some of the same kind of 
bipartisan support that we were talking about with the gentleman from 
Iowa (Mr. Ganske) a moment ago. When we find ourselves in substantial 
agreement and when we have that kind of action on the floor of the 
House, we truly will be bipartisan, but that is not what we are going 
to do tomorrow.
  Mr. Speaker, the President's plan is an important voice in this 
process, but it is not the only voice. There are a lot of questions 
that remain about his budget. We have an honest disagreement about some 
of his priorities and questions about how he will pay for all of his 
priorities as identified in his budget without borrowing from Social 
Security and Medicare. And how many times, Mr. Speaker, in the last 
several weeks and months, how many times, to those who were here last 
year, have we voted on lockboxes after lockboxes after lockboxes in 
which we have stood 400 strong saying we are not going to touch Social 
Security and Medicare?
  Let me issue a little bit of a warning to my colleagues who are going 
to vote for this tax cutting bill tomorrow, be careful when playing 
with fire because your fingers may be burned. Examine the budget. 
Examine the proposals. Examine the projected surplus. Take a good, hard 
look at where my colleagues are headed with the strategy that my 
colleagues are following.
  We in the Blue Dogs are going to be attempting tomorrow in the short 
period of time to make our point as strongly as we can possibly make 
it.
  We should not pass the tax cut bill tomorrow. We should first pass a 
budget. Ironically, ironically, the House Committee on the Budget has 
scheduled a hearing tomorrow afternoon during the time we are going to 
be debating the tax cut. The purpose of the hearing is to give Members 
an opportunity to testify about their interests regarding the fiscal 
year 2002 budget.
  At the very time that Members of this House are being given our first 
opportunity to offer our input into the priorities for our national 
budget on behalf of the people we represent, we are being asked to vote 
on a major portion of the President's budget.
  Now, we object to that very strongly, and I will conclude my remarks 
by saying I was here in 1981. I was one of the Democrats that helped 
pass the Reagan revolution. Knowing what I knew then, knowing what I 
know now, I would have voted the same way then based on what I knew 
then, but that is why I will be opposing this action tomorrow with 
every ounce of strength at my disposal, because I believe it to be 
wrong.
  Mr. Speaker, I believe that we are in danger of going down the same 
path we went down in the 1980s in which we increased our national debt 
by $4 trillion because we cut taxes first, but never got around to 
restraining our spending.
  We believe very strongly that we should put in place a budget that 
restrains spending; that caps discretionary spending; that makes all of 
the

[[Page 3095]]

priority interests that a majority on both sides of the aisle can agree 
to, then we should proceed with a tax cut, and it is a part and a 
component thereof.
  No matter how my colleagues color it, we will hear tomorrow, we will 
hear, we heard today, people saying it was the Congress that spent the 
money.
  I got a fax today from a fine gentleman out in Nevada that says, it 
is great. We heard you. You ought to have a budget first. It makes 
sense to the American people, but the reason tax cuts must be passed 
hastily is because waiting for a budget to pass would give you and your 
cohorts the opportunity to spend enough money to reduce or remove the 
tax cut.
  Let me remind this gentleman, this body is now in the control of the 
Republican Party. The Senate is in the control of the Republican Party, 
and the White House is in control of the Republican Party. Therefore, 
anyone that fears that spending is going to get out of control means 
that the majority is going to get out of control, and I do not believe 
that for a moment, but seemingly you do. That is the message you are 
sending to the American people.
  I repeat, we are for significant tax cuts, but as my colleagues will 
hear tonight, this much ballyhooed $5.6 trillion surplus is not real. 
It is not real. My colleagues will hear some facts from the gentleman 
from Mississippi (Mr. Taylor), and I hope my colleagues listen 
carefully.
  Mr. Speaker, I yield to the gentleman from Texas (Mr. Turner).
  Mr. TURNER. Mr. Speaker, I thank the gentleman from Texas (Mr. 
Stenholm) for yielding to me. It is a pleasure to join all of our Blue 
Dog Democrats on the floor here tonight to talk about what we think is 
the critical issue of the moment here in the House of Representatives, 
and that is the fact that we are faced tomorrow with a vote on a major 
tax cut when this House has yet to follow established procedure under 
the Budget Act, and try to come to grips with a budget prior to acting 
on tax cuts.
  Frankly, no American household and no business in this country would 
dare suggest that that is the right way to proceed, because at your 
house and mine and in your business and mine, the first thing we always 
know we are supposed to do is to establish a budget first. And until 
you have established a budget, you do not know how much you can spend 
on that remodeling of that new sun porch on the back of your house. You 
do not how much you can spend on that summer vacation. You do not how 
much you need to set aside for your children's education. That is what 
a budget is all about.
  This House of Representatives, contrary to the spirit of the Budget 
Act, which requires this Congress to pass a concurrent budget 
resolution with the Senate before we act on tax cuts is going to bring 
a major tax cut to this floor tomorrow, apparently, solely to generate 
momentum for the President's $1.6 trillion tax cut.
  Why are they doing it? I am not sure. The truth of the matter is, the 
Senate has already let it be known, as the Majority Leader of the 
Senate, that the Senate will adopt a budget prior to acting on tax 
cuts.

