[Congressional Record (Bound Edition), Volume 149 (2003), Part 5]
[House]
[Pages 6021-6026]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           THE BUDGET DEFICIT

  The SPEAKER pro tempore (Mrs. Blackburn). Under the Speaker's 
announced policy of January 7, 2003, the gentleman from Michigan (Mr. 
Smith) is recognized for 60 minutes.
  Mr. SMITH of Michigan. Madam Speaker, I thank the Chair for this 
opportunity and if I could ask one of our pages to put a couple of 
charts up here.
  Right now in the United States House of Representatives, the 
Committee on the Budget is marking up, what we call it is marking up, 
the budget for the 2004 fiscal year. The 2004 fiscal year starts next 
September 30, and we are looking at a budget that is going to be a 
little more conservative on discretionary spending but still looking at 
spending that has been increasing almost 7.5 percent a year, and that 
has led us into a very serious problem.
  Probably at the present time, though overshadowed by national 
security and the conflict in Iraq, this year's budget is very important 
to the future of our kids and certainly to the future of our economy in 
this country. We must reverse the tendency to spend more and more 
money.
  If my colleagues can imagine a chart that projects the increase in 
spending, and we do not have to imagine, this shows where we are going 
on the increase in debt and so it is going to represent the increase of 
this House Chamber to spend more and more money; and of course, what 
happens politically, if we bring home pork barrel projects, then we get 
on television, we cut the ribbon and probably we are more likely to get 
re-elected. So the tendency of Members of Congress, both in the House 
and Senate, is to make more promises of things they are going to bring 
home and end up spending more money, and that is what has led us to a 
very serious dilemma.
  It seems reasonable that the increase in spending for the Federal 
Government should not be any more than the

[[Page 6022]]

increase experienced by the average family in the United States; and 
yet, what is happening in government is we are spending three and four 
times the rate of inflation as far as the increase in spending over the 
last several years; and that is, of course, leading us into a very 
serious deficit, and let me just give my colleagues my thoughts on why 
this deficit and the larger debt is not good for our future.
  Deficit, by the way, just to get our terminology straight, deficit 
spending means how much we overspend in any 1 year, how much spending 
is greater than the revenues coming into government, and then we add up 
that deficit for that year, and it adds to the total debt. The total 
debt of this country right now is $6.4 trillion. When I came to 
Congress just 10 years ago, it was just a little over $4 trillion. So a 
dramatic increase. So about $2 trillion increase in the 10 years I have 
been in Congress, but here is the prognosis for what we expect to 
happen in this 2-year session of Congress, and that is another $1 
trillion increase, $1 trillion or more.
  The projected deficit this fiscal year is $436 billion. For next 
year, it is $435 billion, and I say projected and emphasize that word 
because it does not include the supplemental that is coming in. It does 
not include the additional tens of billions of dollars that will be 
required as we continue in Afghanistan, if we go to war in Iraq. So we 
are approaching a half a trillion dollars overspending.
  This is a swing of more than $7 billion in just this 3-year period 
between the year 2000 when we had a $236 billion surplus to this kind 
of deficit spending in just that 3-year period out of a $2.1 trillion 
budget. Huge differences. I mean, the economy certainly is part of it. 
So as the economy is sluggish and goes down, earnings are less from 
both individuals and businesses, so tax revenues are less. Expenses are 
more and so we are facing a war-type situation on whatever happens in 
Iraq, what we do in the war on terrorism; and so it is reasonable to 
some extent to go ahead and borrow a little more for those purposes, 
but we should be very conscious of the fact that we are continuing to 
spend in other discretionary spending 7.5 percent a year, much faster 
than inflation, of course, anyplace.
  This shift in the budget certainly represents unrestrained spending, 
and that is what many of us are suggesting to the Committee on the 
Budget as they meet now, where some of the Democrats are suggesting, 
look, we should spend more for education, we should spend more for 
health care. There are hundreds of problems that need to be solved in 
the United States today, especially when individual States are hitting 
their budget crunch, but to ask government to increase borrowing to 
solve our problems is in a way saying to our kids and our grandkids 
that our problems today are so important and we do not think your 
problems, when you grow up and start paying your taxes, are going to be 
that important. So we are saying we want you to pay for today's 
spending that this Congress is suggesting in terms of all of the 
important programs that we might spend money for.
  What greatly concerns me is that government spending grew explosively 
even as revenues have declined. Discretionary spending increases have 
been at least 6 percent each year since 1965 and at least 7.4 percent. 
Each year since 1998, there is four times the rate of inflation. The 
President's proposed budget is 3.5 percent increase for 2004 which is 
still as conservative as it is, still close to twice the rate of 
inflation.
  Now, the gentleman from Maryland (Mr. Bartlett) came and looked at 
this gross Federal debt and its components bar graph. So if he would 
like to come down and go over the bar graph to help describe the 
predicament, and I hesitate to say lies, but certainly hood winking of 
a lot of American people that at one time when we start bragging that 
the debt is going down, when actually the top blue line, it has never 
gone down, a little slow-down during 1998, 1999; but the total debt of 
this Federal Government has never gone down and the projection of ever 
bringing into balance the gross Federal debt is a long ways off, even 
though if we pretend that we do not owe the Social Security trust fund, 
when extra moneys come in, if we pretend that, if we pretend that it is 
not something that we owe the trust fund to Federal employees or the 
military as they pay in for their retirement funds, then we might have 
a balanced budget by 2007.

