[Congressional Record (Bound Edition), Volume 148 (2002), Part 4]
[House]
[Pages 4690-4696]
[From the U.S. Government Publishing Office, www.gpo.gov]




                     RAISING THE FEDERAL DEBT LIMIT

  The SPEAKER pro tempore (Mr. Johnson of Illinois). Under the 
Speaker's announced policy of January 3, 2001, the gentleman from 
Indiana (Mr. Hill) is recognized for 60 minutes as the designee of the 
minority leader.
  Mr. HILL. Mr. Speaker, this evening the Blue Dog Coalition will once 
again be discussing the administration's request that Congress raise 
the Federal debt limit, and that is what we want to talk about this 
evening. The Blue Dog Coalition, for those who are listening, is a 
group of about 30 Democrats who believe it is important for the Federal 
Government to be fiscally responsible; in other words, not to spend 
more money than it takes in. I think the American people, with their 
families, try to practice their own home budgets in the same way, and 
the Blue Dog Democrats have adopted this principle. Balancing our 
budgets helps us keep interest rates lower so that businesses and 
families can borrow money at lower interest rates. It is the only right 
and common sense thing to do. The Blue Dogs tonight want to talk about 
some problems that are going on with our present Federal budget that I 
think the American people need to hear.
  This past August, Secretary of the Treasury O'Neill wrote the first 
of three letters to Congress requesting an increase in the debt limit. 
In these letters, he asked for a $750 billion increase. None of these 
letters, however, mentioned how long $750 billion would keep the 
Federal Government in the clear. More important, none of the letters 
recognized the irresponsibility inherent in asking Congress to hand the 
administration a three-quarters of a trillion dollar blank check 
without also requiring it to explain how we are going to get back to 
balanced budgets and a Social Security surplus that is off limits.
  Many of my Blue Dog colleagues have pointed out on past Tuesdays that 
the Federal debt limit is a lot like the credit limit on any credit 
card used by any American. The difference in this example is that the 
administration has hit its credit limit at $5.95 trillion dollars, but 
not indicated a willingness to examine its own fiscal policies. Few 
things in life are certain, but I feel confident in saying that the 
average family in southern Indiana, if faced with a maxed out credit 
card, would step back for a moment and figure out how he is going to 
pay it off.
  In early April, Secretary O'Neill sent another letter to Congress. 
This time he was writing to inform Senate and House leaders that he was 
tapping Federal Government retiree accounts, let me repeat that again, 
that he was tapping Federal Government retiree accounts in order to 
give the Federal Government the breathing room it needs to continue to 
meet its spending obligations.
  Now, Mr. Speaker, in the private world, if a business tried to raid 
its pension fund and was found guilty of doing that, they would go to 
jail, but here we are doing a similar thing with government retiree 
accounts in order to give the government the breathing room it needs to 
continue to meet its spending obligations.
  Six years ago, 225 members of the majority party voted to reprimand 
and prohibit then-Secretary of the Treasury, Robert Rubin, from taking 
these same actions. Now, one could argue that the old saying, what is 
good for the goose is good for the gander is in order here. Even if 
one-quarter of the 147 who remain in the House had been moved to action 
by Secretary O'Neill's recent maneuver, there is little doubt in my 
mind that together we would have already sat down to discuss some kind 
of compromise, a plan to, one, raise the debt limit enough to get the 
government through this fiscal year; and two, to get our budget back in 
balance without relying on Social Security surpluses.
  Historically, partisan squabbling has characterized the debate over 
whether to increase the Federal debt limit. There are many Blue Dogs, 
however, who would like to put an end to political gamesmanship and get 
down to business. We do not believe in political brinkmanship, 
especially when the ability of the United States Government to continue 
to meet its lawful financial obligations is on the line.
  No one among us is suggesting that the Federal Government be allowed 
to default on its debt. Secretary O'Neill's recent tapping of the 
Federal employee retirement funds, however, does not change the fact 
that we are bumping up against the debt ceiling. In fact, action is 
still needed and the Secretary now has one less accounting trick up his 
sleeve. As of this evening, the administration has put only one option 
on the table: raise the debt limit by three-quarters of a trillion 
dollars. That is it; that is the only option.
  In early 2001, it was projected that the debt limit would not need 
raising until 2008. Let me repeat that. In early 2001, last year, it 
was projected that the debt limit would not need raising until 2008. 
Even though the administration has requested an increase in the debt 
limit far sooner than we expected, there has been no talk about its 
evaluating its own budget policies, no talk about fashioning a plan to 
get back to a balanced budget without using the Social Security 
surpluses, and no talk that maybe, just maybe, we have a problem here 
that needs to be dealt with.
  The basic Blue Dog position has not changed. We still say that along 
with any action on the debt limit must come a recognition that we have 
a problem and a plan to correct that problem.
  The current budget situation is like the elephant living in the 
living room. He is there and he is larger than life, but very few, if 
any, of our colleagues on the other side of this aisle, they will not 
acknowledge him. Several of my Blue Dog colleagues and I have been, 
over the past couple of months, trying to alert everyone who will 
listen, to the elephant's presence. Rest assured that we will keep 
coming down here to the floor and pointing him out until everyone 
acknowledges that he exists and he is in the living room.
  This elephant, unfortunately, comes with his own set of numbers. In 
one year, the projected 10-year surplus decreased $4 trillion. The 
Federal Government will run a deficit, both this year and next year. 
Because of these deficits, the Federal Government will have to borrow 
money to pay its bills and, to pay these bills, the government will 
borrow almost $2 trillion more this decade than was expected when the 
CBO published its numbers in January of 2000.

