[Congressional Record (Bound Edition), Volume 147 (2001), Part 4]
[House]
[Pages 4729-4736]
[From the U.S. Government Publishing Office, www.gpo.gov]



                         THE BUDGET RESOLUTION

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 3, 2001, the gentleman from Wisconsin (Mr. Kind) is recognized 
for 60 minutes as the designee of the minority leader.
  Mr. KIND. Mr. Speaker, I want to first of all start my remarks this 
evening by commending the chairman of the Committee on the Budget, my 
friend, the gentleman from Iowa (Mr. Nussle), as well as our ranking 
member, the gentleman from South Carolina (Mr. Spratt), given the 
collegiality and the civility that they have demonstrated in the course 
of putting together a budget resolution, whether it was the work that 
they specifically were involved with on the committee in putting 
together the package that we started debate on tonight and will finish 
tomorrow but also the conduct of the debate that we saw here this 
evening. I think they demonstrated by their leadership that we can have 
some real differences of opinion on what the best direction is that we 
should be taking for the sake of the country, have differences of 
opinion in regards to what the budget resolution should look at but do 
so in a civil manner. I think that was demonstrated here this evening.
  Mr. Speaker, I wanted to take this time, along with a few of my 
colleagues from the new Democratic Coalition, to continue the 
discussion that we are having on the budget resolution this evening. 
This is a very important time in the legislative process of this 
session of Congress because it is the budget resolution that 
establishes the broad frameworks that we will be filling in the spaces 
and the details throughout the course of this legislative year that 
will set the tone in regards to many of these programs, the size of tax 
cuts, the commitment to debt reduction, the commitment to trying to 
preserve and protect Medicare and Social Security for future 
generations. We want to devote a little bit more time this evening in 
regards to where we see things going as part of the new Democratic 
Coalition.
  It is a coalition that comprises roughly 80 Members now within the 
Democratic Caucus. We believe in pro growth strategies. We believe in 
the necessity to reduce the national debt. We believe in tax relief for 
working families, and we believe that there are also some very crucial 
investments that we need to make collectively as a nation in order to 
see the type of economic progress and the expansion of economic 
opportunities, not just in the coming year but for future years.
  Many of us have some severe reservations in regards to the Republican 
budget resolution that has been submitted; not the least of which is 
that the cornerstone of what they are offering is a very large, very 
sizable tax cut that is based on economic forecasts not this fiscal 
year or even next year but over the next 10 years.
  Many of us believe that if surpluses do, in fact, materialize during 
the course of future years, and many of us hope that they will, that 
the economy will remain strong; that the current projections will prove 
accurate; that this is an excellent time for us to get serious on 
national debt reduction; to be serious about finding some long-term 
bipartisan solutions to preserve Medicare, Social Security; deal with 
the rising crisis that we have in this Nation in regards to the cost of 
prescription drugs, while also being able to deliver a responsible tax 
relief package that all Americans will benefit from.

                              {time}  2200

  That is where our major point of contention is with the Republican 
proposal. We believe in tax relief like they do, but we would like to 
see tax relief that is done in a responsible and fair manner.
  There have been a lot of numbers bandied about during the course of 
this evening and undoubtedly they will again tomorrow; but basically, 
the corner of the budget resolution that the gentleman from Iowa (Mr. 
Nussle) and his committee has reported out calls for a $1.6 trillion 
tax cut over 10 years. To be honest, this is not tax relief that will 
happen this year or to any great extent next year; but most of the tax 
relief that they are talking about is backloaded severely to the 6th, 
7th, 8th, 9th year from now. They have to do that for one simple 
reason: we do not have the surpluses and no one is predicting that the 
surpluses will be generated within the next 5 years, at least, in order 
to pay for a tax cut of that magnitude, so they have to backload it, 
hoping that the surpluses will, in fact, materialize 8, 9, 10 years 
from now.
  Now, the average person in my district knows what is going on with 
this game. In fact, many of them are highly suspicious of these 10-year 
forecasts. They know that this is very speculative, these forecasts 
that are being bandied about right now, that no one can predict with 
any degree of certainty what the economy is going to be doing next year 
let alone what it will be doing 8, 9, 10 years from now. In fact, it 
has been said that God created economists in order to make weather 
forecasters look good. That is exactly what we are talking about, when 
we are talking about economic forecasts and projected budget surpluses 
that may or may not materialize 7, 8, 9 years from now.
  There was a lot of talk earlier this evening that this tax cut they 
are offering does not even compare to the size of the tax relief that 
President Kennedy introduced back in 1960, that Ronald Reagan had 
introduced with his economic plan back in 1981, and perhaps in real 
dollar terms, the size of it does not compare. However, there is one 
very important significant difference, and that is the context in which 
these tax cut proposals were offered back in 1960, 1981, and today. 
Because I submit that back in 1960 and 1981, they were looking at an 
entirely different economic and demographic situation than we are 
today.
  We could afford to take a chance back in 1960 and 1981 to pass large 
tax cuts because of two very important reasons. One was that we did not 
at that time have a $5.7 trillion national debt staring us in the face 
that is draining precious resources from the Federal budget every year 
just on the interest payments that we are making on our national debt, 
which totaled over $220 billion alone in the last fiscal year. That 
money is money that could be better spent for tax relief, for instance, 
for investments in education, in math and science programs and basic 
scientific and medical research in this country, but it is not. It is 
not because there is a large $5.7 trillion national debt that we have 
to make interest payments on, which comprises roughly the third largest 
spending program in the entire Federal budget.
  But back in 1960, they were still keeping the budget in relative 
balance. In fact, during the decade of the 1960s, they were exercising 
fiscal discipline and responsibility by maintaining budgets that were 
within balance. In fact, the last time before the 1990s that we had a 
balanced budget in this country was 1969, LBJ's last budget that he 
submitted in his last year in office. Also, back in 1981 we were not 
looking at a $5.7 trillion national debt. I believe back then the 
national debt was roughly $1 trillion as opposed to what we are facing 
today.
  So there is a significant difference between what we are calling for 
today and what the circumstances that existed back then were.
  The other significant difference is that they were not at that time 
facing a demographic time bomb waiting to explode. By that I mean the 
aging population that we have in this country, the baby boomers who are 
all going to start to retire at approximately the same time early next 
decade entering the Medicare and the Social Security programs, bringing 
incredible fiscal pressure to bear if we cannot find long-term reforms 
for those programs, and that is something that I feel is getting