                              {time}  2130

   But that is not honest.
  Madam Speaker, I yield to the gentleman from Maryland, and I even 
brought him a pointer.
  Mr. BARTLETT of Maryland. I thank the gentleman very much. I spent, 
in a former life, 24 years teaching, and so this is like coming home to 
me.
  This is a very interesting graph, and it points out some interesting 
things about the budget and about the deficit and about surpluses. Here 
we have three curves, and these three curves are labeled. The gross 
Federal debt. That is more often referred to as the national debt. And 
then there is the public debt. Now, this is the debt that we advertized 
that we were paying down during the 4 or 5 years of surpluses. And it 
is true. You can see that debt fell off slightly during the 4 or 5 
years of surpluses.
  But look at what was happening concomitant with that, and that was 
the debt held by government accounts. Now, another way of referring to 
that debt is that this is the debt owed to our children and our 
grandchildren, in large measure. This is the trust fund debt. These are 
the surpluses and the trust funds that we have collected from our 
working people, many of them our children and our grandchildren, to be 
there for them for their retirement and for their Medicare. We have 
taken that money and spent that money.
  So all the while that we told the American people that we were paying 
down the public debt, the total debt, that is the debt on which 
interest is accumulating and the debt which we owe, is going up and 
ever up. There was not, as a matter of fact, a moment in time during 
those 4 or 5 years of our so-called surpluses that the gross Federal 
debt or the national debt actually came down. There were 14 months when 
the revenues exceeded the expenditures, but that is because of 
quarterly filings and April 15 and so forth.
  If the Federal Government were required to keep its books on the 
accrual basis, which is the way every American company that handles 
more than $1 million a year, and we handle a whole lot more than $1 
million a year, then there never was a moment in time when in fact the 
national debt, here labeled the gross Federal debt, went down.
  Now, the fact that we were paying down the debt held by the public, 
the public debt, was good news for us here today. The low interest 
rates are at least partially due to the fact that we have paid down 
this debt somewhat. The Federal Government was not competing in the 
open market for dollars, and so interest rates dropped. So the low 
interest on your home, the low interest on your auto loan, which 
frequently is zero now, the low interest on your children's loan for 
tuition, all of that is due to the fact that we were paying down this 
public debt.
  But the flip side of that is that for every dollar of public debt 
that we paid down by taking money from the trust funds, we accumulated 
another dollar debt in the trust fund. So that the sum of those two, 
always the sum of these two, equals the gross Federal debt.
  Mr. SMITH of Michigan. If the gentleman will yield for a moment, just 
a little more to emphasize the servicing of this debt as it grows 
bigger and bigger.
  Last year, it took 11.4 percent of our total budget to pay the 
interest on this kind of debt, the $6.4 trillion. But what if the 
economy recovers; and what if then the Federal Government is out there 
in the marketplace bidding against business and whoever else, the 
homeowners or potential homeowners, whoever wants to borrow some money? 
Here is government at the auction saying, we are just going to be the 
highest bidder because we need this much money to service the huge debt 
load that we have now obligated ourselves to. Interest rates are going 
to go up.
  As government goes deeper in debt, they are going to be competitive 
in the