                              {time}  2100

  All told, by the time the interest payments are added in, the 
national debt will be almost $3 trillion larger than earlier projected 
when the 10-year budget closes. And, to top it all off, Social Security 
surplus dollars will be used to help balance the budget through the end 
of the decade. This is our problem: The elephant is a fiscal house not 
in order.

[[Page 4691]]

  Last year, the Blue Dogs presented a plan that was prudent, fiscally 
responsible, and dealt with the future of both Social Security and 
Medicare. Our plan would have cut taxes and paid down the debt. 
Unfortunately, we were not successful in passing our plan.
  Now we are being asked to green-light an additional three-quarters of 
a trillion dollars in debt to help implement the plan that carried the 
day. That is too much to ask when we have not at all yet acknowledged 
the elephant in our midst.
  The conventional wisdom here in Washington is that the long-term 
increase in the debt limit will be attached to the supplemental 
appropriations request. This $27 billion supplemental spending request 
to fund the immediate needs in the war on terrorism is very obviously 
important. The war is important, and we need to fund it. From the 
beginning of this war campaign, we have been supportive of doing 
whatever it takes to make sure our fighting men and women can do their 
jobs. But pairing an increase in the debt limit to this important bill 
is not necessary. In fact, it could complicate consideration of the 
supplemental request.
  So as members of the Blue Dog Coalition, we are ready to sit down and 
work with the administration to come up with a plan to get our budget 
back in balance without using Social Security surpluses, and provide 
for a short-term increase in the debt limit. It is time for all of us, 
Democrats and Republicans, to roll up our sleeves and get the work 
done.
  Mr. Speaker, it is my pleasure to yield to the gentleman from the 
great State of Utah (Mr. Matheson), another member of the Blue Dog 
Coalition, a new member who has done an outstanding job on the 
Committee on the Budget.
  Mr. MATHESON. Mr. Speaker, I thank my colleague, the gentleman from 
Indiana, for yielding to me, and also I appreciate the very good 
description he has given of the circumstances we are finding ourselves 
in.
  This is not an easy circumstance. It is a challenge we face. The 
answers to this challenge are not simple.
  If they were simple, we probably would have already taken care of it, 
but we have not. Instead, we find ourselves in a circumstance where our 
country has a war on terrorism, our country faces increased 
requirements in terms of providing for homeland security, and those are 
issues that we as Blue Dog members support. We fully support that 
effort.
  We are also in a recession. We are hopefully coming out of that 
recession right now.
  But those factors, the increased resources going to the war on 
terrorism and to homeland security and our country's recession, have 
clearly put us into a circumstance where right now we are running a 
deficit this year.
  I do not like deficits and I do not like debt. I think most members 
of the Blue Dog Coalition, in fact, I think all members of the Blue Dog 
Coalition, would agree with me on that. But we recognize that there are 
times in the short term where it is appropriate, in extraordinary 
circumstances. Being at war, in a recession, it is appropriate to see a 
deficit.
  But just like in the business world, there are times when we have a 
bad year and maybe we put more money out than we pay in revenue; but in 
the business world, if we keep doing that year after year, we get in 
trouble.
  The problem here is we do not have a plan yet for how we are going to 
get out of the problem. For the administration to request an increase 
in the debt limit of $750 billion, I have to tell the Members, we throw 
a lot of numbers around in this town, but that is a lot of money. To 
suggest we raise the limit by that much without identifying any plan 
for how we are going to end this pattern of increased deficit spending, 
that is just not being responsible, and that is not really what my 
constituents elected me to do.
  I am not here to force this country to face some type of problem that 
they are not able to pay off their obligations. I would be more than 
happy to support a short-term limited increase in our debt limit to 
accommodate the current circumstances we are in, where the war on 
terrorism and the recession have clearly put us into a deficit 
situation. I will accept that for the short term. The Blue Dog 
Coalition is prepared to support a clean, limited increase in the debt 
ceiling to accommodate that purpose in the short term.
  But what we have to have happen along with that is a commitment to 
sit down and really take on this long-term problem. There are no easy 
solutions, as I said at the outset. It is going to require a lot of 
work, a lot of work by people on both sides of the aisle.
  That is why I have to suggest that I am really proud to be part of 
the Blue Dog Coalition, because I think the Blue Dogs really have a 
reputation for sitting down, rolling up their sleeves, and putting 
their plan out on the table. We do not try to use a lot of rhetoric, we 
try to talk about real numbers, and we welcome people to sit down with 
us and tell us where we are wrong, because we are open to a dialogue 
and we are open to suggestion. I wish more people in the House would 
take us up on that offer, because this problem we face right now is a 
serious one, and it is one that is of great concern.
  I look at this issue, quite frankly, as I look at a lot of issues, 
through the eyes of my 3-year-old son. I try to think about what life 
is going to be like for him. I think about the extra burden we are 
placing on his generation as we rack up more and more debt, and a 
bigger slice.
  Do Members know those pie charts we always see, where that slice of 
the pie that represents interest payments is just going to keep 
expanding? That is not a future I want to leave for my son. I do not 
think it is a future anybody in Congress would want to leave for the 
next generation, and that ought to be the focus that we have right now 
as we make those decisions.
  When we talk about this debt limit issue, I often like to refer to an 
experience I had before I came to Congress, in the private sector. I 
worked developing independent power plants, co-generation facilities. I 
developed a couple of facilities, and each cost $100 million. I had to 
go out and convince a bank to lend me money to build those power 
plants. That bank required me to have a story that I could tell them, a 
story about how, over the long run, they were going to get their money 
back.
  That makes sense. We can all relate to that. Whether we have been in 
the business world and had to borrow a business loan, or whether we 
have taken out a home mortgage or a car loan, we have to pass a test. 
We have to be able to have a story about how I have the capability to 
pay that back.
  We are being asked to raise this debt limit $750 billion, and we do 
not have that story. We are here as Members of Congress. We are the 
banker here. We have to represent the people's interest in making sure 
there is a story about how this is going to be paid back. Until we have 
that, it is just not responsible. It is not responsible to raise this 
by $750 billion.
  So I am so pleased that the Blue Dog Coalition has made this an 
issue. We keep coming here to the floor to raise this issue, because we 
are looking for people to work with. We are looking for an opportunity 
to sit down and roll up our sleeves.
  We recognize the magnitude of this problem and the complexity of this 
problem. There is no easy way out. We cannot do it alone, so we call on 
everybody on both sides of the aisle: Please, let us sit down, let us 
develop a long-term plan. Let us not be irresponsible and just give a 
blank check to Congress and to the administration to rack up another 
$750 billion of debt with no way out of that pattern.
  Mr. HILL. Mr. Speaker, I thank the gentleman from Utah for an 
outstanding presentation.
  One of the things that I heard the gentleman talking about was that 
we are not opposed to raising the debt ceiling. There is a war going 
on, and there are certain responsibilities that we have to think about. 
That is one of them.
  But one of the reasons why I like the Blue Dogs so much is they are a 
group of Democrats that are responsible. It is responsible to raise the 
debt ceiling to