[[Page 4730]]

lost in this debate. There is so much focus on the next 10 years which 
do look relatively optimistic when we look at budget situations, 
economic forecasts; but what is missing in the debate is what the 
second 10 years are going to look like in this century, and that is 
where I am afraid things are going to come home to roost.
  Mr. Speaker, if we make bad decisions today, if we gamble on these 
projected surpluses today, lock in on large tax cuts that do not 
materialize, finding ourselves in a position of not being able to 
afford them, going back to a series of years as we just came out of 
during the 1980s and early 1990s of annual structural deficits, adding 
to, rather than reducing, our national debt, I am very concerned then 
about our children's capacity and our grandchildren's capacity to deal 
with that type of fiscal situation that they will be asked to have to 
deal with. That is a significant difference.
  Just to tell my colleagues briefly how tenuous these forecasts really 
are, even according to the Congressional Budget Office that is offering 
these numbers that a lot of people are basing the tax cuts upon, they 
are telling us that if we are off by just one-tenth of 1 percent of GDP 
growth over the next 10 years, that translates into $250 billion of 
surplus that we will be off. So if we are off by even a half a 
percentage point on GDP growth in 10 years, that is roughly $1.5 
trillion that we will be off with our surplus calculations, which I 
think is very speculative and very risky at this time.
  The demographic aspect of what is happening I think is equally 
compelling. Let me show this graph briefly. Everyone in the House 
realizes that over half of the projected surplus is surplus that is 
generated by the surpluses in both the Social Security and the Medicare 
trust fund. We are collecting more than what is needed to go out in 
Social Security and Medicare. This is a great time in order to download 
the national debt so we are in a better position to deal with the baby 
boom generation's retirement.
  This graph illustrates what the next 10, 20, 30 years are going to 
look like in regards to those surpluses in the Social Security Trust 
Fund. Over the next 10 years, we are running some surpluses; and to a 
large extent, this budget resolution is based on those surpluses. But 
what has not been discussed in any great detail is what the second 10 
years and beyond look like in the Social Security Trust Fund. We are 
going to have some unfunded liabilities that are going to come due 
starting early next decade with the baby boomers starting to retire. 
That black ink, red on this chart, suddenly turns into a sea of red ink 
that we need to come to grips with.
  Mr. Speaker, this is as good a time as any for us to start looking in 
generational terms when we start making some of these budget decisions 
that we now have. Most of the decisions that I make when it comes to 
the budget and the fiscal policies that we pass, I try to make through 
the eyes of my two little boys who are just 4 and 2. I could not think 
of anything more patently unfair to do to them and their economic 
future than to saddle them with a large national debt because we did 
not have the courage to do something about it when we had a chance, or 
to make it more difficult for them to deal with an aging population in 
this country, when we have an opportunity with economic forecasts and 
surpluses that hopefully will materialize, to make the reforms that are 
needed to preserve and protect Social Security and Medicare, to make 
sure that we pass a prescription-medication component in this year's 
budget, to download the national debt as much as we can humanly do so 
that we are in a better position next decade of dealing with some of 
these other fiscal challenges that we are going to face, as well as 
making the crucial investments that need to be made in education 
programs, job training programs, research into medicine and the 
sciences, and a greater emphasis on math and science in the country 
generally.
  So this is hopefully something that will be discussed in greater 
detail in the coming weeks as we develop the budget, in the coming 
months as we work on the budget details, because way too much emphasis, 
I am afraid, is being placed on economic forecasts that are so far out 
into the future that I would venture to guess that no one really, in 
all honesty, would be willing to bet their own personal finances on the 
realization of those forecasts today, when there is so much uncertainty 
in the air.
  Mr. Speaker, at this time I yield to the gentleman from New Jersey 
(Mr. Holt), my good friend, who I serve with on the Committee on 
Education and the Workforce, one of the foremost leaders on emphasizing 
the importance of math and science and scientific research on budget 
issues.
  Mr. HOLT. Mr. Speaker, I thank the gentleman from Wisconsin. I would 
like to pick up on a point that the gentleman made. The Congressional 
Budget Office, not a Democratic organization nor, for that matter, a 
Republican organization, has talked about the uncertainty in the budget 
projections; and they have made it clear that what looks like a surplus 
in some of the future years could actually be a deficit.
  Now, we have a surplus today, an honest-to-goodness surplus, and the 
projections that tell us that we will have a net surplus to work with 
of more than $5 trillion have been gone over by lots of experts; and 
these projections are every bit as good, I would say, as the 
projections of several years ago that said we would be in deficit right 
now. So we should keep that in mind.
  But the Democratic alternative budget that calls for paying down more 
debt and somewhat smaller tax cuts is arrived at not out of fear. This 
is not a fear of that uncertainty; this is not an eat-your-spinach 
austerity budget. No. We are trying to do, really, what the other side 
has said, which is to put more money in the pockets of the people of 
America, of the working families.
  Mr. Speaker, we want to give a tax cut, not like the Republicans, one 
that pays off 6 or 8 or 11 years from now; and we want to pay down the 
debt. We would pay down the debt as rapidly as possible, more rapidly 
than the majority's budget.
  This is not only the responsible thing to do, but it is important in 
demonstrating that our government has fiscal discipline, financial 
discipline. This leads to greater investor confidence and greater 
consumer confidence, lower interest rates, and that alone would put 
more money in the pockets of Americans, every homeowner getting a 
mortgage, every farmer buying a combine, every student with a student 
loan, every small businesswoman raising capital. And if we add to that 
the fact that what we are trying to do is to create a budget that leads 
to productivity growth, productivity growth that powers our economy 
leads to people having jobs. If we are going to have that productivity 
growth, we need a smart, well-trained workforce and we need new ideas.
  Quite simply, we need to invest in education and we need to invest in 
research and development. In both of those areas, our budget does a 
better job than the majority party's budget. Mr. Speaker, in other 
words, we want to invest in teacher recruitment, teacher training, 
smaller class sizes, Pell Grants that will help everyone have the 
advantage of a college education. The Republican budget quite simply 
shortchanges the American people in education and in research.
  So the Democratic budget is not an austerity budget. By paying down 
the debt, by investing in education and research, we are convinced that 
we will have a richer country; and that, I think, has been lost in the 
debate tonight. Yes, we can talk about who is spending more on this 
program and who is spending more on that program, but what we think we 
will end up with here is a program that is more fiscally responsible 
because we do not commit money over the long term when there is 
uncertainty in the projections, and we invest in those things that are 
necessary to have the economic growth that we need.
  I thank the gentleman for putting together this discussion. There are 
a lot of differences in what the majority budget has and what we 
propose to do.

