[Congressional Record (Bound Edition), Volume 149 (2003), Part 15]
[Extensions of Remarks]
[Pages 21260-21261]
[From the U.S. Government Publishing Office, www.gpo.gov]




          CBO'S NEW PROJECTIONS ON THE BUDGET AND THE ECONOMY

                                 ______
                                 

                            HON. NICK SMITH

                              of michigan

                    in the house of representatives

                      Wednesday, September 3, 2003

  Mr. SMITH of Michigan. Mr. Speaker, last week the Congressional 
Budget Office released their new projections on the budget and the 
economy. I commend the reading to my colleagues. Projected deficits, 
overspending, for 2003 is $401 billion and if you include what Congress 
is borrowing from the Social Security Trust Fund it amounts to $562 
billion. For next year (2004) the on-budget deficit is $644 billion. 
Deficit spending means future tax increases.

[[Page 21261]]

  I submit for the Record, Mr. Speaker, an article, in the Investor's 
Business Daily, by Stephen Moore, President of the Club for Growth.

        Washington's Biggest Deficit Is the Shortfall of Courage

                           (By Stephen Moore)

       The new estimates by the federal budget office that the 
     budget deficit this year will reach $400 billion and next 
     year will reach $500 billion should be a major source of 
     embarrassment to the Republicans in Washington--assuming they 
     have any fiscal conscience left to embarrass.
       President Bush and Congress have simply refused to make 
     fiscal choices--they have cut taxes, increased the military 
     budget, the foreign aid budget and increased social spending 
     all at the same time. Now we are swimming in red ink.
       Next month they are set to enact a $460 billion Medicare 
     bill to provide drug benefits to the wealthiest age group in 
     America. This will be the biggest new entitlement program in 
     25 years.
       The tide of red ink will rise even higher, with economists 
     at the National Center for Policy Analysis suggesting that 
     the debt from this program could exceed $3 trillion over the 
     next 50 years.


                           Should Be Ashamed

       The new Congressional Budget Office numbers gloomily inform 
     us that in Bush's four years in office, the budget will be up 
     by $500 billion. That's a bigger increase than the amount the 
     budget grew in Bill Clinton's eight years in office. It's 
     hard to imagine that the budget would grow that fast even if 
     Carol Moseley Braun had been elected to the White House.
       There's also no hint that the GOP has been chastened by the 
     enormous deficits it is responsible for or the meteoric rise 
     in spending.
       Example: Rep. Mark Kennedy of Minnesota is now fighting a 
     lonely battle to try to trim the cost of the upcoming highway 
     bill that is slated to have a cost of about 50% more than the 
     last bloated highway bill.
       I have said it before and will say it again: This is fiscal 
     child abuse. Passing on costs to future generations for 
     today's wasteful government spending is an assault on the 
     financial well-being of our children. Conservatives can no 
     longer apologize for the Republicans' miserable financial 
     mismanagement. They should be infuriated by it.
       I believe that Bush has been a star when it comes to 
     enacting pro-growth tax changes. The tax code has taken a 
     pro-investment, pro-worker direction through cuts in the 
     death tax, the capital gains tax, the dividend tax and the 
     income tax rates.
       Bravo. Bush is absolutely right that the first step to 
     getting the deficit under control is to get back on high 
     economic growth trajectory. And tax rate cuts will certainly 
     help achieve that faster growth.
       Don't believe a word of the Democratic whine from 
     presidential wannabes like Dick Gephardt and Howard Dean that 
     if only we hadn't cut taxes, the budget would be under 
     control. That's a fantasy.
       Without the tax cuts, the budget would still be in huge 
     deficit and the budget would have probably grown even more 
     recklessly.


                              Ignored Deal

       A fascinating new study was just released by the House 
     Republican Study Committee under the able leadership of Rep. 
     Sue Myrick of North Carolina. The RSC shows that if Congress 
     had simply lived under the spending limits set forth in the 
     1997 budget deal agreed to by Clinton and the Republicans in 
     Congress, the budget would be balanced today--even with 
     Bush's tax cuts.
       Meanwhile, my own budget analysis shows that every Congress 
     since 1994 has accelerated expenditures at a faster pace. 
     Conclusion: It's the spending, stupid!
       There's a spirited debate in Washington about how the 
     budget deficit impacts our economy. Some say deficits cause 
     inflation and higher interest rates. Maybe so, but there's 
     little evidence of that effect.
       Some say interest payments on debt crowd out other 
     spending--which may be true, but if it is, that's a good 
     thing, because it constrains the congressional spending 
     appetite.
       My belief is that budget deficits are primarily harmful 
     because they make it too easy for politicians to spend money 
     now and then pass the bill to taxpayers later. And many of 
     those future taxpayers are too young to vote now, so we have 
     an unrivaled case of taxation without representation.


                             No free Lunch

       The ultimate blame for the enormous mushrooming of deficit 
     spending ultimately rests with the White House. The buck 
     simply doesn't stop at this president's desk. Bush wants more 
     guns and more butter, and wants to pretend that no one will 
     ever have to pay for the profligacy.
       But Milton Friedman taught us years ago that ``there ain't 
     no such thing as a free lunch.'' Government spending comes 
     out of somebody's hide--eventually.
       What' reprehensible is that the Republicans now say in 
     unison: Let the 2-year-olds pay for it. And someday they 
     will. This is the coward's solution. A balanced budget 
     requirement with an expenditure limitation is probably 
     necessary because the biggest deficit in Washington these 
     days is the deficit of courage.

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