[[Page 6023]]

marketplace and drive up interest rates. And if we go up with interest 
rates where we were several years ago, that 11.4 percent of the total 
Federal budget could easily double and it could be depriving potential 
homeowners, potential car buyers, potential business expanders from 
borrowing the money they need. So if the gentleman would excuse the 
interruption, I think it is so important that we look at the downside 
to the economy of accumulating this kind of debt as well as the 
unconscionable burden it places on our kids and our grandkids.
  Mr. BARTLETT of Maryland. Well, that is exactly right. And if we look 
at the size of that expenditure, 11.4 percent, that is just a little 
lower than the roughly 15 percent that we spend on our military. And if 
interest rates rise, the amount of money that we spend on servicing the 
debt could be larger than the amount of money we spend on our military, 
which for a single item is certainly the largest number in our budget. 
So the interest on the debt could become the largest single expenditure 
in our budget.
  Every year that we do not balance our budget makes it just that much 
more difficult to balance the budget the next year because we are going 
to have to pay more interest on the additional money that we have 
borrowed. So as year by year goes by and this debt goes up and up and 
up, it is going to be increasingly difficult to balance the budget.
  Now, what we are telling our children and our grandchildren is that 
we cannot run our government on current revenues. And because the 
things we want to spend money on are so important, we hope that you 
will understand that we have to borrow money from your generation. So 
that when it comes time for you to run the government, not only will 
you have to run the government on current revenues, but you are going 
to have to pay back all of the money that we have borrowed from your 
generation. I do not think that is fair. I do not believe my children 
think that is fair. And I do not believe my grandchildren think that is 
fair.
  I would like to talk for just a moment about this debt held by 
government accounts, or the trust fund debt. By law now the only place 
that we can invest surpluses in our trust funds is in nonnegotiable 
U.S. securities. That means when they take some FICA money, tax, from 
you, you see it on your pay stub and that goes into this account in 
Washington. Immediately there is a big computer that recognizes that 
that money has gone there, and so it, in effect, prints an IOU and it 
puts the IOU in the account and it takes the money out so that there 
is, in fact, no money in any of these trust funds.
  Now, there are a lot of different trust funds, 50 odd trust funds. 
The largest of these trust funds is Social Security. The surpluses this 
year in the Social Security surplus will be about $161 billion. The 
next largest trust fund is the Civil Service Retirement Trust Fund, 
then the Railroad Retirement Trust Fund, and the Transportation Trust 
Fund, and the Airport Trust Fund, and it goes on and on through a list 
of smaller and smaller trust funds equally, about 50 of these trust 
funds. This year, the accumulated surpluses in these trust funds will 
be almost $200 billion, $191 plus billion surpluses, in these trust 
funds.
  Now, what this means is, since the only place by law that we can 
invest surpluses in these trust funds is in nonnegotiable U.S. 
securities, this debt is bound to go on as long as this law stays in 
effect. What that means is that government will always be increasing 
the debt by that amount. Because that money comes in and it can only be 
invested in nonnegotiable U.S. securities. And there is no way that 
money in Washington will not be spent.
  Mr. SMITH of Michigan. If the gentleman would yield, I think it is 
good to put a footnote in terms of what historically government has 
done to have extra money coming in to these trust funds so that 
government can go ahead and spend that money.
  I think the gentleman has made it clear that when there is extra 
money coming into these trust funds an IOU is written and government 