[[Page 4731]]


  Mr. KIND. Mr. Speaker, I appreciate the gentleman's comments tonight. 
He makes a very valid point, one that will just take a second to 
emphasize again, and that is that Chairman Greenspan, whether he 
deserves it or not, has received a lot of credit in regards to the 
economic circumstances in the country. A lot of people listen to what 
he has to say; and he has consistently since day one, when he comes 
before the Committee on the Budget or the Committee on Financial 
Services testifying, emphasizes debt reduction, talking about the 
merits of debt reduction, how it will help the Federal Reserve interest 
rates, which is really the true economic stimulus in the economy; by 
making it cheaper for businesses to invest capital in their business, 
create more jobs, increase worker productivity. Then the average worker 
is going to see financial relief through lower interest rates, lower 
mortgage payments, car payments, credit card payments and, as the 
gentleman mentioned earlier, student loan payments will be cheaper to 
do. That is real money in real people's pockets as well, so there is a 
lot of value to continuing to emphasize debt reduction.

                              {time}  2215

  If the gentleman will yield, the Democrats would retire all 
redeemable public debt by 2008. The Republicans' budget would not.
  Mr. KIND. Mr. Speaker, that is a very important point, a very 
important difference between the competing budget resolutions.
  Mr. Speaker, I yield to my good friend, the gentleman from North 
Carolina (Mr. Price), one of the true authority figures when it comes 
to budgetary matters here in the House of Representatives.
  Mr. PRICE of North Carolina. Mr. Speaker, I thank the gentleman for 
yielding.
  I would like to begin by picking up on the point our colleague, the 
gentleman from New Jersey, was making about debt retirement. It seems 
strange to see our Republican colleagues arguing that, really, we had 
better not retire too much debt. After years and years and years of 
piling up debt and red ink and deficit spending, here we finally see 
the light of day. We are running modest surpluses, and we have the 
opportunity to reduce that mountain of debt.
  Let us remind ourselves, that debt is not just an abstract number, 
that debt is costing this country over $200 billion a year in interest 
payments alone. Think what we could do with that money. Think of the 
more profitable public and private investments that could be made with 
that over $200 billion. We need to systematically and in a disciplined 
way get that debt paid down.
  It seems to me that our Republican friends are making a couple of 
mistakes. In the first place, they are underestimating how much of that 
debt we can pay down over the next 10 years without incurring 
unreasonable penalties.
  Then, secondly, they are using a device in their budget which they 
call a reserve fund, but they at the same time are making commitments 
that almost certainly will spend down that reserve fund: increases in 
defense spending, agricultural assistance. Goodness knows, they are not 
even taking any account of the kinds of farm payments we have had to 
make in recent years.
  They are promising us a prescription drug coverage under Medicare. 
How much of that is it going to take for those reserve funds to vanish 
and, therefore, even less debt reduction to be achieved?
  It seems to me that the approach we are taking in the Democratic 
alternative is far more reasonable, far more responsible. We are 
reducing the debt by a good deal more than our Republican friends. At 
the same time, we are taking more realistic account of the investments 
that they and we say that we are going to have to make.
  Instead of the Republican approach, which has been to shout through a 
tax cut here mainly benefiting the wealthiest people in this country, 
and then say, well, we will figure out a few months later what the rest 
of the budget looks like, our approach on the Democratic side has been 
to roughly take one-third of the surplus and say we are going to commit 
that to a disciplined paying down of the national debt, beyond what we 
are already doing with the Social Security surplus, which is applied to 
debt reduction and to the long-term future of Social Security.
  We take another one-third of the surplus and say we are going to 
apply that to tax relief. That is a large tax cut, and one from which 
this country will benefit.
  Then we take the remaining third and apply it to investments which 
really both parties have committed to, in strengthening defense, 
providing a prescription drug benefit under Medicare, investing in 
education, investing in research.
  I do want to return to what our colleague said about the National 
Science Foundation, an important component of that. We will be 
investing in roads and transit. Goodness knows, my district in North 
Carolina is well aware of the need for that investment.
  It will be one-third, one-third, one-third, a balanced program of 
debt retirement, tax relief, and targeted, prudent investments. It 
seems to me that is a sound basis on which to proceed. I very much hope 
that before this process is over, that is the kind of process that we 
can all be part of.
  Mr. KIND. I appreciate the gentleman's insight in this matter. 
Obviously, he has been directly involved in the creation of many 
budgets, and analyzing them as a member of the Committee on the Budget 
and the Committee on Appropriations.
  I think that is one of the great differences between the Democratic 
alternative and what the majority is offering this week, is that we are 
taking a more balanced approach on projected surpluses.
  First of all, we are hedging our bets a little bit. We are saying a 
lot of the surplus is speculative. Let us be honest, over two-thirds of 
the projected surplus will not even happen, if at all, until 6, 7, 8 
years from now, so there is not a lot of wiggle room right now.
  Mr. PRICE of North Carolina. If the gentleman will yield, well over 
two-thirds of that projected surplus is more than 5 years out. There 
have been a number of analysts in recent days that have pointed out the 
ominous fall in the stock market and what that will do to capital gains 
receipts, and the effect that will have on the projected surpluses.
  Then look at what is happening in the States. In my State of North 
Carolina, and I understand something like half the States, the budget 
is taking a dive. The economic situation is deteriorating. We hope that 
that does not become worse, but surely it would be foolish for us to 
ignore those signs in projecting our Federal surplus.
  Mr. KIND. Reclaiming my time, Mr. Speaker, I agree with the gentleman 
wholeheartedly, even in the State of Wisconsin, where we are following 
on the heels of a big tax cut that was just enacted, and now we are 
looking at a revenue shortfall of over 600 million to $1 billion in the 
next biennium. This is a consistent theme now from State to State to 
State from perhaps ill-considered economic gains in the coming years.
  In just looking at the Republican budget resolution, to be honest, 
there are some smoke and mirrors being played here. If anyone believes 
they are only going to go with a 2 percent defense increase in this 
budget, take the fact that they are not allocating any money at all to 
a missile defense program, when we know the Bush administration has 
made this one of their top priorities, and missile defense can be 
extremely costly; or calling for an 8 percent real budget cut in 
agriculture programs when we know we are in the middle of an 
agriculture depression right now. We have seen the farm relief packages 
that have passed this Congress with bipartisan support in the last few 
years. It is just not realistic with the American people or honest with 
the American people on what their true spending costs are going to be 
in the budget.
  The point I was making earlier is that back in 1981, we could afford 
to make a mistake. We could afford to take a gamble on passing a large 
tax