[[Page 4692]]

fight the war, but it is also our responsibility to have some kind of a 
plan. Right now, there is no plan.
  Mr. Speaker, I have come to know the gentleman from Illinois (Mr. 
Phelps) very well for the last going on 4 years now, and he is a man 
with a distinguished record in the Congress of the United States, and 
one of the outstanding Blue Dogs who feels very strongly about this 
issue. I yield to the gentleman from Illinois (Mr. Phelps), a person 
that I came into Congress with back in 1998, and a person who serves on 
the Committee on Agriculture and the Committee on the Budget.
  Mr. PHELPS. Mr. Speaker, I thank the gentleman for yielding to me. I 
thank my friend, the gentleman from Indiana, for his leadership and his 
persistence on this issue.
  I would also like to thank my colleagues on the Blue Dog Coalition 
for giving me the opportunity once again to speak on this important 
issue.
  We, as the fiscal policy leaders of this great Nation, have a 
responsibility to look out for future generations. How can we say that 
we are doing our best to look out for our children when we are not 
keeping our commitment to save the Social Security and Medicare trust 
fund surpluses?
  We need to be fiscally responsible. My Blue Dog colleagues and I 
realize that. That is why we are spending these hours and these weeks 
trying to drive this point home.
  It should not be hard for others to understand that, as well. Fiscal 
responsibility does not mean raising the debt limit when we are already 
in debt by $5.9 trillion. Fiscal responsibility does not mean tapping 
into the Social Security trust fund to support other government 
programs every year for the next 10 years, for a total of $1.5 
trillion. Fiscal responsibility means working together as a team on 
both sides of the aisle to get the budget back in check without 
tampering with our Social Security surplus.
  I completely understand that our Nation is in a different place than 
we were 7 months ago, and we need to be effective and properly fight 
this war on terrorism. I believe we are. We stand behind this President 
and his Cabinet to do this.
  However, we should be able to come up with a solution that battles 
the war against terrorism without taking away from crucial resources 
here at home, resources that our citizens depend on and resources that 
our children are counting on us to protect. Social Security funds 
belong to the people that paid them out of their own hard-earned 
dollars, just like they have all the other taxes they have paid.
  I have heard much around here about giving back money to the 
taxpayers. These are their dollars they have entrusted us, their 
government leaders, to save for the purpose for which they were 
intended. But there are those around here who want the taxpayers to 
believe that there is enough money to return taxes from the same source 
twice, and then try to convince them that Social Security can remain 
solvent and do all this other good stuff we claim we are going to do. 
That just is not so.
  I want to pay down the public debt, balance the budget, give tax cuts 
that are affordable and reasonable, as I have voted, such as repealing 
the estate tax and the marriage tax penalty, those that are affordable, 
and that we can make Social Security then solvent.
  But all of this cannot be done if we travel down this path and this 
policy direction. We must be honest with the American people, the 
citizens of this Nation, and level with them from the standpoint of 
what is realistic.
  There is a big price to pay for strong leadership, and to be 
responsible. It is not easy, coming before the American people and 
telling them that those on both sides of the aisle emphasized the point 
just this time last year that the Social Security money and the 
Medicare trust fund were in a lockbox, locked away where we would not 
touch it. But now we are saying that we have enough money to do all 
this by projecting 10 years in the future the rosiest forecasts that 
reflect the best the economy ever has been in our history, without 
acknowledging what has happened to us after September 11, and without 
acknowledging the loss through the recession and the tax cuts that we 
did a year or so ago.
  Now we are talking that we can do all of this, keep it solvent, and 
still look the public in the face and say we are being honest about the 
budget. This is not so. It is my responsibility to tell the truth, 
because I did not take it lightly when I took that oath of office and 
said that I would deal with the facts as I see them and the truth as I 
know it.
  That is why I feel so strongly about this issue tonight, and want to 
communicate it in the best terms possible. It is a complex situation, 
but we must face it. This is your money, too. We said we should save it 
for the purpose for which you gave it, not say it is a tax return that 
we can ignore, building up the debt at the same time, and never 
communicate truthfully.
  Mr. HILL. Mr. Speaker, I thank the gentleman from Illinois for his 
remarks. He is exactly right, that this is people who paid their 
payroll taxes. It is their money, and we should be making sure that we 
preserve it for them in their retirement years, and not be using it for 
other things.