spends that money for regular government spending. It is not put into 
any account.
  Social Security, for example. We started Social Security in 1934. 
Every time that the trust fund started going down and there was not 
enough surplus, what did government do? It increased the tax rate on 
workers in this country. So we went from a 1.5 percent tax rate and now 
we are paying a 12.4 percent tax rate into the Federal Government.
  In 1993, the taxes were raised so much on workers that we are 
experiencing more money coming in from the Social Security FICA tax 
than is needed. And so that money, the $161 billion that the gentleman 
suggested we are having this year, is now spent for other government 
expenditures. But it is still owed. Sometime, someplace, somewhere we 
are going to have to come up with that money, and it is going to start 
just a few years from now, in 2015 or 2016.
  So I wanted to make the point that government, when they get in 
trouble, and usually the tendency is that we do not deal with difficult 
problems such as overspending, such as Social Security, such as 
Medicare, until a catastrophe hits, and the longer we put off these 
decisions the more drastic those solutions are going to be. So let us 
not force government into again raising the FICA tax, where 75 percent 
of the American workers pay more in the FICA tax than they do in the 
income tax.
  If the gentleman, just for a minute, and I think we will want to put 
that chart back up, but if the gentleman would take that chart off, we 
will see a chart that represents spending over the last 10 years, where 
spending has gone up every year by an average of 7.5 percent.
  Now, discretionary spending, and discretionary means that Congress 
decides every year through our budget process, through our 
appropriation process how much we are going to spend, and the tendency 
has been to just spend more. And we should not forget it is taxpayer 
money. And increasing taxes are not wise politically, because people 
have to reach into their pockets and pay those taxes. More and more 
people are looking at their biweekly paychecks or their monthly 
paychecks and saying, my gosh, look at the taxes that I am paying to 
the Federal Government. But that is only part of it, because now we 
have a hidden tax or a future tax by increased borrowing and increasing 
debt and the deficit spending.
  Madam Speaker, I would yield back to the gentleman.
  Mr. BARTLETT of Maryland. I thank the gentleman. And this is an 
interesting curve. When the gentleman said we are increasing our 
spending by about 7 percent a year, that seems to be a steady rate of 
increase. But it is interesting that when we have a steady rate of 
increase, the amount that we are increasing rises exponentially. And 
that is just the characteristic of this kind of a rise. So if this 
continues, just at the 7 percent, this curve gets steeper and steeper 
and steeper and steeper as time goes on. It is compounding interest.
  There is a namesake of mine, I guess he is my namesake, because he is 
a bit older than I, at the University of Colorado who says the biggest 
failure of our industrial society is our inability to understand the 
exponential function. That exponential function, if we keep on 
increasing spending at this rate, will eventually bury us.
  Let me put this original chart back up for a moment, and I just want 
to talk for a moment about these trust funds and lockboxes. Now, we 
heard an awful lot, while we had surpluses, about lockboxes. And, by 
the way, that is a word we have not heard since we stopped having 
surpluses. Nobody talks about lockboxes anymore. We had a lockbox first 
on Social Security and then we had a lockbox on Medicare.
  Now, what this lockbox said was if we had a surplus in those 
accounts, and we did, and we do, and we will have for a while, but the 
reason we have surpluses in those accounts now is because actuarially 
we have a generation of people that are going to retire in the future. 
And unless we accumulate a lot of money for their retirement, there 
will be no Social Security checks for