[[Page 4732]]

cut plan that President Reagan was advocating. He was also advocating a 
large increase in defense spending. That is, in fact, what happened. So 
if we couple a large tax cut with a large increase in spending, that is 
what occurred within the 1981 economic plan. It led to a decade of 
annual deficits, which led to the $5.7 trillion of national debt that 
we now have and that we are wrestling with and trying to dig ourselves 
out from under.
  Back then we could have an opportunity to recover from that type of 
fiscal mistake that was made. I am not confident at all that if we go 
down the same road, that we can recover in time for the baby-boom 
generation's retirement.
  President Bush was here in the well not too long ago quoting Yogi 
Berra saying, ``When you come to a fork in the road, take it.'' Yogi 
Berra was also famous for saying, ``This is deja vu all over again.'' 
What they are offering in their budget resolution, with the large tax 
cut plus what will inevitably lead to a large increase in spending, 
especially in the defense area, and there will be bipartisan support 
for defense modernization, is a redo of the 1981 economic plan that led 
to the $5.7 trillion of national debt that we are trying to recover 
from, which resulted in the 1990s, in the Clinton administration, of 
putting together budget packages that would get us the balance, and 
then start running these surpluses.
  So I hope we do not repeat the mistakes of the past, and we learn 
from what happened then so we can better prepare for the challenges of 
the future.
  Mr. PRICE of North Carolina. If the gentleman will continue to yield, 
I cannot imagine that with the surpluses that we are running now, and 
seeing the baby boom retirement ahead and the implications that has for 
Social Security and Medicare, I cannot imagine that we would not want 
to get that national debt reduced down to the absolute minimum so we do 
not have this $200-plus billion in debt service each year awaiting us 
now, and so that we are in a better position to meet that challenge 
when it arises.
  It is just incredible in this context to be saying, let us not pay 
down the debt too much. As one of our colleagues said, it is like a 
400-pound man deciding he had better not go on a diet lest he become 
anorexic. That is not really our problem. Our problem right now is to 
systematically and in a disciplined way pay down that national debt, 
get that debt service off our back, get ourselves in a strengthened 
position to meet the challenges that surely lie ahead.
  Mr. KIND. I could not agree with the gentleman more. Interestingly 
enough, that is the feedback I constantly hear from my constituents in 
western Wisconsin. They look at me and say, ``What are you guys doing 
out in Washington?'' Because they kind of view these Federal budget 
terms the same way they look at their own family finances. If there is 
debt they are responsible for, they understand they have a 
responsibility for taking care of that first before they embark on new 
spending programs or large new tax cuts. That seems to be the 
overwhelming, clear preference for the people living back home in 
Wisconsin.
  Mr. Speaker, I yield to the gentleman from Maine (Mr. Allen), a good 
friend and someone who has some very strong opinions with regard to 
this budget resolution.
  Mr. ALLEN. Mr. Speaker, I thank my friend, the gentleman from 
Wisconsin, and my colleagues for being here tonight to talk about this 
budget resolution. At last it seems like we are going to be discussing 
at least the beginnings of an overall budget resolution with a few 
numbers; not a lot of numbers, not the kind of detail that apparently 
we may not see until May or June, but at least we are starting to 
engage in an important debate here.
  I want to follow up on what the gentleman from North Carolina (Mr. 
Price) and the gentleman from Wisconsin (Mr. Kind) have been saying 
about the need to pay down the national debt and to meet our 
responsibilities. That word ``responsibilities'' seems to have been 
lost in terms of our friends on the Republican side of the aisle as 
they get into the debate on this budget resolution.
  We have several responsibilities. I am struck by one in particular. 
That is the responsibility to meet the authorized Federal share of 
funding for special education. This is a program that was created in 
1975, and within a few years the Congress authorized the Federal 
Government to pay up to 40 percent of the cost of special ed.
  I suspect that it is as true in Wisconsin as it is in Maine. When I 
go out and talk to educators in Maine, the business people involved in 
education, the teachers, the superintendents, the members of the school 
boards, their number one concern, their number one request, is full 
funding of the Federal share of special education.
  In Maine, that would be an additional $60 million per year. It is a 
huge amount of money. Yet, in our districts, over and over again, the 
local taxes and State taxes are being used to pick up the abdication of 
the Federal Government for its responsibility to fund special 
education. So local money and State money is being put into educating 
special ed students, and a good many of our regular students are 
finding that they do not have textbooks. They are in classes that are 
too large, and they are in schools that are run-down.
  Before we have dessert first with a tax cut of this size, we really 
ought to meet our responsibilities. We ought to pay down a larger share 
of the national debt, and we ought to fully fund special education.
  Today I went before the Committee on Rules with a proposed amendment 
that I hope will be approved to come to the floor tomorrow, but I 
cannot count on that, an amendment that would take this historic 
opportunity to fully fund the Federal portion of special education. It 
would mean an additional $11 billion. It has nothing to do with a new 
program. This is an old program that deserves a new promise, or, 
rather, the fulfillment of an old promise to fully fund special 
education.
  That sum, $11 billion, is something we could not have conceived of 
except for this year, only with the kinds of projected surpluses that 
we see in front of us.
  I believe that we have the right approach. We can have a tax cut 
about half the size of what the President proposes, and if we do that, 
we can do a Medicare prescription drug benefit, we can fully fund 
special education, and we will still have close to $800 billion to 
shore up Medicare and Social Security, and to have some sort of cushion 
against the possibility that these projections just will not work out 
as they are projected to be now.

