[Congressional Record (Bound Edition), Volume 147 (2001), Part 4]
[House]
[Pages 4697-4703]
[From the U.S. Government Publishing Office, www.gpo.gov]



         CONCURRENT RESOLUTION ON THE BUDGET, FISCAL YEAR 2002

  The SPEAKER pro tempore. Pursuant to the order of the House of 
Thursday, March 22, 2001 and rule XVIII, the Chair declares the House 
in the Committee of the Whole House on the State of the Union for a 
period of debate on the subject of the concurrent resolution on the 
budget for fiscal year 2002.
  The Chair designates the gentleman from Ohio (Mr. LaTourette) as 
Chairman of the Committee of the Whole, and requests the gentleman from 
Ohio (Mr. Hobson) to assume the chair temporarily.

                              {time}  1721


                     In the Committee of the Whole

  Accordingly, the House resolved itself into the Committee of the 
Whole House on the State of the Union for a period of debate on the 
subject of the concurrent resolution on the budget for fiscal year 
2002, with Mr. Hobson (Chairman pro tempore) in the Chair.
  The CHAIRMAN pro tempore. Pursuant to the order of the House of 
Thursday, March 22, 2001, general debate shall not exceed 3 hours, with 
2 hours confined to the congressional budget, equally divided and 
controlled by the ranking member of the Committee on the Budget and 1 
hour on the subject of economic goals and policies, equally divided and 
controlled by the gentleman from New Jersey (Mr. Saxton) and the 
gentleman from California (Mr. Stark). The gentleman from Iowa (Mr. 
Nussle) and the gentleman from South Carolina (Mr. Spratt) each will 
control 1 hour of debate on the congressional budget.
  The Chair recognizes the gentleman from Iowa (Mr. Nussle).
  Mr. NUSSLE. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, this is an opportunity that only comes around every few 
years, and that is an opportunity, as my friend and colleague, the 
gentleman from South Carolina (Mr. Spratt) suggested at the Committee 
on Rules when we met just a little while ago, to have a watershed 
budget, kind of a real opportunity for taking a fresh look at where we 
are as a country; where we are as a Federal Government; what are our 
priorities; what are our values; what are our principles as we move 
forward.
  As we look into this century, we have accomplished so much on this 
threshold and yet there are so many challenges that face us, but just 
to give us a little bit of a threshold to work from, let me suggest 
that, Mr. Chairman, we are about to debate the fifth straight balanced 
budget, and that in and of itself, I believe, not only is a real treat 
but a real accomplishment.
  We have built that budget. We have built that accomplishment in a 
bipartisan way, Republicans and Democrats struggling and arguing and 
sometimes even fighting to come up with the priorities that shape our 
country's future. We did not do it alone, and we did it together along 
the way sometimes; sometimes not. But I think we all have a lot to be 
very proud of as we stand on this threshold and look forward.
  Probably the people who deserve the most credit, as we stand on this 
threshold, are the people that are watching at home, balancing their 
checkbooks around their kitchen table, making the decision about where 
their kids are going to college, getting that Visa bill in the mail and 
going, oh, man, not again, or finding out that the energy prices just 
went up yet again and how that is going to have to take away from some 
of their other priorities.
  So as we struggle through that which we think is so important here in 
Washington, D.C., let us be ever mindful of the kitchen-table 
conversations that are going on around America tonight, and those 
kitchen-table conversations, while maybe not having as many zeroes as 
the zeroes we are going to talk about in this particular budget, are 
just as important, if not more important, to the future of America.
  As we build this budget, we build on a very solid foundation. And we 
decided in order to continue that solid foundation far into the future 
that we had to adopt six principles that would guide our deliberation, 
that would guide the

[[Page 4698]]