                              {time}  2145

  So frankly, we believe as Blue Dog Democrats committed to fiscally 
responsible policies that this House, too, should have a budget prior 
to a tax cut.
  The Blue Dog Democrats as a group, the 33 members, voted unanimously 
to call for this House to act on a budget first prior to taking votes 
on any tax cut. We have advocated from the beginning that we can afford 
a tax cut and we want the biggest tax cut possible, but we do not know 
how big it should be until we first have the debate and have the votes 
on a budget.
  Now we all know that the President says that his tax cut will fit 
within his budget. He says we are going to cut spending so that it 
grows no more than 4 percent a year. Senator Domenici said the other 
day that he thought that was a little bit tight, he would suggest 
perhaps 6 percent irrespective of what the President said is his goal. 
We all know that at the end of the day, it is what the Congress votes 
collectively to support and the President signs that becomes the fiscal 
policy and the budget of this country.
  So we believe that the right thing to do is to have that debate, talk 
about the competing priorities and then make a decision on a tax cut 
that fits within that budget that the Congress has agreed upon.
  Frankly, right now the President's tax cut seems a whole lot like 
trying to fit a size 11 foot into a size 6 shoe because there are a lot 
of competing interests that this Congress from various quarters will 
have an interest in. For example, this Congress has unanimously agreed 
that we should no longer spend the Social Security and Medicare 
surpluses for anything other than Social Security and Medicare. That 
takes some of this estimated future surplus off the table.
  Mr. Speaker, most of the Members of Congress believe that we need to 
strengthen national defense. There are some that support a national 
missile defense system. There are some in this House who share our 
views that education should be strengthened and to do that may require 
us to put some additional money into public education. There is a vast 
array of competing priorities.
  Most of us do not want to pass on the national debt that was 
accumulated over 30 years of deficit spending to our children so we 
would like to see the national debt paid down. All of these competing 
goals will be considered when this Congress gets down to debating and 
determining what the budget of this Congress will be. Then we will know 
how big a tax cut we can afford. So we are going to work very hard all 
day tomorrow to continue to send the message to this House that it is a 
budget first that we need to adopt, then let us vote on the biggest tax 
cut that that budget will allow.
  We also understand that it is very dangerous to be basing these big 
tax cuts on these 10-year projections of what the surplus may be. The 
President suggested in his State of the Union speech the other night 
that the American people have been overcharged and they are due a 
refund. Well, that sounds pretty good. The truth of the matter is none 
of us have been overcharged yet because the surplus we are talking 
about trying to give back to the American people has not arrived yet. 
It is projected to arrive under certain assumptions over the next 10 
years.
  Those assumptions can be questioned. The economic projections may not 
turn out to be true. It presumes about a 3 percent annual growth rate 
in the gross domestic product. We heard Alan Greenspan the other day 
testify before Congress that at the present time the national growth 
rate is zero. I suppose if the national growth rate stays at zero for a 
few more months, the Congressional Budget Office will need to go back 
to the calculator and recalculate the estimated surplus because they 
based it on some assumptions that may not turn out to be true.
  The bottom line is this: We want a tax cut as big as we can afford, 
but we also want to save Social Security and Medicare for the retired 
baby boomers when we know significant strains will occur on both of 
those systems. We want to pay down the national debt rather than pass 
that debt on to our children. We want to be sure that we get the 
benefits of a lower national debt which will result in lower interest 
rates which in many ways is equally as good as a tax cut because it 
puts money in the back pockets of every American who is trying to get a 
home mortgage, trying to buy a car, trying to borrow money to send 
their kids to college, trying to borrow money to expand their business.
  Lower interest rates will come, according to all economists who have 
spoken on this issue, if we pay down the national debt. I would say to 
you if you owe $100,000 on your home mortgage, if we could reduce 
interest rates 2 percent which is what some economists estimate would 
happen if we paid down the national debt over the next 10 years, that 
would mean $2,000 in interest savings to you. That is a bigger tax 
break than any of these tax cuts which

[[Page 3096]]