                              {time}  2230

  We need balance.
  The final thing I would say is this: the President came up to the 
State of Maine last Friday, and he made his usual pitch. To hear him 
describe and to hear our friends on the other side of the aisle 
describe what is going on, they say, well, we have met our 
responsibilities, and we have a trillion dollars contingency fund, 
which my colleagues and I know is not there; and then they say we are 
dealing with the money that is left over.
  Mr. Speaker, I ask, does anyone in the country believe that the 
President's last priority is tax cuts? We all know that is the first 
priority. That is where the money is coming from. As the American 
people begin to understand, as they see real numbers, they will realize 
that a tax cut of $1.6 trillion is so large that we cannot deal with 
other priorities fully funding old programs like special ed or dealing 
with new emergencies like the high cost of prescription drugs for our 
seniors.
  It seems to me we have to take account of the fact, as all of my 
colleagues have been saying, that we do not know that these projections 
will come in as promised or as projected and, therefore, we have got to 
be disciplined.
  This is the time to shore up Social Security and Medicare, to prepare 
for a

[[Page 4733]]

future when we will have more claimants in those programs and be 
responsible about our budgeting. The Republican budget resolution is 
not responsible and, therefore, it should be rejected.
  Mr. Speaker, I thank the gentleman for yielding to me.
  Mr. KIND. Mr. Speaker, I just want to commend the gentleman from 
Maine (Mr. Allen) for the leadership that he has provided this House in 
regards to getting this Congress to live up to the Federal Government's 
responsibility for funding special education costs.
  The gentleman mentioned the 40 percent level where we should be, but 
I do not think too many people back home realize we are only funding it 
at slightly less than 15 percent of that 40 percent share. This is a 
challenge that is not going to go away.
  We have a collision course with school budgets and modern medicine, 
where we are seeing more and more children who in the past normally 
would not have survived to live to school age entering the school 
systems, bringing the special needs with them and the increased costs. 
That is what IDEA is; that is what special education is all about.
  If we can get one thing right in the education component of this 
budget, it is getting to our full share, that 40 percent level, of 
special education, which would provide tremendous relief to local 
school districts so they can use resources to implement the reforms 
that they would like to make; but they cannot because so much of their 
resources are being diverted to cover for our shortfall in IDEA and 
special education.
  The gentleman and I have been working together on a task force to 
elevate this issue and to highlight it and we are going to continue 
doing it, reaching across the aisle trying to gather bipartisan 
support, because it is more than just funding IDEA. It is really a 
civil rights issue as well.
  These children bring special needs to the classroom. They deserve to 
have access to a quality education like any other children in this 
country, but we are selling them short. We are not living up to our 
responsibility, our commitment to them to get the job done.
  We can very easily do that if we make it a budget priority, and that 
is what this budget resolution is all about. It is a reflection of our 
priorities and our values as a country and what we are willing to 
invest in or not invest in.
  Mr. Speaker, I yield to the gentleman from Maine (Mr. Allen).
  Mr. ALLEN. The gentleman reminds me of a point I wanted to make. 
Fully funding special education by the Federal Government would help 
special ed students obviously. It would also help regular students 
because, frankly, State and local money that is now being diverted to 
fund special education would be available for textbooks and additional 
programs for regular students.
  Third, it would really help relieve pressure in the future on local 
property taxpayers. There is no question in my mind if we have a $1.6 
trillion tax cut, the pressure on local property taxpayers is going to 
go up much faster than if we have a more responsible tax cut, balanced 
with investment in education and health care and with a reserve left to 
shore up Social Security and Medicare.
  Mr. Speaker, I thank the gentleman for yielding.
  Mr. KIND. I thank the gentleman for his leadership.
  Mr. Speaker, I yield to the gentleman from New Jersey (Mr. Holt), my 
friend.
  Mr. HOLT. Just on that point, we wanted to talk about education 
funding and the obligations we have. With all of the talk about 
increased attention to education, the fact of the matter is that the 
budget of the majority party is less as a percentage increase in 
spending than any of the past 6 years; and to put it really into 
perspective, to see what is really at work here, when we face an 
obligation of something on the order of $100 billion to meet our 
obligation for special education, the majority party is presenting as a 
tax cut for the top 1 percent of Americans 13 times as much money as 
they are proposing for all of their educational reform and new 
educational initiatives. That, I think, is a stark difference.
  I thank the gentleman for yielding.
  Mr. PRICE of North Carolina. If the gentleman will yield for a brief 
point, I am sure we all remember that back during the campaign, George 
W. Bush campaigned on a $5,100 Pell Grant, wanting to get the maximum 
Pell Grant award for freshman up to $5,100; and yet in this education 
budget, we are dealing with, it appears, a $1 billion increase in the 
entire Pell Grant program. And our budget analysts tell us that would 
get the maximum award up about $150. So the maximum award would become 
something like $3,900.
  To say the least, that is not $5,100. And it just does not represent 
the kind of investment in education we need to be making and that the 
political rhetoric would indicate that both parties want to make.
  Mr. KIND. Suffice it to say, as a member of the Subcommittee on 21st 
Century Competitiveness of the Committee on Education and the 
Workforce, we are waiting with baited breath for the details of the 
President's higher-education funding priorities because this is all 
about access to higher education for students.
  And if we want to slow down economic growth in this country, that is 
one sure way of doing it is underinvesting and access to postsecondary 
educational opportunities.
  I would like to yield to the gentleman from Washington (Mr. Inslee), 
my friend.
  Mr. INSLEE. Mr. Speaker, I thank the gentleman for yielding.
  Mr. Speaker, I appreciate the gentleman's leadership in getting this 
group together. I just have a couple of points I want to make; and 
perhaps it expands on a few issues people have been talking about. 
First is personal disappointment by a guy who turned 50. I turned 50 
last week, and it made me think about, besides imminent mortality, of 
course, the generation we are in and how this budget is such a 
disappointment to those of us who are in the baby boom generation and 
really see this as an opportunity for the baby boom generation to grow 
up; a real opportunity for the baby boom generation, who at times have 
been accused of being a little self-absorbed, a little selfish, to 
really decide we are going to do something pretty dramatic, which is 
take responsibility for our own retirement.
  Because the baby boom generation with all of our great attributes, 
having given birth to the Beach Boys and rock and roll and some of 
those good things we brought to the country, but what we give to the 
country is a prospective economic collapse starting about 10 years from 
now when we start to retire. This budget which we are going to vote on 
in the next few days is really going to tell us what the baby boomer 
generation is about, whether we are going to be about irresponsibility 
and sort of hiding behind these fiscal hallucinations saying these 
things are honky dory for the last 10 years and pass the majority's 
budget, or whether the baby boom generation is going to stand up and 
say we are going to be responsible for our own retirement.
  Because everybody knows from the Members the gentleman has up here 
today shows that when we start to retire 10 years from now, that looks 
fairly decent the next 10 years, but the day we start to retire 10 
years from now all heck breaks lose, and we go right down back into the 
enormous hole in Social Security and Medicare benefits, unless we make 
some investments today in our future and paying down the debt and 
taking care of Social Security and Medicare, which this budget in a 
starkly obvious fashion does not do.
  I do not think this budget is about numbers. This budget is about 
whether the baby boom generation is going to grow up and take personal 
responsibility for their own retirement. And this budget proposed by 
the Republicans says we will not, and I think that is wrong.
  As a recently turned 50-year-old, I think we ought to stand up and 
take care of our own retirement. And the majority party has sort of 
said, they show us these numbers, we have seen their charts, and they 
say during the next 10 years, we are going to have