decision, that would guide the blueprint as we move forward.
  The first is that we would try and have maximum debt elimination. We 
as a country recognize, whether one is a farmer in Iowa or whether one 
runs a small business in upstate New York or whether one is a senior 
down in Florida or South Carolina, balancing their checkbook and making 
ends meet they know that debt can kill them; they know that running up 
too much and having too much indebtedness makes it pretty difficult for 
one to make the decisions that face them every day. We as a country are 
no different. By building up a national debt, by not living within the 
means of the revenues that we get from the hard-working Americans 
across this country, we have built up over a number of decades a huge 
debt held by the public, and one of the goals in this budget was to 
eliminate as much of that as possible; and we accomplish that in this 
budget.
  Over the course of the next 10 years, we will pay down the most 
amount of debt held by the public that this Nation has ever 
experienced; and, in fact, by the end of this period of time, we will 
pay back all of the debt one can possibly pay and still be responsible 
as a Nation. Sure, there will be a little bit of debt left over that 
needs to be carried because it either has not matured yet or we would 
have to pay a high penalty or a high premium in order to recoup, but 
the bottom line is that we will turn over to our children and our 
grandkids almost a debt-free nation.
  Second, maximum tax relief for every taxpayer. We want to make sure 
that everybody who pays taxes gets a little bit of tax relief. Why do 
we do that? Because we are running a tax surplus. After all the bills 
are paid, after all the debt is paid down, after we meet all of the 
priorities of a country that has many, we have a tax surplus that has 
been growing. In fact, it has been growing so large, it is now the 
largest, if we look at it with regard to our economy, our gross 
domestic product, it is the largest that we have ever carried as a 
Nation and we need to reduce that tax burden for every taxpayer.
  There are some other priorities that we wanted to include in this 
budget. First we wanted to improve our education for our children. We 
have elected a President of the United States who has demanded that no 
child in this country should be left behind, and we take him up on that 
offer by continuing some very large increases in spending, but also 
demanding reform for our Nation's education system, recognizing that 
the soft bigotry of low expectations within our system, as the 
President has dubbed it, is something that needs to be broken, needs to 
be changed and more local control with high standards needs to be what 
we need to usher in in this new education era.
  Next is a stronger national defense. We live in an ever-changing, 
ever more dangerous world, one that cannot be paid for, cannot be 
bought, cannot be invested in without rethinking our national defense.
  The President of the United States, from that podium right back 
there, challenged us and said the money should not determine the policy 
but yet the policy should determine how much money we spend. He charged 
Secretary Rumsfeld, the Secretary of Defense, with coming forward with 
a full review, top to bottom, of our Nation's defense, and suggesting 
that we should not just put in some extra money because it sounds good, 
add some more money because the industrial defense complex needs to 
have that money to run, to just put in some more money because we have 
defense hawks around here or because it is expected as a Congress in 
order to add those dollars, but to say, no, first let us do a top-to-
bottom review before we make the decision about how much money to 
spend. And that review is ongoing and we build that into our budget.
  Next is to reform and modernize our Medicare system. We recognize 
certainly coming from a rural area, as I do, that Medicare is what we 
depend on. Health care in rural America is Medicare. We have a growing 
and a very aging population that needs this reformed and modernized to 
meet the new needs of their generation.

                              {time}  1730

  Back in 1965, modern prescription drugs and other procedures maybe 
were not contemplated. They are today, and our Medicare system needs to 
provide for that. That is why in this budget we provide for 
prescription-drug modernization, as well as other modernizations, so 
that we can extend the life of Medicare far beyond its current 
existence.
  Then finally, a better Social Security system for our seniors today 
and for tomorrow; not just for today, but for tomorrow, recognizing 
that in a bipartisan way, Republicans and Democrats have set aside the 
entire surplus from the trust fund of Social Security and recognizing 
that while that answers the question of Social Security today, it does 
not answer the question for my generation or for generations to come.
  So in this budget, while we continue the practice of setting aside 
the entire Social Security Trust Fund, putting it in that lock box, 
what we also do is we say, we want reform, we expect reform, we support 
the President's call for reform, and we move forward toward reform in 
this budget.
  We believe that discretionary spending overall should be kept in pace 
with the economy. So as the President has suggested, we say that our 
government should not grow any faster than the family budget, should 
not grow any faster than the economy as a whole, so we limit the growth 
of government to the rate of inflation; and we believe that is a 
responsible way to move forward.
  Finally, what we say is that after all of these priorities, after all 
of these goals are met, there is still money left over. After we pay 
for education, after we pay for our national defense, after we pay for 
our environment, after we pay for Medicare, after we pay for 
prescription drugs, after we set aside all of Social Security, after we 
pay down the national debt to the lowest point in over a century, there 
is still money left over, and whose money is that? It is the people who 
are balancing their checkbook around their kitchen table and they 
deserve a refund, they deserve their money back, they deserve to make 
those decisions that they want to make for their families and their own 
communities. And it is for that reason that we provide tax relief in 
this budget.
  How does the surplus add up? Well, because of the projections that 
the Congressional Budget Office puts forward, we believe that there 
will be $5.6 trillion worth of surplus over the next 10 years. What do 
we propose to do with that? We propose to pay down the debt by setting 
aside all of Social Security. As we know, when our FICA taxes come in, 
they pay for benefits. Those that are left over usually get rolled into 
Treasury notes.
  Well, we are able to not only pay down that debt because we are 
getting more surplus; but we are also able to, as a result of this, set 
aside for debt service, for a contingency reserve, and for Medicare the 
entire amounts to allow not only for reform, but for a rainy day. We 
have a contingency reserve over the course of this next 10 years of 
$517 billion as a cushion.
  We recognize that the projections are not always very accurate. We 
believe these are very reasonable and very conservative projections; 
but we recognize that it may not hit exactly where we say, even though 
over the last 6 years they have come in larger than expected. But we 
still set aside over half of $1 trillion in addition to Medicare, in 
addition to Social Security, in addition to paying the debt service; 
and we still set aside half of $1 trillion to deal with that which we 
know is coming in the future: a farm crisis, a national defense review 
that may require additional spending.
  We believe that this is a responsible budget, one that should be 
supported not only by my colleagues, but should be supported by the 
American people as a solid foundation to build upon, but also one that 
is flexible enough to deal with the contingencies and the concerns of 
the future. We have a good budget, it is a realistic budget, it is an 
enforceable budget. Support the budget.