[[Page 6024]]

them. There will be no Medicare coverage for them. So that is the 
reason we have these accumulated surpluses. It is not that we can cut 
taxes because we have these surpluses, because we are going to need 
them in spades.
  Now, that lockbox had nothing to do with preserving or protecting 
Social Security. We have not, as a matter of fact, done anything to 
preserve and protect Social Security. I am delighted we are talking 
about it. Seven years ago, 8 years ago, if I talked about Social 
Security, that would have been perceived by seniors as a threat to 
their Social Security. I would have lost a lot of votes. And so nobody 
even talked about Social Security.
  Mr. SMITH of Michigan. If the gentleman will yield on this point. I 
was made chairman of a bipartisan Social Security task force. And it 
was interesting that after all of the Members learned the facts and 
learned the serious situation of Social Security running out of money; 
in other words, less money coming in than we were going to have to pay 
out in promised benefits, all, everybody, Republicans and Democrats, 
said, look, we have got to reform Social Security.

                              {time}  2145

  But I think part of the sadness of this story is the temptation and 
what we have seen Washington do so often is to maybe be not totally 
truthful with the American people in terms of whether you call it a 
lockbox and we are not going to spend the surplus from Social Security, 
or whether we are paying down the debt when actually the total debt of 
this country is increasing. I think it behooves every voter, every 
concerned citizen, every young person who this tremendous load is going 
to fall on to pay the increased costs of servicing this huge debt, and 
mostly likely it is going to result in higher taxes. Retirees should be 
concerned because the temptation of government is to reduce benefits 
and increase taxes.
  Mr. BARTLETT of Maryland. I would like to talk about the balanced 
budget that we had and surpluses. There was a balanced budget, and 
there were some surpluses. The balanced budget was the unified budget. 
That is all of the money that comes into Washington and all of the 
money that Washington spends. But about 10 percent of the money that 
comes into Washington should not be Washington's money to spend because 
it is taken from the American people presumably to be put in trust for 
the American people to make available to them such things as civil 
service retirement, as Medicare benefits, and as Social Security 
retirement in later years. So there was a surplus, but it was not a 
surplus that resulted in paying down the debt.
  Now a debt was paid down. The debt that was paid down was the public 
debt, and I am sure the average citizen had no idea that there were two 
debts, a public debt and the national debt. While we paid down the 
public debt, the national debt kept going up. As I mentioned earlier, I 
checked with the CBO, and there was not a moment in time during those 4 
or 5 years when Washington was telling the American people that we were 
paying down the debt when in fact the debt that really mattered, the 
debt that we are passing on our children and grandchildren, there never 
was a moment in time when that debt went down. It went up. That debt is 
projected to go up faster and faster over the next several years. 
Looking at the curve, in the next 2 years, this jumps up just about 
half a trillion dollars. The advertised deficit is only $245 billion; 
but the real deficit is going to be roughly twice that because we have 
to add to whatever Washington tells us the deficit is, we have to add 
to that the monies that are taken from the trust fund.
  Now, this whole trust fund charade started during the Johnson years. 
Those who are older remember his guns and butter. He was running 
deficits that were embarrassingly high. So what his administration did 
to hide those deficits was to move those trust funds on budget and then 
take the surpluses in the trust funds and spend them and pretend that 
was not debt.
  They make the perfectly silly statement the Social Security surplus 
offsets the deficits. For me this year that is true because I did not 
have to go, as a part of this government, out in the marketplace and 
borrow dollars because what I did, without their consent, was to borrow 
that money from my children and grandchildren. As a matter of fact, 
what we have here, what we are amassing here is the largest 
intergenerational transfer of debt probably in the history of mankind. 
Eleven years ago when I ran for Congress, I promised my constituents 
that I was going to conduct myself down here so my kids and grandkids 
would not come and spit on my grave. I have tried to do that. That is 
why I have always been honest with my constituents.
  For all of those years that we were saying that we had a surplus and 
were paying down the debt, I told audiences that it will probably not 
surprise them to learn that Washington is not being altogether 
truthful. We are paying down the debt. It is the public debt; but the 
public debt is only part of the national debt, which is a sum that is 
really important because we have to add to the public debt the debt 
accumulated in the trust funds which we have borrowed. That just keeps 
going up.
  Mr. SMITH of Michigan. Madam Speaker, if the gentleman were to put 
his pointer on the green line, even the bragging of paying down part of 
that public debt lasted such a short time because of the increase in 
total spending by this Congress and the Presidents.
  Mr. BARTLETT of Maryland. Projecting this out, we will buy and buy, 
and have a lesser appetite for borrowing from the public.
  Pigs may fly, too, but I think that is about as likely as the Federal 
Government paying this debt.
  Mr. SMITH of Michigan. Madam Speaker, let us talk about monetizing 
the debt because some economists have said all we need to do is 
monetize the debt. That means printing more money and having inflation 
making it easier for the government to pay down that debt.
  Mr. BARTLETT of Maryland. That is right. That is what happened in 
Russia today. So their senior citizens who worked a lifetime to earn a 
retirement, now have $5 to $6 a month for their retirement. We could 
monetize the debt. We could cause such inflation in this country by 
printing money that is not represented by goods and services, and that 
is what inflation is. We could do that so it would be easy to pay down 
this debt because we would be paying it down with cheap dollars, but 
the people who really get hurt are those people who have worked hard 
and are counting on retiring on interest. We have destroyed their 
retirement. We have no right to talk about doing this to people in the 
future.
  Mr. SMITH of Michigan. Imagine for a moment as a family or a business 
and you go into debt, nobody does that without some kind of plan to pay 
back that increase, maybe emergency money, that you are borrowing. But 
in every situation there is a plan to pay back what you borrowed. Not 
true with the Federal Government. There are no plans, no prospects of 
paying back this debt, except some time it is going to get so high and 
servicing this debt, the interest which is now 11.4 percent of our 
total budget, and we are borrowing money at a very, very low interest 
rate right now, 3 to 4 percent, that could easily go to a situation 
where we are paying twice that or even more than twice that.
  Like the gentleman from Maryland (Mr. Bartlett) said, servicing that 
debt, interest on the debt could be more than our military expenditures 
for this United States. Even at this time, right now we are approaching 
17 percent for defense spending; and so it is easy to see if we do not 
control spending, if we are not conscious of the real truth in what the 
debt is doing and what it is doing to our future and our kids and the 
economy, then we are going to continue on that curve upward. Already at 
the top right-hand side of the curve, Members can see we are 
approaching a $10 trillion debt.
  In the first 180 years of this country's history, our total spending 
did not amount to as much as the spending for this next fiscal year 
that we are projecting, a little over $2 trillion. So government has 
grown much faster than