are being talked about would give an average American family.
  We have a lot to discuss and a lot of priorities to put on the table, 
and it is going to be the collective judgment of this Congress when 
they vote on a budget that determines the balancing of those priorities 
and until we have that budget, we really cannot say with any certainty 
how big a tax cut we can afford.
  That is our message and we believe the American people understand the 
importance of fiscal responsibility. They understand the importance of 
strengthening national defense, preserving Medicare and Social 
Security, being sure that we pay down the debt and do not pass it on to 
our children. We want to be sure if today we pass a tax cut, it does 
not mean that our children are going to end up paying for it tomorrow.
  That is fiscal responsibility, that is what the Blue Dog Democrats, 
the 33 members of our coalition have worked for since the inception of 
the Blue Dog coalition. I am proud to be here tonight with my 
colleagues who work for fiscal responsibility.
  Mr. STENHOLM. I yield to the gentleman from Texas (Mr. Sandlin).
  Mr. SANDLIN. Mr. Speaker, I want to commend the gentleman from Texas 
(Mr. Stenholm) for the fine work that he has done on this issue and for 
leading the Blue Dogs and for his comments tonight, along with the 
gentleman from Texas (Mr. Turner). They have done such an excellent 
job, there is very little left to speak about.
  The Blue Dogs believe that the American people are entitled to a tax 
cut. We believe that we can afford a tax cut, and we support tax cuts 
for the American people.
  The question is the $1.6 trillion tax cut proposed by the 
administration too much. On the other hand, is it too little? Could it 
be just right? We just do not know, and we do not know because we do 
not have a budget, we do not have a spending plan. We have absolutely 
no way to judge this tax cut.
  We do have the opportunity to look at the numbers proposed by CBO and 
by the administration. And let us look at that for just a moment and 
see where we are. The CBO 10-year baseline surplus is $5.644 trillion.
  When you take off the Social Security surplus and the Medicare 
surplus, that is $2.5 trillion and $0.4 trillion. That is an available 
on-budget surplus of $2.7 trillion, and I think it is important that we 
make a distinction between the available on-line budget surplus, $2.7 
trillion, versus the 10-year baseline surplus of $5.644 trillion.
  Now, let us look at the true cost of the Bush tax cut. The estimate 
of revenue lost from the basic tax package by the administration is 
$1.6 trillion. The cost of making the provisions retroactive to 2001 is 
$100 billion. The cost of interference from the AMT tax, $300 billion; 
cost of extending expiring tax credits, $100 billion; promised tax cuts 
not in the plan, $100 billion; additional interest payments on the 
public debt, $400 billion. The total cost of keeping the President's 
tax promises, all of the promises made thus far, the total cost is $2.6 
trillion.
  This means that nearly the entire 10-year projected surplus will be 
used up by the administration's tax cut. Now, it is important that we 
notice that that is a projected surplus over 10 years. This is not 
money that we have in hand. We do not have a surplus of cash in hand. 
This is money that is projected to increase over a 10-year period.
  Where, oh where is the budget. We were promised that we would have a 
budget prior to voting on tax relief. Also the rules require it. For 
some reason the United States House of Representatives is not going to 
follow the rules. I thought we got over the technicalities and our 
friends on the other side of the aisle last year, talking about legal 
technicalities, now seem to be in support of that. It is totally 
irresponsible to enact these tax cuts at the present time without a 
budget because how can we address Medicare and the problem of Medicare 
as the baby boomers retire and go on Social Security and qualify for 
Medicare payments? What are we going to do in America for prescription 
drugs. How can we look our seniors in the eye and tell them we passed 
massive tax cuts and now that you need relief, we have spent the money? 
How can we tell the farmers facing drought, facing ice storms, we 
cannot help you, we spent the money?
  How can we tell our children in education, how can we tell our 
children, we cannot close the digital divide, we cannot have smaller 
classrooms, we cannot modernize our schools, we cannot help with 
education, you know why, we spent all of the money because the 
administration tax plan uses up the entire 10-year projected surpluses?
  There is a way to do it. The way to do it is to spend Social Security 
surpluses. Social Security is a solemn promise we made to senior 
citizens. In my district in Texas, I have many senior citizens. In 
fact, I have the highest median age of any district in Texas.
  Social Security is the one program that the government has enacted 
that has had the most effect of our senior citizens and has pulled more 
senior citizens out of poverty than any other action in the history of 
the United States of America. How can we tell them that we are going to 
spend that money that was accumulated from a lifetime of work, how can 
we tell them that we are going to spend that money with tax cuts now.
  Tomorrow we are going to talk about across-the-board tax cuts. Let us 
talk about what that means. Across the board. That seems to indicate 
that everybody shares. It is across the board. Everybody gets the 
benefit. Is that what it is? Absolutely not.
  Most people would be surprised to hear that across the board does not 
include them. If people at home today looked to their left, their 
right, in front of them and behind them, called their friends on the 
phone, they are not going to find anybody that benefits from across-
the-board tax cuts because the truth is that 44.3 percent of the cuts 
go to the richest 1 percent of the people. Everyone does not share in 
this tax cut. Very, very few do.
  Now, what is the best tax cut we can afford. What is the best thing 
we can do for the American people? We can pay down the debt in this 
country. We have a balanced budget, but that means that our income 
matches our out-go for this year. The best tax cut for America is to 
reduce interest rates. The way to reduce interest rates is to pay down 
the debt.
  The Blue Dogs have a very good plan, a simple plan. We say take 
Social Security completely off budget. Do not consider that in our 
financial sheets, do not spend that money. Take it off budget. Take the 
remaining operating surplus, take 50 percent of that and immediately 
put it on the debt of the country. Pay down our debt just like our 
farmers and families and businesses do. Pay our debt. Take the interest 
that we save by paying our debt, and put that into Medicare and Social 
Security and make sure that we keep our commitments. Take the other 
half of the surplus, use 25 percent for tax cuts, we can do that. We 
can look at estate tax and the marriage penalty and capital gains; we 
can look at the rates. We want to take 25 percent and give the American 
people a tax cut. They deserve it; we can afford it. Then take 25 
percent and apply in priorities such as agriculture, education, 
prescription drugs, things that we know we must invest in in this 
country. That is the fiscally responsible thing to do.
  The Blue Dogs are committed to a 50-25-25 plan, and we have seen some 
movement in the U.S. Congress toward that plan. Let us be responsible.
  Please, Mr. President; please, administration; please, our friends on 
the other side of the aisle, send us a budget. Let us know what we are 
working with. Do not ask us to cut a revenue stream when we do not know 
what we are going to spend our money on. Let us operate like every 
family farm in America, like every business.

                              {time}  2200

  Everyone has to know what their budget is before they determine what 
their expenses will be and what their revenue stream is.
  Herbert Hoover, he of fiscal fame, once said, ``Blessed are the 
young, for they shall inherit the national debt.''

[[Page 3097]]

We do not need another Herbert Hoover. We refuse to be Herbert Hoovers 
on this side of the aisle. We need to pay down the national debt and 
keep a fiscally responsible financial policy in this country.
  So our message is clear from the Blue Dogs: we support tax cuts. We 
can support many of the tax cuts proposed by the administration, but we 
can only support those tax cuts after we receive a blueprint for 
spending, a budget for the United States of America. Let us follow the 
rules set in the United States House of Representatives. Let us get a 
budget. And when we get a budget, we will work with the administration, 
work with our friends on the other side of the aisle, we will get tax 
relief for America and have a fiscally responsible policy.


