[Congressional Record (Bound Edition), Volume 149 (2003), Part 4]
[House]
[Pages 4476-4477]
[From the U.S. Government Publishing Office, www.gpo.gov]




               FOUR KEYS TO CONTEXTUALIZE THE BUSH BUDGET

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Washington (Mr. Baird) is recognized for 5 minutes.

[[Page 4477]]


  Mr. BAIRD. Mr. Speaker, it is time for this body and for our 
President to level with the people of the United States of America. 
Just a couple of years ago when people ran for office, we were all 
talking about the Social Security and Medicare lockbox. We need to be 
honest with the American people and say that that lockbox has been 
opened up. It has been turned upside down and every penny's been shaken 
out of it.
  When we hear talk these days about the budget deficits, those 
deficits are masked and artificially lowered because we are 
unfortunately, once again, borrowing from Social Security and Medicare.
  My colleagues will hear various talks about what the deficit is. 
Often times they will hear that the unified deficit is, let us say, for 
example, $304 billion for next year or $307 billion for the following 
year. The only way we arrive at those figures, which are admittedly 
very substantial, is by borrowing from Social Security and Medicare.
  Were it not for that borrowing, what would the real deficits be? The 
real deficits for next year or for this year would be $468 billion. For 
next year, they would be $482 billion; and that is without budgeting 
for the cost of occupation of Iraq, nor is it for budgeting for the 
cost of fixing the alternative minimum tax, which this body should do.
  We need to be honest. We cannot run for office 1 year and say we are 
going to establish a lockbox and the next year pretend that we have not 
opened it as we have.
  Our friends on the other side are going to try to say that it is not 
so much deficits that matter. These, by the way, are the folks who have 
previously talked about a balanced budget amendment in which I think we 
need to balance the budget. They will say it is not deficits. It is 
deficits as a percentage of GDP.
  The trouble with that is our own Treasury Secretary Mr. John Snow in 
1995 said, and here is the quote, that a credible sustained reduction 
in Federal deficits will bring about major economic benefits. He was 
right, and he suggested that if the government spends less and borrows 
less from investors to cover the climbing deficits, more capital will 
be available for investment in the private sector of the economy. 
Inflationary pressure would ease and interest rates would respond by 
declining as much as 2 percentage points.
  Today, Mr. Snow and many of his colleagues are saying it is a matter 
of deficits as a percentage of GDP; but when he said this in 1995, the 
budget deficits at that time were about where they are now as a 
percentage of GDP. In other words, deficits mattered in 1995. Deficits 
matter in the year 2003, and deficits are going to matter in the year 
2013 when our kids have to pay off the debt we are creating today, and 
those kids are going to have to pay the debt tax.
  We have heard a lot about the debt tax. The death tax is the tax on 
estates that are passed on to people, and it affects about two percent 
of the population. The debt tax, D-E-B-T, debt tax affects every member 
of this population from the day they are born. It is over $4,000 a year 
for an average family of four and it is rising.
  We need to return to fiscal responsibility. That was a concept once 
embraced by conservatives. I still believe it is a conservative 
concept. Unfortunately, it is not a concept that is shared by many 
erstwhile conservatives.
  So what is the take-home message? The take-home message is if we are 
going to put Social Security and Medicare in a lockbox, we should do so 
and we should be honest with the American people.
  Let us look again at what the deficit really is. The projection for 
2004 is $482 billion.
  One final note. People will say we could solve the problem of 
deficits if only the Democrats or the Congress would hold down 
spending. There is some truth to that, but the combined nondefense 
discretionary spending projection for 2004 is $429 billion. The deficit 
is $482 billion. If the nondefense discretionary spending is only $429 
billion, this means we could eliminate every nondefense discretionary 
program, and that includes Head Start, environmental protection, 
agriculture, transportation, many veterans benefits, the National 
Institutes of Health, not hold the line on inflation, eliminate these 
programs and countless others entirely, eliminate law enforcement from 
the Federal Government to support, et cetera.
  We would still then have a deficit. This deficit is not caused solely 
by any means by spending. It is caused to a significant degree by the 
exorbitant tax cuts that have been passed and the increasing tax cuts 
that are proposed; and if we are going to pass those, we need to at 
least level with the American people and tell them what the true costs 
are today and the true costs are in the future.

               Four Keys to Contextualize the Bush Budget

       The ``On-Budget'' Deficit projections for the next five 
     years are listed below along with the corresponding figures 
     for the Projected Non-defense Discretionary Outlays.

----------------------------------------------------------------------------------------------------------------
                                                                       2003     2004     2005     2006     2007
----------------------------------------------------------------------------------------------------------------
On-budget deficit..................................................     -468     -482     -407     -412     -406
Non-defense discretionary spending.................................      416      429      440      447      455
Net if all non-defense outlays were eliminated.....................      -52      -53      +33      +35      +49
----------------------------------------------------------------------------------------------------------------
Numbers in $billions, not including any projections for costs of Iraq war and occupation or adjustments to fix
  the AMT.
Source: Table S-2, page 312 OMB Budget.

                               Key Points

       1. Democrats should only refer to ``On-Budget Deficits'' 
     and not let Republicans mask the true deficit by borrowing 
     from Social Security and Medicare. The President, most 
     Republicans in Congress, and many members of our own caucus 
     were elected based on the ``lockbox'' pledge. If those 
     pledges were honored, the deficits, as shown above, are far 
     higher than the Administration or Republican Members of 
     Congress acknowledge.
       2. When Republicans say we could achieve balance if only 
     Democrats would limit spending, they are lying. As the chart 
     shows, even if all non-defense spending were completely 
     eliminated, not simply reduced slightly, we would still face 
     on budget deficits. Furthermore, the on-budget deficits in 
     the chart above are based on Republican revenue and spending 
     proposals. If the Republicans truly wanted to reduce 
     deficits, they could make the cuts or increase revenues, but 
     they have refused to do so and instead prefer to borrow from 
     Social Security and Medicare to mask their policies.
       3. The Republican dodge of expressing deficits as a 
     percentage of GDP is clearly a ruse because the newly 
     appointed Secretary of the Treasury, John Snow, vigorously 
     called for deficit reductions in 1995, a time when deficits 
     as a percentage of GDP were almost identical to levels 
     projected for 2003. Republicans may counter this argument by 
     saying the projections at that time showed a widening deficit 
     problem over the projected 5 years and the Administration's 
     current deficit projections are shrinking. However, the 
     Administration's present budget forecast includes no cost for 
     a war in Iraq, no AMT fix and rosy growth forecasts. These 
     costs will certainly add significantly to the growing deficit 
     over the next 5 years.
       4. The consequence of such borrowing to pay for the 
     Republican tax cuts for the wealthy is an increase in the 
     ``Debt Tax''. Simply put, the ``Debt Tax'' is the average 
     amount every American must pay each year simply to service 
     the interest on the national Debt. The difference between the 
     ``Death Tax'' which the Republicans want to repeal, and the 
     ``Debt Tax'' which they are covertly increasing, is that the 
     former only affects the wealthiest two percent of our 
     citizens when they die. By comparison, the ``Debt Tax'' 
     confronts every single American from the moment they are born 
     and for the rest of their lives until we pay down the debt.

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