[[Page 4699]]

  Mr. Chairman, I reserve the balance of my time.
  Mr. SPRATT. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, some years when we do the budget it is routine, even 
inconsequential; but some years, as in 1990 when we did the budget 
summit with President Bush and again in 1993 when we did the Clinton 
budget, and in 1997 when we did the Balanced Budget Agreement, the 
budget lays down a path that we follow for many years to come. This is 
such a budget. Because of what we did in 1990, 1993, and 1997, we are 
reaping the consequences of our fiscal good behavior. We think we see 
enormous surpluses projected at as much as $5.6 trillion; $2.6 trillion 
to $2.7 trillion, after we back out Social Security and Medicare. So 
this is a watershed budget. We are going to make an allocation of these 
surpluses that will last for at least 10 years and beyond, and that is 
why what we are doing has to be done with great gravity.
  The chairman of our committee, the gentleman from Iowa (Mr. Nussle), 
just laid out six principles. Well, let me compare the difference 
between us and them, using his criteria, his six principles. He started 
with debt retirement, and I heartily agree. The more debt we can pay 
down, the better for our children and the better for our future, the 
better for Social Security and Medicare. So what is the scorecard on 
debt retirement, debt reduction? Our budget, our resolution on the 
Democratic side over 10 years between 2002 and 2011 will reduce the 
debt held by the public, Treasury debt held by the public by $3.681 
trillion. Their resolution, the Republican resolution, will reduce that 
debt by $2.766 trillion. We win on that score by $920 billion. Not even 
close.
  Tax relief. The gentleman said we should give some of the surplus 
back to the American people; and we agree, heartily agree. We have set 
aside one-third of the surplus to give it back to the American people 
in the form of tax relief to those taxpayers who need it the most. But 
in making room for tax cuts, we have also left room for other things 
that people clearly want: education. That was the next on the 
gentleman's list. The next criterion by which to judge the budget 
resolution he said was education. Listen to this: because we made room 
for other priorities, and were not just fixated on tax cuts alone, we 
provide $132.8 billion over the next 10 years, that much, $133 billion 
more than the Republican resolution would provide for the education of 
our children. There is no comparison. It is not even close. We went 
hands down on that particular issue.
  A stronger national defense. I have been on the Committee on Armed 
Services for all of the time I have served here, more than 18 years; 
and I heartily agree, we need to do more for national defense, we need 
to modernize our defenses. We have been living off what we spent in the 
1980s during the 1990s and now we need to put a little bit more into 
defense, so we do it. We have in our budget resolution $48.2 billion 
more for financial defense than they provide. They provided the 
gentleman from Iowa (Mr. Nussle) the opportunity to supply a different 
number, but we are realistically budgeting for defense $115 billion in 
budget authority over and above the baseline set by the Congressional 
Budget Office, which is an inflated baseline, a baseline equal to 
inflation. That much more for national defense. At least for now, we 
win on that score as well.
  Medicare reform. That was the way it appeared on the gentleman's 
list. If we look through his budget resolution, the Republican 
resolution, we look in vain for any proposal for Medicare reform. It is 
not there. There is a vague proposal about prescription drug benefits 
for Medicare; but if we are really absolutely earnest about Medicare, 
then one of our chief concerns has to be how long will its solvent life 
last so we can tell older Americans it will be there when they need it. 
We will not be cutting it because we cannot extend its solvent life.
  We have drawn a strict principle here. We want to add prescription-
drug benefits to Medicare; but because we do not have a huge tax cut, 