                             General Leave

  Mr. STENHOLM. Mr. Speaker, I ask unanimous consent that all Members 
may have 5 legislative days within which to revise and extend their 
remarks on the topic of this special order.
  The SPEAKER pro tempore (Mr. Graves). Is there objection to the 
request of the gentleman from Texas?
  There was no objection.
  Mr. STENHOLM. Mr. Speaker, I now yield to the gentleman from 
Mississippi (Mr. Taylor). A lot of talk tonight has already been made 
about surpluses, debt and deficits. I hope everyone will pay particular 
attention to the facts about to be presented by the gentleman from 
Mississippi.
  Mr. TAYLOR of Mississippi. Mr. Speaker, I want to thank the gentleman 
for this opportunity, and I want to invite my Republican friends to 
join this debate. I think it is important that some of the statements 
that have been made this week, this year, about this large surplus be 
addressed tonight.
  In fact, tonight I have the greatest of medical respect for one of my 
colleagues, who is a doctor, the gentleman from Iowa (Mr. Ganske). I 
have actually changed my vote on the House floor a couple of times on 
medical matters based on conversations with him. But the gentleman from 
Iowa said something tonight that is totally out of line. He spoke about 
a $5 trillion surplus. I heard it with my own ears. So if I heard him 
wrong, I would invite him to please come correct me.
  There is no $5 trillion surplus. What we have in this Nation is a 
$5,735,859,380,573.98 debt. That is as of the end of last month. We 
hear from so many of our colleagues that the debt is being paid down; 
the debt is being paid down. I think the President even said it. But 
the truth of the matter is that the total debt outstanding, as of 
September 30 of the year 2000, just 5 months ago, the last day of the 
last fiscal year, was $5,674,178,209,886.86. That means that the debt, 
just since September 30 of last year, has increased by 
$61,681,170,680.12 cents.
  That is the reality that the President did not mention in his State 
of the Union address. That is the reality that my friends who talk 
about projected surpluses choose to ignore. Because the reality is this 
Nation is horribly in debt, and almost all of this debt has occurred in 
our lifetime. Our Nation was less than $1 trillion in debt when the 
vaunted Reagan tax cuts took place. They talked about how it grew the 
economy and the Nation was so much better for it. Well, if the Nation 
was so much better for it, why were we twice as deep in debt at the end 
of the Reagan administration as when we started?
  Who do we owe this money to? A lot is owed to banks. A third is owed 
to foreign lending institutions. But let me tell my colleagues the real 
kicker, because this involves every single person listening tonight if 
they have ever worked in their life, or if their spouse has worked. Our 
Nation owes the citizens of the United States who have invested their 
hard-earned money into the Social Security Trust Fund $1.7 trillion.
  The lockbox that so many of my friends talk about, that they are so 
proud that they voted for, if we were to open that lockbox that 
allegedly protects our Social Security, all we would find in it is a 
slip of paper that says, ``We owe you $1.7 trillion.'' There is not a 
dime in it. It has all been spent on other things to disguise the true 
nature of the debt.
  We hear a lot about the Medicare Trust Fund. And again Congress has 
voted repeatedly for a lockbox. We have a lockbox so we are protected. 
If we were to open that box up we would find a piece of paper that 
says, ``I owe you $229.2 billion. That is right now. That is today. 
That is money that was taken out of paychecks with a promise that it 
would be set aside to pay for benefits when the time came to pay for 
them.
  Incidentally, this was done during the Reagan Presidency. In the 
first year of the Reagan Presidency they cut income taxes, much like we 
are talking about doing tomorrow, at three different times during the 
Reagan Presidency, with a Republican Senate and a Democratic House. We 
keep hearing it was the Democrats that did this. They had the White 
House and they had the Senate. And of course everyone knows the Senate 
is more powerful than the House. That is why House Members run for the 
Senate. Senators never run for the House. It is just understood. So 
they controlled the White House, which is two-thirds, because a veto is 
worth two-thirds vote in both Houses. They controlled the Senate, which 
is where the real power is, and that is why everyone runs for the 
Senate, not for the House. Yet somehow the Democratic House gets blamed 
for these things.
  During that time they raised taxes on Social Security and they raised 
taxes on Medicare for the average working Joe by 15 percent. Fifteen 
percent. Big guys got a tax break, because income taxes, which is what 
came out of their paycheck, went down. The little guys, like the folks 
I represent in Mississippi, their taxes went up. It is even worse. 
Because if one of those little guys happened to be self-employed, if he 
was a pulpwood hauler, if he was a shrimper, if he was an oysterman, if 
he was his own boss and his own employee, his taxes on Social Security 
and Medicare went up by 33 percent. That was due to the Reagan tax 
increases, with a Democratic House and a Republican Senate. It is only 
fair we point this out.
  It gets worse. One of the guys who is talking about this big surplus 
and, therefore, we can have a tax break, is none other than Alan 
Greenspan. Alan Greenspan was the chairman of the commission that came 
up with this plan in 1983, to take money out of people's paychecks with 
the promise it would be set aside, and he knows it was not. Now he is 
telling us we have all kinds of money for tax breaks. Mr. Greenspan's 
statement in 1983 does not match his statement today. I wish he would 
come to the House floor and tell me which one is the truth.
  It gets even worse than that. Back then they recognized that we have 
a changing demographic system in our country. We are getting old. I am 
one of them. We used to have, when my dad was a teenager, about 19 
working people for every one retiree. By the 1950s, it had dropped to 
about 10 working Americans for every one retiree. Tonight it is about 
three working Americans for every one retiree. In just a few years it 
will be two working Americans for every retiree. So in the 1980s they 
told the American people that they were going to start taking money out 
of things like Social Security, like Medicare and, yes, the military 
budget to fund future benefits.
  They told the guys in the military back then, we are going to start 
taking a percentage of the budget every year and we will set it aside 
and we will lock it up, and they said it would be there to pay for 
their retirement. So if there was a lockbox, which I have never heard 
the President talk about for the military trust fund, and if those 
retirees could open it up, they would find another piece of paper. What 
we are going to tell those guys who defended this Nation in World War 
II, who defended this Nation in Korea, who defended this Nation in 
Vietnam, in Desert Storm, and all the wars since then and all the wars 
that will be? There is an IOU in there for $163.5 billion. It is an 
IOU.
  There is not one penny in that fund. Although all these years, since 
the early 1980s, funds have been taken out of the Department of Defense 
budget that could have gone for new ships,