[[Page 6025]]

the rest of the economy. What does this mean? We have not used the 
world ``socialism,'' but I think as government is bigger and does more 
things and does not empower people but empowers the Federal Government, 
we become more socialistic. And people are expected to pay in based on 
their ability to pay in, and take out based on their needs.
  I think what has made this country great is the fact that those that 
learn and apply, those that work hard and save, those that invest end 
up better off than those that do not. That has been part of the 
motivation of our Constitution, which has brought us to the best, the 
strongest economy in our world in our last 226 years. How do we keep 
people's eyes from glazing over when we talk about going deeper in 
debt, and we hear justifications, that debt is manageable as a 
percentage of GDP? But just on a commonsense, logical basis, should we 
be passing this burden on to our kids and grandchildren?
  How many grandmothers and grandfathers would be saying, if they 
understood the burden that they are putting on their grandchildren, we 
will do with a little less, but the Federal Government has to hold the 
line on spending?
  Mr. BARTLETT of Maryland. Madam Speaker, the average American has 
little idea of how much tax they pay. The last year for which I saw 
data, tax freedom day was May 10. Every American citizen works up 
through May 10 to pay Federal, State, and local taxes. On May 10, 
Americans will have paid all of their taxes; but May 11, do not count 
on working for yourself because for the next 7 weeks, up until July 6 
last year, every American had to work full time to pay the cruelest tax 
of all, the most regressive tax we pay, it is the worst tax for our 
poorest people because the poorest of the poor have to pay this tax, 
just like the richest pay the tax. There is no exemption from this tax, 
there is no deduction for this tax, and it is the favorite tax of my 
liberal friends who do not understand how really regressive this tax 
is. And what this tax is, it is unfunded Federal mandates. It is all of 
the laws that we have passed here that require a State or a county or a 
city or a business to do something that costs them money which we do 
not pay for in the Federal budget. It is called an unfunded Federal 
mandate, and that consumes the working time of every American for about 
7 weeks, that is, 52 percent of your time is spent working for the 
government.
  Mr. SMITH of Michigan. Madam Speaker, in the last few days, a lot of 
local representatives of local government are coming into Washington 
complaining about these unfunded mandates. Here is the Federal 
Government, since we like to not spend the money maybe and not have the 
debt look so bad, we simply pass a law that the State or a local unit 
of government has to do it.
  We have to watch and guard against that as we look at a new 
Department of Homeland Security and the tendency of this Department to 
put out regulations and rules and mandates of what local governments 
should do. If we put out a mandate, then the gentleman from Maryland 
and I both agreed that the Federal Government should pay for it if we 
are going to demand that a local municipality or State is going to 
provide those services. If the Federal Government is passing a law for 
local units of government or companies, then the Federal Government has 
a responsibility to pay for it.
  Mr. BARTLETT of Maryland. I think the most important thing to 
remember here is what we are doing here does not affect just you and me 
this year and our taxes; it is going to affect our kids and our 
grandkids.
  I just cannot in good conscience continue to pass on to my kids and 
my grandkids this ever-increasing debt. What we are telling them is 
that it is impossible for us to run our government on current revenues 
because our needs are so important; they need to understand that we 
have to borrow from their generation so that we can continue to live 
the way we are living now in our generation.