                              {time}  2115

  I would like to call on one of the deans of the Blue Dog Coalition, a 
man I have really come to respect very much. He is a leader on this 
issue, leader on the Committee on Ways and Means, a leader for the 
Congress of the United States. So I would like to yield some time to 
the gentleman from Tennessee (Mr. Tanner).
  Mr. TANNER. Mr. Speaker, I come tonight to talk about debt. That 
seems to be the topic of the day, and I have got to tell my colleagues, 
I watched the previous hour and I was thinking all of the time I was 
watching that these are the same folks that last year touted the tax 
plan as presented and now tonight say, oh, no, it is terrible because 
it was not permanent. We were criticized last year, but let me talk 
about what is happening in this country.
  My colleagues are seeing a group, a minority within a minority 
really, the Blue Dog Democrats, my colleagues are seeing a group emerge 
from all of the rhetoric here in this town, partisan rhetoric. They are 
seeing a group emerge that has some credibility on the debt. What was 
missing and what is missing and what will be missing on Thursday 
morning when we talk about making the tax cut bill that the House 
passed last year and the Senate passed last year permanent, what they 
do not say is that we have right now in, and the citizens of this 
country right now last year paid $360 billion in interest on a revenue 
total of $1.991 trillion. This comes out of a CBO publication of March 
of this year.
  That is an 18 percent mortgage on this country. There is no business 
in the world, in America or anywhere else that I know of, that can 
withstand an 18 percent mortgage on their inventory, on what they are 
doing in terms of their business. If we take away the interest on the 
debt that was paid as far as Social Security goes, we have a net total 
of $206 billion, which on nonSocial Security revenue, amounts to 16 
percent. Said another way, this country right today has a 16 percent 
mortgage on it that we all have to pay.
  Now, if we want to ensure and people want us to ensure that not only 
those that are my age but my children and my grandchildren will be 
overtaxed all of their lives and all of the foreseeable future, then 
keep us on the road of the Republican policies that have been 
enunciated here and will be enunciated here Thursday, and that 
basically is we are going to spend more because we are in a war, which 
we should. We are going to do a tax break for those of us in my 
generation passing on to those who are in uniform tonight in 
Afghanistan, fighting the war and their children. We are going to 
borrow money so that we can have a tax break to spend more money, 
knowing we have an 18 percent or 16 percent, whichever figure we want 
to use, mortgage on this country.
  If people want to make sure that we are going to be overtaxed as an 
American public for the rest of our lives,

[[Page 4693]]