we have a moderate tax cut, we have the resources, the wherewithal to 
do that by using resources from the general fund of our budget, not by 
dipping into the trust fund of Medicare and diminishing that trust fund 
and shortening its life, which is what the Republicans propose to do. 
They want to give to Medicare with one hand and take from it with the 
other, so that the result is, they get a very meager prescription-drug 
benefit, mostly for low-income beneficiaries and a shortened solvent 
life for Medicare. We extend the life of Medicare, and we provide a 
robust $330 billion to provide prescription-drug coverage under 
Medicare.
  However, my biggest concern about their budget and the biggest 
difference between us and them and the point that I would close on is 
just this: I have been here for 18 years. I came here when the deficit 
was just beginning to mount. We have tried to get our arms around this 
terrible thing we call the deficit and change it; and we finally, 
finally, after 18 years, reversed some of the fiscal mistakes we made 
in the early 1980s and put this budget in surplus, surpluses that 
nobody ever thought possible. Surely we do not want to take any action 
now, now that we have gotten here, that would put our budget surplus in 
jeopardy. But this is what the Republican resolution does.
  If we want it drawn as a line graph, here it is to my right. That red 
line against the blue background is where their bottom line would go, 
what resources are left over. We take the surplus that is available, 
back out the tax cuts they propose, back out Social Security and 
Medicare, adjust it for spending increases; and this is the path that 
they are plotting for the future. From 2002 to right here around 2007, 
2008, we are skating on thin ice. We are skating on thin ice. We barely 
have a surplus at all. There is no margin for error, no room for a 
mistake here.
  Let me show my colleagues what could happen if these robust 
assumptions about the growth of our economy on which these frothy, 
blue-sky surpluses are based. Let us assume that the growth rate in 
this country drops from the assumed rate on which these surpluses are 
predicated, from the assumed rate of growth of around 3 percent down to 
2.5 percent, a drop of just one-half of 1 percentage point from 3 
percent to 2.5 percent. As we can see, we go to the red in a hurry. We 
are back to borrowing from Social Security and Medicare once again. 
Just a slight deviation, just a slight mistake, error, or inaccuracy, 
and we are well below the line again.
  Having worked here for years, to finally get to this day where we 
have a surplus, I hoped it would give us some freedom, some freedom for 
policy initiatives, for priorities that we have long deferred, help us 
pay down the debt of this country, help us address at long last the 
long-term problems of Social Security. That is a path we do not want to 
take. It has been too long, too hard getting to where we are to risk it 
all for this kind of projection.
  That is why I say, there is a real difference between the budget 
resolution that we present and theirs. It scores better on every 
criterion the chairman just presented. It provides funds for extending 
the solvent life of Social Security and Medicare. They do not. But it 
leaves room for other priorities, prescription drugs, education, 
defense, agriculture which they have not provided for in their budget. 
Ours is a better budget resolution, and I think the debate that is 
coming up will clearly, clearly show that.
  Mr. Chairman, I reserve the balance of my time.
  Mr. NUSSLE. Mr. Chairman, I yield 1\1/2\ minutes to the gentleman 
from Alaska (Mr. Young), the distinguished chairman of the Committee on 
Transportation and Infrastructure.
  Mr. YOUNG of Alaska. Mr. Chairman, I rise to engage in a colloquy 
with the gentleman from Iowa on House Concurrent Resolution 83, the 
fiscal year 2002 House budget resolution.
  Mr. NUSSLE. Mr. Chairman, will the gentleman yield?
  Mr. YOUNG of Alaska. I yield to the gentleman from Iowa.
  Mr. NUSSLE. Mr. Chairman, I would be pleased to engage in a colloquy 
with the gentleman from Alaska.