                              {time}  2200

  We are telling them that, Sally and John, when it comes time for you 
to run the government, not only are you going to have to run the 
government on current revenues, but you are going to have to pay back 
all the money that we borrowed from your generation. Milton Friedman 
observed that government spends all the money you give it plus as much 
more as it can get away with.
  Washington loves to spend money. Whenever a new bill comes up that 
has more money in it than we had in it last year, the question is 
always asked, if we spend more money, can we help more people? That is 
not the right question to ask. Of course if we spend more money we will 
help some more people. But the right question to ask is would this 
money help more people if we left it in the private sector than if we 
took it into the government and spent it? The answer to that question 
is almost always, except for running the military perhaps, that the 
money will do more good when left in the private sector.
  So you listen to people here on the floor, they are always making the 
wrong point. They are always asking the wrong question. What they are 
saying is, if we spend more money, will we help more people? Yes. But 
that is not the right question. The right question is, if we left this 
money in the private sector, would it help more people than if we took 
it into the government and spent it? Almost every time the answer to 
that question is, please leave it in the private sector.
  Mr. SMITH of Michigan. It is interesting that the original framers of 
our Constitution put in the Constitution that there would not be a tax 
based on income. They were looking at ways to structure a United States 
that encouraged effort, that encouraged work. We eventually amended 
that so we started saying, well, we will start out with a 1 percent tax 
on what you earned, now it goes up to 39\1/2\ percent of what you earn. 
It says to a young couple that wants to do a little better for their 
kids, we are going to tax you so much if you go out and get a job, but 
if you work an extra half shift or a full shift and earn more money, we 
are not only going to tax that extra earning but we are going to tax it 
at a higher rate. It has tended to be in many cases a discouragement 
for the kind of productivity that has made us so great in the first 
place.
  As we look at our tax revision and how do we make our tax more fair, 
how do we have a tax that encourages savings, that encourages 
investment, it is something that has to be done to our very complicated 
Tax Code, where lobbyists and special interest groups have come in and 
got special favors for the sectors that they represent, often to the 
cost and expense of so many American taxpayers.
  I think the points that we want to stress as we conclude tonight's 
session are, I think everybody during the next election should ask 
every Member of Congress that is running for Congress why they are 
increasing the debt that our kids and our grandkids are going to have 
to pay off, what they are going to do about Social Security, what they 
are going to do about Medicare. As the workforce goes down, the 
demographics, if you will, as there are fewer people working to pay all 
of the benefits for seniors, I think we should be asking Members of 
Congress, what is the honest reality of increased spending, that 
increased debt, and what are the unfunded liabilities of government, 
and there are so many unfunded liabilities, what we are eventually 
going to have to pay that is not considered in this budget. In fact, 
Social Security is the only revenue that has been taken off-budget so 
that you can see it on a separate line. Most of the intergovernment 
expenses are still considered under the budget, under the general fund.
  Let me give you one example. All of the Members of Congress, all of 
the employees of the United States Government, there is no money that 
actually goes into the Social Security Administration. What happens is 
there is simply an IOU written for all of these Federal employees, 
Members of Congress, this is an IOU of how much we owe you for that 
12.4 percent of the payroll of

[[Page 6026]]

Federal Government workers and Members of Congress. There is a lot of 
pretense in the budget and honesty is going to be the basis and 
understanding how the debt is growing and the consequences of each 
annual deficit that adds into a larger and larger debt, understanding 
the consequences of how it affects our economic future and the future 
of our kids.
  Mr. BARTLETT of Maryland. You mentioned our Founding Fathers. It 
might be instructive to seek their counsel and to look back at how we 
got here and their dreams for this country. Our Founding Fathers came 
mostly from the British Isles and the European continent. If you think 
back in your history, almost all of them came from a country that was 
ruled by a king or an emperor who claimed and, incredibly from our 
perspective, was granted divine rights. What that says is that the 
rights came from God to the king or the emperor. They were divine 
rights. He would give what rights he wished to his people. When our 
Founding Fathers came here, in that Declaration of Independence, they 
made a very radical statement and we read it and seldom reflect on how 
radical it was. They said there that all men are created equal. The 
country they came from did not believe that because they thought the 
king and the emperor was created more equal, if we can use the term 
from Animal Farm. And that we are endowed by our Creator with certain 
unalienable rights. Among these are life, liberty and the pursuit of 
happiness. And what our Founding Fathers wanted to establish was a very 
limited government. They did that by writing into the Constitution, and 
I always carry a copy of it, in article 1, section 8, and these are 
just the words between my two thumbs. That is not much. This describes 
all of the powers that they granted to the Federal Government.
  Just after I came here, about 10 years ago, I was given 3\1/2\ 
minutes in debate. That is a long time in debate. It was about a land 
grab that I thought was unconstitutional. So I took out my Constitution 
and I went down it. I am not going to read every word in this, it is 
not much if I read it all, but I just hit the highlights of each of 
these little paragraphs. You can see that they are little paragraphs.
  That Congress shall have power to lay and collect taxes. We learned 
how to do that, did we not?
  To borrow money. We are doing that big time.
  To regulate commerce.
  To establish a uniform rule of naturalization.
  To coin money and regulate the value thereof. Somehow we gave that 
away to the Federal Reserve without amending the Constitution. I do not 
quite know how we did that.
  Provide for the punishment of counterfeiting.
  Establish post offices and post roads.
  Promote the progress of science. These are copyrights and patents.
  Constitute tribunals inferior to the Supreme Court. This is our lower 
courts.
  Define and punish piracies and felonies.
  And then about a third of all of these words deal with our control of 
the military.
  To declare war. We do that. The President does not do that.
  Raise and support armies.
  Provide and maintain a Navy.
  Make rules for the government and regulation of the land and naval 
forces.
  Provide for calling forth the militia.
  Provide for organizing, arming and disciplining the militia.
  And then a big paragraph on the District of Columbia, to exercise 
exclusive legislation in all cases whatsoever. I am really supportive 
of home rule, but I do not know how we gave Washington home rule 
without amending the Constitution, which I think we should have done.
  When I finished doing this, I went to leave and the recording clerk 
that sits just behind me came up the aisle behind me and tapped on my 
shoulder and said, What was that you were reading from? Oh, I said, 
that is the Constitution.
  Can I see it? I hand it to them.
  Can I copy it? They took it back and copied it.