[[Page 4734]]

these rosy surpluses. There may be some surpluses, if things go 
perfectly. We do not know that, but there may be some.
  But after those 10 years, what they do not tell you, everything goes 
negative. It is really interesting. Almost 10 years to the day, almost 
everything goes negatively very, very rapidly when we start to retire.
  I think what their economic policy is tantamount to is the guy who 
has fallen out of the 20-story, the 20th floor of the building, and he 
goes through and we know the stories, he passes the 10th floor on the 
way down and the guy says how are you doing, he says okay so far.
  I think it is time for the baby boomers to reject this budget and 
take responsibility for our own retirement. It is the right thing to do 
to our kids and for our kids, and I hope we will be successful as we go 
down this road.
  Mr. KIND. I thank the gentleman for his comments and a point well 
made.
  Mr. Speaker, I want to thank the gentleman from South Carolina (Mr. 
Spratt) for all of the work and the effort that he has and his staff 
has put in during the course of the last couple of months in putting 
together a solid Democratic alternative, one that recognizes that we 
need to maintain balance, that there is strong support within the 
Democratic party to provide responsible and fair tax relief to all 
Americans, that there is support within the Democratic party and 
recognizing the need to modernize our defense capability, which is 
going to costs some investments.
  It is going to require investments over the next 10 years to get 
there, someone who is recognized in the alternative budget proposal 
that he has offered and the need to invest in scientific and medical 
research, and the importance of investing in education for our children 
and access to education for the higher-education programs that we 
support, so that the financial aid will be there for our students to go 
on to college or to technical school.
  Mr. Speaker, I think it is a solid proposal. It is well balanced. One 
third being devoted to debt relief, one third being devoted to tax 
relief, and one third recognizing the individual responsibilities that 
we have existing right now.
  I commend the gentleman for all of his work that he has put in and 
his staff has put in.
  Mr. Speaker, I yield to the gentleman from South Carolina (Mr. 
Spratt), our leader on the Committee on the Budget, the ranking member.
  Mr. SPRATT. Mr. Speaker, I thank the gentleman from Wisconsin for the 
recognition.
  This is a complicated chart, but it says everything about the budget, 
why we are still here at this hour of the evening talking about it, 
trying to make the case, the point that this budget really cuts to the 
bone.
  And I have three problems with the budget in general. First of all, 
it cuts so close to the margin that it leaves no room for error. If 
these projections over 10 years, a period that everybody agrees is a 
precarious amount of time in which to cast economic projections, if 
these projections are off by the slightest amount, this bottom line 
here, the so-called on-budget surplus, the surplus remaining after 
backing out Social Security and Medicare, it is just $20 billion next 
year, and by 2005, it is actually negative, because it begins to 
decline in 2004.
  It is never a significant number until about 2008 or 2009. That is 
the margin of error, the cushion fund, if you will, in case these 
projections go wrong. So that is a first problem I have with the 
budget.
  What can happen? We just talked about education. If we are wrong here 
and that goes into the red, then we will see education under pressure 
again. Discretionary accounts like that that are funded every year will 
be under the gun again.
  Secondly, by committing the lion's share of our surpluses to the 
massive tax cut they are proposing, and when you provide for the 
additional interests that we will have to pay because we are using the 
surplus for tax reduction rather than debt reduction, very little room 
is left for any other priority.
  If we want to see where the difference is, look at education, 
critically apparent when we look at education, because we have a 
balanced approach.
  We put a third on debt reduction, a third on tax reduction, and a 
third on priority spending. We have money for the first time, real 
money for education, $130 billion over 10 years more than what the 
Republicans are proposing in their budget, $130 billion. There is no 
difference, no comparison between us and them when it comes to 
education.
  That begins at the beginning when we set our framework and said we 
have got an unusually good stroke of fortune here.
  We are now reaping the consequences of fiscal good behavior. We, 
therefore, want to set aside something for those programs which we have 
denied and deferred in prior years as we tried to subdue the deficit.
  Education leads the list. We think it is the future. We think it is 
the ladder that holds up opportunity in America. So we allocate $130 
billion more than they do to education.