[[Page 3098]]

could have gone for new planes, could have gone for better housing, and 
could have gone for better pay. The promise was made that we would take 
this money and set it aside. It is not there. All there is right now is 
an IOU.
  How about the folks who work for us? I am proud of the opportunity to 
be a Congressman. I am incredibly proud that I have had the opportunity 
to make things better. We put together budgets, we make laws, but the 
day-to-day function of the government is actually handled by all those 
Federal employees out there that make things work. We collect money out 
of their paychecks with the promise that it will be there for their 
retirement pay. Same story. Happened in the 1980s. Because we 
recognized we have changing demographics, so we had better collect the 
money now, while we have a fairly large workforce and a fairly small 
number of retirees, and set it aside for the year 2035 when we are down 
to almost one to one workers-to-retirees.
  So since the early 1980s, they have pulled $501.7 billion out of 
Federal employees' paychecks, all these nice people here tonight, all 
those Capitol policemen guarding us, all those folks working for NASA 
and the agencies that are out there trying to make our lives better. 
They have pulled that out of their paychecks with the promise they were 
going to set it aside and it would be there for their retirement. But 
if we were to open that bank account tonight, we would find an IOU for 
$501.7 billion. How can the President, how can the majority leader, the 
Speaker of the House say there is a surplus? How, with a straight face, 
do they look the American people in the eye and say there is a surplus 
when this is our true debt?
  A lot was made of the surplus last year. Everyone said about a $239 
billion surplus. But if we take the time to look where it was, it was 
in things like money collected from Social Security, money collected 
from Medicare, money collected from the military retirees, from our 
Federal employees, from the highway system, and the airline system. All 
the times when we told people we were going to take this money out of 
their airline ticket, out of their fuel taxes and their paychecks and 
we were going to set it aside, and they trusted us to spend it on those 
things that we told them we would, that is only surplus.
  When we take those monies aside that are collected for a specific 
purpose and promised for a specific purpose, it was an $8 billion 
surplus left over. Eight billion. Not $230 billion, $8 billion. But it 
gets even worse than that. Because if we really take a good look at 
that $8 billion, we can discover that one of the tricks the Republican 
Congress played was to delay the pay of the troops from September 29, 
which they would have gotten it under normal circumstances for many, 
many years in the past, to October 1.
  Everybody knows Congressmen make big money. I am one of them. If my 
pay gets delayed by a couple of days, I will do okay. I will figure it 
is not that big a deal. But if I was an E4 with two kids, and my pay 
was delayed from a Friday to a Monday, that means a weekend of 
scrounging around in the couch looking for pennies and nickles to get 
enough money for baby formula or for diapers, because they are living 
hand to mouth. It is estimated that anywhere from 6,000 to 13,000 of 
them are eligible for food stamps. So what does the Republican Congress 
do to tell those folks we appreciate them? Well, they became the only 
people in the Federal Government whose pay was delayed. Not Federal 
employees, not Congress, just the military.
  Why did they do it? Because that pay period moved from the last 
fiscal year to this fiscal year. We did not save a dime, but that $2.5 
billion pay period went from September to October, and it made that $8 
trillion surplus look a little bigger. Because when we pull that $2.5 
billion out, it is only a $5.5 billion surplus.
  Now, if I found that one trick, what if I really had the time to 
study the budget and find all the other tricks? I think I could tell 
the American people that there was not a surplus. But let us say there 
was an $8 billion surplus. What does that mean compared to this 
cumulative debt? Eight billion dollars, compared to this, is like a 
fellow who, after 30 years, finally breaks even at the end of one year. 
He has $1,000 left over, and he says, My, God, let us go have a good 
time, totally ignoring the fact that he is $686,000 in cumulative debt. 
That is what the ratio is.
  So I have a real simple question for the President, a real simple 
question for Mr. Greenspan, who again was involved in raising Social 
Security taxes and Medicare taxes, and who now says we have all this 
money left over despite this huge deficit. If they believe what they 
say, about we can do it after the trust funds, why do they not endorse 
the amendment I offered in the Committee on Rules today, which says we 
can only have these tax breaks in years when we fulfill the financial 
obligations to Social Security, to Medicare, to our military retirees, 
and to our civilian employees?

                              {time}  2215

  If you really think the money is out there and you are sincere about 
those things, I will give you the chance to call a press conference 
tomorrow morning and say, ``Yep, there's enough money to do it.'' I do 
not think you will. Because I think they are more concerned with tax 
breaks than with paying our bills. What the shame about that is, think 
of the guys who died on the beaches of Normandy. Think about every 
generation of Americans, from the horrible things that happened to the 
men who signed the Declaration of Independence, to the kids who died in 
Vietnam, to the kids who died just this weekend, the National Guardsmen 
down in Georgia. Do you know what the difference between us and all 
those other generations is? If we continue down this path, we will be 
the first generation of Americans ever to leave the Nation worse than 
we found it, because we have done the easy thing every time rather than 
the right thing.
  I as a father have taken the steps to see to it that my kids do not 
inherit my debts. Do you not think that it is time that our Nation 
takes the step to see to it that our kids do not inherit this 
generation's debts? I think the opportunity to start is tomorrow. That 
is why I laud what the Blue Dogs are doing. That is why I laud what 
those conservative Republicans who really do care about debt reduction 
are going to do tomorrow.
  Mr. TURNER. Mr. Speaker, I want to say that the gentleman from 
Mississippi has made a very excellent presentation and probably 
revealed the best kept secret in Washington, and that is that there are 
no trust funds. Most folks think that in business, where if you have a 
pension fund, there is some money sitting over there earning some 
interest and invested in some good investments, earning interest and 
earnings for the folks that are going to be drawing on that pension 
fund someday. But in Washington there is no Social Security Trust Fund, 
there no government retirees' trust fund, there is no military 
retirees' trust fund, there is no Medicare Trust Fund. It is a pay-as-
you-go system.
  Mr. TAYLOR of Mississippi. Despite the promises made by Ronald Reagan 
and Alan Greenspan in the 1980s when they raised individual taxes by 15 
percent on working Americans to pay for these things. The gentleman is 
exactly right. If I may, and I know everyone else wants to speak so I 
am going to be real quick. It is even worse than that, because in their 
attempts to disguise the true nature of the public debt, within 8 days 
of the Bush administration taking over the running of this country, a 
report that had been coming out monthly for decades called the Monthly 
Statement of the Public Debt of the U.S. right here that shows that our 
Nation was over $5.7 trillion in debt. Within 8 days of the President 
taking over, they changed the name. It is no longer the Statement of 
Public Debt, it is the Statement of Treasury Securities.
  Most of us are from the South. Most of us know what coffee houses and 
truck stops are like. We all could imagine going into one in Texas or 
one in Mississippi or Alabama or Arkansas and going up to one of those 
guys and saying, ``How would you like some public debt?'' I think 
everybody would say,