[[Page 4700]]


  Mr. YOUNG of Alaska. Mr. Chairman, first of all, I would like to 
commend the gentleman from Iowa (Mr. Nussle), the chairman of the 
Committee on the Budget, and the Committee on the Budget for bringing 
this resolution to the floor.
  The intent of this resolution is to honor the funding guarantees in 
TEA21 and AIR21 and provides substantial increases for other important 
transportation programs, such as the Coast Guard. It is my 
understanding that due to errors in the functional totals that were 
provided by the Office of Management and Budget and perhaps other 
discrepancies between OMB and CBO, the Function 400 totals in this 
resolution were inadvertently understated.

                              {time}  1745

  I have been assured that a technical correction will be made in 
conference so that the final budget resolution accurately reflects the 
funding levels necessary to fully fund highways and transit under 
TEA21, and the Federal Aviation Administration's operating capital, and 
airport grant programs under AIR21, as well as provide increases for 
other transportation programs, such as the Coast Guard.
  I would like to ask the gentleman from Iowa (Mr. Nussle) if my 
understanding accurately reflects his intention.
  Mr. NUSSLE. Mr. Chairman, the gentleman from Alaska is correct. The 
Office of Management and Budget's budget submission contained recently 
identified errors in the transportation function.
  Let me assure the gentleman that we will address these errors in 
conference, and that the Function 400 totals will be fully funded for 
TEA21 and AIR21, and provide increased funding for the Coast Guard.
  Mr. YOUNG of Alaska. Mr. Chairman, I thank the gentleman very much.
  Mr. NUSSLE. Mr. Chairman, I reserve the balance of my time.
  Mr. SAXTON. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, let me begin by offering my congratulations to the 
Committee on the Budget, led by the gentleman from Iowa (Chairman 
Nussle), for the extremely hard work and efficient job they have done 
in bringing this budget to the floor which will be voted on here in the 
next day or so. We appreciate very much the work that has been done and 
the budget that has emerged, which I rise to strongly support.
  Mr. Chairman, as the chairman of the Joint Economic Committee, it is 
customary for us to have an hour at this time or at some point in the 
budget debate to discuss the effects, or the potential effects, as we 
see them, of the pending budget to be voted on on the economic 
performance of our country; and in fact, if we might be so 
presumptuous, since our economy has something to do with the world 
economy, on the effect that the budget and the spending program that it 
lays out would have on the economic performance of this country and the 
world during the next fiscal year.
  I think in order to put this in the proper perspective, from the 
perspective of a citizen of this country, it is very important to 
recognize where we have been and how we got there economically over the 
past number of years, and then to talk a little bit about where the 
economy appears to be going.
  I think it is important to point out, therefore, that we have done 
quite well over the last two decades. As a matter of fact, we are in 
the 10th year of an economic expansion, and yes, the economy is still 
expanding, albeit a bit slower than it was.
  I think it is also important to point out that the 10-year growth 
period that we are currently in was preceded by an economic expansion 
that lasted 8 years. So there are some good things at play in the 
United States economy, producing first an 8-year period of growth, 
followed by a very short 8-month recession, and a very shallow one, I 
might point out, during the last half of 1990 and the first quarter of 
1991, and then we began to grow once again, and we have grown through 
today.
  We believe there are some reasons that happened. First, perhaps, is 
that in the early 1980s and in the mid-1980s, a stage was set in our 
country by the reduction of some tax rates which were brought about 
during the Reagan administration. Because we were able to build on that 
platform, if you will, of a new tax process, a new system, in effect, 
of at least lower rates, we were able to see the progress begin during 
the 1980s of building this long-term economic growth period that we 
have seen.
  Secondly, it is important to point out that not everything that 
affects the economy happens as a result of activities in this room or 
in the other body. As a matter of fact, the Congress had very little to 
do with the activities of the Fed, the Federal Reserve, during the last 
12 years or so. Headed up by our friend, Dr. Greenspan, the Fed took 
upon itself a new, or at least a partially new, direction.
  In a book that I recently read about Dr. Greenspan, the introduction 
to the book called him ``an anti-inflation hawk.'' That is precisely 
what has characterized the last 12 years of the activities of the Fed: 
The Fed has targeted inflation. As a result of the targeting of 
inflation, they have brought inflation down so that interest rates, the 
long-term interest rates, are also relatively low.
  So between lower taxes than we have had historically, lower tax rates 
than we have had historically since World War II, and the lowest rate 
of inflation over a sustained period of time in that same period, we 
have seen very significant economic growth. There are other factors, 
but suffice it to say that our taxing system and our inflationary rates 
have been quite low.
  However, all good things tend to come to an end, although this one 
has not come to an end quite yet, and we hope it will not. We do know 
that the economic program has begun to change, and there have been 
signs of a slowdown.
  Although this slowdown was documented last December in a JEC study 
entitled ``Economic Performance and Outlook,'' there seems to be a 
little confusion in some quarters about when the slowdown actually 
started. A review of the facts demonstrates that the economic slowdown 
has been under way at least since the middle of last year.
  Recent economic developments are important, and it is important to 
understand that. Because policymakers cannot afford to be unaware of 
what has actually been happening in the economy, I would like to 
present some facts about where we have been.
  The best single indicator of the slowdown is the decline in the rate 
of economic growth in the second half of the last year. That would be, 
of course, 2000. This decline in GDP growth was already evident in 
numbers released by the Clinton Commerce Department last year, and 
confirmed in subsequent releases.
  Real economic growth, as a matter of fact, during the second quarter 
of 2000, was at 5.6 percent. This chart that I have here next to me 
shows here in the second quarter of 2000 we had a very significant 
increase to 5.6 percent from 4.8 percent during the first quarter. So 
things were really moving along quite well.
  But then as the year progressed and we got into the third quarter, we 
can see here on the chart that the rate of growth actually dropped from 
5.6 percent, which occurred in the second quarter, to 2.2 percent GDP 
growth in the third quarter, and in the fourth quarter it fell 
significantly again to 1.1 percent. So we are looking at a rate of 
growth today that is much lower than the rates that we saw early in 
2000. As a matter of fact, we believe that this demonstrates quite 
conclusively that the slowdown actually began during the third quarter 
of 2000.
  Some components of the economic slowdown, some additional components, 
are also important. For example, a very large portion of the private 
economy is accounted for by personal consumption and investment; that 
is, personal investment. The real personal consumption spending growth, 
as a matter of fact, decreased during that same period of time. It 
decreased, as a

[[Page 4701]]