                              {time}  2245

  Finally, Social Security and Medicare, we all know that, in 2008, the 
first of the baby boomers will retire. Seventy-seven million of them 
are marching to retirement right now. They are already born. They are 
not going anywhere. They will soon be claiming their benefits. We have 
got about 10 years to get ready. All through the 1990s, we knew this, 
but we did not have the wherewithal to deal with it. Now that we have 
the wherewithal, the $5.6 trillion surplus, we have an obligation. We 
have an obligation to deal with it.
  As I have said earlier, we may be sitting on what appears to be an 
island of surpluses, but we are surrounded by a sea of debt. A large 
part of that debt is not monetized. It is unfunded, so to speak. It is 
represented by the promises that have been made to the beneficiaries 
that have yet to retire but, nevertheless, need those benefits when 
they do retire for Social Security and Medicare.
  The unfunded liability of those programs today, if we funded the 
account adequately to provide for their solvency indefinitely into the 
future is $3.1 trillion. That is the unfunded liability. Now, we can 
either take some of our surplus and use it for that, or we can slough 
the problem off on to our children and let them pay for our retirement, 
the baby boomers' retirement.
  What is the morally responsible thing to do? It is to take some of 
the surplus we have now and set it aside for Social Security and 
Medicare, and that is exactly what we do.
  The first thing we do in our budget, we take a third of the surplus, 
$910 billion, we assign it to the future of these two programs in equal 
accounts, to Medicare and Social Security; and it ensures the solvency 
of these programs, Medicare to 2040, Social Security to 2050. That is 
not fiscally irresponsible. That is fiscal responsibility.
  Mr. KIND. Mr. Speaker, the gentleman from South Carolina (Mr. 
Spratt), as the ranking member, is obviously much more familiar with 
the numbers of the budget resolution than I. I have a question for the 
gentleman. There is a lot of talk about this $5.6 trillion surplus over 
the next 10 years. But what is that reduced by if we do, in fact, take 
the Social Security and Medicare trust funds out of the equation? Where 
does that leave the surplus total at that point?
  Mr. SPRATT. Mr. Speaker, even if we do that, what we are doing when 
we take them out of the equation is using the surpluses accumulating 
for now in those two trust accounts to buy up debt we incurred in the 
past, outstanding debt. In the past, we used it to fund new debt; and 
the proceeds of that new debt we used to fund new spending.
  Now, we have both agreed, I will give the other party credit, we have 
both come to an accord that we will use both of these programs solely 
to buy up existing debt. Unfortunately, our Republican counterparts are 
breaking faith with us on the Medicare part A trust fund, the HI trust 
fund, because they are effectively saying we can use

[[Page 4735]]