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore (Mrs. Blackburn). The Chair will remind 
Members that it is inappropriate in debate to refer to other Members by 
their first names.
  Mr. BARTLETT of Maryland. Madam Speaker, our Founding Fathers were so 
concerned that someone might not understand that they really meant to 
have a limited Federal Government, that just 4 years later, in 1791, 
they wrote 12 amendments that started through the process of two-thirds 
of the House, two-thirds of the Senate, three-fourths of the State 
legislatures, 10 of those made it through, we know that there was a 
Bill of Rights, and the 10th amendment in the Bill of Rights, the most 
violated amendment in the Constitution, the least referred to amendment 
in the Constitution probably, says very simply, the powers not 
delegated to the United States by the Constitution nor prohibited by it 
to the States are reserved to the States respectively or to the people. 
That is old English and that is legalese. If we put that in modern 
everyday language what it says is if you can't find it in article 1, 
section 8, you can't do it.
  I brought this up because this is the reason that we have this 
problem, an ever increasing debt, because we have not recognized the 
limited Federal Government that our Founding Fathers envisioned for us. 
Were they to be resurrected today and come see what we have done to 
their country, they might have a heart attack and die very quickly 
again. But they could not have imagined that the Federal Government 
would be what it is today, doing all of the things, little of which, by 
the way, can be justified by article 1, section 8, which is supposed to 
define what we do. So one way of solving our problem is a return to 
truly constitutional government, to stop doing those things that in 
their wisdom they knew could be done better in the private sector. We 
need to keep asking that question over and over again. Where will this 
money do the most good? Spent by government or left in the private 
sector to provide jobs and resources for our people?
  Mr. SMITH of Michigan. Let us make clear, left in the private sector 
means being left in the pockets of the people that earn it. I would 
like to finish up on I think somewhat of a little bit of a positive 
note. In spite of the dilemma and the projection for increased 
deficits, the Republican Conference met this morning. We talked about 
our determination to hold the line on spending. The Committee on the 
Budget that is still meeting, I think, at this hour of the night to 
pass out their final resolution does a couple of things. It says let us 
reduce spending, discretionary spending outside of defense and homeland 
security. Let us reduce that discretionary spending by 1 percent across 
the board. And then if this budget is passed by the House and the 
Senate, it will go to the appropriators and it will be up to the 
appropriators to decide how to move some of that discretionary funding 
around so that they end up actually reducing, for the first time in the 
gentleman from Maryland's career here in Congress, in my career in 
Congress, because we came together in 1993, it will be the first time 
that there has actually been some reduction in discretionary spending 
outside of defense, and in this case also outside of homeland security. 
So a little good news. Let us hope that we have the intestinal 
fortitude, the determination to do what is right and at least start a 
beginning of being honest of what the debt is and how much it is and 
slowing down spending.

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