matter of fact, from over 7 percent growth in the first quarter of 2000 
to less than 3 percent in the fourth quarter, again demonstrated by the 
chart here to my left.
  Real private fixed investment growth also fell, as demonstrated on 
the next chart, from 16 percent in the first quarter of 2000 to about 
zero, to less than zero, a negative number, by the fourth quarter of 
2000. So here again we see that during the last half of last year, 
things began to happen that some folks have called a financial 
meltdown. Some folks, it has caused some folks to sell all their 
equities, as a friend of mine told me he did yesterday.
  So these trends, both in the factors that I have outlined here as 
well as in the stock market, which many Americans are watching very 
closely these days, have all shown significant declines, which again 
began during the second half of 2000.
  The economy is therefore in a serious slowdown that was well under 
way in the middle of 2000. As is evident, there is a great deal of 
evidence that an economic slowdown has been under way for more than 6 
months, and that it has nothing to do with public officials 
acknowledging what is shown in official statistics, most of which had 
already been released by the previous administration; that is, of 
course, the Clinton administration.
  While construction and some service-producing industries have been 
holding up fairly well, overall measures of the economy show a rapid 
and deep slowdown.
  So I think that perhaps the point that I want to make to begin this 
hour on the Joint Economic Committee analysis of this budget is that 
there has been a slowdown under way for quite some time.
  We have seen, during the last two decades, almost 18 years of 
continuous economic growth, again, separated only by a short and mild 
8-month recession in the second half of 1990 and the first quarter of 
1991. Therefore, we should be able to learn from what we have done 
correctly in the past, and also learn from what perhaps we have done 
incorrectly during that same period of time.
  Mr. Chairman, a review of the facts is enough to convince any 
reasonable person that a sharp economic slowdown has been under way, 
and this raises the obvious question of what the appropriate policy 
response should be.
  As I have pointed out before, both monetary policy and fiscal policy, 
that is, tax and spending policy, have been very tight as the slowdown 
has unfolded. Steps have been made by the Federal Reserve to relax its 
overly tight monetary policy, though more is needed, and then 
adjustment of tax and spending policy is also warranted.
  The current economic system is generating large and growing surpluses 
in revenue to the Federal Government, and the tax system is creating a 
fiscal drag at the same time on the economy. Federal revenues as a 
share of GDP are at their highest since World War II. Let me repeat 
that: Federal revenues as a share of GDP are at their highest since 
World War II.
  I believe that, translated into slightly different language, that 
means that the American people are paying more in tax revenues as a 
share of GDP than at any time since World War II, and that, Mr. 
Chairman, at least in the view of the chairman of the Joint Economic 
Committee, creates a drag on the economy. The high level of Federal 
taxes is a hindrance to economic growth that can and should be 
alleviated, and I applaud the Bush administration for coming forth with 
this proposal for a $1.6 billion tax cut.
  For all the talk about the size of the tax relief proposal, it 
amounts to about 6.6 cents on every dollar projected over the 10-year 
period. In other words, it is not a large tax decrease when compared 
with the total size of the revenues which will be coming in during that 
period of time.
  The President has proposed and this budget contains, as we all know, 
a $1.6 trillion tax relief package. During the same period of time that 
this tax relief package will play out, our total revenues will be $26.6 
trillion, so that amounts to about 6 cents on the dollar over that 
period of time, and I believe very much warranted.
  Over the long term, reductions in tax rates and incentives for 
personal savings and investment will boost the after-tax reward for 
these activities, increasing the flow of resources into production.

                              {time}  1800

  This will improve economic growth, at least moderately in the short 
to intermediate run, and the compounding effects of this improvement 
over time will significantly increase economic and income growth over 
the long run.
  Speedy delivery of the tax relief could also work to contain the 
current slowdown and facilitate a stronger renewal of economic growth.
  The bottom line is that the Federal Government has a large tax 
surplus that is exacting a disproportionate additional cost on the 
already struggling taxpayers.
  The Federal Government does not need this extra revenue, and it 
should be returned to the taxpayers where it originated in the first 
place.
  A serious economic slowdown requires a reduction in fiscal drag 
caused by this excessive taxation.
  The tax system is imposing excessive additional costs on the economy, 
and now is the right time to provide tax relief and reduce this burden 
on hard-pressed taxpayers.
  We cannot make the economy turn on a dime, but we can alleviate the 
hardship caused by the slowdown and help build a foundation for 
stronger recovery.
  There are those who say that the surplus should not be used for tax 
relief, and I believe that that is wrong.
  Another important reason to provide tax relief is that the surplus 
will be spent, and I know that the gentleman from Florida (Mr. Miller), 
Chairman of the Committee on Appropriations is here, and I know what a 
great job he has done over the last period of time in holding down 
helping to hold down spending.
  But the fact of the matter is that we know that if that surplus 
remains, that that is too much of a temptation for the forces of this 
town to resist and, therefore, provides another compelling reason for 
this tax reduction to go in place.
  The basic problem was outlined by the public choice school of 
economics some years ago. When they pointed out that surpluses just 
always get spent. The key problem is that there is an imbalance in our 
political system that leads to a bias towards increased Federal 
spending whenever there is a surplus.
  The nature of the imbalance is this: The benefits of increased 
government spending are highly concentrated among the clients of 
various special interests groups that operate in our country and in 
this town while the costs of increased government spending are diffused 
among all the taxpayers.
  In other words, the taxpayers are only indirectly represented by 
those of us in this room, while those who favor increased spending are 
represented by paid lobbyists throughout this town. In other words, in 
the legislative process, the more intense an organized representation 
of special interest groups in favor of more spending tends to overwhelm 
the general interests of taxpayers scattered throughout the country. 
The larger the surplus, my friends, the more pressure there will be to 
spend it.
  Why should not we send some of the taxpayers hard-earned money back 
to them, and as we have pointed out on this chart, it is only 6 cents 
on the dollar over the period of time.
  One of the founders of the public choice economics won the Nobel 
Prize for his development of this and related explanations of decision-
making and unconstrained legislative bodies, that of course was Jim 
Buchanan who is now at George Mason University earlier at the 
University of Virginia.
  The fundamental truth of this proposition is why so many of us have 
supported tax limitation and similar amendments ultimately based on the 
public choice theory.
  Without such constraints, the pressures on the Federal Government to 
spend are so relentless and well organized that the outcome is in very 
little