some of that to pay for prescription drug benefits under Medicare. $153 
billion of the $392 billion that will accumulate over the next 10 
years, they say we can spend it on Medicare drug coverage. But if we do 
that, it will not be there to pay for the other hospital insurance in-
patient benefits to which it is primarily obligated.
  Mr. KIND. Mr. Speaker, it is my understanding, correct me if I am 
wrong, a large part of that $5.6 trillion in surplus everyone is 
talking about are the surpluses being run in Social Security and 
Medicare. There seems to be pretty much a universal agreement, at least 
in this House, that we should not touch that, that that should be set 
aside and dedicated in preparing for the baby boomers' retirement.
  If we did that, that $5.6 trillion number then is immediately reduced 
to roughly $2.7 trillion of surplus over 10 years, again if the 
projections prove true. But the gentleman from South Carolina (Mr. 
Spratt) was just mentioning earlier how close they are cutting it with 
this budget resolution.
  If we look at the $1.6 trillion tax cut proposal that they have out 
there, that is not entirely honest with the American people as well 
because they are not reducing debt as much as we are proposing. There 
would be an additional half a trillion or $500 billion on debt interest 
over the next 10 years, so that $1.6 trillion tax cut immediately jumps 
up to $2.1 trillion that we would have to pay for.
  If we are going to deal with the alternative minimum tax, and 
everyone around here understands we need to deal with that so more 
working families are not included, that is going to be an additional 
$200 billion, $300 billion over 10 years to fix that problem.
  If we extend the tax extenders as we do every year in this place, it 
is an additional $100 billion that is going to be added to the 1.6. So 
that $1.6 trillion tax cut would actually balloon up to roughly $2.6 
trillion. If we only have roughly $2.7 trillion as a margin of error, 
that does not leave us with a heck of a lot of room to do virtually 
anything else, let alone reforming Social Security, Medicare, dealing 
with the prescription medication program, which I think a lot of people 
believe we need to take action on, or the education investment that we 
have to make.
  Are those numbers pretty accurate?
  Mr. SPRATT. Absolutely, Mr. Speaker. Look at the bottom line on this 
chart again, complicated as though it may be. In 2002, the amount left 
over is $20 billion. It is a lot of money. But keep in mind that that 
does not include the plus-up for defense, and it does not include the 
plus-up for agriculture. The two of those could easily be $15 billion, 
even $20 billion, in which event we are in the red again. We are 
dipping into those trust funds as early as 1 or 2 fiscal years from 
now. It is right there. The numbers are right there. It is their 
particular budget proposal. That is how close to the margin it comes.
  Now, there is an appearance abroad that this budget allows us to sort 
of have our cake and eat it, too, to have big tax cuts and not really 
to have any significant programs cut that are important to people, 
particularly children.
  One of the things that the President touts in his budget is he 
increases NIH by $2.8 billion and takes it one step away from doubling 
over a period of 5 years. So do we. It is important. We agree with 
that. However, if we read on, we find that that $2.8 billion increase 
in the NIH budget comes out of its parent agency, the Department of 
Health and Human Services. It comes out of its hide.
  They also have other important agencies: the Center for Disease 
Control, the CDC, the community health centers. They suffer so that NIH 
can get the plus-up. We provide NIH the plus-up and also adequately 
raise the HHS budget so that other good important health programs do 
not have to suffer to pay for the widening wedge for NIH. They do not.
  Let me tell my colleagues something else. One of the reasons that I 
do not think we should be out here tonight or today or tomorrow doing 
the budget is we still do not have the detail we need to know exactly 
what is in this budget proposal.
  When we press the Secretary of HHS for further detail, he said, ``I 
do not have it. It will come to me April 3 or thereabouts from OMB.'' 
When we press the Secretary of Agriculture for further details, we 
could not get it. She told us she would find out on April 3 also. When 
we asked the Secretary of Defense to come testify, he would not testify 
because he is not ready to testify. But we know he is coming back with 
a big bag for more money.
  However, look at what happens as a result of trying to plus-up some 
things while holding other things constant. In HHS, here we have a 
President who ran on the campaign slogan that he would leave no child 
behind. He told us in his State of the Union message that his wife, a 
lovely woman, Laura, was a librarian, and she would see to it that 
children's programs were properly attended to.
  Look carefully at the HHS budget when it comes. Based on documents 
released last week to the New York Times, there are three major cuts. 
Where are they coming in the HHS budget? In children's program. Why did 
he cut them? They have no voice.
  We finally got the child care and development block grant up to $2 
billion last year. Why were we pushing to get it up? It is a central 
ingredient for welfare to work. If mothers do not have child care, they 
cannot leave their kids alone at home. So we had to do it. We raised it 
$800 million to $2 billion. Still not enough. But it includes and 
covers 214,000 additional children. What has been targeted at HHS for 
reduction by OMB? You got it, $200 million out of children, child care.
  We also added money to the account for abused and neglected children, 
just $178 million in the whole budget of HHS. What has been targeted 
for cuts? According to the New York Times, that particular program, 
taking money from abused, neglected children.
  Finally, we dealt with some huge omissions that have been overlooked 
for years and is not at all defensible. Most Americans do not know it, 
but graduate medical education, interns and residencies, are paid for 
through the Medicare program, indirectly, but substantially, to the 
tune of about $10 billion. That is fine for everybody but 
pediatricians. They do not see patients on Medicare.
  So our children's hospitals have not enjoyed that kind of subsidy in 
the past that all other specialties have enjoyed at the teaching 
hospitals. We finally corrected that last year with a $235 million 
fund, and that, too, is under target.
  So when one talks about a budget that is providing for our needs and 
wants, not leaving any child behind, what one sees is that this big tax 
cut has even shoved the most critical and sensitive programs on the 
back burner.
  Mr. KIND. Mr. Speaker, I want to thank the gentleman from South 
Carolina (Mr. Spratt) for his insight tonight, his expertise, the work 
product that he has been able to produce in the alternative budget 
resolution. Hopefully it is opening up a lot of eyes in regards to what 
the majority party is offering, the promises that they are making, and 
the lack of details that they are providing right now. I thank the 
gentleman for his work.
  Mr. Speaker, I yield to the gentleman from New Jersey (Mr. Holt).
  Mr. HOLT. Mr. Speaker, I thank the gentleman for yielding to me.
  Mr. Speaker, I would like to follow on some of the things that our 
distinguished ranking member has covered. In addition to some of the 
things that the gentleman from South Carolina (Mr. Spratt) has talked 
about, the Republican budget would result in cuts in the following 
programs: the Environmental Protection Agency; the Department of 
Agriculture, including field offices; the National Aeronautics and 
Space Administration; Renewable and Alternative Energy, which is 
critically important, we have been reminded recently; Army Corps of 
Engineers; Federal support for railroads; the Small Business 
Administration; Community Development Block Grants; the Department of 
Justice. We had talked earlier about the hit that the community-
oriented policing program would

[[Page 4736]]

take. Legal Services Corporation, and on and on.
  Something that troubles a lot of us a great deal is what would happen 
to environmental initiatives and land use initiatives. President Bush 
has made two environmental promises. One is to provide $900 million or 
what is called full funding for the Land and Water Conservation Fund. 
This is a fund for acquiring open space and parks and recreation and to 
eliminate $4.9 billion of maintenance backlog in the National Park 
Service. However, with his funding totals, he can only live up to these 
promises by consulting other vital environmental and natural resource 
programs.
  So the Republican budget does not add up. The Republican budget would 
shorten the solvency of Medicare as the gentleman from South Carolina 
(Mr. Spratt) and others have pointed out. The Republican budget would 
not live up to our obligations in education and would fall short of our 
obligations in providing health care for veterans.
  All of this is because, seen from a 10-year projection, it looks like 
there is so much money that it seems possible to offer a two point 
something trillion dollar tax cut. Well, it is not possible if we are 
going to do these other things, if we are going to meet our 
obligations, if we are going to be fiscally disciplined so that we can 
have consumer confidence and investor confidence and a sound economy.
  Mr. KIND. Mr. Speaker, I thank the gentleman from New Jersey (Mr. 
Holt) for joining us here this evening.

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