[[Page 3099]]

``No, thanks, I don't want any.'' But if you asked most of the guys we 
know if they would like some Treasury securities, there is a pretty 
doggone good chance that they would say, ``Yeah, I'd like some. That 
sounds like a good deal.'' It is all part of the scam. I resent it as 
an American. I hope every American resents this. I hope they resent the 
fact that the Social Security Trust Fund has been plundered, that the 
Medicare Trust Fund has been plundered, that the military retirement 
trust system has been plundered and that the Federal employees' 
retirement system has been plundered. And I do not think we ought to be 
doing anything until we pay those systems back.
  Mr. STENHOLM. I thank the gentleman from Mississippi for those 
remarks. I will guarantee that that will not be the last time that this 
House will hear it this week, next week and the week after that. And I 
hope that the leadership of this Congress will pay attention to the 
gentleman from Mississippi, because he has in fact taken the real heart 
of the argument that we Blue Dogs are making tonight and that we will 
take to the floor tomorrow.
  Mr. Speaker, I yield to the gentleman from Arkansas.
  Mr. BERRY. I thank the gentleman from Texas for yielding. I want to 
thank him and the gentleman from Mississippi and all the other Blue 
Dogs for their leadership in this matter.
  I think it is quite obvious, Mr. Speaker, that the Blue Dogs are in 
favor of cutting taxes but we are not in favor of buying lottery 
tickets with our children's future. We think we should have a budget 
first. If you took the financial condition of this country, as the 
gentleman from Mississippi just so adequately pointed out, and a 
financial plan that we have today, that this country has to a banker, 
any banker in the United States or anyplace else where there is a 
responsible banker, they would just throw you out of their office. They 
would either declare you crazy or tell you to get out because they have 
got better things to do.
  Throughout the campaign, in the State of the Union, for the last 
year, this House has been putting the Social Security and Medicare 
Trust Funds in a lockbox. Ever since I have been here, we have been 
talking about that. We have been talking about paying off the debt. We 
have promised the American people that we are going to protect our 
children, we are going to protect Social Security, we are going to 
protect Medicare, we are going to provide a prescription drug benefit 
for our seniors, we are going to provide a good education for our 
children, we are going to provide for a good national defense, we are 
going to have a solid agriculture that has a good safety net. And we 
are going to have these lockboxes. Over and over we talk about the 
lockboxes and over and over we vote to put this money in the lockboxes. 
And now we find out that it does not even exist. Yet we are going to 
vote tomorrow without even having a plan as to how we are going to 
accomplish these things.
  As the gentleman from Mississippi just so adequately pointed out, the 
surplus is projected just like we project the weather. The debt is 
real. It really exists. We can count it to the penny. I am proud to be 
a Blue Dog. There are only 33 of us. But we stand strong and we stand 
tough against making bad fiscal decisions and irresponsible fiscal 
decisions. I think we all want to have as large a tax cut as we 
possibly can afford. But none of us want to buy lottery tickets with 
our children's future.
  In the last paragraph of the Declaration of Independence, the last 
thing that is there before the men signed it, and they all knew they 
were putting their lives on the line when they signed it, they said 
that they pledged their lives, their fortunes, and their sacred honor 
to the future of this country and to that declaration. I would 
challenge the Members of this Congress today to stand strong as those 
men did and do the right thing for the children of this country and the 
future of this country.
  Mr. STENHOLM. Mr. Speaker, I yield to the gentleman from Kansas (Mr. 
Moore), the cochair of the Blue Dog Budget Task Force.
  Mr. MOORE. Mr. Speaker, about 3 weeks ago I was invited along with 19 
other Members of the House and five United States Senators to the White 
House to meet with President Bush and Vice President Cheney. This was a 
chance for President Bush to talk to us about his proposed $1.6 
trillion tax cut and try to hear from us about our views on this tax 
cut and to find out where the Congress might stand. When it was my turn 
to speak to President Bush, I said to him, ``Mr. President, I know that 
you know Governor Bill Graves of Kansas. I'm from Kansas.''
  He said, ``Yes, he's a friend of mine.''
  I said that I read an interview with Governor Graves in the 
Associated Press about a week before I came to the White House and that 
Governor Graves I thought was very candid in talking to the reporter 
and he was talking about tax cuts and revenue shortfalls and education 
funding in the State of Kansas. The governor said during this 
interview, when he was talking about tax cuts that had happened in 
Kansas about the last 3 or 4 years, ``If I had known then what I know 
now, I would have done some things differently.'' He is not here right 
now but if he were here, I think he would say that I am accurately 
representing what he said. Basically what he was saying was, ``We cut 
taxes too much and now we're having great difficulty in Kansas in 
trying to come up with the money to fund education.''
  In fact that very morning on the front page of the New York Times, 
and I showed a copy to President Bush, there was an article that 
mentioned Kansas by name and 15 other States and the governors were 
meeting talking about the same situation in each of those 16 States, 
where there were projected revenues, there were shortfalls and they 
were having problems funding vital services in each of those States.
  What we are talking about here is a Congressional Budget Office 
projected surplus of $5.6 trillion over 10 years. And President Bush is 
now saying we have enough to fund a $1.6 trillion tax cut. Yesterday 
afternoon I got a call from the Director of the Office of Management 
and Budget, Mitch Daniels. Mr. Daniels said to me, ``Congressman, can 
you be with us on this tax cut?'' I suspect prior to the time he called 
me he knew that I had voted last year for estate tax relief and for 
marriage penalty tax relief.
  I said, ``I want to be direct with you.''
  He said, ``Please do.''
  I said, ``I have a couple of concerns about this tax cut and 
projected surpluses.'' I said, ``Number one, there is not a budget. And 
I think we should have a budget before we implement or enact a new tax 
cut.'' This is last Sunday. I said, ``Number two, I'm going to 
Washington on Monday so I can vote on this tax cut bill.'' And I said 
that I was watching the weather last night and they were projecting in 
Washington, D.C., a 12-inch snow. I was very concerned with that 
projection that I might not make it back to Washington for the tax 
vote. As it turned out, the projection, only 24 hours in advance, was 
very wrong and there was no snow to speak of. And now we are talking 
about projections on economic conditions 5 and 10 years out. And if a 
projection for a weather forecast can be that wrong, 12 inches wrong in 
only 24 hours, think what can happen to economic and financial 
projections 5 and 10 years out.
  The people in Kansas and the people around this country I think live 
by three very simple rules, they are not written down, they are just 
common sense and people know innately and understand these rules. 
Number one, don't spend more money than you make. Number two, pay off 
your debt; and, number three, invest in basic needs in the future. The 
basic needs for a family are food and shelter and health care and 
education and transportation. The basic needs for a Nation are national 
defense and Social Security and Medicare, and a highway system, things 
of that nature that we all would agree on. And people out in the 
country wonder why Congress cannot learn to live by the same budgeting 
and financial rules that American families do. We have the opportunity 
for the first time in a whole generation, after 30 years of deficit 
spending, to do the right financial and fiscal thing, the