[[Page 4702]]

doubt, and so, we have before us a proposal to reduce the level of 
taxation on the American people contained in a very frugal budget.
  It is being spent out of the money that is left over. After our basic 
needs have been met, an increase in this budget of, I understand, less 
than 4 percent overall, and still there is room for a tax cut.
  I believe it is essential. When I go on the street and talk to my 
friends, they recognize the responsibility as a Member of the House 
that I have, as we all have a responsibility to help to provide Federal 
policy that makes our economy grow.
  I challenge my friends on either side of the aisle to go back home 
having voted against the budget, which includes the provisions that are 
so important in setting the stage for this tax decrease.
  Mr. Chairman, I challenge any of my friends to explain that in the 
light of the economic conditions that we appear to be headed for.
  Mr. Chairman, I reserve the balance of my time.


                Announcement by the Chairman Pro Tempore

  The CHAIRMAN pro tempore (Mr. Hobson). The Chair would note that the 
Committee has embarked on the period of debate specified in the 
previous order of the House on the subject of economic goals and 
policies, on which the gentleman from New Jersey (Mr. Saxton) and the 
gentleman from California (Mr. Stark) each control 30 minutes.
  The gentleman from New Jersey (Mr. Saxton) consumed 20 minutes of his 
30 minutes.
  The Chair recognizes the gentleman from California (Mr. Stark).
  Mr. STARK. Mr. Chairman, I yield myself 7 minutes.
  Mr. Chairman, I hope my estimate does not turn out like the budget to 
be 20 minutes.
  Are not economics exciting, Mr. Chairman?
  The Joint Economic Committee has been granted the authority to 
control this part of the budget debate, and it has been a tradition 
since I guess 1978 when Senator Humphrey and Congressman Gus Hawkins 
first authored the Full Employment and Balanced Growth Act.
  It is our duty to present the views on the current stay of the U.S. 
economy and provide input into the budget debate before us. Now, this 
budget is not one of which those two men would be proud, and the budget 
before us today has the real potential to dismantle the great strides 
our economy has made in the past decade.
  I would like to get this economic debate into the terms of my 
distinguished colleague from Iowa, who had sort of a better grasp of 
economics, this kitchen table, now back in California, where I come 
from, in San Lorenzo, California, my in-laws have a kitchen table. As a 
matter of fact, it is the only table they have to eat from in their 
house.
  They are going to be watching this, and they are going to figure it 
out. I think they are going to say with this Republican budget, those 
folks are eating the filet mignon and why we are sitting here with our 
Hamburger Helper?
  It is kind of interesting. My father-in-law kind of figured out what 
our tax breaks would be under this budget, and I can tell my colleagues 
this without giving away too much detail about Frank and Mary, they are 
going to save $239, all right? Their son-in-law, that is me, is going 
to get a tax cut bigger than their annual income.
  They do not think that is very fair, but it may be because I am their 
son-in-law, but I do not think it is very fair either, because what 
they are not telling you in this great economic budget that 50 percent 
of all of this tax cut is going to people who make more than $200,000 a 
year.
  Congress conveniently put all of us congressmen into that upper 
echelon. We are all going to get an average of about $28,000 a year tax 
cut, and our constituents are going to get probably less than a 
thousand bucks. I hope my colleagues all can go home and talk to their 
constituents around the kitchen table and tell them what you have done 
to them and those who pay payroll taxes are not going to save a nickel 
on this budget.
  They are going to continue to pay that old Social Security, that 
Medicare tax and not get any relief. While the 1 percent, those who 
make $900,000 a year or more average a $46,000 tax cut and get 43 
percent of the benefits, the average American is not going to get 
bupkes.
  The distinguished gentleman from Iowa talked about a watershed 
budget. Remember, I did not grow up on a farm, but I wonder if the 
watershed is the one with the half moon carved in the door, because 
that may be where this budget came from. Because my colleagues talk 
about a top-to-bottom review, we could not have enough time, Mr. 
Chairman, to get to the middle, all of this is going to be a top 
review, because the bottom and the middle are not going to get 
anything.
  I would like to go on for a moment to what concerns people, because I 
do not think they believe that this economic thing is on the level, the 
average American is going to get anything. Not only are they not going 
to get anything, the rich are going to get their tax cut out of the 
Medicare trust fund, because the Republicans are stealing the money out 
of the Medicare trust fund to give the tax cut to the very rich.
  Boy, is that going to come home in a few years. The Secretary of the 
Treasury O'Neill, himself, as he talks about running Alcoa, he would 
not accept a long-range projection for more than 6 quarters.
  He would not trust them. He is going to trust a 10-year projection, 
which is really stretching it.
  Mr. Chairman, I am feeling pretty good about this economic projection 
right now. Medicare is not going to have a prescription drug benefit, 
because the tax cut that is being advertised as $1.6 trillion is really 
$3 trillion dollars. I mean, the Republicans cannot count.
  We have already passed the $958 billion the committee has. The 
Committee on Ways and Means has reported out another $399 billion we 
are going to consider that on the floor this week.
  The phase-out of the estate and gift taxes is going to be $267 
billion, for Bush's proposal for tax incentive for charitable 
contribution $56 million; education IRAs, $6 million; the pension, IRAs 
liberalization $64 million; Bush's proposal for permanent extension 
research grant $50 million; and on and on, $2,397 million, and the debt 
service costs $556, a grand total of $2,953 tax cut, and my colleagues 
are trying to tell us that is $1.6 trillion.
  My colleagues better take their shoes and socks off when my 
colleagues try and get above 10 because the numbers do not add up.
  Then, after raiding the trust fund, not having any money left for a 
prescription drug benefit, giving all of this money to the rich, you 
from Iowa tell us you are willing to waste our seed corn, because the 
real economic benefits in our budget should come from educating our 
youth so we do not have to bring in all the foreign workers in the 
Silicon Valley because we do not have enough kids who have had a good 
education to handle the computer programming and the other things we 
have to do.
  We should be ashamed of starving our children from the education they 
need, of providing health care to our seniors, providing health care to 
the youth in this country, providing a prescription drug benefit, all 
at the benefit of giving a few huge tax cuts to these extremely rich 
Republicans.
  Mr. Chairman, I ask my colleagues, please, to vote against this 
budget. Let us give a little more Hamburger Helper out of that filet 
mignon than we are giving to the very rich and let us make some 
economic sense out of this economic Wizard of Oz story.
  It does not add up. It helps only a few rich people. It is a travesty 
to the fair American system. It is not fair. It is not economic, and it 
is going to break the country.
  Mr. Chairman, I yield back the balance of my time.