then continue down the Republican policies. Because what it means is it 
means cut taxes now, spend more and borrow, and borrowing means 
interest and that interest has got to be paid before we do anything, 
before we have a missile system, before we have a submarine, before we 
have an aircraft carrier, before we have an interstate highway. Before 
we have anything, we have got to pay the interest.
  If my colleagues want to make sure that we are going to overtax 
ourselves and those who follow us for the rest of their lives and ours, 
then just follow down this road and borrow more money and borrow more 
money, and we will make sure, we will make very sure that we are 
overtaxed and they are overtaxed as follows.
  This is something that they do not say. Nikita Khrushchev once said 
that an American politician is a fellow that likes to promise to build 
a dam or a bridge where there is no river. This is not easy stuff, to 
stand here and say to the American public we cannot do what some of 
these people around here want to tell them that we can do.
  We cannot spend the money that is necessary to win and fight, fight 
and win the war on terrorism. We cannot cut taxes for everybody in this 
land right now and spend that money without borrowing money to do it, 
and when we do, we are making a mistake that I think generations will 
pay for because that interest keeps going, whether someone is on 
vacation, whether someone is sleeping, whatever they are doing they 
have got to pay the interest.
  People know that and so I am proud that the Blue Dogs took this hour 
to talk about fiscal responsibility. There has not been in my mind a 
sitting down and talking about prioritizing what we have to do. We have 
got to win the war on terrorism. Whatever it takes, we have got to do 
it. We are willing to do that, but by gosh, to cut taxes on somebody 
making $50 million a year at the same time my colleagues are trying to 
ask everybody else to sacrifice is simply not right. It is not right 
generationally.
  We do not want to leave this country to our children with rivers and 
streams that fish cannot live in and kids cannot swim in. We do not 
want that. We did not inherit that and we sure do not want to leave it. 
We do not want to leave a country where kids have to wear a hospital 
mask to ride their bicycle because the air is so polluted that they 
cannot breathe unless they have a mask on. We did not inherit that, and 
we do not want to leave that. We did not inherit a country that was 
broke, and I do not want to leave my kids a country that is broke.
  If we continue down the path we are going, where we are spending 
more, cutting revenue, and borrowing more so we pay more interest, that 
is exactly the formula that we have been asked to pass, and I just 
think it is wrong. I think it is wrong generationally, not only to 
people, our contemporaries, but it is wrong to our children, and I hope 
that we can, the Blue Dogs and others who are here with us tonight, can 
impress on the American people that it is not easy to be against tax 
cuts.
  It is not easy to be against more spending, but there has to be 
priorities given to what we need, and we are willing to cut and cut 
spending any way we can to make sure that we are doing the things only 
that are necessary, but we have got to have the revenue to pay for what 
we want. If we are not willing to do that, then I think we are 
generationally immoral with regard to what we are giving to our 
children.
  I appreciate the gentleman taking this time. I do not know if anybody 
is listening to what we are saying or not, but when we have got an 18 
or 16 percent mortgage on this country and we do not make any attempt 
to get back in the black, I think what we are doing is passing the 
buck, and I think that is wrong.
  Mr. HILL. Mr. Speaker, reclaiming my time, would the gentleman agree 
that it was just a couple of years ago when we began to reverse this 
trend of debt, the United States Government incurring debt, we were 
actually running a surplus, and would he agree within a very short 
period of time, say within the last 12 months, we have completely 
reversed that policy of surplus budgets into deficit spending once 
again?
  Mr. TANNER. Mr. Speaker, I would agree, but whether I agree or not, I 
think the facts speak for themselves. Last year at that time we were 
told there was money as far as the eye could see. We had a $5 trillion 
surplus. That did not come true.
  The budget that the President submitted shows red ink for the next 10 
years. Once this interest figure gets up 20, 25 percent, I have never 
seen a country that was proud, free and broke. There is not one on the 
face of the earth, and we are going broke under these policies, and 
people are going to begin to realize that I think that, unlike maybe 
public perception now, at least when it comes to the Blue Dog 
Coalition, there are some Democrats around here that are more fiscally 
and financially responsible than all the Republicans who want to tell 
my colleagues, as they have, we are going to cut taxes, increase 
spending, but they do not say more borrowing, and more borrowing means 
more interest, and more interest means more taxes from now on, forever.
  Mr. HILL. Mr. Speaker, I thank the gentleman for his leadership on 
this issue. The gentleman from Tennessee can say it just about as good 
as anybody in the Congress can say it, and he is exactly right, and his 
leadership on this issue is very much appreciated.
  I would like to call on a freshman Member of Congress who has 
asserted himself as a rising star in the Congress of the United States, 
the gentleman from California, (Mr. Schiff).
  Mr. SCHIFF. Mr. Speaker, I thank the gentleman from Indiana for 
yielding and for his leadership and the bipartisan ethic he has brought 
to this House, which has certainly been a model for this freshman.
  Once again, I join my Blue Dog colleagues on the House floor tonight 
to bring attention to an issue that has long-term implications for our 
Nation's future. The administration has come to Congress asking us to 
raise the debt limit by $750 billion. This request comes to us a full 7 
years earlier than was predicted when the budget was submitted just 
last year.
  The request to raise the debt limit presents us with an ideal 
opportunity to re-examine our long-term budget priorities and 
particularly our commitment to protecting the Social Security surplus.
  Perhaps second only to the hanging chad, the enduring political buzz 
word of the 2000 election, was ``lock box.'' It seems almost quaint now 
to think back about lock box, but this Congress and the President 
promised the American people that the Social Security trust fund 
surplus would be placed in an iron clad box and used solely to fund the 
retirement of the baby boom generation. Do my colleagues remember that? 
Democrats and Republicans all agreed on this. The inviolable lock box.
  Here we are now with a budget that promises to break that lock box 
wide open regardless of the long-term fiscal consequences.
  Social Security faces a serious financial crisis, and this budget 
would do away with the lock box entirely and allow the surplus to be 
raided to pay for tax cuts and additional Federal spending. The primary 
source of the Social Security revenue is the payroll tax paid by 
millions of American workers and their employers.
  According to the 2001 Social Security trustee's report, Social 
Security outlays will exceed payroll tax revenues in less than 14 
years. By 2025 Social Security will face an annual cash shortfall of 
$400 billion. An annual cash shortfall of $400 billion. By 2038, the 
last year the trust funds are technically solvent, the annual shortfall 
will be over a trillion dollars.
  Despite these ominous numbers, the administration's budget, according 
to the Office of Management and Budget, will consume the entire trust 
fund surplus in just a few years. This debate is not about whether 
Social Security needs reform. It does. This debate is not about whether 
preserving the trust fund surplus will save Social Security in the long 
term. It will not.
  This debate is about common sense and fiscal responsibility. It is 
common

[[Page 4694]]

sense that we should not in any way consider tampering with the trust 
fund before Congress agrees to and passes Social Security reform 
legislation. Spending the surplus will leave our children holding the 
bag. They will have to pay for the unfunded obligations that build up 
in the Social Security trust fund if we spend the surplus, and to pay 
for these obligations, the Treasury will step in, pay the entitlement, 
and to come up with that cash, Congress will have to cut spending, 
raise taxes, or borrow even more as if the trust funds had never 
existed, and our children will pay the consequences. They will have to 
deal with our lack of fiscal responsibility.
  This Congress cannot afford to take such a risk in light of the 
fiscal challenges that we face in the next 10 years. Social Security is 
the most successful government assistance program ever. Millions of 
senior citizens rely on it to survive. Millions of working Americans 
are currently paying Social Security taxes, expecting their money to be 
used for its intended purpose, and we understand that we are now faced 
with the challenges of fighting a war and bringing our country out of 
this economic slowdown.
  We have accepted this reality and we are willing to work together to 
develop fiscal policies that reflect our wartime needs, protect the 
Social Security trust fund and set our country back on the path toward 
fiscal responsibility.