[[Page 3100]]

right thing fiscally for our country, and, that is to live within our 
means and to start to pay down our national debt.
  They have already told you, some of the other speakers here this 
evening, about the benefits. But one that they did not mention is this. 
In 1999, the third largest category of expenditure by our United States 
Government after defense and Social Security was interest on the 
national debt, $230 billion. If we start to do the right thing, we can 
pay down that figure and we can reduce that figure and live within our 
means. I think we should do that, Mr. Speaker, for our children. We 
have placed a $5.7 trillion mortgage on their future. We owe it to 
them.
  Mr. STENHOLM. Mr. Speaker, I yield to the gentleman from Tennessee.
  Mr. TANNER. Mr. Speaker, I want to thank the gentleman from Texas and 
the other Members who have been here tonight to talk about this. We 
have heard a lot of talk about the fact that we think we need a budget 
first and we say that because, as one of the speakers said, that is the 
only way you have a business plan for the country, it is the only way 
you have a budget for a family, is to put this in some semblance of 
order. But the real question is why do we say we need a budget, a 
universe within which to work on these competing interests, whether it 
be paying down debt, tax cuts, increased spending for the military. The 
reason that we do is because we want to do the right thing for the 
children of this country in terms of fiscal discipline.
  As the gentleman from Mississippi said, if we do not get a handle on 
this now, we will be the first generations of Americans to actually 
leave this country worse than when we found it.
  So why do we say we need a budget first? First of all, we want to 
protect the trust funds that the gentleman from Mississippi talked 
about. Those are solemn promises and all we have to give to back them 
up right now are IOUs. The second thing we think we ought to do and we 
must do is pay down the national debt. Why is paying down the national 
debt important? There are 280 million people in this country. We have a 
total debt, according to the government, of $5.7 trillion, thereabouts.

                              {time}  2230

  Of that, $3.4 trillion is publicly held debt. That means that each 
one of us owe $12,140 apiece, per person. That means for a family of 
four that is going to get this $1,600 in 5 years that they have talked 
so much about, that means their share of the public debt is $48,600.
  Now, Mr. Speaker, that just includes the publicly held debt of $3.4 
trillion. If one adds the other debt, the Social Security debt and the 
things the gentleman from Mississippi (Mr. Taylor) talked about, we 
have a $20,300 per person debt on our head when we are born as American 
citizens. For a family of four, that is $82,000.
  The proposal that has been put to us from the White House proposes 
$590 billion less in debt reduction from now until 2005 during this 
President's term than present law provides. Do we know what that means 
to a family of four? It means their share of this debt that we have 
will increase unnecessarily by $8,000.
  Where I come from, as the gentleman from Kansas (Mr. Moore) said 
awhile ago, one of the things we think about in Tennessee is do not 
spend more money than you make but pay your debts. If you have some 
extra money coming in and you owe somebody, you do not go buy a new car 
and leave that somebody that you owe still waiting for their money. You 
go and pay them because that is the thing to do.
  If we do not keep our eye on the ball and continue to pay down this 
debt, then I will be ashamed to say, but I will have to admit, that I 
was one of the first generations of Americans who left this country 
worse than when we found it.
  We do not know what it is going to do to national defense. There are 
some defense needs in this country that all of us know about, not the 
least of which is our obligation to the military retirees, our 
obligation to the men and women who are giving us their productive 
years that are in the uniform service of this country. They need more 
pay allowances. We need to modernize their equipment.
  Agriculture, a nation that cannot feed and clothe themselves 
internally is at risk to whatever extent that food supply is 
interrupted. Agriculture is truly a national security concern. So when 
people say well, all you guys are doing down here is whining about the 
fact that you are not in the process, that this process has left you 
behind and you are whining about it. Well, let me just say this: The 
process that we put in place with the Budget Act and the process by 
which we govern ourselves is the only thing that separates this country 
from a dictatorship or from communism or anything else. You do not have 
to worry about process if you live in a dictatorship. You do not have 
to worry about process if you live under communism. There is none.
  Process is important, and that is why we are here to try to get some 
process in place so that we can intelligently make some decisions, if 
that is possible, make some decisions that are going to leave this 
country better, not worse, than when we leave here.
  Mr. STENHOLM. Mr. Speaker, for our cleanup hitter for tonight, one of 
our newer Blue Dogs from California, fastly becoming one of the leaders 
for a fiscally conservative budget, the gentleman from California (Mr. 
Schiff).
  Mr. SCHIFF. Mr. Speaker, this year we will have a large tax cut. We 
will have a large tax cut that provides tax relief to every taxpayer, 
that addresses estate and marriage penalties as well. That we know for 
a certainty. The question, of course, of how large and who will be the 
primary beneficiaries is as yet undetermined, but we know that we will 
have the largest tax cut that we can afford.
  Will we have a solvent Social Security system? Will we have Medicare 
with a prescription drug benefit? Will we have an adequate educational 
system? Will we pay down the national debt? These questions we do not 
have an answer for. Now, why is that? Why is that that we can say with 
absolute certainty right now we can have a massive tax cut but we 
cannot say whether Social Security will continue? We cannot say whether 
Medicare will be solvent? What does this say about our priorities as a 
nation? It says we do not put Social Security first. We do not put 
Medicare first. We do not put the needs of our children first.
  Now, why is this? Why are we going forward with no budget? Why are we 
going forward with a bill that could have a major impact in this 
country for 25 years with no budget? Why is it so important that we act 
on this right now? Well, the argument that is made is that we need to 
spur the economy right now. Well, let us set aside the fact that even 
Alan Greenspan says that the use of fiscal policy in the form of tax 
cuts does little to affect the immediate condition of the economy. Let 
us say that we agreed with that philosophy. Why does that mean that we 
take action on a bill right now that will affect us in 5 to 10 years? 
If we are concerned about spurring the economy now, let us do something 
to spur the economy now. Let us not make a decision about expenditures 
5 to 10 years from now that will have no effect on today's economy.
  No, we are taking action right now on a bill that will have an effect 
on the next generation. We are doing it without a budget in place. We 
are doing it on the basis of projections we know are incredibly 
speculative. We are doing it at a time where the interest on the debt 
we pay every day is a billion dollars; a billion dollars a day we pay 
in interest on the national debt.
  No, we are going to ignore the promises both parties made during the 
last campaign of paying off the debt by 2012 or 2013. That is out the 
window. We are going to ignore the promises made by both parties during 
the campaign of providing prescription drug benefits to seniors. We are 
going to ignore our promises to set aside Social Security and Medicare. 
No, we are going to pass this bill right now and then we are going to 
worry later to see if we can afford it.
  Now I am just a freshman in this institution, but even a freshman can 
see this is no way to budget for a nation or