[[Page 4703]]




                         Parliamentary Inquiry

  Mr. SAXTON. Mr. Chairman, may I inquire, did the gentleman from 
California (Mr. Stark) yield back all of his time?
  Mr. STARK. Mr. Chairman, I reserved the balance of my time.
  Mr. SAXTON. Mr. Chairman, may I inquire, it is my understanding that 
we are to have votes at this time or shortly, and a request has been 
made at this time to go ahead and take those votes. My intention at 
this time would be to yield back my time; however, if the gentleman 
from California (Mr. Stark) has more speakers and wants to wait until 
after the votes, which I understand will end about 7 p.m., then perhaps 
we can continue the debate during the Humphrey-Hawkins part of the 
debate after 7 p.m.
  Mr. STARK. Mr. Chairman, it is my understanding that the Chair 
intends to call a vote at this point, and after the vote, we would 
continue using the time that has been allocated to the Joint Economic 
Committee, is that it, and it would be the time of the gentleman from 
New Jersey (Mr. Saxton)?
  Mr. Chairman, I have just a few speakers, and I have some time 
remaining, and I might as well do it now after we recognized the 
speakers, but I would ask unanimous consent to yield the balance of the 
Joint Economic Committee's time on the minority to the gentleman from 
South Carolina (Mr. Spratt), the ranking member of the Committee on the 
Budget, if that is agreeable with the gentleman's side.
  Mr. SAXTON. That is fine.
  Mr. Chairman, I believe it would be expeditious on my part at this 
point to yield the balance of the Joint Economic Committee's time back 
to the gentleman from Iowa (Mr. Nussle), chairman of the Committee on 
the Budget, which I do.
  The CHAIRMAN pro tempore. Does the Chair understand that the request 
is made on both sides, asking unanimous consent to yield back the 
balances of their times to the chairman and ranking minority member of 
the Committee on the Budget, respectively?
  Mr. STARK. Mr. Chairman, at the balance of the speakers we have 
listed.

                              {time}  1815

  The CHAIRMAN pro tempore (Mr. Hobson). The Chair will entertain that 
request at that time.
  Mr. SAXTON. Mr. Chairman, I move that the Committee do now rise.
  The motion was agreed to.
  Accordingly, the Committee rose; and the Speaker pro tempore (Mrs. 
Biggert) having assumed the chair, Mr. Hobson, Chairman pro tempore of 
the Committee of the Whole House on the State of the Union, reported 
that that Committee, having had under consideration the subject of the 
concurrent resolution on the budget for fiscal year 2002, had come to 
no resolution thereon.

                          ____________________