                              {time}  2130

  Mr. Speaker, while we examine the need to increase the national debt, 
we must tread carefully and remain constantly aware of the burden we 
are placing on future generations because this debate is about more 
than our current economic situation. It is about what we will pass on 
to our children and to their children. We must continue to work in a 
bipartisan way to return to a balanced budget and fiscal discipline 
without using the Social Security surplus. This is a promise we make, 
and a promise we must keep.
  Mr. HILL. Mr. Speaker, I thank the gentleman from California (Mr. 
Schiff) for his outstanding remarks and his leadership.
  The gentleman was talking about Social Security and how important it 
is and how we need to preserve it for our senior citizens and to 
protect it. I was in Columbus, Indiana, in a retirement home about a 
month ago; and I was talking to some retirees in that home. One of the 
senior citizens spoke up to me and asked a question, Where does Social 
Security come from? My reply to her, It comes from payroll taxes. And 
she said, Who pays the payroll taxes? And I said, People who work and 
employers.
  She said, What gives the right for people in Congress to steal our 
money then if we pay the taxes? She is exactly right. If we are 
spending Social Security surpluses for things other than Social 
Security, we are in effect stealing that money. Strong words on her 
part that makes some sense.
  At that same meeting was a good friend of mine who is going to be the 
next Speaker, the gentleman from Maryland (Mr. Hoyer), who is the 
ranking member of the Committee on House Administration, and the other 
night his basketball team from Maryland beat my basketball team from 
Indiana University. And if there was going to be any team that beat the 
Hoosiers, I would just as soon it be the team of the gentleman from 
Maryland.
  Mr. HOYER. Mr. Speaker, I thank the gentleman for yielding and for 
being such a great sport and a representative of such a great team with 
such a great coach with Mike Davis, their coach handling himself so 
well. We are proud of the job he did.
  Mr. Speaker, 1 year ago President Bush and congressional Republicans 
promised us that we could have it all. They said we could afford the 
largest tax cut in a generation and still be able to invest in domestic 
priorities, strengthen Social Security and Medicare, and pay off our 
publicly held debt. When we Democrats questioned whether we could 
afford the President's $1.7 trillion tax cut, and that is absent the 
additional interest we have to pay, which the gentleman from Tennessee 
(Mr. Tanner) talked about, and still pay down the debt, our Republican 
colleagues responded there was a danger in paying off the publicly held 
debt too quickly.
  Well, worry no more because we are not in any hurry to pay off any 
debt. In fact, we are in a hurry to incur a lot more debt. The OMB now 
projects that our national debt, which includes publicly held and 
intergovernmental debt, will approach $7.8 trillion by the end of 2007. 
That is $275 billion more debt than was projected at the beginning of 
last year. Just this month after congressional Republicans again 
rebuffed the request of the Secretary of Treasury, Mr. O'Neill, to 
increase the statutory debt limit of $5.59 trillion by $750 million, 
the administration was forced to borrow Federal employee retirement 
funds to ensure that the government meets its obligations. In other 
words, Federal employees' pension dollars are now funding government. 
The gentleman from Indiana (Mr. Hill) spoke of that earlier in his 
remarks.
  Do Members remember the last time that happened? It was back in 1995, 
and the GOP was blocking an increase in the debt ceiling in an attempt 
to get President Clinton to sign their budget. Treasury Secretary Rubin 
used the same short-term device that Secretary O'Neill is using to 
avoid a default. How did congressional Republicans respond? They 
reprimanded him. They threatened to impeach the Secretary of Treasury, 
and former Speaker Gingrich derided the tactic as ``looting.'' The 
gentleman referred to stealing Social Security funds. Mr. Gingrich, the 
Speaker of the House, said that what Bob Rubin was doing so we would 
not default in the payment of the monies that the richest Nation on the 
face of the earth owed, that he was prepared to say that he was looting 
the Treasury.
  I have not heard one Republican come to this floor and say that 
Secretary Paul O'Neill is looting the Treasury. Now, I represent 58,000 
Federal employees. I do not think we ought to be doing this policy; but 
frankly, we have an obligation to pay it back, and I think we are going 
to do that. But the fact of the matter is if Secretary O'Neill did not 
do it, this government would default on its debt. If that happened, the 
finances of the world would be put at risk.
  Republicans, when Secretary O'Neill did it, neither criticized the 
administration for doing precisely the same thing that Secretary Rubin 
had done, and which sent them in orbit 7 years ago, nor accede to an 
increase in the debt ceiling. In other words, they do not want to make 
sure that we do not default, and they do not want to raise the debt. 
That is the definition of irresponsibility. That is the definition of 
pretending you are doing something when you are doing just the 
opposite.
  My good friend, the gentleman from Tennessee (Mr. Tanner) said it 
exactly right. If we defaulted, interest rates would skyrocket. Average 
people, no matter how deeply their taxes were cut, could not afford 
their mortgage payment, particularly if they were an ARM, an adjustable 
mortgage. They could not afford to buy consumer goods with interest 
because interest rates would skyrocket. That would be an irresponsible 
policy, but it is the policy that we are pursuing today.
  In what can only be described as a perverse twist, House Republicans 
intend to bring legislation to the floor in 2 days that will make last 
year's tax cut permanent and drive us even deeper into the fiscal 
ditch.
  Mr. Speaker, I am not a Blue Dog; but I support much of what the Blue 
Dogs support, particularly as it relates to fiscal policy. Why? Because 
it is fundamental that if we do not manage our finances responsibly, we 
will not manage anything else responsibly. In just 15 months, our 
Nation has experienced the worst fiscal reversal in the history of the 
world; $5 trillion in projected surpluses have evaporated. Think of 
that. President Bush stood at this podium 12 months ago in February of 
2001 and predicted, he said he was assured we were going to have a $5.6 
trillion surplus over the next 10 years. We said you better be careful. 
That is a long projection to make. You ought not to mortgage the farm 
based on what you think your income is going to be 6, 7, 8 years from 
now.