[[Page 3101]]

a family. In families across America, people have very basic 
principles: Pay your bills; live within your means; provide for your 
family's future; provide for your country's future. This process does 
not meet that very basic standard.
  Let us have a budget first. Let us have a budget that we can be proud 
of, not only today, tomorrow and this year. Let us have a budget that 
we can be proud of 10 or 20 years from now, because what we are doing 
this week, make no mistake, will affect this country for the next 
quarter of a century. I do not want to look back on my period in 
Congress and say that one of the first acts that we did when I entered 
the Congress was something that set this country back on the path of 
deficit spending, increased national debt, that we did the fiscally 
irresponsible thing. Let us have a budget first.
  Mr. BOYD. Mr. Speaker, today we are going to set the course for the 
nation for the next decade. The President is betting the farm on a two 
trillion tax cut based on ten year economic projections. I would like 
to talk to my colleagues a little bit about these projections. As we 
all know, these projections are prepared twice a year by the 
Congressional Budget Office, once in January and once in July. In six 
short months the Congressional Budget Office changed its ten year 
estimate of the surplus by one trillion dollars.
  While this is very good news for those who want the largest possible 
tax cuts or new spending programs based on the surplus, it troubles me 
greatly that we are prepared to risk the balanced budgets we have 
enjoyed over the last four years on estimates which can change so 
drastically in a six month time frame. My concern is that what the 
Congressional Budget Office gives today, it can take away tomorrow.
  If you look closer at the projections, it becomes even more 
problematic. Almost 70% of the 5.6 trillion dollar surplus does not 
materialize until after 2006. What will the economy look like in 2006? 
What problems will face our nation in 2006 that need to be addressed? 
Will the 505 billion dollar surplus that is estimated for 2006 really 
be there? Saying this is a certainty is like predicting what the 
weather will be like five years from now. Allocating the vast majority 
of the non Social Security surplus for a tax cut in this situation is 
like betting the family farm on a roll of the dice.
  Even the Congressional Budget Office warns about using its estimates, 
the same report that projects a 5.6 trillion dollar budget surplus also 
states, ``The longer-term outlook is also unusually hard to discern at 
present. Many commentators believe that major structural changes have 
created a ``new economy,'' and that belief influences the economic 
projections described in Chapter 2. However, CBO's projections, like 
those of other forecasters, are based on very limited information about 
just a few years' increased growth of productivity and strong 
investment in information technology. Projections of those recent 
changes as far as five or 10 years into the future are highly 
uncertain.''
  This is why I believe it is important that we treat the projected 
surplus as a projection, not reality. A possibility, not a guarantee. 
Because of the uncertainty surrounding the projected surplus, I have 
promoted a responsible plan developed by the Blue Dog Coalition. Under 
our budget proposal, 50% of the projected non-Social Security surplus 
is set aside for debt reduction, 25% is set aside for tax cuts, and 25% 
is set aside for priority spending like education reform, strengthening 
our national defense, and a medicare prescription drug plan.
  This plan puts the emphasis where it should be--on paying down our 
nation's 5.7 trillion dollar national debt. It also has the added 
advantage of a cushion if the surpluses do not materialize. 50% of the 
projected surplus is not allocated to new spending programs or tax 
cuts, if the Congressional Budget Office is wrong, then the worse thing 
that can happen is that we would have not reduced the debt by the 
amount expected. In contrast, under the President's and Republican 
Leadership's plan, if the Congressional Budget Office is wrong, then we 
will very quickly have to use the Social Security and Medicare surplus 
to pay for the tax cuts we enact today.
  My colleagues, we are gambling with our future and our children's 
future today. What the Republican leadership is forcing upon us is 
wrong. No family or small business owner that I know would spend a huge 
chunk of his money without knowing what their budget would be first. I 
urge you to reject this risky plan and work with the Blue Dogs to 
develop a budget first, which honestly addresses all of our common 
priorities and will provide the largest tax cut we can afford. By 
developing a budget that balances substantial tax cuts with realistic 
spending levels and a serious commitment to paying down the national 
debt, we will be ensuring a strong economic future for our country and 
our children.

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