[[Page 4695]]

  A month ago President Bush came to that same podium, presented a 
budget, and lo and behold the surplus he now projects over that same 10 
years is $1.6 trillion. That is $4 trillion less. What he does not 
factor into that is because we have less surplus and are going into 
debt, we are going to have an additional $1 trillion in interest. We 
heard the gentleman from Tennessee (Mr. Tanner) talking about that, 
which means we have lost $5 trillion in 12 months.
  I wish Ross Perot would start having infomercials on that issue. It 
is critical. We cannot operate this great Nation with our 
responsibilities to our own citizens, and in the international 
community, operating as fiscally irresponsibly as that. Five trillion 
dollars. Our debt is climbing again, and according to the Congressional 
Budget Office, our on-budget accounts will be in deficit every year for 
the next 10 years, producing a total on-budget deficit of nearly $2 
trillion.
  Now, the gentleman from Indiana (Mr. Hill) talked about our policies 
in the 1990s. They are instructive because in 1992 we had a $292 
billion annual operating deficit. We could not, nor should we have 
sustained that. So we came in 1993, and we adopted a program. It cut 
spending deeply and it raised taxes. Some people would say that is an 
awful thing to do. What does raising taxes mean? I do not mean raising 
them in terms of increasing them. It means this generation is committed 
to paying for what it buys.
  My position is if we do not want to pay for it, we ought not to buy 
it. I do not mean that we ought not to buy an aircraft carrier that we 
can amortize over 40 years. It is like buying a house, you mortgage it 
and pay it over time. We ought not to be paying for salaries that are 
used this year with borrowed money. That is how New York went bankrupt 
and we had to bail them out. We need to be responsible.
  There is an extraordinary American sitting on the floor with us. He 
is the gentleman from Nebraska (Mr. Osborne), one of the greatest 
football coaches in the history of this country. He taught his young 
people fundamentals. He did not teach them to make some hail Mary pass, 
he hoped that would happen from time to time. What he taught them was 
how to block, how to tackle, how to run, how to watch what the other 
fellow was doing, how to learn your plays. He taught the fundamentals. 
He was convinced if those young people knew the fundamentals, they 
would win games. Because, as Gary Williams knows, as Coach Smith knows, 
if you teach young people the fundamentals, they will win games because 
they will do it right. And sometimes, yes, they will do something 
spectacular.
  But a nation, a nation needs to pay attention to its fundamentals as 
well. Do any of my colleagues in this Chamber remember what the 
majority leader said last July? I talked about the President 12 months 
ago. Last July the gentleman from Texas (Mr. Armey), majority leader of 
this House: ``We must understand that it is inviolate to intrude 
against either Social Security or Medicare; and if that means 
foregoing, or as it were paying for tax cuts, then we will do that,'' 
said the gentleman from Texas (Mr. Armey).
  We are now some 9 months later. On Thursday, we are not going to do 
that. In our budget that we passed, not with my vote, just a few weeks 
ago, we did not do that. We preached fundamentals, but we are not 
playing fundamentals. And the losers will not be, frankly, any of us 
who sit on this floor. It will be our children and grandchildren, and 
it will be the fiscal integrity of this great Nation.
  That promise turned out to be as empty as the GOP's lockbox stunt 
last year. The rally is that the Republican tax cut is the single 
largest factor in erasing our surpluses. Do we need to pay for the war 
on terrorism? Absolutely. Is it going to cost us more money than we 
expected? Yes. Should we follow that policy? Of course we should. We 
are in lock step with our President in confronting those who would 
undermine our security and safety in this land, and, very frankly, in 
other lands as well.
  However, the Social Security and Medicare surpluses which were 
critical, as the gentleman from Texas (Mr. Armey) said, and would not 
be touched, are in fact going to be used 100 percent.
  I have some other things to say about this policy, but I want to 
close with this. David Stockman in 1981 became director of the Office 
of Management and Budget.

                              {time}  2145

  He came in with a roar, like March, I suppose, and he was going to 
see that this budget was balanced. In fact, Ronald Reagan, when he 
signed the Reagan program in 1981 said the budget is going to be 
balanced by October of 1983. Or perhaps it was 1984.
  In any event, it did not happen. Mr. Stockman, of course, was the 
director of OMB the same year I was elected to Congress. His mandate, 
sell President Reagan's supply side economic program. President Reagan 
assured us, as I said, that by fiscal 1984 we were going to balance the 
budget. We did not. Instead of producing increased revenue, the Reagan 
tax program threw us into fiscal freefall. The budget deficit, just 
under $79 billion in 1981, exploded until, as I said before, peaking at 
$290 billion in 1992. As David Stockman himself later admitted, and I 
quote, David Stockman, OMB director, ``I knew that we were on the 
precipice of triple digit deficits, a national debt in the trillions 
and destructive and profound dislocations throughout the American 
economy.''
  David Stockman, in his book, looked back on his service with lament 
because he knew where we were going. My friends, it is clear where we 
are going if we continue to pursue these policies. What the Blue Dogs 
are saying is that we need to work together, not Republicans and 
Democrats, but 435 of us, elected by our people, to responsibly manage 
their country, their dollars, their hard-earned wages. We need to 
commit ourselves to doing that. I commend the Blue Dogs for their 
leadership on this most critical fundamental responsibility of this 
Congress.
  Mr. HILL. I thank the gentleman from Maryland for that strong 
presentation. The gentleman has been in the Congress for quite some 
time and has an historical appreciation for the events as they have 
unfolded on this particular issue. His presentation was an exposure of 
the truth. That is what we need more of in this institution. I just 
cannot say enough about that strong presentation. I am glad that though 
he is not a Blue Dog Democrat, he has the same feelings that we do 
about this issue and I appreciate his comments.
  Another Member who is not a Blue Dog Democrat is the gentleman from 
Wisconsin (Mr. Kind). He has asked to have a few minutes to share with 
us about this very important issue. I yield to the gentleman from 
Wisconsin (Mr. Kind).
  Mr. KIND. I thank the gentleman from Indiana (Mr. Hill) for not only 
grabbing this hour for an important conversation and debate that we are 
going to be having later this week but for the leadership that he has 
particularly shown on fiscal responsibility, maintaining fiscal 
discipline. He has been very active in both the Blue Dog and also the 
coalition of which I am a member, the New Democratic Coalition. We have 
a lot of overlap in the membership between our two groups, and it is 
because we are basically fiscal soulmates.
  When it comes to the issues affecting the public purse, the Federal 
budget, both of our groups, the New Dems and the Blue Dogs, believe 
very strongly in maintaining fiscal discipline, keeping our eye on 
taxpayer dollars, trying to promote policies that will best position 
this Nation to deal with the challenges of the future, which to me 
seems the looming budget debt and the implosion that is about to occur 
starting next decade. Of course I am referring to the 77 million 
Americans who are all marching virtually simultaneously to their 
retirement, the so-called baby boom generation, who will start entering 
into the Social Security and Medicare trust funds.
  Yet this week we are going to have a very important policy debate in 
regards to whether or not this Nation

[[Page 4696]]

will have the resources to deal with the greatest fiscal challenge we 
face, that is, this aging population and the burden it will place on 
the Social Security program, the burden it will place with rising 
health care costs and how do we maintain some common sense and fiscal 
discipline to deal with that.
  I am very concerned. It is almost like deja vu all over again, 
pursuing the policies of the 1980s where we had large tax cuts being 
proposed and enacted which left us in annual structural deficits year 
after year, adding to the $5.7 trillion national debt that we now have 
rather than maintaining the fiscal discipline which was needed. For me, 
and I believe for a lot of people in this Congress, one of the keys to 
future economic growth and prosperity, and it is something we hear 
constantly from Chairman Greenspan when he is testifying, is keep your 
eyes on the effect fiscal policy has on long-term interest rates. They 
have consistently testified, and the history of fiscal policy shows, 
that when you start racking up deficits again, adding to the national 
debt rather than subtracting from it, having the public sector 
squeezing the private sector for the limited resources in order to 
finance ongoing government operations, it has an adverse effect on the 
bond market and it leads to long-term interest rates going up rather 
than coming down, which is a hidden tax then on all Americans, whether 
they are wealthy or middle-income or low-income Americans, because of 
the additional expense it will take for them to borrow money, whether 
it is for home payments or car or credit card payments or to invest 
capital in businesses. It is the long-term interest rates we need to 
keep an eye on.
  The best thing we can do as an institution here is to maintain sound 
fiscal policy, reduce the national debt which will help reduce those 
long-term interest rates and really set us on the course for long-term 
economic prosperity. This is a serious issue. One of the concerns I 
have is that the majority party in the House and the party at the White 
House right now are pursuing policies that are not enabling our country 
to best position ourselves for the challenges of the future. That is 
what has to change.
  I think people back home are beginning to realize that the tax cut 
that was enacted last year is being financed now through the collection 
of payroll taxes, FICA taxes, additional moneys that are supposed to be 
going in and guarded in the Social Security and Medicare trust funds, 
but which are now being raided in order to finance these tax cuts. If 
anyone last year would have been told that this would be the reality, 
that we would be passing tax cuts for some Americans and paying for it 
through the collection of payroll taxes that are supposed to be going 
into these trust funds, they would have thought it was crazy economic 
policy to pursue. But given the economic slowdown, the change of events 
of last September, that is, in fact, the situation.
  I think it is time for groups like the Blue Dog Coalition and the New 
Democratic Coalition to stand up and start making an issue of this. I 
commend the gentleman from Indiana (Mr. Hill) for his leadership and 
for the time he was able to get this evening to talk about this very 
important issue.
  Mr. HILL. I thank the gentleman from Wisconsin for joining us here 
this evening.

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